Downtown Progress

[Tucy]

What’s prompting ‘for sale’ signs at five dozen luxury condos in downtown Dallas?

https://www.dallasnews.com/business/rea ... town-area/

[Warrior2015]

All big city downtowns right now are suffering. So at least its not just dallas

[eburress]

Somebody else mentioned this in another thread, but it is concerning.

"The downtown protest marches also may have prompted some center city residents to head for the ‘burbs, agents said."

I hope this doesn't turn into another white flight.

[Matt777]

I was bored tonight and drove around Trinity Groves, Downtown, and Deep Ellum. It sure was crowded and lively. Downtown seemed almost as busy as before the pandemic, especially around the AT&T Discovery District. Deep Ellum wasn't as busy as a pre-pandemic Friday night, but it was still quite lively. It was good to see, but also concerning at the same time.

[eburress]

Oh that's great! REALLY good to hear!

[clcrash19]

Went to uptown with some buddies tonight.. drove through downtown tonight with some friends, can't believe how packed the discovery district was at 11:30 pm. It was slammed..

Also a good crowd at true kitchen over by the majestic off elm. pretty cool to see both

Really hope downtown gets it momentum back

[mdg109]

Went to Victory Park on Friday night and the patios were packed here as well from Dibbs all the way to Medina restaurant.

[Tivo_Kenevil]

Went to uptown with some buddies tonight.. drove through downtown tonight with some friends, can't believe how packed the discovery district was at 11:30 pm. It was slammed..

Also a good crowd at true kitchen over by the majestic off elm. pretty cool to see both

Really hope downtown gets it momentum back

Bishop Arts was lively this weekend too

[jetnd87]

I think the "flight" reaction is (a very understandable) overreaction. Once things settle - on the social and health fronts - the trend of many people desiring urban locales will return / hold. The biggest question mark in my mind is office space - it's not going to zero, question is how big will the haircut be. But the desire to live and play in denser, more interesting urban environments should maintain...

What we really need to figure out is affordable housing. Our society just cannot put up with another century of housing costs rising at the same rate. Build baby.

[cowboyeagle05]

Well according to the Downtown Residents Council Facebook group Downtown is currently dealing with lots of night time racing, loud car donuts in parking lots, scooter racing, motorcycle groups racing down the main thoroughfares revving engines plus the occasional homeless related screaming and or yelling. Like every day it seems like a new post related to one of those topics or the bright lights of The National.

[eburress]

I've noticed that too. It seems like the lux properties mentioned in the article are more in the Uptown area though, which it seems would be less affected by the shenanigans you see on the Downtown residents FB group.

[MC_ScattCat]

I've noticed over here in in North Oak Cliff I hear cars doing doughnuts and racing since this pandemic started. Usually around 11pm it starts. It's super loud an annoying even from a distance. It's becoming a problem here in Dallas.

[Tivo_Kenevil]

They do that on Commerce viaduct too

[Warrior2015]

Somebody else mentioned this in another thread, but it is concerning.

"The downtown protest marches also may have prompted some center city residents to head for the ‘burbs, agents said."

I hope this doesn't turn into another white flight.

I believe there will be more protests tonight. Its only a matter of time before people will really start to get fed up and start fleeing downtown in pretty large numbers. Constant marches, increased aggravated assaults, homeless , mentally ill, a lot of people will feel living down there isn't worth it. I hope I'm wrong because the city has come so far in progress, but if this trend continues I am certain this will be the case.

[exelone31]

It's like the old saying goes...the only thing that can stop a bad guy doing donuts in the middle of the street, is a good guy doing donuts in the middle of the street.

[eburress]

Somebody else mentioned this in another thread, but it is concerning.

"The downtown protest marches also may have prompted some center city residents to head for the ‘burbs, agents said."

I hope this doesn't turn into another white flight.

I believe there will be more protests tonight. Its only a matter of time before people will really start to get fed up and start fleeing downtown in pretty large numbers. Constant marches, increased aggravated assaults, homeless , mentally ill, a lot of people will feel living down there isn't worth it. I hope I'm wrong because the city has come so far in progress, but if this trend continues I am certain this will be the case.

