Insurance Firm Shedding Lease in Granite Properties Building

Uptown has emerged as the darling of Dallas’ office sector, but that doesn’t mean it’s immune to the challenges that have pummeled office markets across the nation since the pandemic.

Gainsco Auto Insurance plans to vacate its 107,000-square-foot lease across five floors in a 12-story building, at 3333 Lee Parkway, when it expires in October, Bisnow reported.

Gainsco’s departure will void almost 45 percent of the 239,000-square-foot building, posing a big problem for the landlord, Plano-based Granite Properties.

The building is 80 percent leased, according to CoStar. Triple-net lease space there goes for $30 per square foot, according to an online listing. Building amenities include access to the Katy Trail, showers with towel service, an outdoor putting green and a tenant lounge and conference space. It was built in 1981 and has been renovated.

It’s unclear if Gainsco has another lease lined up, or if it intends to downsize. If it does the latter, Gainsco would join a growing list of firms reducing their office footprint or vacating their space entirely, highlighting the impact of the remote-work movement.

EnLink Midstream, for instance, is shrinking its operation by 78,000 square feet at One Arts Plaza in downtown Dallas, and McKesson Corporation has listed 270,000 square feet for sublease at its headquarters in Irving’s Las Colinas.

North of Dallas, Texas Capital Bank just put over 202,000 square feet on the sublease market at the Lakeside Tower in Richardson. The company’s imminent departure will leave the property almost completely vacant, with just 1,600 square feet of occupied space.

At the end of 2023, roughly 71 million square feet, or 30 percent of total office inventory, was available in Dallas-Fort Worth. Leasing activity also hit a two-decade low, with only 11.9 million square feet, or 5.1 percent of inventory, signed last year, the outlet reported, citing data from Avison Young.

“Until leasing activity picks up meaningfully, it will be difficult to bring down the current high vacancy and availability rates to more normal levels,” Avison Young analysts wrote.

—Quinn Donoghue