DALLAS | The Spire | 1.7 million sq ft | 11 acres

[TexasPlaya]

Originally Posted by skys the limit

The proposal is a current proposal. The Arts District area has spawned billions in development over the last five years, especially when including the explosive growth of highrises in the Uptown District just immediately north of the Woodall Rogers Freeway.

With the Woodall Rogers Urban Park now under construction, and the construction of the 42 story Museum Tower, the link between the core CBD and Uptown will be seamless. The Arts District is now almost fully built out with its many arts venues, with the Dallas Performance Hall under construction as the last major arts facility development that will complete the Arts District.

All of these are adding further synergy to the development surrounding the Arts District, which includes The Spire project.

Here is a link to the architectural firm's website showing the current proposals for The Spire project:

http://www.wdgdallas.com/

I also do have a recent news update indicating that the development group for The Spire has purchased more land for their Downtown Dallas development plans. I'll post that tomorrow as I do not have that link with me at the moment. I don't think the development group would be spending more money purchasing more land now if they weren't committed to their plans.

I think given the ultra-hot Dallas Arts District area that it is planned for that at the moment the project looks real and viable.

That's all fine and dandy but doesn't guarantee anything currently. There are mega plans like this for projects outside of Houston's DT and Med Center that have all the land and plans available but if there isn't a demand for the space or the financing isn't in order then it's not happening. 1.7 million square feet for DT Dallas is a lot given it's high vacancy rate for the past decade, that just doesn't make sense.

[skys the limit]

Originally Posted by TexasPlaya

That's all fine and dandy but doesn't guarantee anything currently. There are mega plans like this for projects outside of Houston's DT and Med Center that have all the land and plans available but if there isn't a demand for the space or the financing isn't in order then it's not happening. 1.7 million square feet for DT Dallas is a lot given it's high vacancy rate for the past decade, that just doesn't make sense.

Let's set one thing straight at the moment - the high vacancy rate in Downtown Dallas is primarily in old buildings of Class C and lower and some Class B, not the newer Class A buildings. The Class A buildings are generally 100% leased. There has been no new Class A office space in Downtown Dallas for years until One Arts and the Hunt Oil Tower were built in the last year or two along with the total renovation of the 31 story Art Moderne Mercantile Bank Building which has Class A office and retail on its lower floors even though the building is primarily apartments.

One Arts and Hunt Oil are fully leased, I believe, and the Mercantile Class A office space on the bottom two floors is leasing as well to the oldest architectural firm in Texas (http://dallas.bizjournals.com/dallas...3/daily42.html and http://downtowndallas.wordpress.com/).

The Spire will be a Class A office project, along with residential components.

I am not privy to the actual masterplan for the project. It may call for portions of the plan to be built first, then others later. I really don't believe the developers would build all of the highrises at the very same time, but I do not know that for certain.

As an example, the Park 17 project in Uptown located at 1717 McKinney Avenue fronting Woodall Rogers Expressway was just completed. It is two highrise structures built at the very same time, one 20 stories and the other 24 with retail and parking. One of the towers is residential and the other is office.

Demand for Class A office space in Uptown has been very strong. I have an article that talks about how the Class A office construction in Uptown has largely been pre-leased up to 70% even before construction was started on a project. So there has been a strong demand for Class A office in the immediate area, Uptown, for some time.

There is usually a lagtime between a project's announcement and its actual construction, this provides more time to pre-lease and market the properties. That makes good business sense.

Just because The Spire announcement has been made doesn't mean it is being built tomorrow. Next year more than likely, next month not necessarily but I do not know that for sure either.

But the Arts District area is very hot. Downtown Dallas has had no new Class A office space built since One Arts and Hunt Oil were built as brand new highrises, which are fully leased, and the lower couple of floors of the renovated Mercantile Building, which is leasing. So the prospects look pretty good that the project is viable based on the anecdotal and empirical data that is available.

[TexasPlaya]

Originally Posted by skys the limit

Let's set one thing straight at the moment - the high vacancy rate in Downtown Dallas is primarily in old buildings of Class C and lower and some Class B, not the newer Class A buildings. The Class A buildings are generally 100% leased. There has been no new Class A office space in Downtown Dallas for years until One Arts was built, and I believe it is fully leased.

Maybe... but 1 year ago the vacancy rate was reaching 30% and that 30% was primarily due to Class C and some Class B as you say?

http://dallas.bizjournals.com/dallas...8/daily10.html

The Spire will be a Class A office project, along with residential components.