It's definitely already happening. E.g., a shooting (which I hadn't heard about in the news) in my friends' Farmer's Market apartment community was the last straw for them. They're now heading out to the 'burbs.

[DPatel304]

While there may be people fleeing Downtown Dallas for the 'burbs, there are also still many people 'fleeing' other cities to come to Dallas and I'm sure many of them will continue to move to urban Dallas.

I guess we'll see what happens in the next few years, but I'm not really concerned for Downtown at this point in time.

[mdg109]

I went last night at around 8 pm, and I was preparing myself to run into protestors, but I didn't see anything. It was actually very calm. Homelessness seemed to be very under control compared to other nights, and it was also pretty clean. I'm assuming this is DDI doing a good job with security and the clean team.

[Cbdallas]

I have to say I did not ride the scooters due to age but I liked seeing everyone using them downtown and I think it made downtown much friendlier to tourist and younger people living there. It brought an energy to the downtown uptown area that I think we will miss especially while still under Covid conditions for the foreseeable future.

[Tivo_Kenevil]

IDK see what the problem is with the scooters. City hall complaining as if the downtown pedestrian infrastructure was good.

[eburress]

Poor pedestrian infrastructure is partly why the scooters are such an issue. According to the Downtown Residents FB group, people riding the scooters on sidewalks are "terrorizing" pedestrians and in several instances, running over their dogs.

[Tivo_Kenevil]

Poor pedestrian infrastructure is partly why the scooters are such an issue. According to the Downtown Residents FB group, people riding the scooters on sidewalks are "terrorizing" pedestrians and in several instances, running over their dogs.

Same can be said for Bicycles. This seems more of a policing problem than a scooter problem IMO. I think it's funny that it's an issue given that Downtowns are in life support at the moment. The more people down there the better.

[exelone31]

Poor pedestrian infrastructure is partly why the scooters are such an issue. According to the Downtown Residents FB group, people riding the scooters on sidewalks are "terrorizing" pedestrians and in several instances, running over their dogs.

In a few headlines I've scrolled by, it also sounds like the scooters have been shooting people as well. Seems like a good reason to get rid of them.

[Tivo_Kenevil]

Poor pedestrian infrastructure is partly why the scooters are such an issue. According to the Downtown Residents FB group, people riding the scooters on sidewalks are "terrorizing" pedestrians and in several instances, running over their dogs.

In a few headlines I've scrolled by, it also sounds like the scooters have been shooting people as well. Seems like a good reason to get rid of them.

That Dallas News article was so ridiculous

[cowboyeagle05]

Yeah from what I've seen kids and kid-adults will get together rent like 5 or 6 scooters and just run around downtown for an hour or two running up and down sidewalks once all the traffic from rush hour has gone and Downtown is more of a ghost town. The riders will run on sidewalks, around parks, wrong way on one way streets, screaming etc. I can understand the frustration and usually enforcement is supposed to be handled by Code Enforcement and how many code enforcement officers do you all see in Downtown at midnight stopping kids running a muck.

[Warrior2015]

Somebody else mentioned this in another thread, but it is concerning.

"The downtown protest marches also may have prompted some center city residents to head for the ‘burbs, agents said."

I hope this doesn't turn into another white flight.

People are already moving out and encouraging others not to move downtown smh

[eburress]

Things don't seem to be nearly as bad here as they are in other cities but clearly there's enough of *something* happening to scare people out of Downtown. Hopefully things don't further devolve with some defunding the police BS.

[The_Overdog]

We can be worried about downtown (and DFW in general) when projects start getting cancelled, the pipeline dries up, rent prices drop, and so on. Right now, none of that is happening.

Individual text messages are not indicators of anything other than personal drama, and the texts are less severe than those shared by moms in upper middle class school districts about individual schools.

[Tucy]

[quote="The_Overdog"]We can be worried about downtown (and DFW in general) when projects start getting cancelled, the pipeline dries up, rent prices drop, and so on. Right now, none of that is happening.
/quote]

CBRE 2nd Quarter 2020 Multifamily Market Report:
DFW market imbalance leads to slightly weaker occupancy & rent

http://cbre.vo.llnwd.net/grgservices/se ... 4c45a0e5fe

[The_Overdog]

Can you summarize? The link isn't working for me.

