Downtown Lease May Serve as Stopgap Ahead of Possible Morgan Stanley Expansion in DFW
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Financial services giant Morgan Stanley is weighing a major permanent expansion in the D-FW that could see it setting up shop in Uptown, but for now, it is going to lease some temporary digs downtown.
The company is in final negotiations to sign a four-year lease for 120,000 square feet of space in Fountain Place, the 58-story glass office tower at Ross Avenue and North Field Street designed by I.M. Pei and Harry Cobb.
While Morgan Stanley’s downtown lease would allow for a two-floor expansion, bringing the square footage up to around 150,000, the deal is expected to serve as a stopgap as the firm decides where to consolidate its regional operations. Uptown is a leading contender, but there are some suburban options in Frisco and Plano, according to local real estate professionals.
If finalized, the temporary downtown move would mark a limited boost to a central business district struggling with high office vacancies and the looming departure of AT&T. Officials and downtown stakeholders have been doing a lot of soul searching amid renewed focus in recent years on neighborhood crime and homelessness, and a changing real estate landscape is lending itself more toward residential than old school office uses in the CBD.
CoStar data reportedly shows almost 680,000 square feet of space available at Fountain Place, putting the vacancy rate at around 55%.
Setting aside downtown’s woes, a planned expansion of Morgan Stanley that lands in Uptown would further reinforce Dallas’ growing status as a premier financial hub. The Y’all Street brand is gaining serious traction, and Uptown has been on the receiving end of the flight-to-quality trend that’s animating office deals in the D-FW these days.
All told, a Morgan Stanley expansion would reportedly take the firm’s current regional footprint of roughly 96,000 square feet up to 500,000. However, the company might opt to split its long-term office space between Dallas and the suburbs. Of course, nothing is set in stone yet. New construction in Uptown gives Morgan Stanley plenty to think about, and the multitude of fresh mixed-use and office properties in Collin County add to the menu.
Regardless of where the financial brand decides to settle in, some 2,000-3,300 jobs could result from an expansion through relocations.
“Our region has added 100,000 new finance jobs in the past decade, and we are now second only to New York in the size of our financial services sector,” Dallas Mayor Eric Johnson said during his latest State of the City address.
