DALLAS — Editor's note: This story originally appeared in The Dallas Business Journal here.
An office tower that has been sitting along U.S. Highway 75 for more than two decades will soon breathe new life.
On Dec. 13, Dallas City Council approved rezoning Pyramids North Tower at 9201 N. Central Expressway to include medical tenants. Big Sky Funds LLC has owned the more than 145,000-square-foot building since October 2022, which currently houses a law office and a technology strategy firm.
As non-medical tenants vacate, the firm said it has about 20,000 square feet of new medical tenants who signed up for space contingent on the rezoning.
In 2005, the neighboring South Tower, which Big Sky also owns, was rezoned for medical use and currently houses offices for Baylor Scott & White Health and Dallas Plastic Surgery Institute, LLC. The two buildings combined will have almost 300,000 square feet of medical space, forming a large medical complex. JLL's Russ Johnson and Chris Wright are heading up leasing for the North Tower.
The original building, built in 1999, was intended for Allegiance Telecom Inc, but the firm declared bankruptcy in 2003 and never occupied the complex, according to Big Sky.
Big Sky has completed $300 million in acquisitions of new medical assets over the past 90 days and $1 billion in the past two years, the firm said. The investment in health care real estate comes as local medical office space has been performing significantly better than traditional offices.
Dallas-Fort Worth led the nation in medical office leasing in the 12 months ending in second-quarter 2023, with 1.4 million square feet of net absorption — a figure that subtracts the amount of space that has been vacated from the amount that became occupied — according to Transwestern's most recent report on the sector.
Meanwhile, the traditional office sector saw just over 864,000 square feet of negative absorption over the same period, meaning far more space was vacated than leased. Traditional office also had a much higher occupancy rate at 22% versus 11.2% in medical.
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