I am not privy to the actual masterplan for the project. It may call for portions of the plan to be built first, then others later. I really don't believe the developers would build all of the highrises at the very same time, but I do not know that for certain.

As an example, the Park 17 project in Uptown located at 1717 McKinney Avenue fronting Woodall Rogers Expressway was just completed. It is two highrise structures built at the very same time, one 20 stories and the other 24 with retail and parking. One of the towers is residential and the other is office.

Demand for Class A office space in Uptown has been very strong. I have an article that talks about how the Class A office construction in Uptown has largely been pre-leased up to 70% even before construction was started on a project. So there has been a strong demand for Class A office in the immediate area, Uptown, for some time.

There is usually a lagtime between a project's announcement and its actual construction, this provides more time to pre-lease and market the properties. That makes good business sense.

Just because The Spire announcement has been made doesn't mean it is being built tomorrow. Next year more than likely, next month not necessarily but I do not know that for sure either.

But the Arts District area is very hot. Downtown Dallas has had no new Class A office space built since One Arts, which is fully leased. So the prospects look pretty good that the project is viable based on the anecdotal and empirical data that is available.

I would imagine that this sort of project would be built in phases. However, even with the Art District area being "hot" isn't there still a lot of new construction in the VP/Uptown area that isn't doesn't have a high occupancy? It seems like everywhere many projects get put on hold and canceled but this one is moving forward?

[skys the limit]

Originally Posted by TexasPlaya

Maybe... but 1 year ago the vacancy rate was reaching 30% and that 30% was primarily due to Class C and some Class B as you say?

http://dallas.bizjournals.com/dallas...8/daily10.html



I would imagine that this sort of project would be built in phases. However, even with the Art District area being "hot" isn't there still a lot of new construction in the VP/Uptown area that isn't doesn't have a high occupancy? It seems like everywhere many projects get put on hold and canceled but this one is moving forward?

I think quoting a stale article that is a year old concerning vacancy rates in any city, much less Dallas, is more than a bit disingenuous.

I personally think that because you are from Houston the year old headline says what you want to hear, but the reality of things today and going forward is very much different.

The vacancy rate has gone down over the last year in Dallas' core CBD, from the close to 30% to around 25% now (of which the bulk of that is from Class C and Class B ).

As an aside, the positive of that situation is that the Dallas core CBD is increasingly creatively reusing the space in the vacant older buildings for wonderful developments - primarily residential developments which can only help build the core CBD that much more.

But it is not so much what has happened in the past year that is important but what is happening now and about to happen in the near future that intelligent business leaders are focusing on.

Here is a current article that discusses in detail what the current status is for Downtown Dallas and what is going on behind the scenes. I'm personally thrilled to read the incredible activities that have been going on behind the scenes that very well may lead to not only significant office space leasing by many multiple smaller relocations into Downtown Dallas but even super high profile relocations that are in the works.

Please read this article, in its entirety:

http://www.dmagazine.com/Home/D_CEO/...wn_Dallas.aspx

The article points out many specifics but one fact that is most interesting to this thread specifically is that Spire Realty Group is a Houston based development company.

Spire Realty Group of Houston is developing The Spire Dallas.

My personal guess is that Spire Realty Group of Houston evidently sees the handwriting on the wall (as the article clearly spells out) is why they are currently investing such a significant amount of effort, energy and money in Downtown Dallas.

I might suggest that if you have questions concerning why Spire Realty Group is pursuing their 11.3 acre, 1.7 million square foot office project plus residential and retail space in Downtown Dallas now instead of Downtown Houston you might call them locally in Houston to inquire.

I know people are so beaten down by all of the negative news, especially Houston in the last couple of weeks. Houston just received two blows that are really quite bad for the city.

First, Houston loses almost a billion dollars in Federal mass transit grant money just a week ago because of illegal activities of the Houston rail authority, putting Houston's much vaunted plans to inaugurate light rail on multiple routes behind by years.

I've read the posts of various Houston people wringing their hands on "how as a result Dallas will just continue to expand its already existing lead in mass transit over Houston".

And secondly just a few days ago, Houston received the negative news that hometown Continental Airlines is merging with United Airlines of Chicago and will be vacating its headquarters in Houston as a result. That will cost Houston a loss of prestige in a high profile corporate headquarters leaving the city and losing high paying corporate jobs.

Believe me, I wish only the absolute best for Dallas' smaller metro sister on the Gulf, Houston, because anything bad that happens to Houston affects the State of Texas which ultimately can have some affect on Dallas.

But I must tell you that it has been more than very irritating to hear the constant negative whine of people from Houston naysaying every positive development occurring in Dallas.

