COMMERCIAL REAL ESTATE
IT’sTOP-TIERTIME FORDALLAS-FORTWORTH. REAL ESTATE EXPERTS TELL US WHY. THE CRANE REPORT | HOW 3 BIG DEVELOPMENTS EVOLVE TO SUCCEED 2022
N 14
Where Artistry Comes Naturally Discover Harwood District’s Tallest Tower
Coming 2023 H A RWO O D 1 4 . C O M
Exceptional Air Quality ― Inside and Out The Link at Uptown, a 300,000 square foot Class AA office tower delivering in Q4 2021, features 4,500 square feet of sky-level outdoor amenities for access to fresh air and best-in-class mechanical systems for exceptional indoor air quality. The Link’s HVAC technology offers: • Full-Building Digital Direct Control (DDC): Accuracy of space temperature and humidity control • Outdoor Air Systems: High efficiency filtration and real-time control of airflow to each floor • Recirculated Air Systems: Combination of high efficiency filtration and enVerid air cleaners to optimize indoor air quality • enVerid Air Cleaners: Safely remove contaminants such as carbon dioxide, aldehydes, VOCs, and bioaerosols from scrubbed air Remote monitoring for real-time commissioning and optimization of the equipment
The Link at Uptown Dallas, Texas
Keri Samford, Executive Director of Development 972.624.3127 • edc@thecolonytx.org • www.TheColonyEDC.org
NOW ARRIVING AT GRAPEVINE MAIN STREET
Just ten minutes from DFW International airport by rail, the City of Grapevine is the perfect home for businesses with broad reach and even bigger goals. See what a business-friendly atmosphere, topnotch accessbility, and a commuting workforce of 1.1 million people can do for you.
choosEgrapevinetx.com
2022 COMMERCIAL REAL ESTATE
IT’sTOP-TIERTIME FORDALLAS-FORTWORTH. REAL ESTATE EXPERTS TELL US WHY. THE CRANE REPORT | HOW 3 BIG DEVELOPMENTS EVOLVE TO SUCCEED 2022
CONTENTS
Cover Illustration: Michael Samples
22
Welcome Letter . . . . . . . . . . . . . . . . . . . . . . . . 10
FOUNDATIONS DFW Market Statistics, Economic Indicators, and Commercial Real Estate News. . . . . . . . . 14
BUILDING TOMORROW TOGETHER Dallas Region Economy on a Bridge to Normal for 2022 . . . . . . . . . . . . . 22
FEATURE How Dallas-Fort Worth Became a Top-Tier Real Estate Market. . . . . . . . . . . . 24
24
2022
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 7
E XC L USI V E LY P UB L ISHE D B Y DALLAS NEXT
29 VIEW FROM THE TOP TIER Real Estate Rock Stars Share Insights on the Future of Commercial Real Estate in Dallas-Fort Worth. . . . . . . . . . . . . 29
EDITOR Quincy Preston quincy@dallasnext.com EDITORIAL DIRECTOR David Seeley CREATIVE DIRECTOR Michael Samples PROJECT EDITORS Sandra Engelland Maddie Preston SENIOR EDITOR Kevin Cummings
52 EVOLUTION OF SUCCESS Leaders of Three Top North Texas Mixed-Use Developments Reveal Three Keys to Success. . . . . . . . . . . . . . . . 52
THE CRANE REPORT Who’s Building What, Where . . . . . . . . . . . . . . 65
SCORECARD
65
DFW’s Top Office and Industrial Leases . . . . . 73
SPECIAL ADVERTISING SECTION Profiles of Cities Around the Region . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
COMMUNITY
8 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
CONTRIBUTING WRITER Dave Moore COPY EDITOR John Branch
DALLAS NEXT DALLAS® PUBLICATIONS + DALLAS INNOVATES
GROUP PUBLISHER Kyle Moss kyle@dallasnext.com BUSINESS DEVELOPMENT Steve Reeves steve@dallasnext.com
City Profiles
The Real Estate Council, Impact Investors . . . . . . . . . . . . . . . . 85 The Real Estate Council Photos . . 86 Calendar of Events . . . . . . . . . . . . . . 87
CONTRIBUTING EDITORS Lance Murray Shawn Shinneman
Dallas Regional Chamber, Top-Level Members . . . . . . . . . . . . . 88 Developer Perspective: Mike Ablon . . . . . . . . . . . . . . . . . . . . . . . . 90
MEDIA STRATEGIST Jon Perez jon@dallasnext.com
To request bulk copies, contact Jon Perez, jon@dallasnext.com. DALLAS® Commercial Real Estate is published for The Dallas Regional Chamber and The Real Estate Council by Dallas Next; www.dallaschamberpublications.com, ©2022 All rights reserved. No part of this publication may be reproduced or reprinted without written permission. Neither the Dallas Regional Chamber nor The Real Estate Council nor Dallas Next is a sponsor of, or committed to, the views expressed in these articles. The publisher is not responsible for unsolicited contributions.
2022
Team Frisco is honored to welcome Northwest Hardwoods and Wiley X’s corporate headquarters relocating to Sports City USA. We are proud to add you to our growing roster of pioneering and innovative businesses. You’re in good company. VISIT FRISCOEDC.COM TO DISCOVER WHY SO MANY BUSINESSES ARE BUILDING THEIR FUTURE IN FRISCO, TEXAS.
Frisco Economic Development Corporation 972.292.5150
FriscoEDC.com
WELCOME The DRC’s efforts help the Dallas Region’s resilience The Dallas Region’s resilience to the global pandemic has been impressive. We were first among three large markets in the country with three-year job gains from 2019-2021, and our employment numbers have exceeded preDALE PETROSKEY President and pandemic levels. We’re Chief Executive Officer now a region of nearly 7.7 Dallas Regional Chamber million people, adding more than 120,000 residents last year—and more than 1.2 million since 2010 (along with 176 corporate headquarters and more than one million new jobs). The 2021-2023 strategic plan of the Dallas Regional Chamber (DRC) aims to build on our region’s success by focusing on Economic Development; Education and Workforce; Diversity, Equity, and Inclusion; and Public Policy. Two new initiatives include: • The Information Technology (IT) and Health Care Sector Convening Partnership—a joint effort by the DRC, Dallas College, and Workforce Solutions of Greater Dallas and sponsored by Amazon, Bank of America, and United Way—is creating talent pipelines for the most in-demand sectors in the labor market: IT and healthcare. • The DRC’s work in Southern Dallas County recognizes that the area’s greatest opportunity for long-term economic growth will come from prioritizing the creation of good jobs. This means creating places where workers, entrepreneurs, and businesses want to locate, invest, and expand. The Dallas Region has been an example of what works during a rather dark moment across the country, including redoubling our efforts to help make our region a more equitable place for all to live, learn, work, and do business. We appreciate the opportunity to play a key role in building an even brighter future here.
1 0 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
Letters from the Dallas Regional Chamber and The Real Estate Council
TREC is committed to building the city you’ve imagined Commercial Real Estate is coming back stronger and faster in North Texas than anyone imagined when we were conducting business by Zoom through the global pandemic. Commercial real estate sales fell during the height of the pandemic but not LINDA McMAHON President and as badly as predicted, Chief Executive Officer and they have bounced The Real Estate Council back considerably. Every day, announcements are being made about new projects and new investors from around the globe buying up every product type at record prices. Dallas is the center of commercial real estate nationally, and commercial real estate is one of the largest contributors to our local economy. Throughout this rapidly changing environment, The Real Estate Council (TREC) membership has maintained its focus on three priorities: • Leadership development of the next generation of leaders and increasing diversity within the industry. We’ve doubled down on ensuring Dallas is the most inclusive and equitable place to do business. • Public policy focusing on local policies that continue our pro-growth environment. Our work will support the creation of the new economic development agency by the city of Dallas, which will focus on ensuring the city has all the tools necessary to promote smart, equitable, and sustainable growth that will benefit all the city, particularly Southern Dallas. • Community investment through TREC Community Investors. Our commitment to Southern Dallas has never wavered. We continue to make additional investments in commercial development, housing, workforce creation, and community empowerment through our 360 degreecollaborative approach to community development. We remain committed to Building the City You’ve Imagined.
2022 CHAIR OF THE BOARD Bob Pragada President and COO Jacobs PRESIDENT & CEO Dale Petroskey CHIEF OPERATING OFFICER & CHIEF FINANCIAL OFFICER Angela Farley COMMUNICATIONS, VICE PRESIDENT Kelly Morris RESEARCH AND INNOVATION, SENIOR VICE PRESIDENT Duane Dankesreiter RESEARCH AND INNOVATION, VICE PRESIDENT Eric Griffin
CHAIR Kim Butler HALL Group CHAIR-ELECT /TREC COMMUNITY INVESTORS CHAIR: Trey Morsbach JLL PRESIDENT & CEO Linda McMahon CHIEF FINANCIAL OFFICER Summer Loveland TREC COMMUNITY INVESTORS Felicia Pierson SENIOR DIRECTOR; MEMBERSHIP, ENGAGEMENT AND MARKETING Amy Stovall
2022
UPFRONT QUINCY PRESTON EDITOR DALLAS® Commercial Real Estate
Letter from the Editor
Welcome to this special double edition, as we introduce ourselves again. Known for years as the Dallas-Fort Worth Real Estate Review, this magazine gets a new name for 2022 and beyond: DALLAS® Commercial Real Estate. While the name is new, our mission is the same—to cover the people, industries, projects, and deals that make the region a top place in the U.S. to grow your business. From Fort Worth to Frisco and all points DFW, CRE in North Texas has reached an inflection point. More and more companies realize this is one of the best spots to move or expand their business—and you’ll see the exciting reasons why in these pages. In this inaugural edition of DALLAS® Commercial Real Estate, our cover feature by Dave Moore reveals “How Dallas-Fort Worth Became a Top-Tier Real Estate Market,” beginning on page 25. We’ve joined Los Angeles, Chicago, and New York among the nation’s top real estate markets, and as one industry veteran notes, “Dallas has emerged as an elite market for institutional capital.” Beyond the capital markets, real estate experts tell us DFW punches above its weight across sectors—and as a whole—attracting new businesses almost daily. Conrad Madsen, co-founder and partner at Paladin Partners, calls Dallas-Fort Worth a “catcher’s mitt” for corporate relocations. “Almost daily,” he says, “you read of a new company leaving California or New York to move their HQ to DFW.” Susan Arledge, executive managing director of site selection at ESRP, puts it bluntly: “It’s almost corporate malfeasance for a C-level executive of a Fortune 500 publicly traded company in San Francisco or New York not to be considering or studying a potential move” to DFW. Beginning on page 29, a stellar lineup of CRE and market experts offers perspectives on how Dallas-Fort Worth has climbed the list of top markets, with insights on what to expect in 2022. “The momentum in Texas, like many things, has been a long time coming,” says Dallas developer Lucy Billingsley. Along with leaders from two other mixed-use developments in North Texas, Billingsley tells us what it takes to build a future-proof place for people and companies
1 2 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
alike. Each of these developments aims to mark success across decades. That starts with a bold vision—and an ideal location. Writer Sandra Engelland examines the “Evolution of Success,” beginning on page 53. The Foundations section explores commercial real estate trends and influences impacting North Texas, beginning on page 14. Dallas-Fort Worth showed remarkable strength through 2021 and into the new year, with the industrial sector growing, the office sector rebounding, retail occupancy nearing historic highs, and the apartment market booming. In Fort Worth, new federal funding is bringing the Panther Island development closer to reality, and in Dallas the Valley View-Galleria area is slated to become an International District for businesses, festivals, and attractions. Scorecard, beginning on page 73, looks at top lease deals in office and industrial across Dallas-Fort Worth in 2021. And, as always, the Crane Report details top office, industrial, and multifamily construction projects in North Texas, starting on page 65. DALLAS® Commercial Real Estate is part of the DALLAS family of publications, which also includes the DALLAS Relocation and Newcomer Guide and the DALLAS Economic Development Guide, along with the Dallas Innovates website and daily newsletter. Together, our publications tell the world about the future of live, work, learn, and play in North Texas—and what’s new and next in business.
You’ll find extended real estate content on our sister website, www.dallasinnovates.com. Stay in touch— we’d love to hear from you.
Quincy Curé Preston Editor
2022
Allen has it All. All you’re looking for is in Allen. From class A office space to A rated schools, world-class entertainment parks and recreation – all in the heart of a thriving Metroplex. Here you can build a business where people are not just surviving but thriving. When it comes to living, working and playing, Allen is all in. Be part of it all. www.allenedc.com
The Place to Raise Your Business
FOUNDATIONS
A baseline for the region’s future.
INDUSTRIAL STRENGTH
KEY WORD FOR DFW WAREHOUSE SPACE IS ‘MORE’ THE REGION’S INDUSTRIAL SECTOR CONTINUES TO GROW AFTER A ROBUST 2021. PHOTO: TRANSWESTERN
When you look at the industrial market in Dallas-Fort Worth in 2021 and ahead to 2022, you could sum it up as more, more, more. Yes, more construction, more leasing, and more jobs. Experts believe that 2022 will continue the momentum of 2021, which was a “banner year,” says Cushman & Wakefield analyst Christopher Grubbs. He says that the DFW industrial market is a “vital, sought-after logistics hub” that has been resilient throughout the pandemic. Recent Transwestern reports also say Dallas-Fort Worth should continue its robust performance in 2022. “Tailwinds for the sector will likely continue as logistics managers expect little relief for warehouse utilization over the next 12 months. Combined with a bullish economic outlook and population growth, demand should continue absorbing space and driving rent growth in 2022 and beyond,” Transwestern says in the report. DFW smashed records in the fourth quarter, with demand reaching an all-time high of 41.7 million square feet and driving vacancy rates to historic lows, according to the report. It adds that rents are reaching new highs as industrial properties achieve double-digit growth and flex properties rebound. Notably, speculative development
TRANSWESTERN DEVELOPMENT CO. IS DEVELOPING COWTOWN CROSSING, A 1.02 MILLION-SQUARE-FOOT SPECULATIVE INDUSTRIAL PROJECT, IN NORTH FORT WORTH. THE THREE-BUILDING LOGISTICS CENTER IS LOCATED AT HIGHWAY 287 AND INTERSTATE 35W.
reached an all-time high of 43.9 million square feet, and the leasing of new spaces reached above-average rates. The report goes on to say that industrial rents are up 10.5% over 2021. C&W’s Grubbs says industrial demand has proved to be resilient throughout the pandemic so far. He points to fi ve factors that define the industrial market in DFW: ■ Vacancy fell to 5.6% in Q4 2021, well below the 15-year historical average of 8.2%, with lower vacancy mainly driven by demand outpacing the supply. ■ The market has 54.1 million square feet of space under construction, led by Southern Dallas with 15.4 million square feet, AllianceTexas with 8.9 million square feet, and South Fort Worth at 6.1 million square feet. ■ E-commerce is an “industrial bell cow” that also shows how customers are buying goods. In Q4, Amazon took
occupancy on a new 1.1-millionsquare-foot build-to-suit. ■ Leasing activity shows no sign of slowing down, with notable activity in the Dallas Fort Worth International Airport (2.5 million square feet), Alliance (1.8 million square feet), and Great Southwest and Far North/I-35 areas at 1.2 million square feet. ■ Net absorption in Q4 totaled 10.4 million square feet, mirroring the positive momentum from the previous three quarters. That absorption far exceeds new supply by nearly 6.4 million square feet. Cushman & Wakefield ‘s Nathan Orbin, who is executive managing director for the U.S. with the firm, says 2021 saw the creation of many jobs in the industrial sector, particularly in trade, transportation, and utilities. He cites Moody’s Analytics, which reported the DFW industrial sector grew by 1% (10,833 jobs) in the third quarter of 2021 alone.
Orbin says a leading indicator of industrial demand is jobs in trade, transportation, and utilities, which accounted for most of the industrial growth, at 75%, or 831,952 jobs. Industrial employment in DFW totaled 1.1 million jobs at the end of September. As a whole, the market is experiencing positive, elevated demand and supply. Cushman & Wakefield is tracking more than 36.2 million square feet of active tenant requirements, which includes the organic growth and expansion of companies already operating in the region as well as new businesses entering the market. Orbin says at the end of the Q3, the overall vacancy rate in DFW was 6.6%, a 20-basis-point reduction over the prior quarter. “We believe leasing activity will continue to be extremely robust, keeping vacancy below historical levels,” Orbin concludes. — Lance Murray
“WE BELIEVE LEASING ACTIVITY WILL CONTINUE TO BE EXTREMELY ROBUST, KEEPING VACANCY BELOW HISTORICAL LEVELS.” NATHAN ORBIN, CUSHMAN & WAKEFIELD 1 4 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
2022
F FOUNDATIONS
OFFICE OPTIMISM
EXPERTS SEE ‘FLIGHT TO QUALITY’ DALLAS-FORT WORTH OFFICE MARKET ENTERED 2022 WITH A REBOUND.
