DALLAS—According to Savills Studley's recent third-quarter office market report, Uptown and the Arts District in Dallas are flourishing, with new products there raising tenants' expectations and putting pressure on downtown landlords to upgrade properties.

"One reason why tenants have relocated from the downtown core to Uptown and the Arts District areas is to be in a more vibrant and up-and -coming environment, in order to attract and retain talent," Ric Kanatzar, managing director of Savills Studley's Dallas office, told GlobeSt.com. "In addition to the rent delta that exists between markets, the downtown core will need to think strategically about how to compete with these increasingly popular neighborhoods."

Other notables from the report:

• Leasing is rebounding, with a hike in new development: Leasing rebounded from 2.6 msf to 4.0 msf--the strongest activity since early 2014, while 4.2 msf of construction is under way with 15.3 percent pre-leased.
• Landlords are upping their deal-making strategies: To keep credit-worthy tenants in place and compete for new ones, landlords are undertaking capital improvements, such as constructing retail and residential components and building out common areas.
• Strong demand continues in Plano, Frisco and Uptown: Tenants looking for bigger blocks of space and lower rents can still locate more options in the Richardson Telecom Corridor.