Office Leasing Continues But Requires Creativity
There are a combination of renewals, new deals and expansions/extensions but at the end of the day, this is still real estate and “you just have to be creative and find the right solution for each tenant”, Mike Silliman says.
DALLAS—Faegre Drinker was created as a result of the February 2020 merger of law firms Drinker Biddle & Reath and Faegre Baker Daniels. The combined firm is one of the nation’s top 50 largest law firms with more than 1,300 attorneys and 22 locations across the US, China and the United Kingdom.
Faegre Drinker recently renewed its office lease at Comerica Bank Tower. The AmLaw-rated firm leased 37,179 rentable square feet on the 54th and 55th floors.
“Retaining a great tenant like Faegre Drinker really speaks to the appeal of the building,” said Paul Sharp, senior vice president of TriGate Capital. “We were glad to be able to find an ideal solution for them in this challenging environment.”
Daryl Mullin, Jon McNeil and Greg McCavera of JLL negotiated the lease with Mike Silliman, senior vice president of leasing with M-M Properties.
This renewal follows AmLaw-rated firm Morgan Lewis’ lease of 30,000 square feet, which reaffirms the building’s position among law firms and service providers, the leasing team observes. Overall, the DFW market is holding up relatively well given the circumstances, which require creativity, Silliman says.
“As to the current market, we have 140,000 square feet in leases. These are a combination of renewals, new deals, expansions/extensions and are in advanced talks with another 70,000 square feet,” Silliman tells GlobeSt.com. “At the end of the day, this is still real estate, you just have to be creative and find the right solution for each tenant, which I am grateful that we were able to do with Faegre Drinker.”
The Dallas/Fort Worth metro area lost 226,800 non-farm jobs during the 12 months ending May 2020, resulting in a 6% decline year-over-year, according to preliminary data from the Bureau of Labor Statistics. Financial services were the only office-using sector that gained jobs so far this year, at 2.8% or 9,000 jobs. After hitting 12.8% in April, the unemployment rate sat at 12.3% in May, pointing to a 770-basis point increase from the end of first quarter 2020.
The DFW office market continued another round of negative net absorption in second quarter 2020, which was enhanced by move-ins that have been pushed back to later in the year, according to a CBRE report.
Two large sublease vacancies contributed to 45% of total net absorption in the quarter, while negative direct net absorption stemmed predominantly from class-B properties. Sublease availability went up by about 450,000 square feet but still only 2.8% of total inventory, says CBRE research.