The largest Fortune 500 company based in downtown Dallas is planning to leave behind its skyscrapers to move to a campus roughly 20 miles away, marking a major setback for the central business district.
AT&T's decision to relocate its headquarters to Plano, Texas, from its longtime home comes after the telecom giant has weighed its real estate options for the past year, CEO John Stankey told employees Monday. AT&T plans to build its new global headquarters at 5400 Legacy Drive in Plano on 54 acres surrounding the former Electronic Data Systems campus.
“After nearly a year of consideration, deliberation and planning, we have made the decision to invest in our employee experience and construct a new global headquarters at 5400 Legacy Drive in Plano," Stankey told employees, an AT&T spokesperson said in an email to CoStar News.
The location gives AT&T "room to consolidate all Dallas-Fort Worth administrative space," including its locations in downtown Dallas, Plano and Irving, and to "create a campus designed for collaboration, innovation and engagement," Stankey said. The nature of AT&T's work has evolved significantly since it moved its headquarters to Dallas from San Antonio in 2008, Stankey said.
"What hasn't changed is our belief and confidence in the Dallas-Fort Worth Metroplex as the right place to operate a thriving multinational corporation," Stankey added.
The new headquarters campus in Plano is expected to give the majority of AT&T's employees a shorter commute, according to internal data from AT&T. AT&T leases four towers comprising 2 million square feet in downtown Dallas.
Downtown woes
Finding another tenant for that space is expected to be nearly "impossible to fill" and is "a big blow to downtown Dallas," with large companies often having "a herd mentality" when it comes to locating their operations, Steve Triolet, a senior vice president of research and market forecasting at Partners, told CoStar News.
"This is just one more excuse for companies not to consider downtown Dallas," said Triolet, who is not involved with AT&T's real estate decisions.
AT&T ranked No. 37 on Fortune 500's latest list of the largest publicly traded U.S. companies by revenue. Once AT&T moves its global headquarters to Plano, it will leave only one Fortune 500 company, Jacobs, with a corporate address in downtown Dallas.
The other 21 Fortune 500 companies based in North Texas, noted by the Dallas Regional Chamber, have their global headquarters located outside of downtown Dallas, with offices in Uptown Dallas, Preston Center or in Dallas-area suburbs.
Downtown Dallas has the highest office vacancy rate at 26.7% in North Texas, according to CoStar data. The city's central business district is plagued by an aging office stock, expensive parking and increased crime, per a study conducted in partnership with advocacy group Downtown Dallas Inc.
Another Fortune 500 company, Tenet Healthcare, made a similar move when it relocated from downtown Dallas to a nearby suburb in 2019. The vacancy left by Tenet Healthcare in downtown Dallas was never filled, Triolet said.
New Plano campus
AT&T's new campus in Plano is part of a larger redevelopment underway by NexPoint with the help of economic incentives from the city of Plano, as CoStar News has reported. Plans include turning hundreds of acres featuring an aging office campus in Legacy Business Park into a $4 billion life science hub.
More details on AT&T's proposed new campus were not available. AT&T did not immediately respond to inquiries from CoStar News. NexPoint declined to comment.
Once AT&T moves into its new space in the second half of 2028, it will join other major companies, including Toyota North America, NTT Data and JPMorgan Chase, with large offices in Plano.
In a joint statement from the city of Dallas, Mayor Eric Johnson and City Manager Kimberly Bizor Tolbert said the city's "unique economic strengths" are what attracted AT&T to downtown Dallas in 2008, but as they worked to retain AT&T, it became clear its leaders preferred a "large horizontal, suburban-style campus" rather than a skyscraper.
AT&T recently invested $100 million into its downtown campus with a new plaza with a media wall and restaurants for workers, as reported by CoStar News. The upgrades were part of a 2019 sale-leaseback to a group of Dallas-based owners who later sought investors, as CoStar News reported. AT&T's lease expires in 2031, according to CoStar data.
AT&T's decision to leave downtown Dallas reflects the company's "shift in structure and culture" to a suburban location, said Tolbert.
"Ultimately, this was a decision that came down to AT&T’s desire for a new horizontal location with significant acreage for development," Tolbert added. "AT&T’s transition will be gradual, and the company will remain part of our city’s fabric in the years ahead.”