Please read the article with an open mind. It is quite informative on many levels to say the least.

And it is a current, contemporary article. Not a stale year old article.

[phillyaggie]

From the linked article, published October 2010:

What isn’t in question is the still relatively high vacancy rate for the Dallas CBD’s estimated 30 million square feet of office space: 28.4 percent (as pegged by CBRE); 25.8 percent (according to Grubb & Ellis); and 30.1 percent (C&W). It’s a tenants’ market downtown—and elsewhere in North Texas—and it’s likely to stay that way into next year.

With landlords battling for deals, it’s no surprise that downtown rental rates have dropped. The average class A office rent ranges from $19.70 to $21.79 per square foot.

Whether for a new lease or a renegotiated one, the market response can be as much as a year’s worth of free rent. Tenant-improvement packages are growing more generous. And some landlords are offering drastically reduced rents over the long term.

So yeah, downtown Dallas has a lot of vacant office space, and rents are cheap.

And let's not forget the high profile loan default and sale of Victory development by its backers...they haven't quite yet filled that place out yet either, even after giving great incentives to law firms, etc. to move.

In a way, that can be good thing. All that vacancy leads to ultra-cheap rents, and that helps the Dallas boosters sell the city to companies in other states interesting in moving.

But I don't know how it helps with financing a spec development. Unless this Spire development already has tenants...

One Arts wasn't a spec build; it was built for Seven-11. And same goes for Hunt building, which was built by/for Hunt Oil that used to office at Fountain Place... which, being one of the trophy buildings of Dallas, is also still facing some vacancies when Hunt moved out, even though Tenet has taken up some space since.

[glowrock]

Originally Posted by skys the limit

Let's set one thing straight at the moment - the high vacancy rate in Downtown Dallas is primarily in old buildings of Class C and lower and some Class B, not the newer Class A buildings. The Class A buildings are generally 100% leased. There has been no new Class A office space in Downtown Dallas for years until One Arts and the Hunt Oil Tower were built in the last year or two along with the total renovation of the 31 story Art Moderne Mercantile Bank Building which has Class A office and retail on its lower floors even though the building is primarily apartments.

One Arts and Hunt Oil are fully leased, I believe, and the Mercantile Class A office space on the bottom two floors is leasing as well to the oldest architectural firm in Texas (http://dallas.bizjournals.com/dallas...3/daily42.html and http://downtowndallas.wordpress.com/).

The Spire will be a Class A office project, along with residential components.

I am not privy to the actual masterplan for the project. It may call for portions of the plan to be built first, then others later. I really don't believe the developers would build all of the highrises at the very same time, but I do not know that for certain.

As an example, the Park 17 project in Uptown located at 1717 McKinney Avenue fronting Woodall Rogers Expressway was just completed. It is two highrise structures built at the very same time, one 20 stories and the other 24 with retail and parking. One of the towers is residential and the other is office.

Demand for Class A office space in Uptown has been very strong. I have an article that talks about how the Class A office construction in Uptown has largely been pre-leased up to 70% even before construction was started on a project. So there has been a strong demand for Class A office in the immediate area, Uptown, for some time.

There is usually a lagtime between a project's announcement and its actual construction, this provides more time to pre-lease and market the properties. That makes good business sense.

Just because The Spire announcement has been made doesn't mean it is being built tomorrow. Next year more than likely, next month not necessarily but I do not know that for sure either.

But the Arts District area is very hot. Downtown Dallas has had no new Class A office space built since One Arts and Hunt Oil were built as brand new highrises, which are fully leased, and the lower couple of floors of the renovated Mercantile Building, which is leasing. So the prospects look pretty good that the project is viable based on the anecdotal and empirical data that is available.

Sorry, but you're dead wrong, my friend. Saying that Class A office space in Downtown Dallas is nearly 100% leased is either a flat-out lie at worst, or extreme naivete at best! Downtown Dallas has very high vacancy rates right now, not just in old B and C buildings, but in A's as well. Same for nearly every city across the country that experienced any sort of building boom from the early 80's to present day. So that also includes places like Houston, Denver, Phoenix, Los Angeles, the Bay Area, and many others...

Aaron (Glowrock)

edit: For the record, your last several posts have been extremely ridiculous. What I just read had nothing to do with a Houston/Dallas war, that's just in your head. Just makes no sense to build 1.7 million sf in a market with 25%+ vacancy rates!

[skys the limit]

You're obviously not reading, or understanding much very well:

http://www.dmagazine.com/Home/D_CEO/...wn_Dallas.aspx

And the bulk of vacancies in the Downtown Dallas CBD is in older buildings. There are always tenant movements going on, which means there will be some Class A vacancies as a result.