HEAD OF THE CLASS
PHOTO: GFF/GRANITE
“The fundamental role of the office is shifting to a place that brings people together for collaboration and socialization,” says Gensler’s Cindy Simpson. Class A+ office trends like workplace flexibility, hospitality-type amenities, and lots of green space—indoors and out— help make the grade. Here are prime projects designing for extra credit.
AERIAL VIEW OF GRANITE PROPERTIES’ 26-STORY TOWER, 23SPRINGS, IN DALLAS’ UPTO WN.
Is the Dallas-Fort Worth office market back on track after being in the pandemic-induced doldrums since 2019? Real estate experts see optimism in the numbers from 2021 that show a positive track for DFW in 2022. In Q4 of 2021, office occupancy grew for the first time since 2019. Cushman & Wakefield research analyst Nicolas Belusic reveals five trends that impacted DFW’s office market: ■ After strong leasing activity in Q3, Dallas-Fort Worth absorbed more than 888,000 square feet in Q4. It was the first quarter of occupancy growth since the start of the pandemic. ■ DFW delivered 1.3 million square feet of new office product in the Q4 and 2.3 million square feet for the year, with “strong roles” played by Victory Commons and The Link in Dallas. ■ Class A absorption in Q4 was almost 1.5 million square feet—“further proof of tenants’ flight to quality in DFW,” Belusic says. In 2021, at least 9.5 million square feet of Class A office space was leased. ■ Operating expenses and asking rates increased. That, with the addition of 1.3 million square feet of Class A product in the market, pushed overall asking rents in DFW to an average of $27.36 per square foot. ■ Despite an overall growth
2022
in occupancy, the delivery of 1.3 million square feet of new space in the fourth quarter drove the vacancy rate to 22.1%. Office projects “in the works” “Though the commercial office market hasn’t returned to pre-pandemic levels, several Dallas-Fort Worth area urban centers outside downtown are thriving, with office projects in the works,” real estate publication The Real Deal reports. For example, Quadrant Investment Properties and Maryland-based Federal Capital Partners are planning a 10-story, 120,000-square-foot Class A office building at 1333 Oak Lawn at Dragon Street in the Dallas Design District. HALL Group also announced a new $7 billion masterplan to grow its existing HALL Park in Frisco, a 15-building, 162-acre office park, into a mixed-use community. Other projects include Vari’s near completion of its 180,000-square-foot global headquarters in Coppell that will also serve as a multitenant campus and Granite Properties’ 23Springs, a 26-story office building at the corner in Dallas’ Uptown. “Unicorn” submarket Some DFW submarkets have caught the attention of analysts, including the Stemmons Freeway
submarket, which Marcus & Millichap called a “unicorn,” amid a broader office sector disruption, and a “diamond in the rough.” “Masked by the overall office sector interruption, one submarket in Dallas-Fort Worth has quietly had an impressive showing,” Marcus & Millichap notes. “The Stemmons Freeway corridor, spanning Interstate 35 northwest of the Dallas core, has excelled.” The company says that vacancy in that corridor fell 510 basis points over the 12 months that ended in June. “No other submarket recorded a vacancy decline greater than 150 basis points during the span,” Marcus and Millichap says. Healthcare demand The company notes that the corridor benefits from its proximity to the University of Texas Southwestern Medical Center, which generates demand from healthcare companies. The local average asking rent was boosted by 9.6% during the period, bolstered by net absorption of more than 830,000 square feet. Marcus & Millichap says that only four other submarkets had rent increases of at least 3%, with none of them exceeding 5%. —LM
HALL Group is evolving its existing 15-building, 162-acre office park in Frisco into a mixed-used community with a new $7 billion master plan for the property. The building phase of the project will include a Class AAA office tower, a hotel, a 19-story luxury apartment tower, 60 new executive suites, and more—along with plenty of green space.
Ryan Companies expects to break ground early this year on the first Class AA multitenant office tower in Plano’s Legacy West. Global tax services and software provider Ryan LLC will be a major tenant in the 24-story tower that is planned for completion in Q1 of 2024.
The iconic gold towers of Campbell Center at Interstate 75 and Northwest Highway in Dallas will be renamed “The Gild” once they’re transformed with a multimillion-dollar redo. The Fenway Capital Advisors’ project will boost the 878,564-square-foot towers from Class A to Class A+.
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 1 5
F FOUNDATIONS R E TA I L R A L LY
SURPRISE! SURVEY SAYS ... DFW RETAIL OCCUPANCY RATE NEARS HISTORIC HIGH DESPITE THE PANDEMIC, 2021 PROVED TO BE ONE OF THE STRONGEST ON RECORD.
PHOTO: SPROUTS
Despite the pandemic, the DallasFort Worth retail market ended 2021 with the third-highest occupancy rate since Dallas-based retail real estate services firm Weitzman began its annual survey in 1990. Because of the encouraging results for 2021, Weitzman sees positive signs ahead in 2022 for the region—and the rest of the state. Each year, Weitzman surveys the fi ve leading Texas cities in which it operates: Dallas, Fort Worth, Austin, Houston, and San Antonio. Executive Chairman Herb Weitzman says that 2021 proved to be one of the strongest in the history of the company’s survey. At the close of 2021, the North Texas region reported a retail occupancy rate of 93.5%, the third-highest occupancy for the DFW market since Weitzman’s survey first appeared in 1990. That trails only 2019’s rate of 93.7% and 1981’s 94.8% rate, Weitzman reports. And, in another sign of the region’s strength, 2021 was the 12th time in the past 32 years that DFW exceeded the 90% rate. At year’s end, DFW’s retail market inventory totaled roughly 200.2 million square feet in retail projects containing 25,000 square feet of space or more. Encompassing 42 submarkets in the Dallas and Fort Worth markets, that’s the largest inventory of any Texas metro area. In Dallas-Fort Worth during 2021, absorption—the total new square footage leased by tenants—totaled roughly 3.9 million square feet, making it the strongest leasing market in the region since 2015 as well as the third-strongest leasing market in 22 years. Weitzman reports that during the worst of the pandemic in 2020, DFW retail closings resulted in a large increase of more than 4 million square feet of new vacancy that year. But with strong leasing in 2021, vacancy throughout the
SPROUTS ANNOUNCED DFW EXPANSION PLANS IN 2021.
market dropped from roughly 16.7 million square feet at the end of 2020 to roughly 12.7 million square feet at the end of 2021. In a show of the region’s strength, 37 of DFW’s 42 submarkets reported occupancy above 90%, leaving only fi ve submarkets at or below the 90% level. While retailers in Dallas-Fort Worth and other large Texas cities will continue to face challenges in 2022, Weitzman says he’s “confident we will all face these challenges and work through them successfully, based on the strong performance retail reported in 2021, combined with the strongest state economy in the country.” The “2022 Retail Survey and Forecast” is based on its review of a total DFW retail market inventory of more than 200 million square feet of space in projects with 25,000 square feet or more. Weitzman says it surveys 1,434 centers in the region’s 42 submarkets. Thirty of those submarkets are in the Dallas market, and 12 are in the Fort Worth market.
While DFW hit the lowest level of new construction recorded at 640,000 square feet in 2021, Weitzman expects deliveries to increase in 2022. Looking ahead, Weitzman’s survey says that several new grocery-anchored projects are underway, along with numerous smaller neighborhood centers in markets ranging from Mesquite to Mansfield. When added to the continued expansion at regional-draw projects, Weitzman says that retail-oriented construction will more than double to roughly 1.4 million square feet in 2022, mostly in the grocery-anchored sector and smaller neighborhood categories. Weitzman says that DFW retail market activity—especially retail leasing demand and store growth—is bolstered by DFW’s job and population growth, as well as a strong residential market. Weitzman’s Matthew Rosenfeld says in a Connect Texas report that, “the pandemic is still with us, but retail has reacted with innovation to remain relevant.” —LM
REBOUND TAKEAWAYS Overall, DFW closed 2021 with 93.5% occupancy, the third-best result in 32 years. Absorption totaled 3.9 million square feet, the third-strongest market in 22 years. Unanchored neighborhood centers hit a record high in occupancy. ■ The subgroup finshed the year at 92.5% occupancy. Malls are seeing greater occupancy and fewer closings. ■ Occupany is 89.5%, up 2% from 2020. In-fill projects are strong. ■ Sprouts announced plans for four more stores in DFW. ■ Dick’s Sporting Goods opened a 50,000-square-foot store in Lewisville, with another on the way in Fort Worth in 2022 . ■ At Home Group moved into a former JC Penney store in Northeast Dallas.
WHILE DFW HIT THE LOWEST LEVEL OF NEW RETAIL CONSTRUCTION RECORDED AT 640,000 SQUARE FEET IN 2021, WEITZMAN EXPECTS DELIVERIES TO DOUBLE IN 2022. 1 6 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
2022
F FOUNDATIONS M U LT I F A M I LY M O M E N T U M
PEAK PERFORMANCE: NORTH TEXAS APARTMENT MARKET BOOMING MULTIFAMILY’S ATTRACTION FOR BUILDERS AND INVESTORS SHOULD CONTINUE IN 2022. Experts believe the multifamily market in Dallas-Fort Worth will continue to be hot in 2022. Rents are up, rising 12.6% since the pandemic’s beginning in March 2020, according to Chris Salviati, a housing economist with the multifamily firm Apartment List. That puts median rents in DFW at $1,128 for a one-bedroom apartment and $1,353 for a two-bedroom. DFW ranked 55th nationally among the nation’s 100 largest cities for year-over-year rent growth, the group reports. According to the same source, year-over-year in November 2021, 102 apartment communities totaling 28,791 units opened in DFW. ApartmentData.com also reports that another 70 communities with 19,600 units are under construction, and 170 communities totaling 70,444 units are proposed and in the planning process. That’s a solid performance for the DFW multifamily sector, making it attractive for investors, according to GlobeSt.com. Greg Willett, vice president of Marcus & Millichap’s Institutional
Property Advisors multifamily research division, says in a report that areas such as Frisco, Allen, and McKinney are locations to watch. Willet echoes GlobeSt., saying that rapid population growth and household formation are making the Dallas-Fort Worth region attractive to investors worldwide. “The sizable field of buyers eager to acquire properties in the Metroplex is pushing up sale prices and compressing yields,” Willett says in his report. “From 2013-2020 the mean sale price increased by an average of more than 10% per year, a trajectory sustained in 2021.” Willett points out that last year, the average cap rate fell below 5% for the first time in history. “Many buyers are following household formation trends to North Dallas suburbs, with deal velocity ramping up in locations beyond Interstate 635 like Carrollton, Frisco, and Garland,” Willett’s report says. He predicts that the areas that will garner the largest supply of new multifamily dwellings include intown Dallas, south Arlington, and Frisco. —LM
STEVE DILLON
Steve Dillon, vice president of Balfour Beatty’s large projects group in North Texas, shares three things to know about the multifamily market in Dallas-Fort Worth.
1
NEED TO KNOW
With limited housing to accommodate North Texas’ growing market, multifamily is shaping into a prevalent sector. People are moving to North Texas daily, and with the ongoing bidding competition for houses, renting is becoming a very reasonable alternative.
2
3
TRENDS
Two years ago, developers with land in North Texas would likely use it as an opportunity to start construction for an office building. However, after the digital transition we experienced with COVID-19, we’re now seeing those developers shift to multifamily.
OUTLOOK
Currently, the occupancy rate is roughly 93% of the demand. If the rate of people moving to North Texas stays the same, the need for multifamily will remain, and the sector will continue to boom.
AFFORDABLE HOUSING
DALLAS’ EQUITABLE HOUSING FUND AIMS TO COMBAT RISING RENTS A NEW DALLAS ECONOMIC DEVELOPMENT FUND WILL RAMP UP AFFORDABLE HOUSING SUPPLY THROUGH PUBLIC-PRIVATE PARTNERSHIPS. Managed by nonprofits LISC Fund Management and TREC Community Investors, the Dallas Housing Opportunity Fund will work with investors and developers to expand options for low-income households. With rents rising along with demand, the city of Dallas recently launched a public-private partnership to provide more affordable housing to the residents who need it most. In December, the Dallas City Council approved a $6 million economic development grant to kick off the new Dallas Housing Opportunity Fund (DHOF). “To build for our future, Dallas must support programs and policies that provide and promote fair, affordable, and equitable
2022
housing,” Mayor Eric Johnson says. “By seeding the Dallas Housing Opportunity Fund, we can strengthen our neighborhoods and improve economic opportunities for all of our residents.” In the past decade, the population in the Dallas region grew more than 20%. At the same time, market asking rents increased 27%. More than half of low-income households in the city report spending more than 30% of their income on housing. The conditional grant will help finance developments that build and sustain housing options for low-to-moderate-income families. A local subsidiary of LISC Fund Management, LLC, a
nonprofi t community development financial institution based in Washington, D.C., is partnering with TREC Community Investors to lead the DHOF. The partnership will work with investors and benefactors to raise capital, identify opportunities with developers, and help overcome hurdles to diverse housing development. TREC Community Investors CEO Linda McMahon told the Dallas Business Journal, “It signals a new era at city hall that they’re willing to look at unique and public-private strategies to advance the need that we have within the city around housing. It’s a topic of concern for every corporation. It’s a topic
DALLAS MAYOR ERIC JOHNSON
of concern for our developers. It’s the beginning of some changes that I think are very positive and something new that the city has not really been focused on.” McMahon says in a statement that the fund would give developers options for capital to “ensure the housing is affordable for the long term.” —SE
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 1 7
F FOUNDATIONS ‘NO END IN SIGHT’
CBRE: DFW DATA CENTER MARKET RECORDS MOST ACTIVE LEASING QUARTER OF ALL TIME SKYROCKETING LEASING AND CONSTRUCTION ACTIVITY BODE WELL FOR LOCAL TECH.
Cheap, clean power—and location “We’re right in the middle of the country,” Bernet says. “It’s easy to get here. Our power is inexpensive, and it’s clean. And it’s reliable, despite what you might hear about the Snowmageddon last year.”
PHOTO: DATABANK VIDEO TOUR
Data may live in the cloud, but it has to have a real home somewhere. That’s where data centers come in—and the market for them in Dallas-Fort Worth has taken off like never before. So says a Q4 2021 market flash from Dallas-based commercial real estate giant CBRE. The report reveals the DallasFort Worth data center market had a strong finish to 2021, “recording the most active quarter of leasing of all time.” Several large leases signed by social media and financial services users—whose identities were not disclosed—drove the swell of activity in Q4. That led to “incredibly strong” net leasing activity for the full year, recording 80.52 megawatts (MW) in 2021, CBRE says. “We’ve had a lot of influx in corporations that feel like they need to be here,” Brant Bernet, SVP of data centers at CBRE, says. “Some of the big hyper-scalers that really hadn’t been in Dallas have come to Dallas—or are coming.” His colleague, CBRE’s Chris Herrmann. says these companies bring their data center business to the region for many of the same reasons corporate America is moving its offices here. “We also have the power infrastructure and the fiber infrastructure—the attributes to this area that could attract these companies,” Herrmann adds. “I think it bodes well for the economy that folks are looking at Dallas,” Bernet says. “It’s also taken a lot of vacancy off the books.” The momentum in Dallas-Fort Worth is clearly upward—and a sign of things to come, CBRE says. The data center experts highlight a few of the reasons why:
DALLAS-BASED DATABANK ANNOUNCED THE FOURTH EXPANSION OF ITS DFW DATA CENTER, DFW3, IN DECEMBER. BY GROWING CAPABILITIES IN THE TECH-CONCENTRATED REGION, IT AIMS TO SUPPORT THE RISING DEMAND FOR ENTERPRISE-CLASS DATA CENTERS.
Add the “really good tech workforce here,” and Bernet sees the region continuing its streak of being No. 2, 3, or 4 in the world in data center net positive absorption. “We’ll continue to stay right in that mix,” he says.
worldwide is that we’re in the first or second, maybe third, inning of an extra-inning type game.”
Booming data center construction All that increased demand has led to “skyrocketing” construction activity, CBRE reports, with Compass (Red Oak), Flexential (Plano), DataBank (Plano), and Equinix (Dallas) all building out more space to meet the strong demand for data centers in the region. CBRE data center associate Mikey Jaillet says some of the 80.52 MW in 2021 net leasing “will not even deliver until early 2023 most likely. So the future absorption pipeline, just due to this being under-construction space, looks incredibly healthy for the Dallas data center market going forward.” And while construction skyrocketed from Q3 2021, a lot of that is pre-leased, he says. However, companies like Flexential and DataBank are building out more space speculatively.
