CBRE, the world's largest brokerage by revenue, plans to relocate its Dallas headquarters to a building next door that once housed its now-defunct flexible workspace concept called Hana.
The firm said the move into space it already has under lease at 2121 N. Pearl St. will occur later this year and include "headquarters staff and certain other corporate employees," according to a spokeswoman. The announcement comes as CBRE's plans to build a new headquarters tower in the same Uptown Dallas neighborhood remain on hold because of economic conditions, which CoStar News first reported in December.
The decision is a high-profile example of the real estate development decisions playing out across corporate America as rising interest rates and the highest inflation in decades drives up the cost of undertaking planned projects.
For CBRE, the move into the space on Pearl Street is just the latest in a game of headquarters musical chairs the firm has been playing since it relocated its headquarters to Dallas.
In 2020, CBRE relocated its headquarters from Los Angeles, where it had been based for more than 30 years, to Uptown Dallas, into its existing office at 2100 McKinney Ave. in what it called a cost-savings move.
In 2021, CBRE signed agreements with the city of Dallas and the state that helped it secure economic incentives in exchange for investing in a new 750,000-square-foot office tower at 2401 McKinney Ave., which is the site of a Truluck's upscale seafood restaurant.
The tower was expected to be developed by Dallas-based Trammell Crow Co., CBRE's U.S. development arm, but has been stalled amid rising interest rates and inflation. CBRE had been planning to relocate its global headquarters and its Dallas operations, including Trammell Crow Co., advisory and global workforce solutions into the proposed tower at 2401 McKinney but office market conditions have change considerably since those plans had been made, the spokeswoman said.
"The Truluck’s site is one of the best office development sites in the U.S. and Trammell Crow Company will develop that site when office market conditions are right," CBRE's spokeswoman said in an email on Monday. "It is likely that our global headquarters and much of our Dallas area operations will be housed at 2401 McKinney in the future, as it will take several years to develop the building once a decision is made to break ground."
In the meantime, the spokeswoman said CBRE will continue to fulfill its commitments under an incentive agreement with the state of Texas and the city of Dallas. Those state and local incentives are tied to job growth and related metrics of maintaining a headquarters in Uptown Dallas and are not tied to a specific address, according to the spokeswoman.
CBRE declined to answer questions about its headquarters plans outside of the prepared statement.
Coworking Space
CBRE plans to occupy about 67,000 square feet within PwC Tower at Park District at 2121 Pearl St. The space once held the firm's flexible workspace arm Hana before CBRE folded it into the Industrious brand in 2021 after CBRE invested in the New York-based coworking company.
Trammell Crow Co. developed Park District, which is adjacent to Klyde Warren Park in Uptown on behalf of Metlife. The building is adjacent to CBRE's current headquarters at 2100 McKinney Ave., which will still be used by CBRE.
"Employees in our local Dallas advisory and local Trammell Crow Company businesses will continue to work out of 2100 McKinney," CBRE's spokeswoman said.
A little more than a week ago, CBRE executives told investors on its fourth-quarter earnings call that its development pipeline was shrinking as projects were put on hold amid what CBRE CEO Bob Sulentic said would be a mild recession. Those projects exiting the pipeline were ones not expected to break ground in the next 12 months.
That statement seemingly referred to CBRE's development site now housing seafood house Truluck's, but the firm did not return media requests from CoStar News seeking additional information about those comments.
The decision by CBRE to put this project on hold comes as Uptown Dallas — where PwC Tower and its current headquarters is located — remains an epicenter for new office construction in Dallas. Goldman Sachs is expected to officially get underway on its massive regional hub by this spring.
Even the neighboring Perot Museum of Nature and Science is expected to soon get underway on its next evolution as its neighbors Goldman Sachs gets started with its project.