With move to downtown, tower things looking up
By: Steve Brown
Published: February 14th, 2014
Since the 1970s, downtown Dallas has been playing a defensive game with the suburbs when it comes to business.
Millions of square feet of office tenants have migrated to Richardson, Plano, Las Colinas and Frisco hunting newer workplaces.
But word this week that a major employer from California is considering a move to one of downtown’s office skyscrapers should be all the proof anyone needs that the game has changed.
Omnitracs LLC, a hightech firm based in San Diego that services the transportation and logistics industry, is eyeing the KPMG Centre tower on Harwood Street near the Arts District.
A consolidation of operations by Omnitracs and sister companies could bring as many as 1,000 jobs to Dallas’ core in a combination of local hires and out of state moves.
The deal would also rescue an aging skyscraper that has lost most of its major tenants in the last couple of years.
Omnitracs isn’t the only outside firm that’s taken an interest in downtown Dallas’ large supply of well-priced office space.
Over on Elm Street at Thanksgiving Tower, construction crews have started gutting the first five floors of office space that will soon house operations of Santander Consumer USA, a consumer finance company.
Santander, which is owned by an international banking giant, plans to move its offices and hundreds of workers from a building in the Love Field area to downtown.
With the supply of vacant office space drying up in many other business districts, tenants are increasingly looking at downtown. And new buildings that are going up have much higher rent costs than those downtown.
It for sure doesn’t hurt that in the last 10 years we’ve spent billions of dollars in the core of the city on knockout cultural facilities, new parks, transportation improvements and a convention hotel.
Businesses have certainly noticed.
“We have recently toured several suburban tenants through downtown buildings,” said Jeff Ellerman, vice chairman in the Dallas office of CBRE Group. “These buildings have everything, including plenty of expansion space for companies.
“As the suburbs are filling up, downtown has the value of light rail and it is able to house high-density office users,” Ellerman said.
The changes in Dallas’ central business district, including thousands of new apartment units that have increased the 24-hour population, are putting the area back on corporate America’s radar screen, said Mike Wyatt, executive vice president of commercial real estate firm Cushman & Wakefield Inc.
“These new office moves will light a fire under some other tenants that have been waiting on transactions,” Wyatt said. “It could have a catalytic effect.”
Some major companies have already made the move downtown.
In 2006, Comerica Bank moved its headquarters downtown from Michigan.
And AT&T, the worldwide telecommunications giant, moved its head offices there in 2008.
Hammond Perot, a director in the Dallas office of economic development, said the number of business inquiries about downtown, including requests from outof-state firms, is growing.
“You are seeing a return on that investment we have made,” Perot said. “Just drive around and see.”
While he expects the number of business workers downtown to grow in the next few years, Perot is realistic enough not to expect an outright exodus from the burbs.
“The folks that are looking for offices up in Frisco and Plano aren’t going to be looking downtown,” he said. “They are different markets with different cultures and workforces.
“Of course, I’m not saying it hasn’t happened and won’t happen again,” Perot said. “But it will be limited.”