Cloud-using ‘power hogs’ are diving into local market Jaillet says the Dallas data center market has been a large one “since really the inception of data center markets,” Jaillet says. “But we haven’t had a huge interest in cloud users.” Then came the back half of Q4, when “hyper-scalers” started landing in the area. “And we still have not seen large data center leases from some of those other cloud users as well,” Jaillet says. “So as those start to hit, you’ve got to think eventually the data center market will continue to increase.” Some of those cloud users include unnamed “power hogs” of 10 MW or larger. Jaillet says there are around 10 “power hogs” in the Dallas-Fort Worth data center market at present, a number Bernet says is growing exponentially. “This business has been around competitively for 13 years to get to 10,” he says. “It won’t take 13 years to do another 10, that’s for sure.”
Expansion has just begun Bernet says there’s “no end in sight” to the expanding data center market. “Our take on the Dallas data center market and in general
Tenant-friendly market may become a landlord’s market For the last five years, the DFW data center market has been flat to downward. An overbuilt supply
of data centers led to “arguably the most tenant-friendly market in the United States,” CBRE says. That may be about to change. After the Q4 leasing spike, few large blocks of contiguous data center space remain in the market. “The data center business has not really experienced cycles like the typical real estate business has,” Bernet explains. “We overbuilt because it looked like a really good thing to do in Dallas. We and others started telling our clients, ‘You ought to look at Dallas because pricing is truly at an all-time low.’” Then, as companies are looking at Dallas, “it just starts that cycle. And so all of a sudden, here we go— back into a landlord’s type of market for the first time in probably three years.” “We’re not seeing an uptick in pricing yet,” Bernet notes. But because of basic economics and supply and demand, “it just makes sense that pricing will appreciate as we go forward.” A turn toward a landlord’s market in DFW data centers could be about more than quickly tightening supply. Bernet also points to supply chain issues for delivering data center space “that continues to get pushed out and pushed out, longer and longer. That makes it more expensive to deliver more space throughout 2022 and beyond.” —DS
WITH “NO END IN SIGHT” TO THE MARKET GROWTH, CBRE’S BRANT BERNET BELIEVES DFW IS ONLY IN THE “EARLY INNINGS” OF AN EXTRA-INNING GAME. 1 8 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
2022
F FOUNDATIONS PROPTECH PIONEER
REN TA L IN V E S T ING
CONNECTING THE DOTS IN CRE PROCESSES
NEW ONLINE PLATFORM OFFERS INVESTMENT OPPORTUNITIES IN SINGLE-FAMILYHOME RENTALS
Dottid founder and CEO Kyle Waldrep aims to disrupt the commercial real estate industry with his SaaS proptech platform. How? Dottid’s software-as-a service platform keeps assets and transaction details in line so real estate companies can focus on what matters: time, money, and relationships.
On the need for proptech: Dottid sits in one of the most critical functions for a CRE owner: leasing and asset management. With COVID-19 driving companies to remote work and fewer tenants expanding or renewing, leasing efficiency has become critical. Asset owners need to do more with less people. They need to know where deals stand. Owners must get tenants in faster to generate revenue quicker. Through our new partnership with the Altus Group, CRE owners can use Dottid for leasing and asset management, and they’ll also understand how real-time transactions are affecting the value of their assets.
PHOTO: DOTTID
Founder Waldrep, who launched Dottid in 2018, says his mission is to be the operating platfrom for commercial real estate owners worldwide. Accelerating its national rollout, the proptech startup recently announced a partnership with Lincoln Property Company—which led Dottid’s $4.5 million funding round that closed in December—and an integration with Altus Group’s ARGUS Cloud platform. The startup also launched Dottid Industrial earlier this year in a product extension. Here’s what the founder had to say about the state of proptech, CRE trends, and the future.
Ty Lee, managing director of Dallas-based Common Ground Capital and Common Dwelling, and his team take houses from purchase to profit.
KYLE WALDREP
On market challenges: One challenge facing all proptech platforms is technology adoption. CRE has historically lagged behind in the use of platforms and tools, with many users quite comfortable with current processes. Customers want robust platforms that solve big problems—building simple, intuitive technology is key. The office market has been driven by work-from-home and hybrid-work strategies, thus there are fewer leasing tours and deals signed for large space in big buildings. Trying to predict COVID-19’s next evolution is nearly impossible, so CRE organizations will have to maneuver with efficiency to get tenants in buildings and keep them happy. Tech currently plays—and will continue to play—a huge role in leasing, building operations, and tenant experience.
On how CRE looks way different than it did 10 years ago: Trophy office assets have always been the glamour of the space, and yet today, large warehouses are buying and selling like hotcakes. Investor capital has diversified to secondary and tertiary markets. Developers are building apartments and industrial assets in smaller suburbs as people migrate out of big cities. Suburban offices are easier to lease than downtown skyscrapers. We’re two years into COVID-19 changing everyday life, and public response to the future of the workforce is mixed. Office will not go away. People, at their core, desire community and thus will likely gather in a hybrid model. —Quincy Preston and Sandra Engelland
ECONOMIC DEVELOPMENT
Dallas architect and real estate developer Ty Lee launched two funds geared toward investing in the single-family home rental market last year. In March of 2021, he launched Common Ground Capital for accredited investors, and, in December, Common Dwelling,an online platform offering investment opportunities in rental houses for as little as $100. The new offering gives everyday Americans a chance to invest in— and profit from—the strong singlefamily home rental market, he says. Lee, who worked at CBRE and Perkins + Will, and his team aim to evaluate, buy, renovate, and rent homes faster than other crews, often in 7 to 14 days. His architecture background gives Common Dwelling an edge, he says, allowing his team to evaluate homes and assemble the resources to do things at an expert level. How does he find rentals amid the market’s record demand? “Even in a tight housing market, we’re able to find great yields and could literally pick up a house a day if our equity was unlimited,” he says. “As prices continue to flatten and supply continues to increase, we’re looking forward to growing our portfolio further.” Demograpics was “the biggest thing that drew me to single-family rentals,” Lee says. The stat that sealed it for him was from Arbor Realty Trust: 43% of Gen-Zers would prefer to rent a single-family house after they graduate from college instead of an apartment. —QP TY LEE
DALLAS PLANS LAUNCH OF ECONOMIC DEVELOPMENT CORPORATION Dallas has unanimous approval from the City Council to start a new nonprofit Economic Development Corporation. The nonprofit will focus on generating investment and jobs in underserved areas in the city. Separate from the existing economic development department at City Hall, the EDC would market Dallas and develop city properties. City council member Tennell Atkins told WFAA the EDC “would be able to buy land, hold land, to be able to deal directly with corporations faster than the city of Dallas.” In a tweet, Mayor Eric Johnson called the council vote a “major step forward for our city as we strive to compete more aggressively at the regional, national, and international levels.” —QP
2022
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 1 9
F FOUNDATIONS PANTHER PROJECT
FORT WORTH’S PANTHER ISLAND CLOSER TO REALITY
Fort Worth’s Panther Island isn’t an island—yet. But plans announced in January by the U.S. Army Corps of Engineers could finally bring it to life. The Corps says it will spend $403 million on the final design and build of a 1.5-mile flood-control bypass channel, which will reroute part of the Trinity River near downtown Fort Worth. The channel will turn 800 acres of land into Panther Island—which the city hopes will become a massive housing and mixed-use entertainment and recreational district, connecting downtown Fort Worth to the city’s cultural district and the stockyards. The Panther Island project has been kicking around for nearly two decades. But the project always depended on the bypass channel— the centerpiece of the Trinity River Vision/Central City Flood Control Project. Fort Worth Mayor Mattie Parker called the funding “the go-time
control and drainage operations for the island. RENDERING : 2018 FILE ART PANTHER ISLAND/CENTRAL CITY FLOOD
THE U.S. ARMY CORPS OF ENGINEERS ANNOUNCED PLANS TO SPEND $403 MILLION ON THE FINAL DESIGN/BUILD OF A CHANNEL CREATING THE ISLAND.
moment we have been anxiously awaiting.” The funding ensures a safer community and is a green light for further investment in the area. Michael Morris, the transportation director for the North Central Texas Council of Governments, may be one of the happiest recipients of the Corps of Engineers news. He was the leader of the team that financed construction of three Panther Island bridges—the last of which finally opened in October after long delays. “This gives me some relief that
we did not build our bridges in vain,” Morris told the Fort Worth Report. “That decision appears to have paid off, and I think Panther Island is a game changer for the city.” The FWR notes that Panther Island’s total cost is estimated to be around $1.16 billion, with the Tarrant Regional Water District, the city of Fort Worth, the Texas Department of Transportation, and a tax increment financing zone slated to cover the rest of the funding. A $250 million bond package passed in 2018 will also help fund flood
What’s next —and what’s to come When the channel is completed—perhaps by 2025, according to a Trinity River Vision Authority timeline—it will be up to the private sector to invest in and fully build out Panther Island. As the FWR article notes, the University of North Texas conducted a 2014 economic impact study that projected more than 29,600 full-time workers could be employed on Panther Island, generating over $3.7 billion in annual economic activity. The island could potentially be home to 10,000 housing units and 3 million square feet of commercial space. In essence, it’s all a case of “If you build it, it will come.” Now that the Corps of Engineers is building the channel, Panther Island and a big new chapter for Fort Worth may be coming at last. “The Trinity River flood control project is a critical piece of infrastructure that will provide needed flood protection and growth opportunities to Fort Worth,” added Congressman Marc Veasey. “I’m pleased to have been a part of the bipartisan team that got this project over the goal line.” —DS
TREND REPORT
CRE INFLECTION POINT: WHICH WAY WILL THE INDUSTRY GO? DELOITTE REAL ESTATE OUTLOOK SAYS COMBINED DISRUPTION MEANS CHANGE IN HOW CRE IS DEVELOPED, FINANCED, AND USED. The commercial real estate industry is poised at the forefront of the recovery. That’s according to a recent survey and report titled the “2022 Commercial Real Estate Outlook,” released by Deloitte Touche Tohmatsu, a multinational professional services network with offices in over 150 countries and territories around the world. “After nearly two years of change not seen in many generations, the CRE industry is at an inflection point. Which way will it go?” Deloitte asks in its summary.
2 0 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
More than 400 senior executives at large commercial real estate firms around the world responded to the survey, which found that two-thirds of respondents say they expect their companies to be partially or completely remote in the future. Wyn Smith, Deloitte’s senior real estate partner for audit and assurance in North Texas, says that organizations should be forwardlooking and that the Dallas region is experiencing much of what other areas are feeling. “Optimism prevails, according to our recent CRE outlook, and that may define forward activity,“ Smith says. “Rather than merely riding the current wave, organizations should be driving toward long-term positive financial results, with a specific focus on new technologies,
tools, and the skillsets to utilize them.” Smith says that the larger CRE market is seeing significant M&A activity, that there is money to be invested, and that long-term fundamentals matter. “These market forces are playing out locally as well,” Smith says. “Dallas is an incubator for top industry talent but hasn’t escaped the resignation and hiring trend. These same technologies and tools being used to drive financial results could also be a draw to top talent looking to work with innovative companies.” Overall, the report says, “optimism around fundamentals prevails,” as 80% of respondents think their company’s revenues in 2022 will be slightly or significantly better than 2021 levels.
Deloitte also says companies are dealing with increased demands to prioritize environmental, social, and governance (ESG) issues as they face aging technology infrastructures, a tightening labor market, and increasingly differentiated competition. Deloitte’s report underscores how the pandemic has altered the outlook of employees in the industry. It reveals that some employers, who are battling hard for talent, aren’t responding quickly enough to these shifts. The respondents say that they want more purpose-driven work environments to focus more resources on ESG goals. They foresee their workplaces offering more flexibility in benefits and in working remotely, according to the report. — LM
2022
F FOUNDATIONS
RENDERING : OMNIPLAN
P U B L I C - P R I VAT E PA R T N E R S H IP
DALLAS INTERNATIONAL DISTRICT TAKES SHAPE FROM ‘ZOMBIE MALL’ TO GLOBAL DESTINATION, A PLAN 10 YEARS IN THE MAKING AIMS TO TURN THE VALLEY VIEW-GALLERIA AREA INTO INTERNATIONAL CENTER FOR BUSINESS OF ALL SIZES. From French to Farsi, Hindi to Haitian, and Thai to Tagalog, Dallas residents speak a world of languages. Now Dallas is putting an accent on its growing diversity—by establishing an International District in one of the city’s most prime locations, the Valley View-Galleria area. Dallas’ new International District will provide a unique home for international businesses of all sizes— along with a 20-acre central park, international festivals, community gatherings, and a nearby PreK-12 STEAM International Academy being built by the Dallas ISD. Funded by a public-private partnership, the district can also be a testing ground for innovation with a civic smart zone and an automated people mover. In January, the Dallas City Council’s Economic Development Committee advanced the district initiative in the 450-acre area located north of LBJ Freeway between the Dallas North Tollway and Preston Road. “Dallas is already an international city with a diverse population, major attractions, and two world-class airports,” Dallas Mayor Eric Johnson says. “But we still have immense untapped potential, 2022
and we can do more to promote and enhance our unique assets, strengthen our global business ties, and increase international tourism.” The International District is an opportunity to boost the city’s presence on the global stage—while transforming an underutilized area, the mayor says. Public-private partnership A public-private partnership will fund the International District initiative, along with support from the city of Dallas, local developers, businesses, and private foundations and individuals. The city believes the district will fuel new commercial opportunities for Dallas. Ten years of planning led to the January announcement. From 2011 to 2013, a public-private partnership was formed by the city of Dallas, the North Dallas Chamber of Commerce, and area stakeholders. In May 2013, the Dallas City Council adopted the Valley View-Galleria Area Plan. Its goal: create a walkable, mixed-use neighborhood anchored by a public park. 20-acre ‘iconic’ central park At the heart of the development will be a 20-acre “iconic park” called
The Commons of the International District, built with $6 million in funds from the 2017 Dallas bond program, conditioned on a $6 million match of private grants or donations. MIG, a Berkeley, California-based expert in park design, developed a conceptual master plan for the park back in 2016-17, and the park’s first parcel has already been acquired by the city of Dallas through the purchase of Prism Center at 5580 Peterson, a building that’s now housing the district office of Dallas City Council District 11. The building will also be the proposed home of an International Business Center and Entrepreneurship Center. ‘Civic Innovation Smart Zone’ As a Civic Innovation Smart Zone, the International District will leverage best practices in smart cities and eco-friendly design. The new park will be a “testing ground for park innovation,” and energy efficiency will be a key goal at Prism Center and new developments in the district. “Green walls” and improved concrete will reduce the impact of an urban “heat island,” while drought-tolerant planting and rainwater recycling systems will help preserve water.
Another feature in the district could include an automated “people mover.” In 2020, the NCTCOG’s Regional Transportation Council authorized $10 million in funds to implement an automated transportation system (ATS) pilot in the Valley View-Galleria area. Last April, the NCTCOG executive board authorized an $850,000 consult contract with Lea+Elliott, Inc., to develop performance guidelines for the ATS system. Bike- and pedestrian-friendly Montfort Drive will bisect the east side of the park. The city is working on a “complete street” project for Montfort—reducing vehicle traffic, improving walkability, and adding new bike lanes. This street project is set for completion by late 2022. STEAM ‘school of the future’ In November 2020, voters approved a Dallas ISD bond package that set aside $75 million to build a new K-12 STEAM school near the district. The STEAM school (focused on science, technology, engineering, arts, and math) will be a 50/50 “transformation school,” with 50% of its seats going to economically disadvantaged students. —DS
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 2 1
B BUILDING TOMORROW TOGETHER
DALLAS REGION ECONOMY ON A
BRIDGE TO NORMAL FOR 2022
DFW has returned to its normal, frontrunning position as the best-performing major regional economy in the U.S.
The latest economic indicators show a complete recovery of jobs lost during the COVID-19 pandemic and a return to prepandemic job creation rates. Put on your economic hat and take a moment to appreciate that you are in DFW and in Texas. 2021 was a remarkable year, and we’ve now crossed the bridge to 2022. The tailwind of our record-breaking economic year in 2019, along with the success, growth, and investments made in our region over the past decade—and the movement here of companies and people—benefitted us greatly during the pandemic.
