The downtown core of Dallas is witnessing a significant rise in office vacancies, leading business and neighborhood leaders to call for enhanced security measures to combat crime and address homelessness. This push aims to revitalize the area and attract both workers and residents back to the historic business district.
According to data from the commercial real estate intelligence firm CoStar, vacancy rates in downtown Dallas increased markedly from an average of 21.3% in 2019 to 27.1% in 2024.
Several factors contribute to this downturn, including aging buildings, a scarcity of modern amenities, a lack of parking, and mounting safety concerns. As some stakeholders suggest, these concerns, or at least perceptions of safety issues, are driving people away from downtown.
In stark contrast, Uptown — characterized by its newer buildings and higher rent rates — boasts a vacancy rate of under 20%. Moreover, the area is set to add an additional 2 million square feet of office space over the next two years, representing nearly 75% of the city’s total office construction pipeline. Meanwhile, downtown will see no such additions.
Research by Downtown Dallas Inc. (DDI), a public-private nonprofit organization, indicates that improving crime rates downtown could recover an estimated $4 billion in lost property values. The DDI’s findings cite a significant decline in property values for notable buildings, including an 11% drop for Comerica Tower and a 1% decrease for Bank of America Plaza, the city’s tallest skyscraper, since 2010.
Furthermore, property transactions in downtown fell from $1.35 billion between 2017 and 2019 to approximately $850 million between 2022 and 2024, a 37% drop-off.
While overall property values downtown have seen a 4% increase since 2010, the DDI warns that even one struggling property could drastically affect the broader market.
Economic challenges, driven by rising interest rates, pose further obstacles for landlords managing properties with low occupancy rates. This situation complicates their ability to secure loans upon refinancing.
The high cost of maintaining public safety in downtown Dallas has become a significant concern for property owners. Brian Bergersen, CEO and president of Spectrum Properties, manages various properties, including around 400 apartments and 100,000 square feet of retail space near the Dallas Farmers Market. He cites public safety issues as costing him approximately $750,000 annually.
Bergersen emphasized that for property owners downtown, addressing safety and homelessness is the top priority. He noted that recent efforts to tackle these issues in a more aggressive manner are essential for restoring confidence in the area.
Retailers continue to face challenges in downtown’s corridors, particularly along Main, Elm, and Commerce streets, as office tenants leave. Bergersen questioned the future of retail and restaurants, as well as the viability of public parking garages when city streets lack daytime workers.
Despite these challenges, some businesses near the Farmers Market are thriving. Bergersen pointed out that stores like Jason’s Deli and CVS maintain strong sales, which is promising for the downtown area.
With the Farmer’s Market attracting approximately 1 million visitors annually, Bergersen remains hopeful that upcoming events like the 2026 FIFA World Cup and renovations at the Kay Bailey Hutchison Convention Center will bolster the downtown economy.
An examination of the broader Dallas market illustrates a clear divide. The appeal of Uptown, known for high-end dining and luxury shopping, has secured many significant corporate relocations from downtown, including firms like Invesco and Goldman Sachs.
Research from DDI shows that property values in Uptown have skyrocketed by 242% since 2010, a stark contrast to the more troubled downtown.
Bill Kitchens, director of market analytics at CoStar, explained that downtown’s higher vacancy rates stem from the larger size of its office towers and their outdated designs. Many of Dallas’ tallest structures, mostly clustered downtown, were constructed between 1954 and 1987, leading to a mismatch with current tenant preferences.
Uptown’s allure lies in its modernity and amenity-rich offerings, making it a sought-after location for businesses. Kitchens remarked that Uptown has developed into a lively retail destination, in contrast to downtown.
As crime rates continue to rise, the DDI and other downtown stakeholders, including the city and Dallas Citizens Council, are taking steps to enhance public safety. DDI reported a 34% increase in crime downtown from 2019 to 2023, predominantly in property crimes such as burglary and theft, although violent crimes, including homicides and robberies, saw a decrease.
Crime hotspots are concentrated around public spaces, parks, and transit hubs, particularly near DART stations and bus stops.
To address these issues, DDI is collaborating with the city to deploy an additional 35 Dallas police officers downtown and is establishing a central command post in the area this summer. Jennifer Scripps, DDI’s president and CEO, highlighted the organization’s long-standing advocacy for increased policing downtown and noted that recruitment and retention efforts have led to a rise in police presence. She pointed out that year-to-date, overall crime has decreased by 24%, with significant reductions in nonviolent offenses.
Beyond enhancing police presence, the initiative aims to reduce homelessness in the downtown area by establishing measures such as restricting sleeping in public spaces and directing individuals to shelters.
DDI’s leadership is optimistic that these measures will bring back vibrancy to downtown, allowing the area to benefit from previous investments in public and private developments, including new parks and apartments.
Scripps highlighted the ongoing rejuvenation of the Arts District, located in the northern part of downtown, as an example of successful reinvestment efforts.
Eric Fleiss, CEO of Regent Properties, observed that while many downtown buildings face challenges, those that have undergone renovations are faring well. Following the acquisition of Trammell Crow Center in 2022 by Regent, the property has become a notable success with over 90% occupancy during peak work hours.
Fleiss attributed this success to long-term initiatives such as the development of Klyde Warren Park, which has transformed the Arts District into a thriving submarket, insulated from challenges faced by other areas.
He noted that major renovations in the Arts District, including works at the Trammell Crow Center, the JW Marriott hotel, and One Arts Plaza, have driven property interest and occupancy numbers higher.
Scripps remarked that the lack of crime in the vicinity has further incentivized investment in the Arts District, distinguishing it from other parts of downtown burdened by homelessness.
To foster a holistic revival of downtown, DDI has longer-term plans to introduce more parks and green spaces while also converting vacant office buildings into residential units to appeal to a growing community.
Fleiss emphasized that Dallas is among the most progressive U.S. markets regarding converting office space for residential use, rivaled only by New York City. Given Texas’ population growth, he believes the demand for new or converted residential options in downtown will rise significantly.
With an estimated downtown population of around 15,000 and more than 10,000 apartments available, Fleiss predicts that an increase in residents will naturally lead to a decline in crime.
He acknowledged the ongoing issue of homelessness but commended the city for its improved management of the situation. He believes that as more people take residence downtown, it will encourage the emergence of new restaurants and retail spaces, fostering a safer and more vibrant community.
In conclusion, a DDI representative confirmed that the organization will continue to evaluate the outcomes of public safety initiatives, noting positive trends in quality of life metrics since the last quarter of 2024. Scripps expressed cautious optimism about the future, stating, “We are seeing good trends and receiving positive feedback, though we acknowledge that this journey is not without its difficulties.”
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