Having scoured North Texas for office space since the start of the year, AT&T has intensified its search outside of downtown Dallas in recent weeks — with a particular focus on Plano and Frisco, three real estate professionals with knowledge of the company’s efforts told The Dallas Morning News.
The Park at Legacy, a 1.8 million-square-foot corporate campus at 6501 Legacy Drive in Plano, remains a leading option for the Fortune 500 telecom giant, the real estate professionals said.
AT&T also is considering a build-to-suit facility near The Star in Frisco and a campus at the former Electronic Data Systems headquarters in Plano, they said.
AT&T representatives have not addressed the search, saying the firm doesn’t comment on speculation. It’s unclear when AT&T could make a decision on its future in downtown Dallas, where its sprawling footprint spans 2 million square feet across four buildings.
D-FW Real Estate News
AT&T had nearly 6,000 workers assigned to its downtown offices in 2022, and its lease at the 27-story Whitacre Tower expires in 2030.
Dallas leaders have pledged they will work to keep AT&T in the city. City Manager Kimberly Bizor Tolbert told the Dallas Economic Development Corp. last month that discussions are ongoing.
Representatives for AT&T declined to comment.
“AT&T remains a critical component of the core of our city. We are engaged in discussions with company executives. We want AT&T’s presence in Dallas, and our engagements will continue,” Tolbert said in a statement Thursday evening.
AT&T spent $100 million on its Discovery District outside of the Akard Street corporate headquarters, including a massive video screen, a food hall, outdoor seating space and more. The Discovery District opened in 2021.
A study by Boston Consulting Group conducted for Downtown Dallas Inc. earlier this year found AT&T would consider leaving its downtown headquarters if public safety issues were not addressed, citing concerns over crime and homelessness.
Following the report, a coalition of public and private sector leaders rolled out a “Safe in the City” campaign to address challenges related to downtown public safety, homelessness and economic development.
Downtown Dallas Inc. estimates AT&T’s relocation could cause a 30% plunge in property values, costing downtown an estimated $2.7 billion in overall value.
The suburban contenders and other possible sites
Key players at AT&T have been briefed on retail options in northern Plano near two potential office sites, and the company is drawn to The Star in part because of nearby amenities, the real estate professionals said.
Plano’s The Park at Legacy was identified as a possible site for AT&T last month. The 1.8 million-square-foot campus is currently home to JCPenney and NTT Data Services. The property is owned by Austin-based Capital Commercial Investments, Inc.
Doug Agarwal, the firm’s founder and president, told The News he’s currently negotiating with a long-term tenant that has a higher credit rating to take roughly 400,000 square feet at the site — a move that would prevent a much larger firm from leasing at the Park at Legacy.
Agarwal said he’s optimistic that the tenant will sign. He believes office rents in Plano will rise, citing a 36.8% increase in rents in Dallas’ Preston Center submarket since the start of 2024.
Roughly five minutes away sits the 135-acre district that was once home to Electronic Data Systems, H. Ross Perot Sr.’s information technology company, founded in the 1960s.
Dallas-based investment strategy firm NexPoint is planning a 4-million-square-foot development called The Texas Research Quarter. The space will host labs and manufacturing space for life sciences companies looking to call Plano home.
Last year, Plano council members approved up to $15 million to reimburse NexPoint for the redevelopment. The funds will come from a recently created tax increment reinvestment zone that covers a portion of the Legacy Business Park area.
Those familiar with plans say AT&T could build a campus on a portion of the site without disrupting NexPoint’s larger $4 billion redevelopment plans.
Representatives for NexPoint declined to respond to questions regarding AT&T and its possible interest in the Texas Research Quarter property.
Plano’s director of economic development, Doug McDonald, would not comment on AT&T’s possible interest in either Plano site.
“Plano is known to be attractive to national and international corporations, and we are home to numerous iconic brands,” he said in a statement. “Due to the strong interest in Plano and competition within the region, we do not publicly comment on economic development projects until they are brought to Council for formal adoption.”
A third option for AT&T involves building a new office property at or near The Star, the 91-acre campus that serves as the practice facility and world headquarters for the Dallas Cowboys.
The duo have a long-standing business relationship. AT&T holds the naming rights to the NFL franchise’s stadium in Arlington.
The area’s retail, restaurants and private social club are a draw for potential employees. A deal would have to involve the Jones family and other nearby landowners, real estate professionals said.
Kristin Papillon, a spokesperson for the Frisco Economic Development Corporation, would not comment on AT&T’s possible interest in a site near The Star.
Darcy Schroer, a spokesperson for the City of Frisco, also declined to comment.
Other potential options for AT&T have dried up in recent weeks.
AT&T expressed interest in the current headquarters of Beal Bank, located at 6000 Legacy Drive in Plano. Representatives toured the property, but founder Andy Beal quickly decided that he did not want to sell, two real estate professionals told The News. Multiple attempts to contact Beal via phone call were unsuccessful.
The attention on Frisco and Plano doesn’t mean other North Texas submarkets have been ruled out, said Steve Triolet, senior vice president of research and market forecasting at commercial real estate firm Partners.
Other large sites AT&T could use to supplement its office inventory include the more than 1.1-million-square-foot Pioneer Natural Resources campus in Irving and the former American Airlines headquarters at the south end of DFW International Airport.
Plano, Irving-Las Colinas, Richardson and Frisco were all mentioned as possible landing spots.
The final decision will come down to several factors — the size of the property and the speed with which they’d want to move into a new facility, Triolet said.
Triolet said the firm is likely looking for 1 million square feet, and the Pioneer campus fits their needs.
“Don’t rule out existing buildings,” he said. “Las Colinas has more Fortune 500 companies than any other submarket. …They could take the whole Pioneer building.”
Triolet said AT&T will likely maintain a presence in downtown Dallas, but expand its presence in the northern suburbs as a result of the company’s return-to-office mandate.
He cited the firm’s expansion in Richardson earlier this year. AT&T signed one of the region’s largest office leases, taking 186,000 square feet at 2221 Lakeside Blvd. for a major call center.
The space will consolidate multiple regional sites, and Richardson’s AT&T workforce is expected to grow from 400 to 1,400.
“They’re in 2-million square feet downtown. Are they going to shrink their footprint in half for a new headquarters? That seems a little tight,” Triolet said. “I still think they keep a presence downtown, but they’re going to be shifting a lot of their jobs … to the northern suburbs.”
Top brass at AT&T have remained quiet about the search and a potential Dallas downsizing.
During a September appearance before the North Texas Commission in Arlington, chairman and CEO John Stankey didn’t address the speculation. He outlined steps local governments could take to better support AT&T, including improvements in housing affordability, education and public safety.
“I’m grateful when you solve those important problems … like ensuring the core infrastructure that is necessary for me to run my business (and) that I can find educated individuals who want to come work at a company like mine when those kinds of things are working well,” he said.
“I get to focus on what I need to do in my job, which is paying attention to what my customers need and what kind of innovation they need,” he added. “We’re a successful company as a result of that, and that helps this region as well because we give more than our fair share than maybe somebody headquartered in Seattle or New Jersey.”
Dallas Morning News Staff Writer Lilly Kersh contributed to this report.