2 2 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
The most recent jobs data, through November 2021, reminds me of when our region lapped the field in 2019. Looking at the most recent three-year period, a bridge of time with the start of the pandemic at its center, DFW has added 179,600 jobs. Phoenix (106,700) and Atlanta (24,800) are the other metros among the nation’s top 12 to add jobs. DFW is now at 103 percent of our prepandemic job level, though the mix of jobs is different. We lag, like other regions, in lost hosBY MIKE ROSA pitality jobs, but we added 85,300 professionSENIOR VICE PRESIDENT, al and business service jobs, 60,500 trade and ECONOMIC DEVELOPMENT, transportation jobs, and 24,900 financial jobs DALLAS REGIONAL CHAMBER in the past three years. All the recent good news of company relocations and expansions feels normal, too. Two Fortune 500 companies made headquarters moves to DFW official this
2022
B BUILDING TOMORROW TOGETHER year: AECOM to Dallas and Charles Schwab to Westlake. Furthermore, Texas Instruments announced an expansion in Sherman that could result in 3,000 jobs and an investment of $30 billion. Caterpillar Electric Power is putting its headquarters in Irving. WileyX, makers of tactical gear, moved to Frisco. Ariat, makers of equestrian wear, landed in Fort Worth. Vanguard just announced its fifth major U.S. hub will be in Plano. PepsiCo announced two large digital hubs, one here and one in Barcelona. And TripActions, a travel-based Palo Alto tech company that chose Dallas in late 2019 but was obviously impacted a couple of months later, has returned to hiring mode. Extending the bridge back to 2016, six Fortune 500 companies have relocated here. We’ve also added over 45,000 tech jobs, doubling Austin. The DRC is currently tracking over 100 corporate location projects, a pipeline that includes organizations starting with a data inquiry to others in the decision phase after making field visits. Some are very active, and some are paused waiting for COVID-19 or other uncertainties to fade. The projects are across sectors, a testimony to our region’s appeal to companies and functions of all types. Notably, most of our projects initiated during the pandemic. Electric vehicle companies, biotech companies, financial services companies, and food and beverage makers are represented. Headquarters, corporate offices, data or research centers, and manufacturing and logistics functions are being considered. We learned recently that one project, a California company not quite ready to announce, will take a two-step approach to growing here. This tech company will first establish a significant presence, with an eye toward a bigger shift after that. Two-steps have been a theme lately—and an effective way for companies to land. Additionally, the DRC’s domestic marketing
WANT TO LEARN MORE ABOUT HOW TO GET INVOLVED IN BUILDING TOMORROW TOGETHER?
2022
THERE ARE A LOT OF HATS UNDER WHICH DFW AND TEXAS ARE GREAT PLACES TO BE, AND WE’RE LOOKING FORWARD TO CONTINUING THAT TREND IN 2022.
INVESTING IN OUR FUTURE
efforts returned to normal over the last half of 2021. In late October 2021, we took our first corporate contact mission to California in two years. In California, we found something familiar. We met a tech company president frustrated by how difficult and onerous the permitting process is at their California location, while needing to expand greatly with a hot new tech product. We met the C-suite employees of a company in the medical device sector that had to expand in California during the pandemic, but now seeks a more central U.S. location for its manufacturing and corporate office growth. Another company’s president is simply tired of “what’s happened here in California.” Our visit was timed perfectly with his intent to initiate a headquarters relocation search using a major national advisory firm. Every company on this trip is now an active case. There are a lot of hats under which DFW and Texas are great places to be, and we’re looking forward to continuing that trend in 2022.
Contact Mike Rosa, Senior Vice President, Economic Development, Dallas Regional Chamber 214-746-6735 | mrosa@dallaschamber.org
The Tomorrow Fund provides the Dallas Regional Chamber with the necessary resources to drive economic development, improve education, and attract talent. It also supports our public policy advocacy efforts in Austin and Washington, D.C., on critical business priorities—including infrastructure, transportation, and water issues—to strategically manage our region’s growth. The Tomorrow Fund offers an accelerated investment opportunity for DRC member companies. Whereas annual membership dues fund our daily activities to support member companies, Tomorrow Fund investments are specifically targeted to implement our strategic goals. More than 185 DRC member companies invest in the Tomorrow Fund, allowing us to improve the long-term economic prosperity for our business community and enhanced quality of life for all who live and work in the Dallas Region.
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 2 3
A FEATURE
2 4 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
2022
A FEATURE
HOW DALLAS-FORT WORTH
BECAME A TOP-TIER
REAL ESTATE MARKET BY DAVE MOORE
SOMEWHERE ALONG THE WAY, BETWEEN THE SAVINGS AND LOAN crash in 1985 and CBRE’s announcement of Dallas as its new headquarters in October 2020, the Dallas-Fort Worth region joined the upper echelon of the country’s commercial real estate markets. DFW can count itself among Los Angeles, Chicago, and New York City. Exactly how it got here strikes at the heart of this region’s viability, charm, and ability to adapt. It’s a story about something called “coopetition,” of good weather, available land not hemmed in by mountains or an ocean, and a steady flow of inbound moving vans filled with (primarily) Type A personalities. It’s also a tale of how DFW was a forerunner in creating a national commercial real estate market, one that is increasingly diverse and always evolving, despite the turmoil that has roiled our timeline.
‘WE’VE COME A LONG WAY’ Mike Lafitte has been in the DFW commercial real estate market since 1984— long enough to witness the S&L bust of 1985, the 2018 regional bid for Amazon HQ2, and a global pandemic. He’s watched the evolution of the DFW real estate market from a boxer, who was knocked on its back by the S&L panic, to a martial artist, who turns adversity to their advantage. But unlike during the S&L meltdown, this market has withstood the pandemic’s roundhouse punch, and—two calendar years in—is bruised, but still standing, evolving, and even shining above traditional top-tier markets. “When I started in the business in 1984, there wasn’t as much discipline—and there was a lot of exuberance in the market,” Lafitte says. “Now, I think over time, the discipline of the marketplace has kicked in. The banks have done their job. Supply and demand balance matters a lot … and Dallas has been a magnet for job growth driving demand. And, as a result, it’s a great place to do business.”
2022
A key backbone for all that progress: the massive amount of land available to the region, exceeding 9,000 square miles and enabling growth in every direction. With more room to grow, Lafitte said, there’s less reliance on dense urban development and public transit, making the region more attractive. Lafitte, who is global CEO of CBRE’s Real Estate Investments business segment and CEO of Trammell Crow Company, has found that COVID-19 spurred an explosion in the demand for warehouse construction due to the explosion of e-commerce and a decline in traditional shopping. Institutional investors—both domestic and international—have watched that trend over time and have concluded that DFW is a safe market for their capital, he said. All that institutional support has added up. During the first nine months of 2020, Dallas supplanted Manhattan for the top spot. What’s more, RC Analytics concluded that between the second quarter of 2020 and the first quarter of 2021, DFW became the No. 1 U.S. market for commercial real estate construction, growing by 24% in that period—double the next-biggest market, L.A. Dallas-Fort Worth has “come a long way in
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 2 5
A FEATURE becoming respected by institutional capital investors, such as pension funds, REITs, and other sophisticated investors,” Lafitte says. “Dallas has emerged as an elite market for institutional capital.” The lack of drama in the DFW story is why investors are parking their money here, and why they’re sleeping at night after they do.
‘COOPETITION’ In describing what sets DFW’s commercial real estate community apart, The Real Estate Council (TREC) President and CEO Linda McMahon recalls a meeting during peak pandemic a while back. McMahon was speaking virtually with longtime Dallas real estate leader Lucy Billingsley, when Billingsley commented how much she appreciated being able to discuss the crisis with peers. “Everyone was head-down, trying to figure out what they were going to do with their own business,” McMahon recalls. “She said, ‘I miss
Dallas has emerged as an elite market for institutional capital.
Linda mCMahon, TREC
having these types of candid conversations about issues we are facing.’” So McMahon talked to TREC Chairman Bill Cawley about organizing regular virtual meetings with industry leaders. Cawley gave the go-ahead, and the first meeting was organized, with the top 35 commercial real estate executives across the region invited to chat. The resulting conversation was an example of “coopetition”: The executives— who compete daily in the hard-scrabble world of commercial real estate—opened up and spoke of their own experiences, thoughts, and concerns. “The spirit of transparency … has been unbelievable,” McMahon says. The intention wasn’t to create content for public consumption, but that’s what happened. That conversation now lives as a CRE Executive Roundtable podcast, along with 117 other TREC-produced podcasts. But how does this camaraderie give the Dallas Fort Worth region a competitive advantage in the commercial real estate market? McMahon says this: “During the Amazon bid, I organized the Dallas response and worked with multiple developers who were clearly competing. But each felt confident in their own site and development team, so they worked together. “We had a few meetings when they were all in the same room led by [then] Mayor Mike Rawlings, and the spirit that they all expressed was, let’s just win for Dallas. And then they each played their own game. And each one had a very different game.”
LEAVING EGOS AT THE DOOR
— Mike Lafitte, CBRE
2 6 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
Bert Crouch, Invesco
Among the executives featured on the CEO roundtable calls was Invesco’s Bert Crouch. “I felt the need to reciprocate,” says Crouch, managing director/head of North America Invesco Real Estate. “The calls resulted in very candid conversations. Getting all those executive-level people together, they left their egos at the door. They weren’t being as close to their vests, as would have been the norm. You don’t feel like people
A FEATURE
Mark D. Gibson, JLL
Gaston Sirito, JPMorgan Chase
were pitching their book, or telling us what they wanted us to hear. It was very candid feedback on the retail environment, capital flows, financing, [and] who’s doing what and why.” Though Crouch hails from Dallas-Fort Worth, he worked in San Francisco and Manhattan in Wells Fargo’s Real Estate Merchant Banking Group. After an interim stop at Hunt Realty, he joined Invesco’s Dallas office. “Invesco Real Estate was launching an opportunistic strategy targeting distressed commercial mortgages coming out of the Global Financial Crisis” of 2009, he wrote in an email to DALLAS® Commercial Real Estate. “So, they needed someone with a structured credit background to focus on acquiring one-off and portfolios of non/sub-performing commercial real estate loans, along with other opportunistic investments stemming from the downturn.” While in Manhattan, Crouch experienced the hypercompetitive, wildly diverse New York City market. “My focus was on structured real estate lending in New York,” he says. “There was no better place to do it. There’s no more dynamic market for someone who was fairly young and trying to learn the business than in Manhattan.” Fast-forward roughly 15 years after he moved back to North Texas, and Crouch recognizes Dallas’ arrival as a top-tier real estate market, and with that, the increased competitiveness and burgeoning diversity.
DFW HISTORY SHAPES U.S. COMMERCIAL REAL ESTATE There’s no denying Dallas-Fort Worth’s growing influence in the commercial real estate industry, from 1948, when Trammell Crow secured his first lease (renting out space in his family warehouse), to October 2020, when CBRE announced its move from L.A. to Dallas. In that 70-year stretch, DFW’s population soared from roughly 1.1 million to 7.7 million, Invesco established its commercial real estate arm here, Cushman & Wakefield CEO Brett White announced his
move here, and DFW was named the No. 1 commercial real estate market in the U.S. Mark D. Gibson, CEO for capital markets in the Americas at JLL, says that DFW is one of the most competitive real estate markets in the United States, including NYC, or any other major gateway city. He attributes that fact to the commercial real estate talent found in the region and says DFW played a key role in shaping the future of the industry. “You had companies that were based in Dallas—let’s take Trammell Crow and the Lincoln Properties Company as two examples,” he says. “Those were, and remain, highly innovative, partnership-driven companies that started in Dallas and expanded nationally. Those two enterprises were truly the early ‘movers’ that changed the model of commercial real estate. “Prior to their expansion nationally, the commercial real estate industry largely consisted of parochial, locally owned and focused businesses,” Gibson says. “So, again, the modern business model of national real estate companies can largely trace its beginnings to Dallas.” DFW’s commercial real estate talent drew even more talent, and continues to do so, he says. “It all revolves around the incredible commercial real estate talent that resides here, and that is due to large companies like Trammell Crow, Lincoln, and others,” Gibson says. “Those companies were started in Dallas by highly entrepreneurial individuals who, in turn, attracted other highly entrepreneurial, talented individuals to Dallas, and that core talent base has greatly expanded as the industry has grown.” In 1993, Gibson—one of those highly entrepreneurial individuals he describes above— sold his house in Houston and tapped into his personal savings to open an office in Preston Center with his business partner, Joe B. “Jody” Thornton (who is now president of capital markets for the America’s at JLL). “I saw a burgeoning real estate business with best-in-class people,” he says. “I thought it would be a great place to plant a flag, grow a career, and to raise a family.” Gibson says that while he doesn’t see JLL moving its headquarters from Chicago to DFW, a significant percentage of the leadership of JLL North America resides in DFW.
‘THE OFFICE IS NOT DEAD’ Although the abrupt switch to remote work challenged every company, few dealt with it
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 2 7
A FEATURE
Gone are the days of ultra-conservative vernacular. We are becoming a melting pot of diversity. Derrick Evers Kaizen Development Partners
EXPANDING IN TERRITORY, DIVERSITY
as successfully as DFW’s commercial real estate market, says Gaston Sirito, who oversees JPMorganChase’s corporate real estate division and covers the southern U.S. and Latin America, extending from Florida to Nevada. That’s another testament to the market’s ability to adapt. Those flexible and hybrid arrangements will remain in most workplaces for the foreseeable future—and shared office space will remain the hub for company activity, Sirito says. “We are not just going back to the same place we were at the start of 2020,” he writes. “Although we’ve seen some rightsizing of portfolios to account for remote working, I’m a firm believer that the office is not dead,” he says. “While we all heard those initial declarations along the lines of ‘we are never going back!’, we really can’t ignore the adverse effects of permanent remote working on companies’ culture, brand, collaboration, innovation, etc.”
2 8 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
Derrick Evers personifies the notion of growing diversity in commercial real estate in Dallas-Fort Worth. Evers—CEO and managing partner at Kaizen Development Partners—entered the scene in 2006, when he joined the Staubach company. Two years later, he joined Trammell Crow under the mentorship of Bob Sulentic, who, at the time, was CEO of Trammell Crow. Over the years, Evers has seen the diversity of the DFW commercial real estate industry improve (though, he says, it still has a way to go). Sulentic is now president and CEO of CBRE. “He’s a wonderful man. In that time [we worked together], there was so much I picked up from him,” Evers says. “He said, ‘Derrick, you’ve got to be impeccably trustworthy. To have that, you’ve got to sit down with the stakeholders and find what will work with them. This way, you’ll have their trust.’” Evers acknowledges that that approach is harder, but that’s the tack his company is taking. From a design and implementation standpoint, Kaizen started incorporating advanced air-cleaning technology—called HVAC Load Reduction (HLR)—that uses super filtration of indoor air, rather than pumping outdoor air into buildings (especially desirable, considering DFW’s sweltering summers). Customers typically realize energy savings of between 20 to 30%, according to manufacturer enVerid. Kaizen incorporated that technology into its Uptown development, The Link, before COVID. In the relatively short 20 years that he’s been in commercial real estate in DFW, Evers has noticed that the geographic and population growth of DFW has led to a cultural shift as well. The impacts, he says, range from attracting investors from across the globe, to more sustainable developments, to projects geared toward how they make occupants feel. “Gone are the days of ultraconservative vernacular,” Evers says. “We are becoming a melting pot of diversity. While we typically think of ethnic diversity, we are also seeing the diversity in thought and approach, due to the massive infusion of people not from the Lone Star State. That additional exposure has made DFW very much a gateway for capital investments both domestically and internationally into our market.”
2022
O OUTLOOK
VIEWFROMTHETOPTIER
REALESTATEROCKSTARSSHAREINSIGHTS ONTHEFUTUREOFCREINDALLAS-FORTWORTH PACKAGE BY Quincy Preston, Sandra Engelland, and Lance Murray
Whether you’re putting the past two years under a microscope or using a telescope to envision what’s ahead, the Dallas-Fort Worth region has shown a tough resilience during the pandemic. We’ve also been presented with the kinds of opportunities that can mark an inflection point for North Texas. Through it all, companies continue to seek out Dallas-Fort Worth to relocate or expand their businesses. Investors are choosing to back projects here because they know an investment in DFW is a good one. In other words, we’re a contender—not only nationally, but on the global stage.
2022
Continued on page 30
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 2 9
F FEATURE Continued from page 29
In fact, as Dave Moore points out in “How Dallas-Fort Worth Became a Top-Tier Real Estate Market,” the region has joined Los Angeles, Chicago, and New York in the upper echelon of the nation’s commercial real estate markets. That didn't happen overnight. It's been a determined, steady rise for Dallas-Fort Worth as economic development experts, CRE leaders, and others have worked for decades to raise the region’s profile, attract investment, and create the kinds of environments that will attract corporate headquarters and an ever-growing workforce. To use a boxing analogy, Bill Sproull says, “There's no doubt that we’re punching above our class.”
