Posted by Dallas, Texas’s commercial real estate market is constantly evolving and changing, reflecting the economic and social trends of each city and region. Every year, there are new and exciting developments, transactions, and opportunities in the commercial real estate sector, as well as challenges and risks.
How We Identified the Top Commercial Property Sales in Dallas
We used a multitude of data sources, including public records, news articles, and industry reports, to identify some of the top commercial property sales in Dallas, as well as the office vacancy rates and trends in the market. Our team analyzed this data to provide a comprehensive overview of the commercial real estate landscape in Dallas. Whether you are looking to buy, sell, lease, or invest in commercial real estate in Dallas, this post will provide you with valuable insights and information to help you make informed decisions.
A major factor impacting the commercial real estate market in Dallas and other cities are rising interest rates and economic uncertainty. Higher interest rates increase the cost of borrowing and financing for commercial real estate transactions, as well as reduce demand and affordability for buyers and investors. Economic uncertainty can also create volatility and risk in the market, as businesses and consumers may postpone or cancel their plans to lease, buy, or sell commercial properties. Commercial real estate stakeholders closely monitor interest rate and economic trends and adjust their strategies accordingly.
Here are a few of the most significant property deals of the year so far Dallas:
- The sale of The Union Dallas, a mixed-use development with 417,000 square feet of office space, 309 apartments, and a Tom Thumb grocery store, for $370 million to KKR & Co. Inc.
- The sale of The Epic, a mixed-use development with 251,000 square feet of office space, 310 apartments, and a Kimpton hotel, for $240 million to Principal Real Estate Investors.
- The sale of The Star, a 17-story office tower with 400,000 square feet of space adjacent to the Dallas Cowboys headquarters and practice facility, for $200 million to CBRE Global Investors.
- The sale of The Link at Uptown, a 22-story office tower with 300,000 square feet of space in the Uptown district, for $180 million to Stockbridge Capital Group.
- The sale of The Sound at Cypress Waters, a 1,000-unit apartment complex with retail and restaurant space in the Cypress Waters development, for $170 million to Cortland Partners.
The Latest on Dallas Office Vacancy Rates
One of the indicators that reflects the impact of interest rates and economic uncertainty on the commercial real estate market is the office vacancy rate. The office vacancy rate measures the percentage of office space that is unoccupied or available for lease or sale in a given market or submarket. A high office vacancy rate can signal a weak demand or oversupply of office space, while a low office vacancy rate can signal a strong demand or undersupply of office space.
Another factor that is currently impacting office vacancy rates and the commercial real estate market across the nation is the continuing impact of work-from-home. The COVID-19 pandemic has accelerated the adoption of remote and hybrid work models, which allow employees to work from home or other locations instead of commuting to a central office. This has reduced the need and demand for office space, as well as changed the preferences and expectations of tenants and landlords. Some of the trends that have emerged from the work-from-home phenomenon are the increased demand for flexible workspaces, suburban offices, and amenities that support health and wellness.
Using data from various sources such as Cushman Wakefield and Commercial Edge here are the office vacancy rates year over for Dallas starting in 2021:
- In 2021, the office vacancy rate in Dallas was 24.5%, much higher than the national average of 10.9%, as the COVID-19 pandemic and the shift to remote work reduced the demand and occupancy of office space.
- In 2022, the office vacancy rate in Dallas remained elevated at 24.5% by the end of March, as the recovery of the office market was slow and uneven, with some submarkets and property types performing better than others.
- In 2023, the office vacancy rate in Dallas is projected to decline slightly to 23.9% by the end of June, as the vaccination rollout and the reopening of the economy boost the confidence and activity of office tenants and landlords.
Here’s a closer look at office space trends and vacancy rates in Dallas’ submarkets:
| Submarket | 2021 | 2022 | 2023 |
|---|---|---|---|
| CBD | 25.4 | 26.2 | 25.9 |
| Uptown/Turtle Creek | 20.6 | 21.4 | 21.1 |
| Preston Center | 18.7 | 19.3 | 19.0 |
| LBJ Freeway | 23.9 | 24.6 | 24.3 |
| Stemmons Freeway | 23.1 | 23.8 | 23.5 |
| Las Colinas | 22.8 | 23.5 | 23.2 |
| Far North Dallas | 27.6 | 28.4 | 28.1 |
| Richardson/Plano | 24.7 | N/A |
Looking Ahead: Dallas Commercial Real Estate Outlook
The commercial real estate market in Dallas has experienced some notable property sales and transactions in 2023, as well as some challenges and opportunities in terms of office vacancy rates and trends. Looking ahead, the outlook for 2023 and beyond is cautiously optimistic as the market faces some uncertainties and risks, such as the potential oversupply of office space, the changing demand for flexible workspaces, and the competition from other cities and regions.