The $78.3 billion State Teachers Retirement System of Ohio has acquired the Turtle Creek office building in Dallas. The 140,000-square-foot office building is located at 3131 Turtle Creek Blvd. The purchase price was not disclosed, however, news sources reported the building sold for $350 per-square-foot or about $49 million.
Cardinal Capital Partners, a Dallas-based firm who purchased the tower in 2014, was the seller.
As we enter the eighth year of this real estate cycle, Dallas–Fort Worth has shot
to the top as one of the most in-demand office markets in the country, reports JLL in its Q1 2018 Dallas–Forth Worth Office Insight report. Despite the fact that rental rates are reaching 15 percent above their prerecession highs and unemployment is closing in on 3 percent, the cost to do business in DFW still remains at least 20 percent cheaper than the top coastal cities. The DFW office market has accommodated this demand by delivering more than 20 million square feet in the last three years with another 7.5 million under way. Preleasing activity appears healthy with 69 percent of the space under construction already spoken for, reports JLL. However, when factoring out single-tenant, build-to-suit projects, this figure drops to 35 percent. While this is not a new trend in DFW, its affect is felt as rental rate growth begins to wane, said JLL.
Expect rising occupancy costs in the coming quarters to be primarily driven by higher operating expenses as appraised property values — and therefore taxes — continue to increase, JLL reports. To accommodate for this, base rental rate growth could further slow, especially in Uptown. While absorption will continue to be driven by large users occupying new campuses, JLL is currently tracking over 100 requirements in the $25,000 to $100,000 square-foot range, so the firm is optimistic that the abundant new multi-tenant spec space will get absorbed in the coming quarters, even in the absence of another mega-deal.