With one of the strongest business climates in the U.S., and a continued influx of educated, young professionals to the region, Dallas-Fort Worth has attracted notable investors to the area, including J.P. Morgan and Mirae Asset Global Investments. Increasingly, investors and real estate developers are attracted to trendy Uptown Dallas.
Riding the crest of investment and development activity throughout 2018, Dallas’ Uptown commercial real estate market continues to experience an upward growth trajectory—many investors consider it to be one of the best neighborhoods for real estate investment in the country.
Over the last several years, Uptown has seen a significant number of new developments and the sale of existing buildings. One of the latest developments – the 800,000-square foot, $300 million Union project – landed Nuveen Real Estate, one of the world’s largest real estate investment managers. With a mix of professional services companies, the high-rise is already 90 percent leased. Union development includes restaurants, retail stores, a 31-story apartment, and a 60,000 square-foot Tom Thumb urban grocery store.
The scarcity of available land means that the value of existing buildings has risen sharply, making for a competitive playing field for available property. For example, 2000 McKinney Tower, which commanded more than $500 per square foot back in 2015, is one of the most expensive office buildings in Dallas. The lack of available land in Uptown Dallas means that developers have their eye on buildings suitable for redevelopment, specifically those which they can convert to mixed-use spaces.
Given the fiercely competitive market, Uptown landlords can expect premium dollars for their buildings, especially rental properties. The one cautionary note in this booming market is to ensure that some affordable rental properties remain, so those wishing to live and work there are not priced out of the market.
There is still a high demand in the hospitality market, which has experienced steady growth in the number of hotel rooms over the past ten years. In redeveloping older properties, developers seek to maintain historic elements while incorporating the type of work-play living spaces young adults want. T2 Hospitality of Newport Beach, California is looking to develop a 230-room hotel at Cedar Springs and Olive St. According to the Dallas Morning News, this will be one of three new hotels planned for Uptown.
As Uptown continues to lure young people who are attracted to good employment opportunities and an urban lifestyle, it will likely remain one of the best neighborhoods for real estate development and investment.
Questions about mixed-use development or other real estate issues? Contact the Real Estate and Construction team at (972) 818-5300 or fill out the form below.
Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.