Strong Migration Lures Firms, Drives Expansions

DALLAS—Dallas/Fort Worth continues to lead the nation’s major metros in absolute job growth, a large chunk of which includes traditional office-using positions, according to a second quarter report by Marcus & Millichap. Increased population growth of the 20-to-34-year-old age cohort and strong net migration is luring companies and driving expansions in the metroplex.

This strong pace of hiring has underpinned tenant demand for quality space, such as M-M Properties’ signing of another law firm at the Comerica Bank Tower at 1717 Main St. Touchstone Bernays has leased 20,813 rentable square feet on the 34th floor of Comerica Bank Tower, relocating to the building from Renaissance Tower. From the tenant’s perspective, the move allowed Touchstone Bernays to relocate to new space and successfully positions the firm for the next generation.

“While the move was only a few blocks, we feel that our new premises in such a quality building and in a much more vibrant area of downtown enables us to re-energize our attorneys and staff while also providing our firm with an excellent base for the future,” says Ron Johnson, managing partner of Touchstone Barneys.

The lease was arranged by Mike Silliman, senior vice president of leasing with M-M Properties, the in-house leasing company for the building owner. Sanders Thompson, principal with Transwestern, and Gifford Touchstone with Gifford Touchstone & Company Realtors represented the tenant.

“Comerica Bank Tower also provides one of the top walkable neighborhoods in the city (93 walk score),” says Silliman. “Combine this with the overall savings that can be achieved here versus options in the Arts District and Uptown, at half the cost of Uptown, and the increased profitability has to be a competitive advantage for the firms in the future. Not only do you get all of the tools needed to recruit and retain talent but the firms that office here are more profitable.”

Comerica Bank Tower has the highest number of AmLaw-rated firms in the city and its goal is to continue to attract more law firms.

“Mike (Silliman) had a great modern law firm space available on the 34th floor that fit them like a glove,” says Thompson. “Add that to the quality of the building, the walkability of the neighborhood and the rental rate; it made this a compelling option for Touchstone.”

The lease brings Comerica Bank Tower to 73% leased and Silliman said there are more announcements coming soon.

“Real estate is a people-to-people business and the fun thing about this deal was the team we got to work with in putting it together. The co-brokers, Sanders Thompson and Gifford Touchstone, are top notch. Gifford’s father founded Touchstone Bernays in 1946, so it isn’t every day to you get to work on a transaction with someone who has a legacy connection to the tenant. Ron Johnson and Mark Smith with Touchstone Bernays were also just great to work with; really high-caliber individuals. We have had a real nice run at the building relative to signing good tenants and good people,” Silliman tells GlobeSt.com.

DFW corporate growth is driving demand for quality space and construction has picked up considerably in response. Nearly 23 million square feet of space was completed during the past three years and an additional 7 million is expected to be placed into service throughout 2018, says the Marcus & Millichap report.

While many of the completions during the past few years were focused on fulfilling needs for corporate expansions and relocations, a significant portion of this year’s deliveries includes speculative spaces. This increase in speculative construction has begun to place upward pressure on metro-wide vacancy and slowed rent growth as space begins to lease, according to Marcus & Millichap. One of the larger spec projects underway is the 250,000-square-foot, The Sound at Cypress Waters, located not far from DFW International Airport.