Bank Of America's New Uptown Lease Adds To Vacancy Glut Downtown
Bank of America’s decision to ditch its downtown office space in favor of a new tower in Uptown has sparked questions surrounding the future of Dallas’ urban core.
The financial institution will occupy more than 238K SF at Parkside Uptown, a 500K SF, 30-story skyscraper planned for the corner of North Harwood Street and Woodall Rodgers Freeway, across the street from Klyde Warren Park.
The banking giant has been at its namesake skyscraper at 901 Main St. in Downtown Dallas since it opened in 1985, per the Dallas Morning News. The move to Uptown will downsize Bank of America’s footprint by more than half, which is in line with changes made by other financial institutions in recent months.
Chase Bank is leaving downtown in favor of a smaller space at 1900 North Akard St., which also overlooks Klyde Warren Park, according to The Real Deal. After announcing a nearly 1M SF, three-building office campus in the North End district, Goldman Sachs trimmed 100K SF from its development plans.
The growing glut of office space downtown is raising questions about the future of the submarket. Several conversion projects are already underway, and some see Bank of America’s departure as yet another opportunity to create more residential units downtown.
The 72-story office building has the physical attributes needed for multifamily, but with at least six conversion projects already planned for downtown, there may not be enough demand to justify yet another, said Steve Triolet, senior vice president of research and market forecasting at Partners Real Estate.
“The problem is it’s a herd mentality,” he said. “The first two of those six … will do well. But if you’re the seventh project … how are you going to do well?”
The conversions already in the works downtown will remove 4M SF of office space and expand the submarket’s base of apartments by 20%, Triolet said. But previous office-to-resi projects have not been wildly successful in leasing apartment units due to the heightened cost of living in new digs downtown.
“What that tells me is the luxury apartments do not have the level of demand to support those conversions,” Triolet said. “There’s just not that many people who can pay that kind of rent.”
Parkside Uptown is being developed by KDC and Pacific Elm Properties, and construction is slated to begin by the end of this year.
About 260K SF remains available for lease, and Pacific Elm is engaged in leasing talks with multiple users, said Aarica Mims, senior vice president and director of leasing at KDC. Global law firm Jones Day was at one point interested in the building but is now looking elsewhere, Mims said.