“we've done a really good job across Dallas-Fort Worth of diversifying industries, looking at life sciences and biotech, and expanding technology efforts." Robert Sturns
It 'staggers the mind.' The number of people and companies moving to North Texas “staggers the mind,” says Sproull, president and CEO of the Richardson Chamber and Tech Titans. He believes that Dallas-Fort Worth leads the nation in terms of all the regions that have emerged from the pandemic the quickest and regained the jobs that were lost. But we also lead the nation in the percentage of office workers who have gone back to the office, he says. “That doesn't mean they're in the office 24/7, 365,” Sproull says. “But think about that in terms of the commercial real estate industry: It’s an in-person industry.” The combination of the momentum we have in Dallas-Fort Worth—the companies and people moving here—added to the fact that we lead the nation in the percentage of office workers back to the office “really does allow us to punch above our weight class,” he says. It’s part of our culture of success: “People believe in the value of work here,” Sproull says. “To me, that's always spoken volumes about the way that CEOs regard the productivity of people in this market. They're just hard workers.” He says CEOs consistently rank Texas high in surveys, saying “I'm choosing North Texas in this market for what they do.” Sproull, who moved back to DFW some 25 years ago, remembers one of the Dallas Observer’s “Best of Dallas” stories: “The lead was really funny, and it struck me just having come back to Texas, but the writer said, ‘Dallas is a business town with no natural beauty and a lot of attitude.’” Yes, says Sproull, “There is an attitude here. We find a way to succeed.” What makes DFW great Robert Sturns, who leads economic development efforts for the city of Fort Worth, is also impressed by the energy in Dallas-Fort Worth as a whole. "Whether we're punching above our weight, or we're just hitting our aspirational goal," he says, "there's a lot of excitement." Everyone thought COVID-19 would slow things to a crawl, he says. But "it's probably busier now than we were before the pandemic." Sturns thinks our "historical base has been growing, and we've done a really good job across Dallas-Fort Worth of diversifying industries, looking at life sciences and biotech, and expanding technology efforts." Sturns and Sproull are among a group of economic development and commercial real estate experts that we invited to share their thoughts about where the region has been, and where it's headed. They examine the positives and the negatives: What makes DFW great? What challenges must the region overcome as it continues its ascent to greater prosperity and a more prominent place in the nation’s commercial real estate establishment? Alan Shor, co-founder and president of The Retail Connection, sums it up: “DFW can take advantage of the current CRE trends and influence them. There’s no stronger market in the industrial, multifamily, retail, or office categories.” Read more of the "View From the Top Tier" in the pages that follow.
3 0 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
2022
F FEATURE
How DFW PUNCHES ABOVE ITS WEIGHT IN CRE Here's what leaders in the region had to say about our Dallas-Fort Worth 'X factors.' JASON FORD
KIM BUTTRAM
KERI SAMFORD
BETH BOWMAN
ALAN SHOR
Frisco EDC
Mesquite EDC
The Colony EDC
Irving EDC
The Retail Connection
DFW’s central location and
Here are five top factors:
When it comes to the factors
Our region is rich in offering
DFW has been—and will
lower costs (lower than
Location. We're lucky to
companies evaluate for
a variety of communities
continue to be—one of the
coastal cities) makes it very
be in the center of the
expansion or relocation,
that can serve the many
fastest-growing MSAs in the
attractive as companies
continental U.S.
the Dallas region continues
needs of companies looking
country, with announcements
realign their footprints.
Accessible. Land availability
to rank high in all areas,
to expand or find a new
almost monthly about busi-
Mobile talent is also flocking
and competitive cost of
including having a central
place to call home. We
nesses relocating or opening
to North Texas because
doing business; access to
location in the U.S. for
can serve a multitude of
major regional offices here.
lifestyles improve as
workforce talent on all sides
distribution and market
needs—from industrial to
The region is predicted to add
money goes further here.
and of all skill levels.
access, a diverse and
e-commerce—and we also
more than 1.7 million residents
From a local perspective,
Workforce. Companies
well-educated workforce, a
offer an attractive location
in the next seven to eight years,
Frisco is a city that takes a
go where the people are.
pro-business environment
for employees searching
making it the third-largest
common sense approach to
Our population explosion
with low taxes, and a high
for affordability and job
metropolitan area in the U.S.
public planning, business
naturally attracts the need for
quality of life with excellent
opportunities, which are
A great example of DFW’s
continuity, public health,
additional products and ser-
communities.
abundant because of our
population growth is the 380
and safety. We have long
vices, plus companies want
continued growth.
corridor—literally, thousands
advocated for heavy
to be where the talent is.
of homes are planned north of
green space in mixed-use
Supply chain. Close
380. Coupled with the explo-
developments. Today,
proximity to suppliers,
sive growth in the communities
that’s a very-high demand
services, related industry.
of North McKinney, Prosper,
amenity for residents,
Business-friendly
Celina, and Little Elm—and the
companies, and employees
environment. Freedom to
transformative PGA HQ Devel-
seeking healthy workspaces
do business without over-
opment—the 380 corridor is
and engaging outdoor
regulating policies.
one of the hottest submarkets in the country.
environments.
BRAD GIBSON
CHRIS GOMES
DANNY BAKER
BILL SPROULL
STEVE WILLIAMSON
HALL Group
Marcus & Millichap
CBRE
Richardson Chamber/Tech Titans
Transwestern
Here are three top factors:
North Texas, especially
Dallas-Fort Worth has
Nationally, there's a
Land parcels in DFW are now
Geographical location.
the DFW MSA, is a highly
become the epicenter of
"buy America" resurgence,
commanding the highest
The Dallas region is centrally
sought-after market for
growth in North America.
particularly in the
sale prices on record.
located and has an ease of
hospitality investors. I've
We’re in the middle of
semiconductor industry.
New development for all
accessibility for domestic
seen a huge influx of out-
a population boom that
In North Texas, you can
product types, but especially
and international travel.
of-state investors moving
has led to the region
look at Texas Instruments'
for industrial and residential
Talent. The talent pool in
into North Texas and a
outperforming other
plans for its new fab
projects, literally exploded
the Dallas region is among
growing number of first-time
markets in terms of job
plants in Sherman and its
in the last half of 2021. The
the best in the country, with
buyers getting into the hotel
creation and growth, as
continued expansion in
unprecedented levels of new
multiple universities locally
industry. Low corporate
well as the demand for all
Richardson. They can't wait
development throughout the
and a draw for graduates
travel is going to continue
types of CRE.
to get the equipment in
region will continue to drive
who return to the area after
to be a challenge for certain
there and start producing.
increases in land prices in
attending other prestigious
corporate-driven markets.
multifamily boom we're
Next door to them is
2022. All product types for
universities.
On the contrary, non-urban
seeing now: population
Qorvo, which is expanding.
land are in great demand,
Taxes. The environment is
core hotels, especially
growth and migration
That kind of advanced
but particularly land that's
friendly to corporations,
interstate and some
trends, business-friendly
manufacturing plays very
already zoned for industrial,
resulting in savings
secondary-tertiary markets
environment, relative
well here in the Dallas area.
multifamily, and townhomes.
specifically around taxes and
here actually performed
affordability compared
Watch the "buy America"
ease of doing business.
better in 2021 than
to coastal markets, and
trend: I think a lot of that
prepandemic comparisons
sustained levels of rent
will be tied into the United
and are expected to continue
growth are forecasted.
States-Mexico-Canada
2022
In terms of the
the same trend in 2022,
agreement (USMCA).
thus presenting some
It opens a door to more
opportunities for investors.
opportunity.
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 3 1
F FEATURE OFFICE
BILL CAWLEY
CHAIRMAN & CEO, CAWLEY PARTNERS The chairman and CEO of Cawley Partners is known for his impact in the North Texas office market, especially along the Dallas North Tollway. Cawley has acquired and developed more than 12 million square feet of office space. While much of the office market has slowed during the pandemic, Cawley Partners keeps moving deals forward to match the optimism of its founder, launching plans to build a 600,000-square-foot office campus in Frisco and a 500,000-square-foot office development in The Colony. Cawley says, “Dallas is thriving while other markets continue to lag.” What activity are you seeing in DFW office development and leasing now? DFW is as active as I have ever seen it. There are many companies actively looking to relocate to the market. Developers are starting several speculative office projects in the Uptown and Far North Dallas submarkets. I think we will reach pre-pandemic absorption numbers. What are the biggest challenges and opportunities for the North Texas office market right now? I see two major challenges. First, the disconnect between the incredible leasing activity and the capital's willingness to invest. The market could handle more product, but it will take several buildings being leased up for capital to jump in. The second issue is the sublease space, but we are seeing lots of it get absorbed as well as being taken off the market for use by the current user. How do you see proptech developing in the market? Proptech is here in a big way. Technology embraced issues brought out by the pandemic, and technology will continue to lead us to solutions that make our tenants feel safe, as well as enhance their experience within our buildings.
3 2 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
“If you’re not changing in today’s market, you will soon be out of the game.” BILL CAWLEY How is the CRE industry changing today and in the future? Real estate is constantly changing. Cleanliness, building standards, safety for our customers, greater amenities, more outside gathering spaces—these things are evolving to keep up with the changing workforce environment. If you’re not changing in today’s market, you will soon be out of the game.
2022
F FEATURE DEVELOPMENT
LEASING
TORREY LITTLEJOHN
DAVID CUNNINGHAM
SENIOR DIRECTOR, DEVELOPMENT & CONSTRUCTION, GRANITE PROPERTIES What activity are you seeing in the DFW office sector right now? New office projects, delayed due to the pandemic, are now being developed, and we expect that to continue. Granite is well into restarting the bulk of our pipeline that was ready to start back in March of 2020. By mid-2022 we will have started the 2020 projects, and we'll begin to refill the pipeline for new projects for future starts.
How is leasing going?
We’ve seen increases in leasing activity in the past six months.
What are the biggest opportunities and challenges for office developers in DFW?
The biggest opportunity is that people and companies want to be in Dallas—there is demand here. And while costs are greater, they are still lower than other cities. The biggest challenge is cost. Whether that’s due to shortage of manpower, materials, or a delay in shipping. Costs are increasing and fast.
Are amenities helping win deals?
There's a flight to quality. Class-A buildings with the best mechanical systems, amenities, and locations will continue to see demand and, we think, will win the bulk of new customers. I believe architecture matters. Not just a cool design but also the right amenities, sufficient parking, and the right look and feel. You spend a large amount of time at the office, and I view the office as another home to spend with your work family. Offices need to be comfortable, have driveup appeal, and give you an image of what you want your company to say about itself. You'll also see more office buildings offering wellness and sustainability-focused features, including green and outdoor spaces for people to work and gather. We just broke ground on Granite Park Six, which includes a large outdoor terrace for people to work, meet, and unwind.
LEASING
BRAD GIBSON
VICE PRESIDENT OF LEASING, HALL GROUP What activity are you seeing in DFW office development?
There are local developers with speculative office developments planned or under construction. Much of the speculative builds are part of a mixed-use development, which is a result of the demands of companies looking to satisfy their workforces. There's still a large amount of vacancy in existing buildings that needs to be absorbed, but demand leans toward new or renovated product with abundant amenities. In 2022 and beyond, as more out-of-state companies add offices in the region, we're likely to
2022
see new developments with large lead tenants kicking them off.
How is the CRE industry changing?
The CRE industry is fluid and changing constantly, which was amplified and expedited because of COVID-19. Companies and landlords are tasked with getting employees back to the office safely and effectively. Ultimately, we know it's best to have in-person interaction for the prosperity of many organizations—though employees often feel just as effective working remotely and are holding the cards.
MANAGING DIRECTOR, JLL
Littlejohn thinks Dallas will continue to be a top contender for corporate relocations "as large out-of-state businesses consider moving to Texas to tap into cheaper labor and more favorable tax treatments." What opportunities and challenges do you anticipate?
Inflation and rising interest rates may create some challenges. Sticker shock on rents and construction may extend the decision process for companies who have not been in the market recently. However, North Texas still has extremely attractive labor demographics for companies. Increasing real estate costs are palatable when companies are better able to manage and grow their talent and productivity.
How do you envision the office environment of the future?
Despite the willingness to continue to work from home on a regular basis post-pandemic, employees still retain a strong affinity for the office. Research suggests the office provides a sense of community and belonging, where remote work has led to gaps in collaboration, leadership, and managerial competencies. The COVID-19 pandemic ushered in a new appreciation for personal workspace, but that doesn’t mean that workplaces should evolve into sterile and isolating environments once people return. On the contrary, after months of remote working, many have learned that the value a workplace offers is not an individual desk or office, but a place to gather for collaboration, brainstorming, and socialization. The workplace of the (near) future should incorporate spaces which empower and encourage exactly what we have all been missing: connection. Offices must inspire collaboration and innovation through their design, with the physical space a reflection of the culture.
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 3 3
F FEATURE our first suburban location with Granite Park in Plano. Honestly, we opened that location with Granite Properties with zero data on how coworking would perform in the suburbs. And it was incredible seeing that space open and filled in about 45 days. I think we're going to see a heavier push into the suburbs as more and more people in the last two years have gotten used to the convenience of working from home. But you're going to see more and more people searching for office space that's closer to home—basically just saying, "Hey, look, we're tired of a 20- to 30-minute commute." I wouldn't be surprised to see more companies choosing to go with a hub-and-spoke model, even within Dallas-Fort Worth, meaning they have one larger corporate office that might be closer to the city center and CBD district.
COWORKING
NICK CLARK
FOUNDER & CEO, COMMON DESK Common Desk CEO Nick Clark says the future of the office will be flexible spaces close to home offering amenities that make leaving home worthwhile. Now in 23 locations in Texas and North Carolina, Dallas-based Common Desk—founded by Clark in 2012— continues to thrive despite the challenges of the pandemic. Case in point: the company was just acquired by WeWork Inc. and will operate as “Common Desk, a WeWork Company.” What are your biggest challenges and opportunities in North Texas? Just meeting the employees’ needs for where they are and where people live. And thankfully, we started pushing into the suburbs back in 2017, when we opened
3 4 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
Why would people gravitate to coworking spaces instead of being at home all the time? I have, as well as a lot of people have, a nice home-office setup. So the need for getting into the office is much more geared towards collaborations, meeting time, getting face-toface time with people. We all know that after going through the great resignation of last year—and I think there are a lot of companies still struggling with that into this year—it's becoming more and more important for companies to have a very strong culture. It's almost impossible to develop a very strong culture from Zoom. We have to go into the office to make connections, build culture, and build relationships with employees, staff, and customers. I think the struggle is going to be for office environments to continue getting better because we're truly competing with the home office. That's something we felt in the coworking world. A couple of years ago, that really wasn't the case. Let's talk about the quality of interaction when you're totally virtual. Why does that matter? When you lose the serendipitous interactions with people, that can become toxic in a company culture. Zoom is very transactional by nature. If everybody is stuck at home and you're going with a work-from-home-first type work culture, that can become very transactional. And I think that's when company culture starts to fall apart.
2022
F FEATURE
“all of a sudden, instead of designing for intimidation, we're designing for accommodation.” NICK CLARK What do you envision for the future of offices? You're going to see office become more experiential. We're more geared towards hospitality. I feel like over the last 10 to 15 years, office buildings have been in an amenity race where everybody's obsessed with getting all the "check-the-box" amenities into their office building. But then, nobody thinks about how you truly activate that. I think the next bounce of the ball is going to be the activations around the office building, which can give them a kind of immersive experience that brings people out of their homes and into the buildings. Employees will think, "Hey, what does the office building have that I do not?" An example of that would be, instead of a decked-out self-service espresso machine in the break room, you've got a barista in the lobby of the building that's actually serving you an incredible latte. That's something that can become a part of their ritual of going into the office—and the reason that they go into the office as opposed to staying home and enjoying their Keurig. What about office design and trends? If we rewind the clock to 10 years ago, everybody got very obsessed with the open office. And then I think people started pulling back and being like, "Wait a minute, this doesn't feel like it's working." I think it's because we got a little too obsessed with the open office. Having that openness is incredible. I think it breeds connection, but people also need privacy. I think we've settled in on a great mix of having private offices, whether they're dedicated offices or just simply touchdown offices for people to go in and have important calls or meetings and also having the option of being in the public open area. Office is trending in favor of flexibility, which is our sector of office. I do think that the office sector is about to experience a very similar, almost kind of apocalyptic scenario that retail just went through. Over the last 15 years we've watched this retail change. I do believe we're about to see something very similar with office, where Class B office is going to all but go away. Class A office will no longer be these mahogany walls, these cathedral common areas that you see in a lot of the trophy Class A buildings of today. They're going to be replaced by hospitable and experiential offerings, along with very usable functional spaces that are still very Class A by nature. Because again, what are we competing with? We're competing with people's homes and the comfort factor of the homes. All of a sudden, instead of designing for intimidation, we're designing for accommodation. I think that office absolutely needs to change: It should be more accommodating and more hospitable. We spend too much time at work for it not to be.
2022
FLEX SPACE
JASON McCANN
CEO AND CO-FOUNDER, VARI
McCann says flexibility is the future of office space. The company that made its name with the standing desk and adjustable office furnishings dove into the North Texas office market, first renovating buildings in Las Colinas and Southlake, and now developing its own headquarters in Coppell—basically its own proof of concept for the idea of a "building-asa-service." McCann thinks the micro trend of offering fully furnished, movein-ready space could become a standard across CRE in the near future. In terms of the office of the future, what are the top things you learned?
