Downtown Dallas Office Vacancy Reaches New Height (Houston, Fort Worth: hotel, house)

[Metro Matt]

Truly sad...

Landmark Dallas office tower shutting its doors | wfaa.com | Business News

[nunusguy]

WOW ! Huge setback for the commercial RE market in Dallas proper.
I had thought with AT&Ts recent corporate relocation from SA to downtown Dallas the hemorrhaging of corporate tenants might stop, but guess not ?

[stoneclaw]

This is definitely a blow to the downtown Dallas office market. I think construction of new office towers in nearby areas definitely needs to stay at a hault for at least another 15-20 years, or at least until half of the existing office space is absorbed.

[blkgiraffe]

Originally Posted by C2H (ComingtoHouston)

This is definitely a blow to the downtown Dallas office market. I think construction of new office towers in nearby areas definitely needs to stay at a hault for at least another 15-20 years, or at least until half of the existing office space is absorbed.

Victory Park and the few other buildings in Uptown Dallas never should have been built. I don't think the city of Dallas realizes how big and powerful their suburbs and Fort Worth are.

[Dallascaper]

This building has been sitting nearly empty for decades. From what I understand, it has good bones, but is very dated and needs to be upgraded to be marketable. The building has other problems, including an awkward, smallish floor plate, and asbestos. Downtown Dallas is filled with obsolete mid-twentieth century buildings like Elm Place; some have been converted to residential, but the process is very expensive.

[Dallas native]

Originally Posted by jluke65780

Victory Park and the few other buildings in Uptown Dallas never should have been built. I don't think the city of Dallas realizes how big and powerful their suburbs and Fort Worth are.

Are you suggesting that what is now Victory Park should have remained a brownfield? There is a significant tax base on that land that did not exist 10 years ago and that's good for the city of Dallas. As time goes by and the economy improves, more will be built in Victory Park. As for the "few other buildings in Uptown", most of those have very high occupancy levels. True, those buildings did entice some tenants to re-locate from Downtown to Uptown. As Downtown continues to re-energize itself, more of the older vacant office buildings will most likely be converted to residential uses.

[hsw]

Skyscrapers in CBDs are Luddite features of 20th century

Most major companies (incl tech and energy and financial) prefer new suburban office campuses...look at SiliconValley's HQs for google, Apple, etc or Exxon's modest HQ campus in Irving

Suburbs are far cheaper and usually more convenient to top execs who often live in nearby upscale suburbs, not in city

Besides, in era of Net/Blackberry, even law firms (historically large consumers of trophy office space) are looking to have many lower-paid workers (like paralegals, jr associates, etc) work from home from a wired office and occasionally come in for weekly meetings, so less need for office space than in pre-Net/Berry era (pre-'00)

And many middle managers/salesguys are on road visiting customers and other company offices much of week, so don't need a dedicated office in a tower somewhere anyway

[Dallas native]

Originally Posted by Dallascaper

This building has been sitting nearly empty for decades. From what I understand, it has good bones, but is very dated and needs to be upgraded to be marketable. The building has other problems, including an awkward, smallish floor plate, and asbestos. Downtown Dallas is filled with obsolete mid-twentieth century buildings like Elm Place; some have been converted to residential, but the process is very expensive.

Exactly! Not much has changed given that Elm Place only had a 20% occupancy rate. Those tenants will move to other buildings, many of which will be Downtown. The announcement of the closure is merely drawing more attention to the situation.

There's already several thousand people living in Downtown Dallas in a dozen or more re-purposed office buildings. That trend is likely to continue and eventually the population will be large enough to attract more restaurant and retail for those residents. Some of this has already happened, even in this economic climate. In the long run, buildings like Elm Place will probably be renovated for other uses and that will be good for Downtown Dallas. Unfortunately, it won't happen overnight.

