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A daily look at the most significant and interesting stories affecting Dallas. Written by Tasha Tsiaperas and Naheed Rajwani-Dharsi.

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The Dallas area is one of the top metros for converting vacant office space into new apartments, per a new RentCafe report.

Why it matters: Redeveloping underused office space is a key part of plans in many big cities to adapt to post-pandemic realities and create much-needed housing, Axios' Kate Marino reports.

Driving the news: More than 3,100 Dallas area apartments will be converted from office space this year, and more than 3,800 are planned in the future.

The Dallas region falls behind just New York City and Washington, D.C., in the number of planned office conversions.

Zoom out: More than 55,300 new units are expected from office-to-apartment flips nationally this year — up from 12,100 in 2021.

The flips now account for 38% of the 147,000 apartments planned in adaptive reuse projects. Hotel conversions account for about a quarter of the projects.

The intrigue: Planned office conversions in Dallas are up 58% this year compared with last year.

Downtown Dallas has been trending more residential in the past two decades, but the pandemic and the move to more remote work has accelerated the transition.

Yes, but: The average asking rent for converted units is nearly $2,700 per month, above the average downtown rent of $2,300 a month.

And some higher-end conversions, such as The National, have rents as high as $6,000, per CoStar.

Dallas is a leader in office-to-apartment conversions

More than 3,100 apartments will be converted from office space this year.

Real estate

The Dallas area is one of the top metros for converting vacant office space into <a class="gtmContentClick" data-vars-link-text="new apartments" data-vars-click-url="https://www.axios.com/2024/01/23/adaptive-reuse-office-buildings-apartments" data-vars-content-id="e8429191-8004-4e88-b518-8fff91c719b2" data-vars-headline="Dallas is a leader in office-to-apartment conversions" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2024/01/23/adaptive-reuse-office-buildings-apartments" target="_self">new apartments</a>, per a new <a class="gtmContentClick" data-vars-link-text="RentCafe report" data-vars-click-url="https://link.axios.com/click/34089316.559767/aHR0cHM6Ly93d3cucmVudGNhZmUuY29tL2Jsb2cvcmVudGFsLW1hcmtldC9hZGFwdGl2ZS1yZXVzZS1vZmZpY2UtdG8tYXBhcnRtZW50cy0yMDI0Lz91dG1fc291cmNlPW5ld3NsZXR0ZXImdXRtX21lZGl1bT1lbWFpbCZ1dG1fY2FtcGFpZ249bmV3c2xldHRlcl9heGlvc21hcmtldHMmc3RyZWFtPWJ1c2luZXNz/6238ba1b690e3a57d5212059B5f5e06ea" data-vars-content-id="e8429191-8004-4e88-b518-8fff91c719b2" data-vars-headline="Dallas is a leader in office-to-apartment conversions" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://link.axios.com/click/34089316.559767/aHR0cHM6Ly93d3cucmVudGNhZmUuY29tL2Jsb2cvcmVudGFsLW1hcmtldC9hZGFwdGl2ZS1yZXVzZS1vZmZpY2UtdG8tYXBhcnRtZW50cy0yMDI0Lz91dG1fc291cmNlPW5ld3NsZXR0ZXImdXRtX21lZGl1bT1lbWFpbCZ1dG1fY2FtcGFpZ249bmV3c2xldHRlcl9heGlvc21hcmtldHMmc3RyZWFtPWJ1c2luZXNz/6238ba1b690e3a57d5212059B5f5e06ea" target="_self">RentCafe report</a>.Why it matters: Redeveloping <a class="gtmContentClick" data-vars-link-text="underused office space" data-vars-click-url="https://www.axios.com/2024/01/16/office-conversions-nyc-apartments" data-vars-content-id="e8429191-8004-4e88-b518-8fff91c719b2" data-vars-headline="Dallas is a leader in office-to-apartment conversions" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2024/01/16/office-conversions-nyc-apartments" target="_self">underused office space</a> is a key part of plans in many big cities to adapt to post-pandemic realities and create <a class="gtmContentClick" data-vars-link-text="much-needed housing" data-vars-click-url="https://www.axios.com/2022/09/28/office-buildings-housing-cities-work-downtown-reuse?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=newsletter_axiosmarkets&amp;stream=business" data-vars-content-id="e8429191-8004-4e88-b518-8fff91c719b2" data-vars-headline="Dallas is a leader in office-to-apartment conversions" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/09/28/office-buildings-housing-cities-work-downtown-reuse?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=newsletter_axiosmarkets&amp;stream=business" target="_self">much-needed housing</a>, Axios&#x27; Kate Marino <a class="gtmContentClick" data-vars-link-text="reports" data-vars-click-url="https://www.axios.com/2024/01/23/adaptive-reuse-office-buildings-apartments" data-vars-content-id="e8429191-8004-4e88-b518-8fff91c719b2" data-vars-headline="Dallas is a leader in office-to-apartment conversions" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2024/01/23/adaptive-reuse-office-buildings-apartments" target="_self">reports</a>.