1. Culture matters. Tenants will pay a premium for short-term leases and fully furnished space in a building with world-class hospitality, great energy, and culture. The majority of the tenants at VariSpace are headquarters locations, a competitive edge for attracting talent. 2. Speed wins. Move-in-ready, fully furnished, turn-key office spaces lease faster. 3. Flexibility wins. Workspaces designed to ebb and flow as business needs evolve are a game changer for both CEOs and building owners. Our movable walls reduce the amount of sheetrock that goes into a landfill every time a tenant moves out.
The experience of owning and operating buildings in DFW have allowed Vari to "think like an owner." Give us an example.
Our first location, VariSpace Las Colinas, was 90% leased while still under construction in 2019. VariSpace Southlake took the lessons learned from our proof-of-concept and applied them to test a second building in a different submarket. Leasing more than 50% of the VariSpace Southlake building in the first year, during the height of 2020, has confirmed the model’s success.
What trends in commercial real estate should we be aware of?
Flexibility is the future. There's also a huge niche out there for a new product—fully furnished, move-in-ready space—for landlords.
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 3 5
F FEATURE We’ve all felt the disruption in various supply chains over the last two years. The shock we have all been experiencing has also led to an increased demand for safety stock, another term for inventory, further adding to the demand for industrial real estate. Another significant factor for growth will be reshoring and nearshoring for various industries and manufacturing operations. North Texas will benefit from manufacturing operations that locate their facilities in Texas such as the recently completed Stanley Black & Decker facility or the recently announced MP Materials facility, both housed at AllianceTexas.
INDUSTRIAL
BILL BURTON
What should we invest in as a region for continued growth? While the factors contributing to continued industrial growth in DFW are many, we must remain focused on the factors that can trip us up. As we look to the future, we have to remain focused on our investments in infrastructure. North Texas has done a good job relative to the rest of the country, and we cannot take our foot off the pedal. The quality of life we enjoy and the relative ease of doing business is related to the quality of our infrastructure. As we continue to add population and we transition to more of an electric economy, we absolutely must invest in the electric grid and diversify the energy supply.
Dallas-Fort Worth is now a “gateway market,” says Burton, who anticipates the region will see continued industrial growth for many reasons. Population centers, inland ports, airports, and seaports are key drivers of industrial growth—and “DFW has three of those four components.”
How does education factor in? We must also invest in our schools and do a better job of connecting business with students at an early age. Unless children understand what jobs may be available, it's hard for them to understand what opportunities are available and how to set goals in order to take advantage of them.
What major factors affect the region’s status as a top market for industrial development? North Texas is now an inland port with the Union Pacific Railroad Intermodal facility in Southern Dallas and the BNSF Railroad Intermodal facility in Fort Worth at AllianceTexas. The BNSF Intermodal facility is now the busiest intermodal operation in their system with over one million lifts per year. DFW and Alliance Airports add tremendous, expedited air freight capacity with FedEx, UPS, and Amazon Air hubs. DFW is also growing extremely rapidly, and there's a direct correlation to the population in a region and industrial demand. Because we are a large consumer market and a large producer market, we also benefit from a more cost-effective transportation model, allowing us to serve a broader area, creating increased demand. The rapid growth in e-commerce will continue to increase that demand as well.
What trends in tech are driving the future in the industrial space? We are a firm believer that technology is going to change the industrial supply chain. Three years ago, we created the Mobility Innovation Zone (MIZ) at AllianceTexas in order to be at the forefront of the technology and transportation innovation that is happening on the ground and in the air. Transportation is approximately 50 to 70% of the supply chain costs. Even small improvements can mean hundreds of
EXECUTIVE VICE PRESIDENT, HILLWOOD DEVELOPMENT CO.
3 6 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
2022
F FEATURE
“Transportation is approximately 50 to 70% of the supply chain costs. Even small improvements can mean hundreds of millions of dollars in savings and improvement in efficiency.”
INDUSTRIAL
CONRAD MADSEN
CO-FOUNDER AND PARTNER, PALADIN PARTNERS COMMERCIAL REAL ESTATE SERVICES Madsen calls DFW “the catcher’s mitt” for a vast majority of corporate relocations. Last summer, Paladin moved its own headquarters from Plano to Dallas' Galleria Tower III. We wanted to be at the intersection of "Main & Main," he says. Madsen, with cofounder and partner Greg Nelson, also announced a new service line last fall—a comprehensive development and construction division for the broker-owned firm.
BILL BURTON millions of dollars in savings and improvement in efficiency. Autonomous trucking is here. Every day, we drive past trucks that are operating autonomously. Even though they might currently have a human in the cab, that will eventually change over time. At AllianceTexas, we recently completed the first facility in the creation of TuSimple’s autonomous freight network. TuSimple has now driven over 160,000 autonomous miles for the UPS North American freight division.
Beyond automous trucking, how will tech impact the supply chain? In addition to autonomous long-haul trucking, we believe autonomous movement of goods will happen inside the intermodal yards, and we will soon see autonomous movement of trailers and containers from the intermodal facility directly to individual warehouse buildings. The efficient and timely movement of goods will have a significant, positive impact on the cost and efficiency of operations. We are working extremely hard with pioneering companies, technology providers, offices of emergency management as well as the various regulatory agencies that will all help in determining how the autonomous movement of goods will evolve. It's a very exciting time in the industry, and we’re fortunate to not only have a front row seat, but to also be able to participate in the evolution that will have a significant impact on the future of our industry and our region.
2022
From your perspective, why is Dallas-Fort Worth now one of the nation's hottest commercial real estate markets? How are we different from other markets?
So many factors contribute to making Dallas-Fort Worth the greatest economic region on the globe. Let’s start with net migration: Almost 400 per day are moving to DFW. More people equates to the need for more housing, warehousing, retail, and office space. Secondly, the ease and cost of doing business. We’re the catcher’s mitt for the vast majority of corporate relocations due to being a less regulated and taxed state coupled with low cost of living for their employees. Almost daily you read of a new company leaving California or New York to move their HQ to DFW. Factor in that we're the epicenter for the central part of the United States from a logistics standpoint: There's a reason we have over 1 billion square feet of industrial inventory in the region. Interstates, world-class airports, and railroads all lead to DFW.
What are the biggest challenges and opportunities for your firm in 2022?
Opportunities are still great due to being in the best economic region in the world. And there's plenty of room for additional market share, new offices, and service lines. The biggest challenge is locating suitable facilities and land sites for our clients.
You've said there's no end in sight for industrial. What's driving growth?
While the growth of e-commerce and net migration are most often talked about in the industrial sector, manufacturing being brought back to the United States is now happening and will be a significant driver of the continued growth of the sector.
How is the CRE industry changing?
You'll continue to see the conversion of unsuccessful retail centers/malls/office buildings converted into last-mile distribution centers or mixed-use developments in dense population centers across the United States to accommodate the growing industrial and housing markets. Another trend to watch is the rapid growth in meal delivery services: look for "ghost kitchens" to increase to accommodate the demand in that sector.
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 3 7
“Whenpharmaandtechcompanies arelookingforwhocanhandletheir sensitIveproducts—whoiscertifiedto doso—weshouldpopuponthatlist.” MILTON DE LA PAZ
LIFE SCIENCE LOGISTICS
MILTON DE LA PAZ
VICE PRESIDENT AIRLINE RELATIONS AND CARGO DALLAS FORT WORTH INTERNATIONAL AIRPORT Dallas Fort Worth International Airport has been a life-saving link in the supply chain during the pandemic. The ability to safely move sensitive products put a spotlight on DFW's top-tier distribution capacity—and the airport's aim to help put North Texas on the global map as a life science hub, says De La Paz. As one of only two airports in North America to have an IATA CEIV Pharma community, DFW cargo stakeholders across the supply chain have been trained in providing the best environment and safe handling for pharmaceuticals and life science R&D needs. The twin goals? To move biologics with quality assurance— and, ultimately, spawn a life sciences’ manufacturing cluster, thanks to logistics and supply chain companies at the ready. De La Paz, who is also a board member for BioNorthTX—an organization that promotes and connects the region’s biotech industry—has helped lead efforts to capitalize on geography, air traffic, and local can-do communities in the sector.
3 8 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
Dallas-Fort Worth International Airport is top-ranked globally for connectivity, and one of its strengths is commercial service. Let's start with a big picture in terms of logistics. This airport was ranked No. 1 in the world in connectivity in 2020: We have more flights connecting the airport around the globe. Think about the distribution capabilities and possibilities that offers. Commercial services—the freight forwarders and our many airlines—are among our many strengths. DFW is American's biggest hub, and even during the pandemic, it was at times operating up to 800+ flights a day. That's just one carrier. When it comes to logistics, geography counts. It's so important to be in the middle of the country. Omnidirectional distribution is key—in any direction you get there faster. How does the airport help bridge the gap between the pharma industry and logistics when it comes to air transport? The pharmaceutical supply chain needs to ensure the integrity of the product. It's about getting products with unique characteristics from point A to B with quality assurance. We engage with the manufacturers and members in the supply chain to make sure that we're all in lockstep. We're not doing this in a vacuum. DFW is one of two North American airports with an IATA CEIV Pharma community. Why did you make the investment? Research tells us that billions of dollars of pharmaceuticals are wasted or lost every year because the efficacy of the product was ruined or undermined because of the temperature excursion. It's about the critical quality assurance these life science companies require. But from a big-picture standpoint, it's about saving lives. It’s about the health and well-being of people who need medicines, some to just get through life. Reducing waste in pharmaceuticals is really about the community and the global cause. Four companies made the investment with us to go through the training, which is extensive. These companies are ready to ship pharmaceutical goods, especially ones that are extremely time- and temperature-sensitive, like cancer therapy, for example. When pharma and tech companies are looking for who can handle their sensitive products—who is certified to do so—we should pop up on that list. DFW has the last-mile trucking companies, we have a cold-chain facility, we have a global freight forwarder—all certified to handle these goods. How did Operation Warp Speed put DFW on the radar for distribution? We saw right away that the requirements to distribute the Pfizer vaccine and Moderna were at a very high standard. Pfizer requires 70 degrees below Celsius. There’s no truck that has that kind of refrigeration. So it came down to packaging—dry ice and other accommodations. We raised our hand: We started talking to the Texas Department of
2022
F FEATURE Emergency Management. We didn't know how Operation Warp Speed would unfold, but we said, "We have the CEIV Pharma community. We have expertise. We have facilities, cold chain, all these infrastructure processes in place. From a humanitarian standpoint, we’re here to help right now." When it comes to transporting the vaccine, much is not public information. But the point is, the different agencies overseeing Operation Warp Speed were glad to know what we have.
What is the DFW advantage for a developing life science manufacturing cluster? We want those who are investing in North Texas in the sector to know that the area has the CEIV Pharma capability. We can connect them with logistics service providers who can make sure that the product is maintaining its integrity throughout the supply chain. Distribution and shipping is key in the life science sector. We support the development of standard operating procedures for quality assurance. What’s your long-term vision for that? Our endgame is to help develop a manufacturing and distribution cluster here in Dallas-Fort Worth. There are a couple of other areas known for life science R&D, but geography is important. When you’re distributing, you want to cut down your distances to have faster access to wherever you need to go. Think about the distribution radius of San Francisco or Boston: You’ve got to go all the way across country. Whereas from DFW, you can reach any point within the 48 contiguous states by plane in less than four hours. By truck you can reach something like 80 to 90% of the U.S. population within two days. We would love it if the DFW region is known and established as a pharmaceutical manufacturing cluster. What's next for your group? As a member of Pharma.aero’s advisory board, I’ve been asked to lead a project for the handling and transportation of cell gene therapies. These are highly sensitive, in terms of time and temperature—and very expensive. We’re talking with manufacturers, scientists, and labs that specialize in selling therapies about requirements for handling in this specialized area.
2022
ECONOMIC DEVELOPMENT
ROBERT STURNS
DIRECTOR OF ECONOMIC DEVELOPMENT, CITY OF FORT WORTH As the economic development director for Fort Worth, Sturns has plenty of reasons for optimism. Just scratching the surface of Cowtown, there’s the booming industrial sector led by AllianceTexas, the recent approval of federal funding for Panther Island, and the announcement of a new Texas A&M System Research and Innovation Center on the south side of downtown. And although Fort Worth missed out on landing the Rivian electric truck manufacturing plant—a deal Sturns and others “felt as good about as we’ve felt about a project in a long time,” he says the hard work and “lessons learned” have already paid off. And he hints at more big news on the horizon at the proposed Rivian site on the city’s far west side at Walsh Ranch. What stands out on the rise of DFW as a top-tier market? It's the overall industrial growth in DFW—I think we're second in the nation now. Fort Worth is really a huge part of that growth. The city has traditionally depended on a lot of manufacturing, distribution, facilities, oil and gas, and logistics. It’s really benefited and thrived during this pandemic. While everyone thought things were going to slow to a crawl, it's probably busier now than we were before COVID-19. What sectors are you most bullish about right now? Aerospace, logistics, transportation. Transportation is high on the list. We have a Mobility Innovation Zone that our partners at Hillwood developed at AllianceTexas. That's resulting in some great activity. They just signed a huge deal with TuSimple, the autonomous trucking company. Another area where we’ve seen a lot of interest and some development activity is in the electric vehicle space. Fort Worth was heavily in the mix on the Rivian project, and, unfortunately, they chose Atlanta—but I think it was a good lesson for us to work with them for such an extended period of time. It's resulted in a lot of other interests across the board in that industry. We just signed a deal with MP Materials, a company that makes magnets for the EV battery. There's an opportunity to reshore some of those manufacturing processes. They deal with GM, which is going to allow them to really expand their growth. What's ahead in 2022 that you can share? There's a lot I can't share. But I will say, in talking about the Walsh Ranch site that we were pitching Rivian, there are some very significant and sizable projects looking at that location. Not one—there's a handful of them. We feel very, very optimistic that we will land a large player. I'm also excited by what's going on at AllianceTexas with the Mobility Innovation Zone. It's in a very aggressive construction phase and recently announced a million square feet in spec industrial development.
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 3 9
F FEATURE LOGISTICS
KRISTA RAYMOND
SENIOR VICE PRESIDENT, INDUSTRIAL & LOGISTICS, CBRE What do you expect to see in tenant demand for industrial and warehouse space in North Texas?
The DFW industrial market is seeing historical low vacancy rates, and the tenant demand is currently higher than we have ever seen. Even with an uptick in new construction activity, demand is outpacing the supply, and we don’t foresee any slowdown within the next couple of years.
How is land availability impacting costs—and ultimately, rents?
The lack of available land has caused land values to double (or triple in some parts of Dallas-Fort Worth) over the past couple of years. The rising land costs along with increased construction costs and the lack of supply have pushed rents to all-time highs for DFW.
What’s your outlook for 2022?
This will continue through 2022, especially in the infill areas. Due to the lack of available land, we will see more development in the areas along the perimeter of the region.
RETAIL
STEVE WILLIAMSON
EXECUTIVE VICE PRESIDENT OF THE LAND AND INVESTMENTS DIVISION, TRANSWESTERN What should CRE leaders know about the retail sector? The most important thing to know: Retail in DFW has recovered significantly from the outbreak of COVID in March 2020. What's the outlook? In DFW, occupancies and new development will continue to improve significantly. Overall retail occupancies are back to pre-COVID levels, and we can watch for new retail developments this year, especially in the suburbs. What challenges exist? Potential headwinds include significantly increased retail rental rates and occupancy costs as the costs of developable sites and new construction have risen. Also, higher retail development costs are forcing higher rental rates. Unless the market adjusts to these new rent structures, there may be pushback from some of the retail tenants on the required rent increases.
Name three trends specific to DFW. • Grocery store expansion is back. HEB is opening new units, Sprouts has secured several new locations, and other major grocers are now looking at local sites again. • Restaurants that closed during COVID are either reopening or new restaurants are backfilling the old restaurant spaces. This trend will continue, and it's a great sign that life is getting back to normal in our post-pandemic world. • On-line orders in conjunction with the use of delivery services and curbside pickup has exploded during COVID. This trend is also here to stay. Anything else? DFW’s unprecedented corporate relocations, job growth, and population growth will continue to lead the nation. As our housing market continues to deliver 50,000+ new units each year, new residential growth will spur and create new retail opportunities in and around DFW. As they say, retail always follows the rooftops!
