Bank of America's pending move to Dallas' Uptown neighborhood is the latest victory for the fast-growing area north of the Woodall Rogers Freeway that divides the city center.
But the big banks' plans to leave will add further clouds to downtown's old financial district south of the freeway.
“Uptown certainly has an inviting vibe, and its boundaries seem to continue to expand over time,” said Ben Brewer, senior manager at developer Hines. “Bank of America’s introduction shows that companies are looking for dynamic micro-neighbors to help them achieve their real estate goals.”
Bank of America plans to move 1,000 employees from its Landmark Tower on Main Street to a new high-rise building in Klyde Warren Park just north of downtown. The banking giant will downsize from about 500,000 square feet of offices in Dallas' tallest skyscraper to about 238,000 square feet in the new tower, which opens in 2027.
Bank of America's pending move uptown follows a common trend of attracting some of the biggest business tenants in downtown's old financial district to new buildings north of Deck Park in an effort to unify the city. This is part of the
Older downtown buildings south of Ross Avenue have seen a steady influx of tenants headed for buildings uptown and near Dallas' Arts District.
Notable recent uptown moves include PricewaterhouseCoopers, law firm Gardere Wynn Sewell (now Foley & Lardner), Akin Gump, and Katten Muchin Rosenman. Goldman Sachs currently has its main offices downtown at the Trammell Crow Center, but it is building a huge new campus between Uptown and Victory Park.
Leasing has kept the office vacancy rate in the uptown area to less than half that of downtown. Also, average rents are over $60 per square foot, and office costs uptown are twice that of downtown.
“The uptown Dallas market's strong performance undoubtedly highlights its strengths and reflects the trend toward high-quality, walkable spaces over the past three years,” said Jihane Bouley, vice chair of the Dallas office of international real estate firm Savills. It confirms that.” “Many of our clients are relocating from previous premises in order to attract and retain top talent and have fresh, attractive spaces that motivate employees to return to the office.”
Approximately 2 million square feet of new office space under construction in Uptown is already largely leased.
“Our expectation is that these buildings will be fully leased prior to opening,” said Phil Puckett, vice chairman of CBRE Group's Dallas office. “Tenant activity and demand in this Uptown office market remains incredibly strong.”
Bank of America will occupy nearly half of Parkside Uptown's 30-story office tower planned for Harwood Street and Woodall Rogers Freeway. The skyscraper, scheduled to break ground by the end of the year, is a project of developers KDC, Pacific Elm Properties, and site owner Miyama USA Texas.
“Given that Bank of America will be the lead tenant, I think this building will also do very well with a continued lease up, especially given that it overlooks Klyde Warren Park,” Puckett said. said.
The bank's exit from Main Street will leave a large vacancy in the 72-story Bank of America Plaza, which is currently about 70% leased. This bank is one of the largest private sector employers located downtown.
“We look forward to continuing our strong partnership with Bank of America with our downtown location for the next four years, relocating across from Klyde Warren Park,” said Jennifer Scripps, CEO of Downtown Dallas. I look forward to continuing this effort into the future.” on mail. “This is a time of reinvention for many of Downtown's iconic skyscrapers, and we believe the future remains bright for Bank of America Tower and the surrounding area, both literally and figuratively. I feel optimistic.”
Transwestern estimates that the overall vacancy rate for downtown Dallas office buildings in the Financial District is nearly 37%, but the vacancy rate for offices near the Arts District is only about 7.5%.
“Most of the buildings with high vacancy rates are a legacy of overbuilding in the 1980s, with some large blocks remaining vacant for more than a decade,” said Andrew Matheny, research manager at Transwestern. Ta.
Owners of several downtown buildings with large office vacancies are converting portions of their towers into residential units or hotels. Skyscrapers like Santander Tower, Energy Plaza, and Bryan Tower are adding hundreds of new apartments to fill vacant office suites.
Pacific Elm Properties, which plans to repurpose three downtown office towers, is also a partner in Bank of America's new Uptown building.
Other new investments in downtown include AT&T's construction of the more than $100 million Discovery District on Commerce Street and three new parks downtown.
A $2.8 billion redevelopment of the convention center promises to transform the southwest corner of downtown.
These projects will bring new activity to downtown while also causing some office tenants to move uptown.
“Downtown Dallas is being transformed by these developments, and the district is adding new uses to foster growth,” Hines' Brewer said. “Between the city, housing and retail, downtown will continue to change for the better over the next few years.”
