Wednesday, May 10, 2017

Uptown Dallas' sky high office rents may be at their peak

Dallas' Uptown district has some of the highest rents in the state.
A square foot of office space can cost more than $40 per square foot for first class space - even more for the fanciest new buildings.
That's about 50 percent more than average rents just a few blocks south in downtown Dallas.
With Uptown being the hot address for Dallas law firms, accountants and other professional service firms, average quoted office rents in the district have shot up by almost a third in the last decade.
But a new forecast by commercial real estate firm Colliers International predicts that the rise in Uptown rents will slow because of an increase in space coming on the market and the inability of companies to continue to keep paying more.
More than 1 million square feet of office space is on the way in Uptown. Only the West Plano/Frisco market has more office building in the pipeline.
Colliers' analysts in a new report said rents in Uptown have held steady in the last quarter "signaling that rates might have reached their peak. "
"The new supply being delivered to the market in the next 18 months, combined with the availability downtown, is having a direct impact on owner's ability to push rates higher," Colliers executive vice president Travis Ewert said.
Renovations to downtown's 1980s towers are also a drag on Uptown rents.
Owners of the 50-story Trammell Crow Center, for instance, are spending $135 million to bring the landmark Ross Avenue skyscraper into the 21st century.
Steve Brown/Dallas Morning News