CBRE’s new Dallas HQ appears to be stalled
Truckluck’s seafood restaurant is still open and operating at 2401 McKinney Avenue in Dallas, a prime indication that CBRE won’t be opening its new headquarters there next year as planned.
Upward-spiraling costs of construction, wide staff layoffs, and a $400 million cost-reduction program announced by the global real estate services company last fall are among the reasons CBRE, for the time being, may be keeping its base in Los Angeles, according to a report from Propmodo.
Dallas had become a nexus for CBRE in recent years. In 2021, it announced plans to put $42 million into its new HQ and an operations center in nearby Richardson. It had also become the base for many of the company’s senior executives, CEO Bob Sulentic among them. Despite the onset of COVID, CBRE pledged to create up to 1,000 new jobs in North Texas.
CBRE estimated a cost of $200 million for the 27-story, 750,000-sq.-ft. office building in uptown Dallas with retail on the ground floor. That estimate is now well below what would be expected during a time of nationwide labor shortages and rising materials costs.
Off the table, most likely, is the $4 million in incentives offered by the city of Dallas in 2021 if the project was completed by the end of 2024. “It’s highly questionable if CBRE can meet those goals at this point. The construction hasn’t started yet, and it could take two-and-a-half to three years to finish,” noted Propmodo.
Also likely to be renegotiated is the financing package CBRE agreed upon in 2021 because of the precipitous rise in construction costs that has taken place since then.
CBRE’s incentive deal with Dallas, however, did not stipulate that the headquarters building be located at a specific address. In 2021, the company had 3,000 employees stationed in North Texas, a 70% increase over 10 years. Other corporate projects have proceeded, including Wells Fargo’s $400 million campus that has broken ground and will receive $31 million in incentives from the city of Irving.
CBRE has not issued any comment on what its current plans are for its future in Dallas.