How Does The Dallas Office Market Go From Good To Great?
Experiential retail. Vertical and horizontal mixed-use. Walkability. The CRE world may be sick of hearing about these buzzwords, but those concepts are here to stay. We sat down with Pillar Commercial president and founder Manny Ybarra and CBRE SVP Celeste Fowden to talk about the evolution of the office market and what makes Dallas successful. Hear more from Manny, Celeste and other insiders at our Dallas State of Office event on Thursday, Sept. 29.
Celeste says Dallas has just about everything working in its favor to attract tenants: solid infrastructure, good education options, strong job growth and low cost of living.
Amenities within a building’s four walls might get tenants in the door, and smart capital improvements keep tenants happy. Manny just installed a corporate kitchen (in lieu of investing $100k into the infrastructure of a new deli) in one of his office buildings—it's stocked daily (sometimes twice a day depending on demand) and offers tenants a variety of healthy and fresh breakfast, lunch and snack options without the mess and smells associated with on-site cooking. Manny tells us he's already seen great feedback from tenants up for renewal and potential tenants.
Celeste (center, with Clay Gilbert and Dennis Barnes on the fourth floor of CBRE’s Park District) and CBRE have completed about 90% of $20M of renovations at Galleria Office Towers (where our Dallas State of Office event will be held), including a fitness center, conference rooms, tenant lounges, and a sophisticated light and license plate recognition system to improve parking.
To some degree, Manny tells us, investors must evolve to include these amenities. Owners and operators will be at a disadvantage if they do not incorporate smart capital improvements and amenities.
Celeste knows that some tenants will always prioritize price over amenities, but she says even Class-B and C tenants are placing higher importance on quality of life for employees.
But Manny (here with his soon to-be son-in-law, Alex) and Celeste agree that outside amenities can be deciding factors for tenants who want a vibrant neighborhood, proximity to a DART station, or a central location so they can pull employees from a wide radius.
And in a time when Uptown and Downtown have great multifamily options and Plano and Frisco have great office options, the days of working in the CBD and driving home to the burbs are over for most North Texans.
Manny says certain submarkets, such as east LBJ and Stemmons, could use a jolt of live/work/play. These areas lack a vibrancy and sense of neighborhood more than they lack office options, Manny says. And if renewed investments turn these pockets around, offices will follow.
Manny and Celeste agree it’s a heck of a time to be in Dallas. Celeste says the CBD could densify and expand north. If we can densify and still accommodate parking needs and expand into the land that’s everywhere in Texas, the Dallas office market has a lot more fortune in its future.
Pick the brains of Manny, Celeste and other thought leaders on Thursday, Sept. 29, at our Dallas State of Office event.
