On the same day that AT&T announced its decision to relocate from Downtown Dallas to Plano, Dallas Mayor Eric Johnson spoke with the New York Post about Zohran Mamdani’s inauguration. Johnson said, “What was already a trickle is going to turn into a flood of individuals and companies who have called New York home for a long time, moving to Dallas.”
AT&T’s move will leave behind a 2 million-square-foot vacancy in Downtown Dallas by late 2028. This comes as office vacancy rates in the city center were already averaging 33 percent, according to Partners Real Estate. The announcement adds pressure on an urban core that has been struggling with high vacancies.
Texas Governor Greg Abbott commented on the situation at a campaign event in Fort Worth, saying, “Local leaders, it’s their responsibility to ensure that homeless people are not endangering their citizens.” While Abbott did not mention Johnson by name, his remarks appeared directed at local leadership regarding the challenges facing downtown.
In addition to AT&T’s departure, uncertainty surrounds Neiman Marcus’ flagship store downtown after Saks Global CEO Marc Metrick stepped down amid rumors of bankruptcy. Saks had previously announced plans to close the landmark store at 1618 Main Street but delayed those plans following discussions with city officials about possibly reimagining the historic property.
Another setback for Downtown Dallas came when Shawn Todd of Todd Interests revealed he would return control of The National skyscraper at 1401 Elm Street due to foreclosure by Starwood Capital Group. The building had undergone a $460 million conversion into a mixed-use project and received $150 million in state and local incentives. Todd stated, “We’ve been committed to downtown,” adding, “We’ve been committed for 20 years. In 35 years, our firm has never lost money — this is the first year that it’s happened.”
Elsewhere in Texas real estate news, syndicators like Jon Venetos of Lurin Capital and Tides Equities are facing significant financial distress through lawsuits and foreclosures. Tides Equities may lose its Highland Meadows apartment complex in Dallas after defaulting on a $76.4 million loan; this is part of over $800 million in troubled commercial real estate debt flagged for foreclosure auction this month.
In Houston’s luxury housing market, half of Harris County’s ten most expensive home sales last year occurred within one square mile in River Oaks. The highest-priced sale was an estate at 2110 River Oaks Boulevard designed by John Staub and last listed for $18.9 million.
Meanwhile in Austin, Google has moved into Sail Tower at 601 West Second Street after signing a full-building lease in 2019. The tower had remained vacant since its completion in 2022—a situation estimated to have cost Google approximately $53 million annually in rent—though Google is now marketing six floors for sublease with Digital Realty Trust as a potential subtenant.
