A massive office tour just a stone’s throw away from the renowned Galleria Dallas shopping mall is now on the market.
Located between Dallas Parkway and Noel Road, the 13-story high-rise known as Galleria North II has been owned by RREEF America LLC, an investment firm based in Chicago, since 2015. In 2018, significant renovations and upgrades were made to the structure, which was built in 1999.
Galleria North II currently boasts a high occupancy rate of over 90% — an impressive figure buttressed by notable tenants like Merit Energy, Robert Half International, and Clifford Fischer & Co.
As previously reported by The Dallas Express, the demand for office space took a nosedive earlier this year, with data suggesting net office leasing in the metroplex fell by almost 680,000 square feet.
The low occupancy rates seen during the COVID-19 pandemic have snowballed due to the remote work trend. Morningstar Credit Information & Analytics LLC suggested in a report that the DFW office vacancy rate rose from 18.3% to 22.4% between 2017 and 2022.
With low demand and high inventory across the commercial real estate sector, prospective tenants are reportedly seeking office spaces featuring newer facilities and amenities, prompting some office tower owners to launch massive renovation projects.
Meanwhile, some office towers have been targeted for conversion into residential units.
As covered by The Dallas Express, the demand for apartments in the Galleria Dallas area is quite high. To capitalize on this, developers like Trammell Crow Residential, Irving-based JPI, and Dallas-based PegasusAblon all have multifamily construction projects in the works.
Yet the City of Dallas is known to present certain challenges for developers, so how quickly all these projects will advance remains to be seen.
City officials previously struggled to manage a heavily backlogged permitting process, which helped fuel the low inventory of housing locally, as previously reported by The Dallas Express.
It remains to be seen whether the 308,000 square feet of office space at Galleria North II will stay as such under new ownership.
Currently, CBRE Group is looking for potential buyers for the tower, which sold for approximately $71 million in 2017.