It really doesn't matter what you think of the project. What matters is what the developer thinks.

If you can read, this comes from the developer's own mouth:

http://www.dallasnews.com/sharedcont...e.198ce58.html

The developer states that it is all private money behind the project. They're not needing to seek funding elsewhere. The project will be done in phases, not all over night. The developer also points out that now is the time to aggressively start the project's marketing and moving forward.

Not my words ... but the developer's. You can blowhard all you want about vacancy rates but the developer is who should be the final word on this and they're clear about what they're going to be doing.

[TexasPlaya]

Originally Posted by skys the limit

I think quoting a stale article that is a year old concerning vacancy rates in any city, much less Dallas, is more than a bit disingenuous.

My quick google search led me to that article. However, I don't think a year old article is disingenuous at all considering it's only 1 year old.

The vacancy rate has gone down over the last year in Dallas' core CBD, from the close to 30% to around 25% now (of which the bulk of that is from Class C and Class B ).

But speaking of disingenuous, this is directly from the article you linked:

"What isn’t in question is the still relatively high vacancy rate for the Dallas CBD’s estimated 30 million square feet of office space: 28.4 percent (as pegged by CBRE); 25.8 percent (according to Grubb & Ellis); and 30.1 percent (C&W). It’s a tenants’ market downtown—and elsewhere in North Texas—and it’s likely to stay that way into next year."

I notice how you take the most optimistic view of the vacancy rate and I didn't note anything about the breakdown between class A, B, and C.

I might suggest that if you have questions concerning why Spire Realty Group is pursuing their 11.3 acre, 1.7 million square foot office project plus residential and retail space in Downtown Dallas now instead of Downtown Houston you might call them locally in Houston to inquire.

Houston's DT office market is actually doing favorably, especially compared to Dallas's. DT Houston has been constructing new offices tower regularly over the past decade. Two are near completion.

I know people are so beaten down by all of the negative news, especially Houston in the last couple of weeks. Houston just received two blows that are really quite bad for the city.

First, Houston loses almost a billion dollars in Federal mass transit grant money just a week ago because of illegal activities of the Houston rail authority, putting Houston's much vaunted plans to inaugurate light rail on multiple routes behind by years.

I've read the posts of various Houston people wringing their hands on "how as a result Dallas will just continue to expand its already existing lead in mass transit over Houston".

Since you brought it up...Houston hasn't lost the federal dollars for rail but it is a big setback. And trust me, no one who actually knows anything about LRT is worried about losing to Dallas. Dallas is currently 19th or 20th in terms of ridership/mile, which is pretty much mediocre.
http://www.apta.com/resources/statis...rship_APTA.pdf

I would rather be in Houston's rail situation instead of Dallas's

But I must tell you that it has been more than very irritating to hear the constant negative whine of people from Houston naysaying every positive development occurring in Dallas.

I'm not trying to be negative but realistic. I hope Dallas can improve its downtown, but it has been losing jobs to its suburbs at a faster rate than most major downtowns. Luckily it has been adding residents at a good rate but there is so much new residential construction in the vicinity that I have hard time believing there is demand for this project, even several years from now. But it's not money so if they can do it, then do it I guess.
[/QUOTE]

[skys the limit]

You, and the other Houston poster immediately before you, are taking this thread completely off topic.

If you want to discuss vacancy rates, Houston's downtown building, how bad Dallas is, etc., etc., take it elsewhere.

This thread is to discuss The Spire project in Dallas.

I will repeat this to you as well:

You're obviously not reading, or understanding much very well:

http://www.dmagazine.com/Home/D_CEO/...wn_Dallas.aspx

And the bulk of vacancies in the Downtown Dallas CBD is in older buildings. There are always tenant movements going on, which means there will be some Class A vacancies as a result.

It really doesn't matter what you think of the project. What matters is what the developer thinks.

If you can read, this comes from the developer's own mouth:

http://www.dallasnews.com/sharedcont...e.198ce58.html

The developer states that it is all private money behind the project. They're not needing to seek funding elsewhere. The project will be done in phases, not all over night. The developer also points out that now is the time to aggressively start the project's marketing and moving forward.

Not my words ... but the developer's. You can blowhard all you want about vacancy rates but the developer is who should be the final word on this and they're clear about what they're going to be doing.

If you want to discuss The Spire project, then do so.

If you want to blowhard about Houston, then start a separate thread to do that!

