Dallas has a thriving restaurant scene, and with several new projects in the works in Uptown and the Arts District, even more options will soon be on the menu.
Del Frisco’s Double Eagle Steakhouse announced in October that it has leased 13,000 square feet for a two-story restaurant at Crescent’s McKinney & Olive tower. Nearby, just steps from Klyde Warren Park, another 7,500 square feet of restaurant space will anchor Invesco Real Estate and KDC’s 1920 McKinney office project. On the other side of the park in the Dallas Arts District, Chef Stephan Pyles will move his signature restaurant east on Ross Avenue to a new 6,000-square-foot space in Craig Hall’s new development.
Mitch Traub, senior vice president of brokerage services with The Retail Connection, is handling retail leasing at 1920 McKinney. He says talks are in the works with a potential restaurant tenant he describes as a “great concept that has not entered the market yet.”
Competition is fierce, Traub says. “There’s a lot of people looking and not enough space,” he says. “Uptown is one of the hottest markets in the country.”
Office developers are jumping in to help meet that demand, while at the same time diversifying their projects and adding amenities for tenants. It makes sense, says Jack Gosnell of UCR Urban. He and UCR colleague Jack Breard negotiated the Del Frisco’s lease and are marketing remaining space in the development. Even in a market with a number of restaurant strongholds—including emerging hot spots like Trinity Groves, Bishop Arts District, Lower Greenville, and Deep Ellum, Uptown stands out.
“Those are edgy restaurants with high-end, progressive concepts,” Gosnell says. “As far as being a powerful, existing city center, none of them quite match up to Uptown.”
Scarcity of land coupled with high-density zoning throughout much of Uptown is creating the opportunity for mixed-use, vertical development anchored by retail and restaurant space. On the retail front, Whole Foods, scheduled to come online in 2015, will anchor the Gables Residential apartment and townhome development.
It’s part of a trend in urban redevelopment that Gosnell says begins with grocery and drug stores, dry cleaners, and home furnishings retailers.
“Finally, once density hits a certain level, you start seeing clothing and amenity-style, specialty retail” Gosnell says. “I think Uptown is just starting that stage of urban redevelopment where we are getting residential densities deep enough for substantial retail development.”
Tenants are willing to pay to be in Uptown. Nathan Wood, senior vice president with the retail services division at the CBRE Dallas office, says he has seen rates range from $50 to the mid-$60s per square foot triple net for Class A retail space.
“There’s absolutely more demand than supply,” Wood says. “We probably have more retail space coming online in Uptown than we have in any period I can recall. Dallas is growing up, and we are getting a lot of attention, in both the retail and restaurant categories.”