As a flurry of development projects sweep through the downtown district of Dallas, the urban core of one of the state’s biggest cities is finally receiving its due. Many of those projects are focused on redevelopment rather than new development, thus paving the way for the downtown area’s transformation.
Stretching between Pacific Avenue and Commerce, Elm and Main streets, the downtown district is now witnessing near historic sales volumes. While the sounds of construction fill the air for the moment, within the next two years, the look of downtown Dallas is likely to be completely different once all of the redevelopment is complete.
What exactly is driving so much activity and interest in Dallas’ downtown core? At the top of the list is a steadily increasing residential base, which continues to grow at a rapid clip as more and more transplants come to Texas to take advantage of the booming economy. Other factors driving interest in the transformation of the downtown area include the need to attract a growing Millennial workforce, which often prefers an environment more suited to a live-work-play setting.
While the city itself is deploying a significant amount of funding toward the revitalization of the downtown area, private investors have not been shy about lending their support, as well. Dallas News reports that investors have been betting big on downtown Dallas as office rents continue to spike. In fact, investors have poured hundreds of millions of dollars into downtown office projects, all in the hopes of tapping into the resurgence taking place within the central business district.
Among the biggest transactions to date is the purchase of the 60-story Fountain Place building, located on Ross Avenue, to the tune of nearly $200 million. The building was purchased earlier this year by Goddard Investment Group and Metropolitan Life Insurance. In addition to the hefty sales price paid by the two firms, millions of dollars will also go into remodeling the 28-year old building. A new parking garage will be included in the renovations.
Dallas News goes on to report that more than $1 billion has been funneled into purchasing and repurposing downtown office towers since the recession. While that may sound like a lot of money, the timing could not be better, as rent prices in nearby Uptown have topped $40 per square foot. By comparison, rents in the old financial district currently average a little more than $20 per square foot. Ultimately, investors are hoping that rents and values in the downtown area will be swept along with the tide of soaring Uptown rents.