[TexasPlaya]

Originally Posted by skys the limit

You, and the other Houston poster immediately before you, are taking this thread completely off topic.

If you want to discuss vacancy rates, Houston's downtown building, how bad Dallas is, etc., etc., take it elsewhere.

This thread is to discuss The Spire project in Dallas.

I will repeat this to you as well:

You're obviously not reading, or understanding much very well:

http://www.dmagazine.com/Home/D_CEO/...wn_Dallas.aspx

And the bulk of vacancies in the Downtown Dallas CBD is in older buildings. There are always tenant movements going on, which means there will be some Class A vacancies as a result.

It really doesn't matter what you think of the project. What matters is what the developer thinks.

If you can read, this comes from the developer's own mouth:

http://www.dallasnews.com/sharedcont...e.198ce58.html

The developer states that it is all private money behind the project. They're not needing to seek funding elsewhere. The project will be done in phases, not all over night. The developer also points out that now is the time to aggressively start the project's marketing and moving forward.

Not my words ... but the developer's. You can blowhard all you want about vacancy rates but the developer is who should be the final word on this and they're clear about what they're going to be doing.

If you want to discuss The Spire project, then do so.

If you want to blowhard about Houston, then start a separate thread to do that!

It's your own fault for assuming my critique of Dallas was somehow related to me being a Houstonian or trying to derail this thread. Since we are talking about a potential project in downtown Dallas, I think vacancy rates and DT Dallas's current state is very relevant.

But anyways....

I still see nothing about older buildings, differentiation between the different classes of office spaces in the articles you listed. I've read them top to bottom a few times but it's possible I missed it.

Just because a developer says everything is great and is optimistic doesn't mean anything really. It is in Dallas's and the developers best interest to be optimistic and give good PR. Furthermore, this project could be scaled back significantly or a number of things could happen.

If they go through with it, good for them and good for Dallas.

[Shasta]

Sorry, but discussing vacancy rates is a VITAL part of the converstation when talking about a real estate proposal that contains over 1.7 million square feet of office space.

Unless they have secured funding in hand, this thing has a 0% chance of getting off the ground. Lenders aren't lending at the moment and they certainly aren't lending for large scale office projects in downtown Dallas. Despite your ridiculous claims, the downtown Dallas office market is abysmal. Dallas' vacancy rates have more in common with Detroit than Houston (where the overall vacancy rate is between 15-16% downtown among all types of buildings (A, B, C, and D).

[Dale]

Houstonians seem a little worried that this might get built.

[Dallascaper]

Originally Posted by JayPro

I apologize for my quotes around the metroplex in my post. In retrospect it was quite judgmental from the eyes of a suburban New Yorker whose metro area covers small parts of three states.

Three small states.

[TexasPlaya]

Originally Posted by Dale

Houstonians seem a little worried that this might get built.

Yep us Houstonians at SSP are part of a nefarious group to keep Dallas down....

[ladarron]

Originally Posted by Dale

Houstonians seem a little worried that this might get built.

Yes, I agree. Why does it seem like Houston is jealous of Dallas?????

[TexasPlaya]

Originally Posted by ladarron

Yes, I agree. Why does it seem like Houston is jealous of Dallas?????

Hey Ladarron I am dv1033 on CD, nice to see you stepped up an came over here.

But to respond to your comment... when people start talking out of their rear-ends about stuff Dallas is doing then they are going to get set straight. Just like when some Houstonians do the same (cough metro matt cough among a couple others cough).

[ladarron]

Originally Posted by TexasPlaya

Hey Ladarron I am dv1033 on CD, nice to see you stepped up an came over here.

But to respond to your comment... when people start talking out of their rear-ends about stuff Dallas is doing then they are going to get set straight. Just like when some Houstonians do the same (cough metro matt cough among a couple others cough).

If Houston was building a 100 story building I would actually be happy for Houston, but when we try to build a high rise building all hell breaks loose.

[TexasPlaya]

Originally Posted by ladarron

If Houston was building a 100 story building I would actually be happy for Houston, but when we try to build a high rise building all hell breaks loose.

Dallas has built many highrises without any Houstonian saying anything on this site. Don't confuse people questioning the ability of project going up with some sort of hate against Dallas.

[Dale]

Originally Posted by ladarron

Yes, I agree. Why does it seem like Houston is jealous of Dallas?????

I don't know. I just noticed that they rushed to this thread to deliver bad news.

[TexasPlaya]

Originally Posted by Dale

I don't know. I just noticed that they rushed to this thread to deliver bad news.

Who is they? I see nothing but a discussion here?