Dallas Office Checks Its Brakes

A rise in space available for sublease and a large development pipeline are curbing the Dallas office market’s enthusiasm.“We’re not seeing gloom and doom. Dallas’ economy is holding its own,” said Dale Ray, managing director for Jones Lang LaSalle Inc.’s Dallas office. Still, he noticed an uptick in sublease space from the middle of May to the middle of June. Cushman & Wakefield Inc. confirmed his observation in a midyear report, recording an increase of 25 percent from the second quarter of 2007 to the second quarter of 2008. Executive director Susan Gwin attributed the jump to a rise in hoteling stations and collaborative work areas in local offices.Additionally, the Metroplex’s office pipeline—the second quarter had 5.6 million square feet, 68 percent of that speculative, under construction—always makes some worry, though Gwin is not one of them. “There seems to be some forethought behind these new developments,” she said. “Lenders are keeping a check on things.”Indeed, the market has received some new buildings well, Ray pointed out. Tenants have leased 70 percent of Rosewood Property Co.’s 19-story, 405,000-square-foot Rosewood Court, which opened in late July. He also reported that the office component of Billingsley Co.’s One Arts Plaza in the Arts District, which also includes residential condominiums, is fully leased.Ray also noted that the new projects have even spurred landlords to refurbish existing buildings, improving the overall quality of Dallas office space.For a look at transit-oriented development in Dallas, visit Dallas August print story.