Global financial services firm Goldman Sachs has leased more than 130,000 square feet in downtown Dallas as it gears up for adding jobs in the city ahead of breaking ground on its massive $500 million employment hub.
The New York-based company leased floors 11-15 and floor 26 at 717 N. Harwood St. and is getting the space ready to move in, according to a state permit. Goldman's lease at the 34-story, 844,326-square-foot office tower built in 1980 expires in February 2027, according to CoStar data.
The timing of the lease expiration makes the office space seemingly a good fit for interim space until Goldman's nearly 1 million-square-foot regional hub near downtown Dallas is completed in 2026. Goldman expects to house upward of 5,000 employees at its new campus and received about $18 million in city incentives. The campus is expected to break ground this quarter. Goldman Sachs declined to comment on the lease on Harwood Street to CoStar News.
Goldman Sachs already has an existing office in downtown Dallas at Trammell Crow Center at 2001 Ross Ave., which traded to a new owner last year. The lease on Harwood Street is within a quick walk of the firm's development site between Uptown and Victory Park on the north end of downtown Dallas, as well as its existing office at Trammell Crow Center.
The firm is hiring for nearly 100 open positions in Dallas, according to its website. The hiring comes even as Goldman Sachs CEO David Solomon warned employees in his year-end letter that the financial giant could lay off 8% of its global workforce, or up to 4,000 jobs, in the weeks ahead as the economy continues to slow.
Goldman Sachs isn't the first company to set up office space ahead of the construction of a major employment hub to help it ramp up its labor force. Charles Schwab and Toyota North America also set up interim offices in the Dallas area ahead of the construction of each of their respective campuses.
Like other major cities, the pandemic has had a negative impact on the office market in downtown Dallas, with a negative absorption rate in the last 12 months totaling 1.8 million square feet of office space, according to CoStar data. The city's central business district has long-held the title of having the most office vacancy in Dallas-Fort Worth, the nation's fourth-largest metropolitan area with more than 7.7 million residents, with vacancy hovering around 25%. The uncertainty of the office market in recent years has seemingly only compounded an already difficult situation with CoStar's market analysts clocking in this area's vacancy at nearly 28%.
This part of Dallas is one of the region's primary office nodes, but its vacancy rate of 27.8% is "among the highest in the Metroplex in decades," CoStar's market analysts said, adding the area contains a high percentage of older buildings, which are not competing well with some of the newer office properties in nearby Uptown or in the suburbs.