In March 2024, Granite Properties, a full-service real estate investment firm specializing in office buildings, and their JV partner, Highwoods Properties (NYSE: HIW), a full-service REIT with a similar specialty, announced they have signed a lease agreement at 23Springs, their new Uptown Dallas office development, with Sidley Austin LLP. The law firm's 118,484 SF lease will fill up 4.5 floors of the tower upon their January 2026 move-in date. Sidley Austin will be joining Bank OZK and Deloitte as pre-leased tenants in the state-of-the-art building, dubbed by Granite Properties as a "Class-AA" office asset. The new lease should bring peace of mind to the developers, giving them 53% occupancy on the building's total 626,215 SF well ahead of the project's March 2025 completion date.

Represented by Stream Realty in the lease transaction, Sidley Austin's move to 23Springs offered a mutually beneficial outcome for all parties involved. The law firm is currently leasing about 80,000 SF a few blocks down the road from 23Springs at McKinney & Olive, another "Class-AA" project by Granite and Highwoods. Sidley Austin's current home, however, presented them with the kind of problem Granite and Highwoods likely loved to have and were more than happy to resolve: with 100% occupancy, the existing office building does not have the space available for Sidley Austin's expansion plans.

Paul Bennett, a Senior Managing Director at Granite, spoke to the project's momentum:

We’re excited Sidley has selected 23Springs to relocate and expand their office. 23Springs’ high-quality design and amenities will attract and energize professionals who enjoy Uptown’s vibrant environment. The development’s leasing velocity remains strong and reflects the continued robust demand for premier office space that is exceptionally located and walkable to shops and restaurants

Ample greenery helps to maintain Uptown's status as one of the few walkable areas in DallasSource: Granite Properties

The duo's "Class-AA" projects, while perhaps a case of grade-inflation, are clearly doing something right. One asset operating at full capacity and another pre-leasing large chunks of space to credit tenants defies the weakness shown in today's office markets. A prime location like Uptown Dallas certainly helps, but the amenities offered (justifying the "AA" grade?) provide tenants with a space with which they can both enjoy working and meet with clients. These amenities include:

  • Half acre park at street level
  • 17,000 SF of upscale restaurant space
  • Underground parking with 24/7 security
  • Onsite valet parking
  • Customer lounge center
  • Conference center
  • Two-story lobby complete with a coffee-and-wine bar
  • A golf simulator
  • Outdoor lounge/meeting area with TVs and Wi-Fi
  • Bike storage
  • A 4500 SF fitness studio

Ted Klinck, President and CEO of Highwoods, spoke to the strategy:

Today’s lease announcement with Sidley, a company with a reputation for their commitment to positive change, validates our strategic plan of owning the highest quality office buildings in the BBDs of markets such as Dallas with favorable economic and demographic trends. 23Springs is a perfect example of the vision we share with Granite Properties to create extraordinary customer experiences through mixed-use environments, rich amenities, customer-centric service and innovative wellness features – what we call work-placemaking.

Top-of-the-line projects in great locations like 23Springs seem poised to dominate the demand within the office market, at least until someone comes out with a "Class-AAA" building. The rise of remote and hybrid work arrangements has made fluorescent-lit cube farms a thing of the past, putting the burden upon office owners to deliver a product that makes people want to go into the office. The results seen by Granite and Highwoods speak for themselves as their high-end products garner rent rolls of credit tenants.