Morgan Stanley is expected to sign a four-year, 120,000-square-foot lease at Dallas’ Fountain Place skyscraper as the banking giant weighs a North Texas expansion that could occupy most of a new office tower in Uptown, multiple real estate professionals told The Dallas Morning News.
The financial services firm would have the option to expand to two additional floors within the 58-story downtown skyscraper designed by renowned architect I.M. Pei and his firm.
The downtown lease would be temporary as the company reconfigures its Dallas footprint, leaving several options for Morgan Stanley to consider. The firm could lease up half a million square feet in Dallas-Fort Worth that may be consolidated in Uptown or split between Dallas and Collin County.
Morgan Stanley is looking to consolidate its D-FW operations in Dallas, most likely as a lead tenant in a new tower at 2401 McKinney Ave. in Uptown. The firm was deciding between Dallas and Frisco, and Morgan Stanley appears to be leaning toward Dallas.
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An option to split the firm’s presence between Dallas and a Collin County suburb remains. The northern outpost could hold the bulk of office space, while the Dallas property could house executives.
No final decisions have been made. Real estate services firm JLL is representing Morgan Stanley in the negotiations, people familiar with the matter told The News.
Morgan Stanley declined to comment on the D-FW expansion. JLL’s Brad Selner, who serves as president of the firm’s South Central region, could not be reached.
CBRE, the firm that handles leasing for Fountain Place, declined to comment.
There’s plenty of room in the tower. Fountain Place is roughly 45% leased with nearly 680,000 square feet of office space available, according to data from real estate firm CoStar. The tower has remained half-empty since Tenet Healthcare left downtown for the suburbs in 2019.
That office space in Fountain Place is tenant-ready, said Steve Triolet, senior vice president of research and market forecasting at Partners.
“The space is already built out. It was the Tenet Healthcare sublease, so most of the space is ready to be occupied,” Triolet said.
It’s unclear how many employees Morgan Stanley would house in its new D-FW digs. But half a million square feet could hold thousands of workers and support a relocation.
It would dramatically increase Morgan Stanley’s more than 96,000 square feet of current office space in Dallas-Fort Worth. The largest share is housed at Uptown’s PwC Tower.
The 2401 McKinney Ave. property is owned by CBRE’s Trammell Crow Company. The Dallas developer announced plans for a 27-story office and retail tower at the site in 2020; at the time, the nearly-700,000-square-foot building was to replace the Truluck’s restaurant at the corner of Maple Avenue.
The $200 million high-rise was a planned headquarters for CBRE, but after obtaining zoning and incentives toward construction work on the tower stalled. The News previously reported the tower would have had to be finished by the end of 2024 to receive city economic incentives.
Emails and phone calls to Trammell Crow Company were not immediately returned.
Other Uptown sites are in play — a site on Cedar Springs Road and another McKinney Avenue parcel.
Among the possible landing spots for Morgan Stanley in the northern suburbs is a 327,000-square-foot office tower that was built for Reata Pharmaceuticals in Plano’s Legacy business park. Another is land near Swedish-based Ericsson’s U.S. Headquarters in Plano.
If Morgan Stanley were to land temporarily in downtown Dallas, it would be a win for a central business district reeling from high office vacancy rates and the planned exit of one of its largest private employers.
Telecom giant and Fortune 500 company AT&T announced plans earlier this month to build a new global headquarters in Plano. The site at 5400 Legacy Drive will span 54 acres, and the firm plans to partially occupy the new building as early as the second half of 2028.
It’s unclear what sort of presence AT&T plans to retain in the city’s urban core. Its lease at the 37-story Whitacre Tower at 208 South Akard St. runs through Dec. 31, 2031.
If AT&T completely left, downtown Dallas’ office vacancy rate would rise to 33.7% — passing Seattle for the highest vacancy rate within a central business district in the country, according to estimates from CoStar.
“(Morgan Stanley) would be a huge win for downtown and for Dallas,” said Bill Kitchens, senior director of market analytics at CoStar.
The expansion would also be a win for the region’s burgeoning “Y’all Street” financial movement, driven primarily by Dallas’ Uptown and Victory Park neighborhoods.
In 2024, JPMorgan Chase expanded its Akard Street office, a site overlooking Klyde Warren Park and on the edge of downtown.
Bank of America is leaving Dallas’ tallest building — Bank of America Plaza — for a new, 30-story Uptown skyscraper.
Goldman Sachs topped out on its highly anticipated campus on Field Street next door to Victory Park. The New York bank is expected to spend at least $709 million on the development.
The 800,000-square-foot campus at 2323 N. Field St. will house more than 5,000 employees. The campus sits on the 11-acre, mixed-use NorthEnd development that belongs to Dallas-based Hunt Realty. Ross Perot Jr.’s Hillwood is teaming with Hunt to build Goldman’s new Dallas home.
A few blocks away from American Airlines Center, Canada’s Scotiabank is bringing 1,000 new jobs.
It’s unclear when Morgan Stanley may announce its Dallas plans.
“This is just another example that Dallas is becoming more and more of an important financial hub,” Triolet said.
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