LAND
DARRELL HURMIS
EXECUTIVE VICE PRESIDENT OF THE LAND AND INVESTMENTS DIVISION, HENRY S. MILLER BROKERAGE; EXECUTIVE VICE PRESIDENT, HSM EQUITY PARTNERS What should CRE leaders know about the land sector right now? Current land deals are basically in the hands of developers in the North Texas area. Prices are inflated and are user- or built-to-suit-based, pushing speculators out of the market. Multifamily and industrial land are driving prices up followed by single-family land. Migration from other parts of the
4 0 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
country and new jobs will continue development in these sectors. The next-12-month outlook continues to look promising as the demand seems to remain strong.
How does that compare nationally? In my opinion, Texas is one of the hottest markets in the country.
2022
F FEATURE RETAIL
ALAN SHOR
PRESIDENT, THE RETAIL CONNECTION We’re fortunate to be living and working in Texas—and specifically in Dallas-Fort Worth—not just for commercial real estate but for quality of life and business as a whole, Shor says. The benefits of an educated, affluent group of residents relocating to our city will continue to accrue with “increased job opportunities, lower cost of living, and better home values— and overall quality of life for our families,” the retail expert says. Shor sees generational "game-changer" corporate relocations such as Tesla and Gordon Ramsay Restaurants a continuing norm throughout the state. What trends will impact retailers in DFW in 2022 and beyond? We’re in an interesting and unique retail environment with specific trends being robust and others creating challenges. On the positive side of the ledger, DFW’s continued powerful growth will spur residential development—both single-family and apartments—which will trigger retail, restaurant, and entertainment growth. Population growth is the No. 1 ingredient for increased retail sales and store growth. As a result, retail sales have rebounded to pre-pandemic levels, and rents continue to grow. Challenges include supply chain availability, which continues to cause inventory shortages in the stores and online. Retailers have gotten creative, selling the available inventory without taking material markdowns. Labor is another challenge, with retailers and restaurateurs struggling to fill—and subsequently keep—key employees in key positions. Rising payrolls and a continuing need to find capable employees will impact the consumer space. Another negative trend impacts those retailers and restaurateurs who are in a growth mode. The increasing labor and construction costs are such that ground-up larger-scale development is at a standstill. While the single-tenant, free-standing pad users are not experiencing the same challenges as the larger-scale power centers, midsize boxes, and junior anchors can
2022
“Population growth is the No. 1 ingredient for increased retail sales and store growth.” ALAN SHOR
only expand by virtue of backfilling existing space or taking advantage of bankruptcies, downsizing, etc. The major markets in Texas are between 94 to 98% leased up. With limited existing space available, retailers with significant growth plans have to become more creative and flexible to fulfill their open-to-buy.
What does it take to be successful in today’s retail world? Consumer-based concepts have to serve a changing customer who wants it all: the right product selection, a competitive price, excellent customer service, and an “experience” when coming into a physical store. No longer can a retailer put goods on the floor, market them with price reductions, and have the customer pick through inventory to find what they want. Today’s customers are tech savvy and use it to their advantage while shopping. Retailers have to do the same thing. What about shopping malls? Enclosed regional malls will continue to have wins and losses. Better malls around the country—those that fall in the A and B categories—will continue to thrive, and their recent sales trends are strong. Those malls will continue to get capital upgrades and redevelopment from owners. Mall ownership is getting creative in merchandising of the malls, recognizing that department stores are largely dinosaurs and replacing them with large-box entertainment concepts, emerging-growth specialty retailers, restaurants, and in some instances, nonretail uses. As has been the trend for several years, accelerated by the pandemic, many malls will get redeveloped into multifamily, industrial, government, educational, and green-space uses. Retailers who previously lived inside the mall world are executing an out-of-mall or open-air strategy, such as Lululemon, Victoria’s Secret, Bath & Body Works, Journeys, and others. ... With the lack of new mall product being developed, many mall-based retailers need to get closer to their customers to execute their omnichannel strategies better. The open-air model will be their best opportunity to grow for the foreseeable future. Who’s doing it right? The retailers who have created the right combination of physical store offerings and experience with a strong e-commerce platform will continue to grow and succeed.
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 4 1
F FEATURE
CONSTRUCTION
THOMAS CROWTHER
MANAGING PARTNER, THE CROWTHER GROUP
When it comes to the future of CRE in North Texas, Crowther is clear: “Every day I wake up in DFW, I’m grateful that I’m in the commercial real estate winner's locker room.” His Dallas-based commercial construction and design-build firm works with clients across the retail, healthcare, office, restaurant, and education sectors. The firm, which considers diversity a strategic business advantage, was recently named the general contractor for the Dallas Housing Authority’s 29,000-square-foot headquarters building expansion. As a commercial general contractor, what opportunities and challenges do you anticipate in 2022? We continue to partner with our trade subcontractors, suppliers, architects, and clients in 2022 related to long lead times and price increases for construction materials and equipment.
4 2 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
Let’s talk sectors. What are you seeing in the DFW retail market? Our project managers are tracking an uptick in retail remodels and rightsizing projects. They expect continued challenges from suppliers relating to the capacity of materials due to increasing demand in the DFW retail market throughout 2022. Several of our retail projects purchase equipment and materials early and store them onsite in secure boneyards or bonded warehouses to ensure products are in hand. In some cases, we are still seeing unavailability due to material and equipment shortages, even with buying power of Fortune 50 retail companies. If key materials and equipment are not purchased early in the preconstruction process, they could continue to impact retail client occupancies in 2022. I would advise general contractors to continue being proactive and transparent with clients on dwindling supplies and prices rocketing up across key building materials such as roofing, cement/concrete, electrical and mechanical equipment, and steel, creating opportunities and potential price escalations in 2022. You’ve said igniting change is part of your business vision. How can real estate professionals help transform communities in the region? Our goal at The Crowther Group is to build partnerships and create impact throughout the communities we serve. This allows us to serve others above ourselves—and be patient and strategic in aligning with the right clients, like the Dallas Housing Authourity. We’re so excited to be a part of DHA’s mission to provide affordable quality housing and access to supportive resources across North Texas. The new 29,000-square-foot office will be a Dallas green construction-compliant facility that will help the team at DHA deliver on their mission throughout the Dallas region. I think the best way real estate professionals can help transform communities in the Dallas region is by serving others above themselves in everything they do throughout the real estate life cycle.
2022
F FEATURE
Industry heavyweightS We asked: Where is Dallas-Fort Worth leading the way in CRE? JASON FORD
LEXIE WOODWARD
BILL BURTON
Frisco EDC
City of Mesquite
Hillwood Development Co.
Frisco and DFW are attracting a large volume of leads from Fortune 1000 and highgrowth, middle-market firms. Many of these are national relocations, consolidations, or expansion opportunities as companies prepare to make big decisions in 2022 for lease renewals and new facilities. Regional mobility is easier here, and DFW’s lower costs and more favorable regulations on business and public health are pushing lease absorptions faster in DFW than many other large regions across the U.S. In fact, Frisco and the largest regions in Texas have lower unemployment rates and greater numbers of employees back in the office, signaling a stronger CRE recovery.
Industrial, industrial, industrial. Particularly on the eastern side of DFW, where the footprint of industrial facilities is more than doubling—from 12 million square feet total prior to more than 28 million square feet by 2030. Eight million of that has happened in the past two years. And that's just within Mesquite. Sunnyvale, Balch Springs, and Forney are rapidly adding industrial too. Mesquite has long been known for logistics and distribution due to our four-freeway intersection, but there's a significant increase in manufacturing coming to our region. We also see more manufacturing and distribution companies combining their headquarters and office within their industrial plants.
Finance, insurance, healthcare, technology, manufacturing, and energy are all major industries in the region. People underestimate the size and diversity of the North Texas economy. The GDP for North Texas is approximately $615 billion, and the GDP for the state of Texas is around $1.7 trillion. If we treated North Texas as a state, it would be the ninth largest economy in the United States. As a country, North Texas would be the 24th largest economy in the world.
BETH BOWMAN
ALAN SHOR
STEVE DILLON
Greater Irving-Las Colinas
The Retail Connection
Balfour Beatty
DFW is leading the way from a diversification of business industries. We’re not just tech or telecom, healthcare or finance—we are all of these and more. We are very competitive and resilient because we have a mosaic of industries that choose to call North Texas home, and in Irving-Las Colinas we are proud to be the "Headquarters of Headquarters" for many of those companies.
The strength of the DFW market allows retailers and restaurateurs to lead the way in new entries to the market, with most consumer-based concepts wanting to be in DFW early and often. Additionally, with retail real estate projects in DFW largely being overparked, retailers can easily execute their BOPIS [buy online, pick up in store] strategies.
With air travel on the rise and many people becoming more comfortable traveling again, this industry will continue to improve from where it was at during the pandemic. With all the activities North Texas has to offer, we'll see a rise in demand for hotels.
"DFWisleadingthewayfroma diversificationofbusinessindustries." Beth Bowman 2022
INNOVATION
BILL SPROULL
PRESIDENT AND CEO, RICHARDSON CHAMBER OF COMMERCE/ TECH TITANS/RICHARDSON EDP Sproull’s been called a force of nature, and for good reason. As leader of the Richardson Chamber, the city’s EDP, and Tech Titans, he personifies the cando attitude and tremendous work ethic he says are the Dallas region’s calling cards. Here’s his take on why so many are moving to Texas, and how Richardson’s partnership with business and UT Dallas can make the area "startup central." How does DFW punch above its weight in economic development and in CRE? Of all the regions around the country that have come out of the pandemic quickest and regained the jobs that were lost—and then some—if you look at the statistics, I believe Dallas-Fort Worth leads the nation. We're above our pre-pandemic employment levels in the region. In terms of sectors, I think there's two of them. One is industrial: We're knocking it out of the park in terms of the amount of industrial building activity that's going on in this market, being in the center of the country with our great transportation network and in the inland port. We're also seeing continued development down in the Wilmer Hutchins area. The other is our data centers: We have a huge Facebook data center in Fort Worth, and it's already in expansion. The big three have huge footprints here now. Equinix, CyrusOne, and Digital Realty all have major operations here—Cyrus is headquartered here. And the Google data center is going into Midlothian. What's new at the Innovation Quarter, aka the IQ, in Richardson? UT Dallas will move five research centers into the new "IQHQ," a city-owned building in Richardson that's being renovated as we speak. It has 28,000-square-foot of space designed to boost the research centers' collaboration with industry. The building itself has a history as the epicenter of tech—it was the home of STARTech, which was the region's first high-tech incubator in the late '90s.
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 4 3
F FEATURE Why is DFW now one of the nation’s hottest CRE markets?
It’s almost corporate malfeasance for a C-level executive at a Fortune 500 publicly traded company in San Francisco or New York not to be considering or studying a potential move. DFW is usually at the top of that list because: • Businesses can generally save 20% on overall costs by making the move from California to DFW. • Combined federal and state corporate taxes total 28% in California and 21% in Texas • On average, an employer in the Bay Area can save about 15% to 20% in annual payroll costs by moving to DFW. • San Francisco typical home value is $1.38 million, and the average apartment rent is more than $3,000 per month. • In DFW, the average cost of purchasing a home is about $350,000, and apartment rent is $1,200 a month. What demand are you seeing across sectors?
SITE SELECTION
SUSAN ARLEDGE
EXECUTIVE MANAGING DIRECTOR, SITE SELECTION, ESRP Arledge believes we have to look at the state of Texas as a whole to understand what’s driving more and more growth to DFW. The prospect of a diverse talent pool, lower taxes, cheaper cost of living, and lifestyle benefits is driving more execs to look south. She points to a comment from the CEO of a company that relocated to Texas from California, by way of example: “My employees were constantly saying, ‘Look, my commute is horrible, and my rent is astronomical for what I’m getting,’” the exec said. “And to be perfectly honest, I also told them, ‘I’m not going to pay you $400,000 per year so you can buy a house in Silicon Valley.' So, we were really looking at improving their lives and moving somewhere where they could start accumulating assets.”
4 4 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
With such an influx of new residents to DFW, demands for e-commerce support and the challenge to global supply chains have all contributed to the demand for industrial space and especially for large spaces. More than 33 million square feet have been absorbed in DFW in the last 12 months—most of which occurred since the start of 2021. In office, the DFW market is making a slow but steady comeback. Kastle Systems estimates office occupancy in the Dallas metro was close to 52% the week ending December 1, an increase of about 11% week-over-week. Despite the coronavirus pandemic, DFW has completed more commercial real estate deals than any other major metro last year. What are the contributing factors?
DFW’s cost of living, nearly 22% below the national large metro average, and its job market was one of the most resilient among major U.S. metros during the COVID-19 pandemic, adding 260,200 jobs between May 2020 to May 2021. What are relocating and expanding companies looking for?
Corporations are almost always focused on cities with access to a highly educated and skilled talent base. 70% of Fortune 500 HQs are in metros that rank in the top 25% for talent, measured as
2022
F FEATURE
“It’s almost corporate malfeasance for a C-level executive at a Fortune 500 publicly traded company in San Francisco or New York not to be considering or studying a potential move.”
TALENT
JAIMEE EDDINGTON
REGIONAL LEADER, HEIDRICK & STRUGGLES
How can the region best improve the quality of talent here?
Eddington, a partner in the Dallas office of Heidrick & Struggles' Americas region, specializes in board- and senior-level financial officer assignments. "Preparedness" is a key word for Eddington, who is a frequent speaker on talent for the future, board composition, and the changing roles in the C-suite. The talent adviser—a former investment banker with Wall Street and corporate finance experience—also spent years at a large luxury retailer, where she led strategic planning of various divisions. Most recently, the impact-focused Eddington was named to the board of governors of The Dallas Foundation.
Talent attraction starts early. The cities with the most successful attractions results have invested in education including K-12 programming, career and technical, higher ed, and workforce development agencies.
What should future-focused commercial real estate firms be thinking of in terms of leadership hires? What trends are you seeing?
SUSAN ARLEDGE
the share of the population with a bachelor’s degree or more, and 90% of those HQs are in metro regions with populations of more than 1.3 million people, and the same share is in metros with international airports. Dallas, Houston, Austin, and Phoenix have been major beneficiaries of this trend.
Tell us more about the role of population trends in site selection.
Site selectors will always analyze population trends to gain perspective on where the pool of available labor is most abundant or growing most rapidly—two very desirable locational characteristics. According to the U.S. Census Bureau, four out of five metropolitan areas experienced growth over the past decade—easing the task for those choosing destinations for white collar operations, such as headquarters and R&D centers, which tend to locate in or proximate to medium and larger cities. At the same time, however, the Census Bureau reported that more than one-half of U.S. counties were smaller in 2020 than in 2010, posing challenges for some manufacturing and assembly employers who often choose to locate in more rural areas, closer to sources of supply, available land, and energy. The main takeaway from these new census data is that making a corporate location decision is likely to be even more complex as the country ages and diversifies and as growth continues to slow. As importantly, execution—after site selection—will be critical if one is to access talent from emergent demographic cohorts and thus ensure a fully successful location decision. One of the most effective and proactive steps employers can take is to expand quality internships for young people of color. In addition to internship programs, industry and skills-specific programs are partnering with businesses to provide students of color with effective learning opportunities.
2022
The pandemic underscored how quickly and dramatically the business environment can change. Leaders had to be agile and adapt quickly to changing markets, and demonstrate resilience and the ability to keep a business on course. We see increased demand for leaders with diverse backgrounds, experiences, and skill sets focusing on inclusive environments and leadership teams. Continued on page 46
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 4 5
F FEATURE
“we encourage companies to see technology as a tool, and be clear about when to use it with their teams.”
MULTIFAMILY
DANNY BAKER
VICE CHAIRMAN AND LEADER OF THE MULTIFAMILY INVESTMENT SALES TEAM IN DALLAS, CBRE DFW has become the epicenter of growth in North America, Baker says. "We’re in the middle of a population boom that has led to DFW outperforming other markets in terms of job creation and growth as well as the demand for all types of CRE," says Baker, who helms CBRE's DFW multifamily capital markets team.
JAIMEE EDDINGTON Continued from page 45
What is attracting top talent to DFW right now? Do you see a shift from what you’ve seen previously?
The Dallas market is booming, and we’ve seen a shift over the last 18 months of more top talent looking at roles in our city for a variety of reasons—lifestyle, climate, and tax advantages. In a workfrom-anywhere world, Dallas offers access to a dynamic and growing business community with many amenities to support a thriving personal life as well.
What type of focus on environmental, social, and governance principles are you seeing for commercial real estate firms? The emergence of ESG is requiring commercial real estate companies to respond to calls from stakeholders for more transparency and influence.
What measures are being put in place?
Leading organizations are responding with hires who can help them evaluate risk, climate, and sustainable strategies for the future. Companies with large carbon footprints will be asked to prove ESG metrics or meet stated goals in more substantial ways.
The pandemic has created massive change in talent leadership. What success have you seen?
The most successful leaders throughout the pandemic have been those that overcommunicate and look for moments to encourage connectivity.
