Developer With Downtown Dallas Designs Is Betting on End of Remote Work

A commercial real estate developer who’s betting on Downtown Dallas recently said he thinks in-person work is going to make a comeback, foreseeing a reversal of the remote work trend that has left a lot of commercial office space idle across the country.

“Everybody’s going to be back in the office,” predicted Mike Ablon, founding partner of the CRE firm PegasusAblon, Bisnow reported.

He shared his thoughts at the Urban Land Institute’s (ULI) Emerging Trends 2025 event in Dallas last week.

What Does Ablon Have Cooking?

The Urban Land Institute and PwC ranked the Dallas-Fort Worth metro area as the top market to watch next year for CRE development and investment opportunities. Ablon must have seen that coming as he and Mike Hoque of Hoque Global announced in September that they would be embarking on a $350 million redevelopment of Bank of America Plaza and its four surrounding city blocks.

“On this one, you could say that what we’re doing is a bit of a moonshot. But if we do this properly, if we can use the building to frame the street, then more people will want to be here. We must think this way to pull downtown to what it might become,” Ablon previously told D Magazine.

In addition to various improvements in and around the iconic tower, the pair of developers are hoping to mint a new financial district with Bank of America Plaza at its center. The new Texas Stock Exchange has been identified as a possible tenant.

What’s the Office Market Looking Like in DFW?

According to a report by the National Association of Realtors, the DFW area had an office vacancy rate of 18.2% with 425,086,791 square feet of inventory in Q2 of this year. In Q2 of 2023, vacancies were clocked at 17.7% with 422,960,421 square feet of inventory. A 2023 ranking of U.S. metro areas by office vacancies put DFW at No.3 in the nation, behind only San Francisco and Houston.

The vacancies represent a lot of lost value. Switch On Business calculated that as much as $1.62 billion in unused office space in the DFW is just sitting there, spurring some developers to convert office space into residential, hoping to mitigate the ongoing housing crunch.

How Adaptive Reuse Is Converting Downtown Dallas Boardrooms to Residential Bedrooms

“The majority of that vacancy … will be in product that was built prior to 2010. When you look at that product and you layer in what’s going on in the workplace today, it is dramatically impacting tenants’ decisions,” said Scott Morse, managing partner at Citadel Partners, commenting on the situation back in October, per Bisnow.

Even though vacancies have been high, activity in the sector picked up over the last several months. In the first three quarters of 2024, investments neared $1.1 billion, some 1.6 million square feet were delivered, and the local construction pipeline outpaced the national rate, according to CommercialEdge data.

Will Workers Head Back to the Office?

Employers have reportedly had a difficult time implementing return-to-office policies in the years since the COVID-19 pandemic. Amazon, for instance, which announced in September that it would be requiring employees to work in-office five days a week starting in 2025, angered many employees and reportedly set off a rash of “rage applying,” or when a disillusioned employee begins applying to other companies en masse.

Some have speculated that recent pushes by some employers (particularly large companies like Amazon and Dell) to force workers back into the office is just a roundabout way of achieving cost cuts without having to resort to layoffs in anticipation of operational course corrections. Elon Musk and Vivek Ramaswamy seem to be pursuing the same strategy in a bid to reduce the federal workforce. In their capacity as heads of President-elect Donald Trump’s Department of Government Efficiency, they reportedly plan on recommending an end to federal remote work policies.

Only time will tell if workers yield to employers’ return-to-office offensive, but if a FlexJobs survey is any indication, many are so wedded to remote work that they’re willing to prioritize it over salary considerations. In fact, the recent survey estimated more than half of American workers would take less pay if they didn’t have to go back into an office. If such a culture holds, high rates of office vacancy may persist, leaving developers like Ablon and Hoque holding a lot of idle square footage.