[EasilyAmused]

Originally Posted by hsw

Skyscrapers in CBDs are Luddite features of 20th century

Most major companies (incl tech and energy and financial) prefer new suburban office campuses...look at SiliconValley's HQs for google, Apple, etc or Exxon's modest HQ campus in Irving

Suburbs are far cheaper and usually more convenient to top execs who often live in nearby upscale suburbs, not in city

Besides, in era of Net/Blackberry, even law firms (historically large consumers of trophy office space) are looking to have many lower-paid workers (like paralegals, jr associates, etc) work from home from a wired office and occasionally come in for weekly meetings, so less need for office space than in pre-Net/Berry era (pre-'00)

And many middle managers/salesguys are on road visiting customers and other company offices much of week, so don't need a dedicated office in a tower somewhere anyway

Your insistance everywhere on the Texas Boards that "top" executive prefer to live in the burbs , or already often live in, is not correct. Upper-Middle Management live in the burbs, top executive live wherever the office is, as long as it's nice, because price doesn't effect their lifestyle. They HAVE TO be available and most WON'T make the drive. High stress and a long commute makes for a bad "top" executive.Lifestyle in big cities can be bought, "top" executives can afford to buy it..upper-management can't. And even if offices did move to burbia, top execs might just baulk at the idea of living away from arts,culture,and the rest of the industry, preferring to make a reverse commute with a driver.

It's true that land in the burbs is far cheaper, because it's so far out. But as far as the energy industry goes in Houston, other than possibly Exxon putting their Fairfax people out in the weeds in a few years, most companies will stay downtown or in the EC. It's very hard to entertain driving all over BFE and back again.

As to you continuing to bring Silicon Valley into comparisons to cities in Texas, the two places can't be more different. Silicon Valley is new, with new money, new traditions and the chronic pursuit of the latest bling. Big town Texas, while it's not an old in comparison to NE states, has strong ties to it's past and clings to the small amount of culture (which is currently in it's cores) it has.

Dallas and Houston are very different when it comes to their downtowns. Houston really wants to claim it's downtown. Some of it's most "exclusive" neighborhoods butt up right against it. It's been a struggle, but it's been an on-going effort for almost 15 years now. While it's a slow process, it is happening. People do desire to live near, and slowly they are wanting to live in. The little I know from Dallas from going to SMU, people don't want anything to do with "Downtown."

Last: It takes more than a new 2 million dollar, stucco Italianate house 30 miles from downtown to make a place upscale. "Write a check" club membership included.

[dv1033]

Originally Posted by Dallas native

Are you suggesting that what is now Victory Park should have remained a brownfield? There is a significant tax base on that land that did not exist 10 years ago and that's good for the city of Dallas. As time goes by and the economy improves, more will be built in Victory Park. As for the "few other buildings in Uptown", most of those have very high occupancy levels. True, those buildings did entice some tenants to re-locate from Downtown to Uptown. As Downtown continues to re-energize itself, more of the older vacant office buildings will most likely be converted to residential uses.

Victory Park (VP) currently is a financial disaster. Of course in time, and through many painful concessions, its residential and retail components will become occupied. They really dropped the ball in overestimating DFW's potential for this type of development; granted they based a lot of their assumption on lax lending (easy money).

Originally Posted by Dallas native

There's already several thousand people living in Downtown Dallas in a dozen or more re-purposed office buildings. That trend is likely to continue and eventually the population will be large enough to attract more restaurant and retail for those residents. Some of this has already happened, even in this economic climate. In the long run, buildings like Elm Place will probably be renovated for other uses and that will be good for Downtown Dallas. Unfortunately, it won't happen overnight.

Downtown (DT) Dallas and Houston are opposite in terms of office space vacancy, so DT Dallas has potential for their unused office space. It is great for DT Dallas that these office buildings can renovated into residential and/or hotel, however it is pretty costly to do so. I think Dallas needs to be very careful because of DT and Uptown's close proximity and the amount of units that recently came online and will be coming online. DT residential will be competing with Uptown/VP residential (already there is too much supply). So you are right, it certainly won't happen overnight.