Overall, in the Downtown office market, we have seen a decrease in vacancy and subsequently, an increase in rental rates over the past couple of years. However, different quadrants of Downtown Dallas are being impacted differently.
The Arts District: This section of Downtown is mostly comprised of buildings along Ross Avenue and has gained the most momentum due to it’s proximity to Klyde Warren Park, linking it to the hot Uptown market. Klyde Warren Park is not the only reason for the area’s success; Arts District buildings are the newest construction in the CBD, ingress and egress is favorable compared to the Core and you’re walking distance to the growing Dallas Arts District. Rental rates, on average, are $31.00/SF Full Service
The Core: Tenants looking for value should evaluate space in the central Core of Downtown. While activity has been good, it has not been as strong as the Arts District which bodes well for tenants looking for Class A highrise options but not wanting to pay Arts District or Uptown prices. Another amenity in the Core is the tunnel system that connects several buildings and has endless food options. Whether or not the tunnel systems are a positive thing for Downtown is another topic. Ingress and egress is not quite as good as the Arts District, but there are several great options for tenants in the Core. Rental rates, on average in the core are $21.11/SF Full Service
The West End: The West End has experienced a boom recently due to the high demand for creative office space. Landlords Goff Capital, Spear Street Capital and Granite have all invested heavily in the area and since the office buildings are all old warehouses that have been converted, this is often where many tenants look for creative space. Parking is a challenge in the area and the retail landscape hasn’t changed much (but is beginning to slowly). Buildings in this area feature less amenities than the other options in Downtown. Rental rates in the area, on average, are $28.12/SF Full Service which is an increase of almost 52% from this time last year.
When evaluating your office space needs, it is important to work with a tenant representative who understands the Downtown markets and their nuances and does not simply look at Downtown as a whole. Please feel free to contact me if I can help your business evaluate the various areas in the Dallas CBD.