Downtown Dallas’ newest office buildings performing solidly
New office buildings should provide a performance cushion during this period of market uncertainty
June 08, 2020
- The only building to deliver at the end of the last cycle in Downtown was 1717 McKinney. Although some early leasing was in place, it took 3 years to stabilize.
- Since then, the newest deliveries have performed well, taking 2 to 3 years to achieve stabilization at 90+ percent occupancy.
- As of late May, leasing averaged 89 percent in the newest deliveries. This is on par with the Uptown Class A average which stood at 88 percent at the end of Q1. In comparison the CBD’s Class A assets were 75 percent occupied.
- Importantly, the area’s most recent deliveries (those coming on line since 2018) are fully leased or very close to stabilized.
- Only Harwood 10 (72 percent) and The Luminary (22 percent) are not fully leased at this time, Both properties, however, remain in early lease-up, having been delivered in 2019.
- Other than Weir’s Plaza (65 percent leased), the remaining under construction assets have minimal commitments in place. This development approach is customary in Dallas.
- For the completed assets, this solid leasing should provide balance to operating incomes and serve as a downside performance cushion as we work though this period of uncertainty.