News

Real Estate

How much does it cost to blacklist America's biggest banks?

The big picture: The state is effectively pulling back from doing business with banks such as J.P.Morgan Chase, Goldman Sachs and Citigroup — on the grounds that they are investing in businesses with ESG (environmental, social and governance) policies, upsetting conservative state leaders.

Flashback: Determined to protect the oil and gas industry, state lawmakers demanded in 2021 that firms that "boycott energy companies" be cut off from doing business with Texas.

In August, Texas' chief financial officer, Comptroller Glenn Hegar, unveiled a first-ever list of 10 financial firms — many of them heavy hitters — he said fit that bill.

Sen. Ted Cruz has derided ESG policies as "woke" and "not capitalism."

State of play: Texas' anti-ESG policies are costing taxpayers about $416 million per year in the form of higher interest payments on municipal bonds, per a 2022 paper by Wharton Business School assistant professor Daniel Garrett and Federal Reserve economist Ivan Ivanov. The topic was highlighted recently by Bloomberg's Matthew Winkler.

The biggest banks — like Chase, Goldman Sachs and Citibank — charge lower average fees and often have a broader pool of investors, Bloomberg reports. That usually translates to a lower cost of capital for the borrower.

The Teacher Retirement System, Texas' largest public pension, sold positions in more than a half-dozen firms to comply with state law, per a year-end compliance letter obtained by Axios.

Axios has filed a request under the Texas Public Information Act regarding the value of those divestments.

Zoom in: The city of Anna passed over Citigroup for a mandate to lead a bond offering last fall, despite Citi submitting the most attractive bid, financially, Bloomberg reported at the time.

Citi offered Anna a rate of 4.215% on bonds totaling about $100 million. Investment bank Robert W. Baird & Co. offered 4.24% — and got the job.

The cost differential to the city of about 20,000 people is $277,334, a city spokesperson told Bloomberg.

Between the lines: The difference in interest rates may seem small — but it adds up.

The impact: Texas has the highest possible credit rating, at AAA.

But on routine borrowings the state is paying 0.19 percentage points more in yield — the equivalent of $1.9 million on every $1 billion of bonds — than California, which has a lower AA rating, according to data compiled by Bloomberg.

Texas' "anti-woke" policies cost taxpayers millions

The difference in interest rates may seem small — but it adds up.

An illo of three Greek pillars, and one made of coins

Texas

How much does it cost to blacklist America&#x27;s biggest banks?<ul><li>Ask Texas, <a class="gtmContentClick" data-vars-link-text="Axios&#x27; Kate Marino writes" data-vars-click-url="https://www.axios.com/newsletters/axios-markets-c0cb60a0-a53f-47a4-b9cf-74d8348230cd.html?chunk=3&amp;utm_term=twsocialshare&amp;utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=newsletter_axioslocal_austin&amp;stream=top#story3" data-vars-content-id="fb8582cf-9e9c-4b16-83a1-cb282faac0c5" data-vars-headline="Texas&#x27; &quot;anti-woke&quot; policies cost taxpayers millions" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/newsletters/axios-markets-c0cb60a0-a53f-47a4-b9cf-74d8348230cd.html?chunk=3&amp;utm_term=twsocialshare&amp;utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=newsletter_axioslocal_austin&amp;stream=top#story3" target="_self">Axios&#x27; Kate Marino writes</a>.</li></ul>

Politics

Haiti is in the World Cup after a half-century drought

National

The debt restructuring quagmire for low-income countries

IMF: N.Y. bill could "prolong and complicate" sovereign debt restructurings

How Argentina's debt crisis changed the sovereign debt market

Rebound in credit markets hides growing corporate strain

Data: PitchBook LCD; Note: Includes repricings and maturity extensions; Chart: Axios Visuals

Kate Marino

Featured stories

Haiti is in the World Cup after a half-century drought

The debt restructuring quagmire for low-income countries

IMF: N.Y. bill could "prolong and complicate" sovereign debt restructurings

How Argentina's debt crisis changed the sovereign debt market

Rebound in credit markets hides growing corporate strain