With more than 300,000 square feet of space, it’s the largest chuck of empty office space in Las Colinas.
Investors who bought the former Abbott Labs building last summer and are remodeling it, couldn’t be happier with the timing of their deal.
“The market is filling up in Irving and there are going to be fewer options for big tenants,” said Bob Buell with Fults Commercial who is marketing the property. “There aren’t as many big blocks of office space left out there.”
Last year net office leasing in Las Colinas totaled almost 1 million square feet. The northwest Dallas County business district was second only to the Telecom Corridor in total office space demand in 2015.
In the last three years, net office leasing in the area has topped 2 million square feet — about the same amount of space as in two downtown Dallas skyscrapers.
Building vacancies in the Las Colinas area had dropped to near 13 percent at the end of 2015, according to Cushman & Wakefield.
That was before a buyer zoomed in on the largest available office property in Las Colinas — the 2-building, more than 500,000-square-foot former NEC America office campus on State Highway 114.
California-based health care giant McKesson Corp. is in talks to buy the buildings for a new office location.
With the NEC complex off the table, businesses hunting a large office block in Las Colinas will have to dig deeper for a location.
“It is a very tight market for large blocks of space,” said Greg Biggs, managing director with commercial real estate firm JLL. “If you don’t have time to build something, you have to consider other markets.”
Biggs said he knows of only about three buildings in Las Colinas that can accommodate office tenants wanting 200,000-square-feet of space.
He said the tight supply in that area is one of the factors driving a huge volume of office construction in the new Cypress Waters development on LBJ Freeway.
Several businesses have moved from Las Colinas or other areas of Irving to Cypress Waters.
Construction is about to start on renovations to the former Abbott Labs building at 1915 Hurd Drive.
“We currently have several full building prospects that we have provided information to,” Buell said. “Additionally we are tracking a handful of other prospects that are early in the process but should be good opportunities for the building.
“All in all, we are pleased with prospective activity to date and excited to get the building renovations underway.”
One of the major companies that’s in the market for new office space is Zale, the big jewelry retailer. Zale recently said that it plans to leave its long time office campus in Las Colinas and move to a smaller building in the area.
Zale needs more than 200,000 square feet of space.
If businesses can wait a year or more for a Las Colinas location, more than 3 million square feet of new office buildings are in the works for a development planned by Verizon and developer KDC.
The City of Irving is scheduled to vote next month on plans for the office and mixed-use campus Verizon and KDC want to build on DART’s commuter rail line near S.H. 114.
The planned project will also include apartments, retail space and hotels.
Energy firm Pioneer Natural Resources is already considering the Verizon project for a possible headquarters location. Pioneer is now in Las Colinas’ landmark Williams Square complex.
But Pioneer’s current lease still has more than three years remaining.
Developer Jeff Swope, who’s previously built office projects in Las Colinas, said he doesn’t expect to see a lot of speculative building in that market.
Swope said companies planning to move to new office locations including Cypress Waters will leave behind vacant space to be refurbished in Las Colinas.
“That is going to keep new product from springing up to a large degree,” Swope predicts.
The appeal of Las Colinas as a corporate office location has grown in the last five years with the addition of thousands of new apartments and construction of the DART rail line, real estate brokers say.
And developer Gables Residential has begun construction on its lakeside Water Street apartment and retail center on O’Connor Boulevard.
Work is now underway on Irving’s long-delayed entertainment center, which will be located on S.H. 114 next to the convention center.
“Las Colinas is a market that has come back very strong,” said John Alvarado, senior vice president with commercial property firm CBRE. “A lot of investors are looking at the transformation as dramatic and meaningful.
“There’s strong interest in properties there.”
The office building located at 1915 Hurd Drive in Irving and it’s the largest vacant office space in Las Colinas with more than 300,000 square feet. Shot Thursday, February 25, 2016 (David Woo/The Dallas Morning Ne
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