[Warrior2015]

Well so far occupancy is still good downtown according to the podcast I attended the other day. They seemed quite optimistic about the future of downtown.

[Tucy]

Can you summarize? The link isn't working for me.

The Dallas/Fort Worth multifamily market experienced modest downward movement in market fundamentals in Q2 due to COVID-19 and the economic downturn. The average effective rental rate declined 0.6% from the prior quarter. Occupancy edged down 30 basis points to 94.3%.

The area they call "Intown Dallas" (which includes, roughy, the CBD, Uptown, Deep Ellum and the Cedars) saw an effective rental rate decline of 1.5% from the prior quarter. Occupancy dropped 120 basis points to 92.9%, with negative net absorption of 162 units.

Oak Lawn/Park Cities saw effective rental rate decline of 1.2%, occupancy drop of 120 basis points and negative net absorption of 222 units.

[Tucy]

Well so far occupancy is still good downtown according to the podcast I attended the other day. They seemed quite optimistic about the future of downtown.

What podcast did you attend? Link?

[I45Tex]

For casual forum readers, 120 basis points is 1.2%, so their measurement of our current rental market (not the total housing market) is based on an Intown inventory of 13,500 ( = 162/0.012) apartments and an Oak Lawn / Park Cities area inventory of 18,500 ( 222/0.012)

[Tucy]

Debt Tied To Iconic Harwood Center Lands On DBRS Watch List After Risk Of Default

The property has a vacancy rate of 30%, which is in line with the rest of the Dallas Central Business District and apparently will rise to 38.5% vacancy if the GSA does not renew its lease this month (September).

Read more at: https://www.bisnow.com/dallas-ft-worth/ ... um=Browser

[Tucy]

While it's unclear if the coronavirus will eventually cause mass abandonment of Downtown areas when leases expire, the Dallas Central Business District itself has already been impacted, with more office workers staying home and businesses contemplating changes in their future footprints. "We have seen more move-outs in the Central Business District in the last 12 months relative to other sections of the metroplex," CoStar Senior Market Analyst Bill Kitchens told Bisnow. Over the past year, Downtown has lost major players like Tenet Healthcare, which moved farther north, and Baylor Scott & White, which relocated from the Central Business District to Deep Ellum, keeping it inside Downtown Dallas but well outside the traditional Central Business District. Kitchens said that through the second quarter of 2020, the entire metroplex saw office net absorption fall 815K SF, with Downtown Dallas accounting for 560K SF of the lost square footage. As of Sept. 16, weekly office occupancy in Downtown Dallas as judged by keycard and other building system recordings was back to 39.9% Downtown, according to a Kastle Systems study.

Read more at: https://www.bisnow.com/dallas-ft-worth/ ... um=Browser

[Tivo_Kenevil]

Ouch. I've always said Downtown should be more Neighborhood than office Park.

[I45Tex]

Neighborhood use could never get widely restarted, not for as many years as daily parking would pay more for a site downtown than residential.

...Residential which required a developer on the line -- interested people couldn't just fill out a starter neighborhood by subdividing a block and filling it with their own DIY live-work projects or their own upmarket Charleston side houses. And the developer would be having to go choose to do a residential building with relatively few comps rather than a tried and true office building.

In a couple more years there may be no point holding on for the next office tower developer to come knocking anymore. At that point people who want to live downtown may finally be the top of the market again. DTD may have a shot at a better plateau after they all slowly revive its personality, one neighborhood characteristic at a time.

[Tucy]

For casual forum readers, 120 basis points is 1.2%, so their measurement of our current rental market (not the total housing market) is based on an Intown inventory of 13,500 ( = 162/0.012) apartments and an Oak Lawn / Park Cities area inventory of 18,500 ( 222/0.012)

That's not quite correct. I believe the negative absorption is strictly a measure of how many units are occupied (i.e. there were 162 fewer units occupied at the end of the quarter. The occupancy/vacancy rate also takes into account new units delivered to (and, if applicable, old units removed from) the market. FWIW, the report shows an Intown inventory of 37,141.

