CBRE is moving its executive operations to a new space in Uptown, but not the one previously expected. Construction is indefinitely delayed on the $200 million office tower that was meant to become the company’s headquarters.
The Dallas-based real estate giant expects to begin moving to offices at 2121 Pearl Street, in the Park District building, by late summer, the Dallas Morning News reported. CBRE will lease 67,000 square feet in the building that overlooks Klyde Warren Park.
CBRE moved its global headquarters from California to Dallas in 2020 with plans to construct a new headquarters at 2401 McKinney Avenue. Developer Trammell Crow, which is owned by CBRE, had been expected to build the tower by the end of 2024. But as construction was further delayed, that goal became more unlikely.
CBRE CEO Bob Sulentic confirmed the “indefinite delay” but said the firm plans to complete the build at a better time. A company statement pinned the delay on the Dallas office market conditions.
“We still believe it’s one of the best office sites in America,” Sulentic told the DMN. “And that site is going to get built. It’s a 700K SF office building and it doesn’t make sense right now. But we still need to have a global headquarters.”
A slowdown in investment sales brought on by rising interest rates has eaten into CBRE’s income, according to a recent earnings report.
The commercial brokerage’s net income plummeted by 88 percent year-over-year in the fourth quarter of 2022, when the firm experienced a “slightly larger-than-expected decline in transactional revenue,” the earnings report stated. CBRE’s net income in 2022 fell by 23 percent.
When CBRE moved to Dallas, it brought 460 jobs and invested $29 million into its offices at 2100 McKinney Avenue. It created 550 new jobs and invested $13 million into its Richardson operations center.
The Park District, where CBRE will be moving, includes an office tower, residential high-rise and retail stores. It was also developed by Trammell Crow and is owned by Metlife.
“That’s a building that we built and developed,” Sulentic said. “It’s in the part of Dallas we want to be in.”
Park District will give CBRE a high-profile location where Uptown meets downtown and is the epicenter of much of the city’s shifting office landscape.
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“We’re not a big headquarters company,” he said. “We have 500 offices out there. But Dallas is our home officially now. It’s proving to be a good place for us.”
Uptown and downtown Class-A office space is still in demand, but many of Dallas’ submarkets are facing a steady decline in inventory as Class-B space becomes less relevant and many companies continue work-from-home schedules. Some of those Class-B spaces are being targeted for office-to-resi conversion projects.