DALLAS With its heart set on 17Seventeen McKinney, the KellyMitchell Group has landed a spot in the nearly full office building after battling first rights of refusal, not once but twice, to earn bragging rights to the prestigious Uptown Dallas address.
It’s a sign of the times in the Uptown submarket, where class AA office buildings are commanding triple net lease rates as the metropolitan area posts its highest rents in 10 years.
“Certain submarkets are truly a landlord’s market. Landlords are testing the water with triple net office leases, which are being well received in the market,” says Sharon Friedberg, senior vice president of Bradford Commercial Real Estate Services. “Until a year ago, this was unheard of in Dallas. It’s only possible in tight, tight markets, such as Uptown and Far North Dallas.”
St. Louis-based KellyMitchell has secured 8,712 sf on the 16th floor of 1717 McKinney Ave., taking a suite that’s bound to another through a delayed expansion right in a few years. The 22-story building, totaling 361,524 sf, has just one suite remaining, 2,516 sf.
“We realize we could get booted out in a few years due to the first right of refusal, but KellyMitchell was focused on this building,” Friedberg says. The underlying
motivation is the firm’s market executive lives close to 17Seventeen another sign of the times in Uptown, where more and more professionals are choosing to walk to work.
“We did have other options in the submarket, but the immediate area was very limited,” adds Friedberg, who with Melanie Hughes, also a senior vice president, are Bradford’s top office leasing brokers.
KellyMitchell suite will be ready for occupancy in late August or early September. The IT consulting firm currently occupies an executive suite in the Crescent. KellyMitchell, which will be hiring IT professionals locally, has offices in 14 cities and service locations in more than 45 states.
Industry reports for first quarter office leasing show Uptown is the third tightest submarket in Dallas, trailing Preston Center and Far North Dallas, north of TX 190. Class A rents have spiked 15% since 2010 while class AA, like 17Seventeen, are triple net asks at this time. Uptown’s vacancy rate is 11.3% in the near 11-million-sf inventory.
“Uptown spaces are going fast and rates are incredible,” Friedberg says.
17Seventeen’s landlord, Granite Properties, was represented by its in-house leasing director, Robert Jimenez. The office property boasts Stephen Pyles’ Stampede 66 restaurant, one-acre amenity deck on the seventh floor, fitness center, outdoor pool and secured parking. The adjacent residential tower, Gables at Park 17, contains 292 rental units.
June 30, 2014