[Tucy]

COVID-19 Ravages D-FW Office Market (from DMN)

Newmark Knight Frank and Transwestern studies show Central Dallas being hit particularly hard.

North Texas office occupancy dropped by almost 2.5 million square feet in the third quarter, following a smaller decline in the previous three months. Far North Dallas, West Plano and Frisco continued to gain office tenants during the quarter.

Transwestern's 3rd quarter numbers:
Downtown Dallas (CBD) -568,894 square feet (negative) absorption.
Uptown Dallas -229,307 square feet (negative) absorption
Central Expressway (a swath along North Central from the CBD to about Forest Lane): -304,039 square feet (negative) absorption.

https://www.dallasnews.com/business/rea ... ce-market/

[dukemeredith]

Far North Dallas, West Plano and Frisco continued to gain office tenants during the quarter.

Transwestern's 3rd quarter numbers:
Downtown Dallas (CBD) -568,894 square feet (negative) absorption.
Uptown Dallas -229,307 square feet (negative) absorption
Central Expressway (a swath along North Central from the CBD to about Forest Lane): -304,039 square feet (negative) absorption.

Wow.

[eburress]

What's the cause? Is it a coincidence that in-town office uses were more negatively affected by the pandemic? Is it a reaction to the unrest, in that companies don't want to be around idiots tearing their own cities apart? Thoughts?

[The_Overdog]

My reading of the report says the only outcome you could derive is 'pandemic'. Every submarket they track except West Plano/Frisco lost, and West Plano/Frisco's gain was small (110k sq ft). Rest of Plano, Richardson, Las Colinas, Irving, Denton, Garland, Allen all negative and if you are trying to make the case that civil unrest caused any issues for downtown, you'd have to explain their losses as well. Nearly every Ft Worth submarket is also negative. Also DFW Freeport lost 200k sq ft. Pandemic.

https://transwestern.com/market-reports

[I45Tex]

If YTD national, state, and Dallas employment growth are negative, but landlords aren't interested in lowering their rates to that degree, then you would expect downward occupancy to happen before downward price pressure can result in an agreeable price.

[Tucy]

My reading of the report says the only outcome you could derive is 'pandemic'. Every submarket they track except West Plano/Frisco lost, and West Plano/Frisco's gain was small (110k sq ft). Rest of Plano, Richardson, Las Colinas, Irving, Denton, Garland, Allen all negative and if you are trying to make the case that civil unrest caused any issues for downtown, you'd have to explain their losses as well. Nearly every Ft Worth submarket is also negative. Also DFW Freeport lost 200k sq ft. Pandemic.

https://transwestern.com/market-reports

True, but, it's also true that the central Dallas submarkets saw relatively greater declines than almost all other submarkets.

The central Dallas submarkets of CBD, Uptown, Stemmmons Fwy, Preston Center, Central Expy, Deep Ellum, Oak Cliff and Southeast Dallas had 1,215,864 square feet negative absorption . That is almost exactly half of the total DFW market negative absorption, in submarkets that comprise only 29% of the overall market inventory.

[homeworld1031tx]

I wonder if the demolition of some of those offices around 75 and walnut contributed to the massive reduction.

[tamtagon]

Does this include Tenet's move to Flower Mound?

[Tucy]

Does this include Tenet's move to Flower Mound?

Sadly, it probably does not, because Tenet's lease at Fountain Place runs through 2024, IIRC. That space (about 165,000 square feet) would presumably be reflected in the 1.2 million square feet of sublet space available in the CBD and in the 26.3% "vacancy with sublet" calculation, but I don't think it would be reflected in the (negative) absorption caculation.

[Tucy]

I wonder if the demolition of some of those offices around 75 and walnut contributed to the massive reduction.

Not sure which demolitions you are referring to, but if they've already been demolished, they were almost certainly vacant well before the start of the third quarter, so no, that would not have contributed.

[homeworld1031tx]

Two relatively large buildings between Meadow and Royal, right off of 75, were demolished over the last few months. They had been heavily damaged by the tornado from last October. I'm not at all sure how the lease cancellation works when you're building is destroyed.

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