Rooftop bars, outdoor terraces and club lounges aren’t just for high-end apartment complexes.
A wave of new office space is at the heart of an evolution in Dallas’ Uptown neighborhood. These buildings have smart technology, bike valets and green space, all built alongside high-end restaurants and boutique retail centers.
Uptown encapsulates about one square mile north of downtown with some of the most sought-after commercial real estate in the city. Uptown itself is relatively new, branded in the early 2000s as development began to take off. It’s one of the few walkable areas in notoriously unwalkable Dallas, and it’s one of the densest neighborhoods in the city. It’s made up of high rise offices, retail centers, nightlife, hotels, restaurants and lots of apartments.
Development has gone into overdrive here recently.
An estimated $750 million worth of office and mixed-use projects are being constructed across the district. Stream Realty Partners’ $200 million the Quad, a redevelopment of the old Quadrangle shopping center, is set to open next year at 2828 Routh Street. And it’s a point of pride for the firm.
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“The Quad is the largest single investment we’ve ever made in Dallas,” said Mike McVean, Stream’s co-founder, during the Quad’s groundbreaking event last year. “If you’re not a big player in the urban core of your home market, then you’re not a player.”
The 12-story, 335,000-square-foot office building will have a slew of high-end tech and amenities to keep modern tenants happy. It sits on 4 acres, with outdoor space and five retail and restaurant buildings to complement the aesthetic.
Stream’s melodramatic tagline to describe the Quad, “the dawning of a different Dallas,” rings true in a submarket practically built for Texas newcomers.
The bland commercial office projects that were popular in Dallas in the ’80s are no longer viable as construction costs have soared and remote work seems here to stay.
“When people move to Dallas, Uptown is the place where people look first and they look last,” said Ramsey March, managing director and partner with Stream Realty, who is overseeing the Quad project. “The way real urban environments work is you have this knitting together of different micro neighborhoods, and that’s what corporations desire to be a part of. There’s a fabric to it. Uptown is where that is and where Dallas business happens.”
Stream Realty Partners is a mid-sized office and industrial REIT based in Dallas. Stream has been keeping its focus on Texas recently with a six-story office building in East Austin and a 3.4 million-square-foot industrial park in Mesquite. But make no mistake, the Quad is the firm’s golden child.
Stream has already leased 20,000 square feet on the second floor to Chicago Title and the entire 32,000-square-foot third floor to Revantage. The remaining floors are available, including the 12th floor, with its fully stocked bar and lounge exclusively for tenants.
Why Uptown?
Stream began conceptualizing the Quad in 2019, just before Covid struck, March said. And while the firm took a wait-and-see approach throughout the pandemic, the original plan for the Quad never changed.
“There has probably been a decade-long trend of increasing office amenities and adding open space, but I really think Covid put it on steroids,” March said. “Before Covid, if you built a good product and timed the market right, you could almost get away with going skinny on amenities. But what we’re seeing now is, you can’t get away with anything less than fully embracing all of that.”
“All of that” is much more expensive than none of that. To see returns, firms have to build in submarkets where they can charge rents to make these high-end buildings economically viable. And no market in Dallas can get away with charging more per square foot than Uptown. The average price of office rent is $33 per square foot in Dallas, according to JLL. But in Uptown, the average is nearly $60 per square foot.
Even at higher prices, tenants are more willing to stay in Uptown compared to anywhere else in Dallas-Fort Worth. At the close of 2022, the region’s office vacancy rate was 25 percent, or about 57 million square feet, according to CBRE. In the Uptown submarket, the vacancy rate is closer to 17 percent or 2.4 million square feet.
“We don’t have 800,000-square-foot Google leases or 600,000-square-foot Meta leases. Uptown is really highly diversified. It’s unusual to find a tenant in Uptown over 100,000 square feet, so unlike those other markets, were not as susceptible to an industry just backing out and pulling the plug on the market,” March said.
The continual 50-50 split of Class AA office and multifamily in Uptown is the key to keeping the district thriving, said Scott Lake, a partner and broker with Davidson Bogel Real Estate in Dallas.
“The strongest residential rents are just off the Katy Trail. That’s where people want to be,” Lake said. “But Uptown is fueled by the office side of things, and other markets are losing their tenants because their buildings are old and aging and they can’t compete with the shiny glitz and glam of Uptown. We are just seeing more of an urban swell, and Uptown is gaining momentum.”