The News: New Buildings, Arts Venues Aid Dallas Vacancy
- May 12, 2009
The continuing recession has translated to growing office vacancy in central business districts across the country. Dallas, though, has been exception, as vacancy fell from 27.6 percent to 27.2 percent at the end of the first quarter, according to a Cushman & Wakefield Inc. report Not a huge decrease, to be sure, but Randy Cooper, executive director in the company’s Dallas office, believes that these numbers are more proof that office tenants are favoring locations in the CBD, which encompasses the Uptown and Downtown submarkets.That was not always the case, Cooper said. Many of the large, 1 million-square-foot office buildings built Downtown in the 1980s did not have enough underground parking for all of each building’s tenants, so many workers had to use nearby surface lots. Also, underground tunnels connected many of these large buildings, so tenants could avoid walking in 100-degree heat, but they also robbed the area of vibrant street life.Dallas’ CBD is a very different place today, Cooper noted. The addition of performing arts venues Uptown in recent years has given the CBD new life. The submarket’s office buildings, which are smaller than those built in the 1980s, feature parking ratios much more on par with suburban office buildings. Additionally, Woodall Rogers Park, now under construction, will connect Uptown and Downtown. The CBD has also become much more of a live-work-play environment as more multi-family units come online.Still, the recession has taken a toll on Dallas’ overall office market. Cooper said a significant amount of office space has been on the market since August of last year, as prospective tenants are delaying their decisions. The fall in oil and gas prices has also hurt some area office users. An increased sense of optimism has surfaced in the past three weeks, but his enthusiasm is still tempered.“It should be a tough year,” Cooper said, and rents are likely to fall and vacancy increase through the year, a turnaround likely taking hold in the beginning of 2010. Cheap land, a large international airport and continued population growth will still boost the market.