What else should leaders think about right now? Because it seems like hybrid work is here to stay, we encourage companies to see technology as a tool, and be clear about when to use it with their teams.
4 6 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
What will influence DFW multifamily development in 2022? The North Texas market is facing certain headwinds, like material and land costs that have gone up substantially and continue to be volatile. Resistance to multifamily development from local municipalities and residents could also create another layer of complexity impacting the supply pipeline. On the flip side, the lower-return environment and continued rent growth will push additional capital flow into development. Although there will be increased liquidity for development opportunities, DFW’s housing inventory is, and will likely remain, undersupplied, leading many investors to believe that the DFW market’s growth characteristics are sustainable. What should we know from the capital markets perspective? From a capital markets perspective, one of the biggest themes in the multifamily sector is capital inflows. Significantly elevated levels of capital availability paired with exceptional multifamily fundamentals and performance has led to return compression and appreciation. Some meaningful examples of capital inflows into multifamily include investors reallocating capital into multifamily and industrial properties, investment managers increasing their hard assets in alternative investment portfolios, and aggregators' ability to access retail investors through nontraded REIT products.
TRENDSETTERS We asked: How is DFW shaping CRE and adapting to change? CINDY SIMPSON
KIM BUTTRAM
JASON MCCANN
Gensler
Mesquite EDC
Vari
Dallas is currently one of the hottest—if not the hottest— destination in the U.S. for business development. As a result, the national and global business community will be looking to our city for trends in campus design and more.
There’s more focus on quality of life and maximizing the quality of time. DFW is modeling that diversity—and adaptability means sustainability.
It's clear that the office of the future will change more than any other time in recent memory. Asset owners that are able to adapt to a higher level of tenant hospitality and flexible lease options will win more deals.
2022
F FEATURE DEVELOPMENT
TERRENCE MAIDEN
CEO, RUSSELL GLEN COMPANY
As the CEO of Russell Glen, Maiden is recognized for his leadership and vision at the forefront of the $200 million redevelopment of Red Bird Mall in South Dallas. Maiden and his team, which includes property owner Peter Brodsky, are turning a dying mall into a vibrant mixed-use hub for updated retail, multifamily, healthcare, and offices. According to Maiden, it’s "simply the right thing to do." As a commercial developer active in a number of sectors, what opportunities and challenges do you anticipate in 2022? I remain very optimistic about the future of commercial development in DFW. The region is continuing to see massive growth, which is encouraging. The real opportunity is to establish ourselves as a place where people want to live, work, and play. Improving transportation options, parks, and trail systems could only enhance our ability to connect. The major challenge, in my opinion, is still COVID-19. As we continue to adjust to this new normal, our approach to development will have to change. People will want more flexibility to work from home and the office from their employers. This option for the workforce will likely create more flex office space. Another major challenge is the cost of construction. I hope that construction costs will begin to decline this year. There also have been many changes in several school districts’ leadership. I believe filling these critical roles will be very impactful for the region. Your company has been a leader in community development, such as your work in Southern Dallas. How can real estate professionals help transform communities in the Dallas region? I'm convinced that real estate can play a vital role in transforming communities and improving the quality of life for people. DFW is a very diverse region, but many areas remain
2022
culturally isolated. Creating catalytic development that creates jobs, access to quality healthcare, grocery stores, and parks in Southern Dallas will improve the city's economic viability and is simply the "right thing" to do.
What are some examples of change in Southern Dallas? There are many areas in Southern Dallas on the cusp of creating meaningful change in the region. I'm most excited about a few projects, including the progress our company is making with Shops at RedBird (former Southwest Center Mall redevelopment), the Southern Gateway Deck Park that's adjacent to the Dallas Zoo, the education corridor with UNT Dallas and Paul Quinn College, and The LOOP, a project that connects 39 miles of existing trails in Dallas with 11 miles of newly built trails to increase access to public transportation and green space.
"There are many areas in Southern Dallas on the cusp of creating meaningful change in the region.” Terrence Maiden D A L L A S | C O M M E R C I A L R E A L E S TAT E / 4 7
F FEATURE
“DFW industrial is one asset to watch that will be front and center when it comes to impacting overall U.S. trends and will continue to be a driving force in 2022.” Maureen Kelly Cooper
CAPITAL MARKETS
MAUREEN KELLY COOPER
EXECUTIVE DIRECTOR, CUSHMAN & WAKEFIELD
Maureen Kelly Cooper couples her knowledge as a CPA with expertise in the real estate capital markets to advise companies that lease or own space. Cooper, who relocated to the Dallas office in 2013 from Manhattan, works with major national and international corporations on transactions, such as headquarters relocations, sale-leasebacks, lease restructurings, build to suits, and private-public partnerships. How do you see DFW shaping U.S. CRE? The Dallas-Fort Worth industrial asset is one of the strongest asset types, which is not only driving the market, but also has a big influencing factor on U.S. commercial real estate. As of the end of Q3 2021, DFW had the highest square footage of industrial properties under construction (44.6 million square feet) in the nation. This leads the second highest, Atlanta, by 5.4 million square feet, which is similar to the quantity under construction in markets like Los Angeles or Minneapolis. Already a hot sector prior to the pandemic, the impact of the
4 8 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
pandemic propelled industrial assets to the forefront with a heightened attention to e-commerce and supply chain trends. DFW industrial is one asset to watch that will be front and center when it comes to impacting overall U.S. trends and will continue to be a driving force in 2022. The DFW office asset is a good indicator of the nation’s undertone in office space demand. For example, in 2021, The Terraces in Preston Center sold at an area record, reflecting a rebound from the pandemic. Additionally, the market continues to support a push for Class A office space, which is unlikely to subside given that these quality spaces will attract top talent for tenants looking to hire and retain employees. Relocations from various parts of the U.S., as well as international movement, continue to make DFW their new home due to a business-friendly environment and a higher quality of life.
What contributes to that market strength? Population is a strong contributing factor to the CRE market. Without people there will be no need for any CRE. By 2025, DFW is projected to grow by 458,000 people, the highest in the nation. The second projected highest growth is Houston at 407,000 people. Population growth happens in markets that are desirable. People want to live in places that provide them a good quality of life—the hottest growth markets are the ones that can provide that to them. DFW is also a very productive metroplex. By 2025, DFW’s gross metro product is projected to grow by $202 billion, the third highest in the nation after New York and Los Angeles metros. The continued strong economic growth supports ongoing demand for CRE and vice versa. DFW also has a very diversified employment base, which helps the market hedge against any risks. Additionally, similar companies like to be located near each other—and DFW has a bit of everything for all industry types. Coupled with a business-friendly environment, the DFW market will continue to remain an attractive location for companies looking to expand and relocate. What trends will impact capital market investment in CRE in the Dallas region in 2022 and beyond? Office and industrial single-tenant transaction activity will continue to grow. For the U.S., this sector has increased from a sales volume of $8.6 million in 2002 to over $60 million for the first three quarters in 2021. We anticipate this trend will continue in 2022 in the Dallas-Fort Worth marketplace. Investors are looking for single-tenant net lease deals with secured, long-term cash flow from companies with strong financial performance in growing industries. The net lease market has experienced many new entrants, thus creating increased competition and driving cap rates lower.
2022
F FEATURE
StrengthinDiversity We asked: How can Dallas-Fort Worth real estate leaders foster diversity, equity, and inclusion in the industry? Experts discuss ways to further DEI in today's work-from-home and hybrid environment, and why inclusion makes the region's CRE market even stronger.
Mattye Gouldsby Jones
Cindy Simpson
Tamela Thornton
Kim Buttram
Jaimee Eddington
It's only through courageous leaders who embrace the value of diversity, equity, and inclusion that we'll experience a positive change in the industry. Owners and principles have to “walk the walk” and share with clarity to the rank and file of their organizations that DEI will be core to their operations. Leaders in CRE can help foster DEI by demonstrating its importance. Some ways to do that include defining the objective and measuring progress against the goals. Leaders should communicate this conviction of DEI repeatedly in other spaces such as board rooms, trade associations, churches, and homes. Value is not just reporting strong financial quarters. Growing DEI makes for a stronger DFW CRE because it strengthens the foundation of the workforce and a city. Bringing diverse backgrounds to the workforce can offer new ideas and better understanding of risks on real estate transactions.
It's important to first get your people engaged in diversity, equity, and inclusion. Leaders should talk to their employees to understand what is working and what is not. From there, you can begin building a strategy to address gaps such as expanding recruitment pools or organizing educational or community-facing events for employees. Creating and sustaining a fully diverse and inclusive industry requires an all-handson-deck approach to create positive environments where everyone feels valued and welcomed. Doing so will allow for different perspectives and provide opportunities where the unique strengths and individual contributions of every person can grow, which will help foster a competitive and thriving industry.
As leaders, we need an intentional focus on developing, recruiting— and then hiring—diverse candidates. There are many tools, such as our Real Estate Diversity Initiative, which offer minority candidates opportunities to gain foundational industry skills, through project-based learning opportunities. Once those qualified candidates are hired, organizations must foster an environment that respects different perspectives, experiences, and skills. Being inclusive organizationally requires entrenched leadership to be comfortable being uncomfortable, as the "boys club" mentality must be eradicated. Strong, empathetic leaders are not afraid to embrace different styles, or confront historical biases which
As with anything we’re serious about doing, we must be intentional. To make significant change, you have to be exceptionally intentional. Leaders can foster change by starting with themselves—engaging diversity across age, race, culture, background…on purpose. For example, start or create a studentinternship program, speak to students about career opportunities in CRE, sponsor groups that represent diversity, etc. The only way things will change is if people see opportunity and leadership by example— and know that they are welcomed.
We've advised our clients to shift their paradigms and change their definitions when they consider candidates. For example, companies often tend to focus primarily on past experience and expertise, and seek executives with previous experience that directly matches the role. Diverse, role-ready talent is out there today. We're saying, "Broaden the aperture on criteria." Go beyond titles and past experience—take a more comprehensive look at leadership capabilities— the ability to mobilize, execute, and transform with agility. With the work-fromhome and hybrid dynamic, leaders are reevaluating what it means to create belonging, value differences, and encourage diversity—in all of its forms—among leaders and teams. When this is accomplished, employees are more able to speak their minds, consider others’ points of view, take risks, and do things differently.
Public Policy Chair, TREC Attorney, Coats & Rose
Co-Managing Director Gensler Dallas
Executive Director ULI Dallas-Fort Worth
Director Mesquite EDC
Regional Leader Heidrick & Struggles
likely have limited opportunities for many. Our business is transforming communities—there's no better way to do that sustainably than engaging with those who are your stakeholders and can become your champions.
"BEING INCLUSIVE ORGANIZATIONALLY REQUIRES ENTRENCHED LEADERSHIP TO BE COMFORTABLE BEING UNCOMFORTABLE, AS THE 'BOYS CLUB' MENTALITY MUST BE ERADICATED." TAMELA THORNTON
2022
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 4 9
F FEATURE How does the hot real estate market in Dallas-Fort Worth impact affordable housing? It's great for Dallas and for the nation that the real estate market is hot in DallasFort Worth, which contributes to more jobs and the need for more housing. The housing product being built does not include a large amount of affordable housing opportunities. Consultants who have studied the problem have stated that DFW is thousands of units behind the need for affordable housing, and the product being constructed does not offer a sufficient number of affordable units given the growth in the region. Consequently, many individuals and families will pay a larger portion of their household income for housing than is ideal, until more affordable housing is available. Strategies should be explored on how to include affordable units in the new developments. How can the DFW CRE community support affordable housing and community development? The DFW CRE community may support affordable housing and community development in a number of ways. First, it is imperative that leadership, in both public and private sectors, commit to developing and executing policy to promote the development of affordable housing. Affordable housing often includes financial resources that are either financed with tax credits (which is not a subsidy) or has funds that require some form of restrictive use or longterm affordability, but not always. Neither of these conditions should deter the development of Class A product that happens to lease to persons who desire affordable rents. In many instances developers have site control with plans to construct on land that is zoned and meet opposition from neighbors. Having a culture of inclusion in all sectors of a city is crucial to having a pathway to develop affordable housing. Secondly, it is important to educate our citizenry through the public and private sectors with a goal to instill a willingness to support the initiatives for affordable housing. Thirdly, I suggest that resources be earmarked to support affordable housing and development of commercial facilities, through public and private enterprises, because the investment will be catalytic and will beget economic vibrancy.
AFFORDABLE HOUSING
MATTYE GOULDSBY JONES
TREC PAC CHAIR / ATTORNEY, COATS & ROSE
Mattye Gouldsby Jones, who specializes in assisting developers with tax credits and bond financing, community development, and legislative matters at Coats & Rose, is public policy chair at The Real Estate Council.
5 0 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
What are the biggest challenges and opportunities for affordable housing and community development in the Dallas region? The biggest opportunity for affordable housing and community development in the Dallas region is to promote an environment to utilize the tools for building Class A multifamily amidst communities that will be rich in amenities, services, and destination. The tools include Opportunity Zone and financing programs that attract investment and families. This is particularly important because traditionally comps are needed in order to garner lending and investment. There is current interest by developers from all over the country to build affordable housing in this region. We as stakeholders should embrace the initiatives that support these endeavors by identifying qualified and empathetic persons to serve in appointed roles where public-private opportunities are available, as well as encourage bold moves in the corporate and philanthropic sectors. The biggest challenge is NIMBY ("Not In My Backyard"). There are many myths that affordable housing brings down property values, etc. Historians have shared the roots of disparities, many based in poor public policy. I remain encouraged that with commitment, investment, and conviction, the trajectory can and will improve for prosperity for all demographic areas and across the region.
2022
F FEATURE TRANSFORMATION
SUZANNE SMITH
COMMUNITY
TAMELA THORNTON
FOUNDER, SOCIAL IMPACT ARCHITECTS
EXECUTIVE DIRECTOR, URBAN LAND INSTITUTE DALLAS-FORT WORTH
Smith founded Social Impact Architects to reshape the business of social change. Last year, the public benefit corporation worked with early stakeholders in the recently announced Dallas International District. Plans call for a 450-acre district in the Valley View-Galleria Special Purpose District, anchored by an iconic 20-acre proposed "central" park.
As the new executive director of the Urban Land Institute Dallas-Fort Worth, Thornton promotes dialogues and actions in commercial real estate that lead to transformed communities. It’s a passion she’s also demonstrated as a founding partner and principal at Emmitt Smith's E Smith Communities, as she helped establish new opportunities in Southern Dallas. She says, “Our business is transforming communities, and there is no better way to do that sustainably than engaging with those who are your stakeholders and can become your champions.”
How did you get involved with the recently announced Dallas International District project? Like every longtime resident, I've wondered, "what's next for this iconic area of Dallas?" Shortly after the pandemic began, I was approached by Jayne Suhler, a good friend and former colleague on the Arts & Culture Commission, to look at the current project and provide some insights for the future. Cool ideas existed, but it needed a strong business case, branding, and a little bit of what I call “cat herding”—my superpowers as a social entrepreneur at Social Impact Architects. The research confirmed the vision of an “International District," and we were excited to share it with all of Dallas in January. What does the project say about Dallas as a city? We now have a solid strategy for the Valley View-Galleria area that leverages the iconic area for the benefit of the entire region. It's the perfect location to celebrate and inspire the diverse people and businesses of North Texas as well as test some of our most innovative and eco-friendly ideas through a new Civic Innovation Zone. Our slogan right now is “Connecting the World to Dallas. Sharing Dallas with the World.” I can't think of anything more important to Dallas’ future than what this project represents—it connects the dots for much of our most important work.
2022
What opportunities and challenges do you see ahead for DFW's real estate and community development in 2022? Real estate activity in North Texas has continued during the pandemic with many sectors experiencing their strongest performance in years. There has been an increased focus on retail services that can flex between on-site and delivery, and single-family housing for rent is a new growth sector. I believe the biggest ongoing challenges will be balancing new growth and redevelopment opportunities with the ongoing need for affordable and workforce housing. The pandemic exposed the number of residents who are living very close to the affordability edge. As new growth continues, the development community will need to be intentional in its efforts to ensure a broad complement of housing stock exists for not only those who might be moving from other higher-cost communities, but those whose daily work sets the foundation of sustainable, thriving communities. How can real estate professionals help transform our communities? The redevelopment and transformation of communities is as much about creating the appropriate land-use strategies as onthe-ground implementation. At ULI, we have a program called Urban Plan, which can be targeted to students, community leadership, and real estate professionals. It's designed to help varied constituents understand how the development process works and the trade-offs that real estate professionals make every day to satisfy a variety of constituents. It's a fun way for individuals to understand the complex nature of land-use decisions and the dynamics that influence and shape our neighborhoods.
D A L L A S | C O M M E R C I A L R ED A AL LELSATAT S |E C /O M 5 1MERCIAL REAL
CYPRESS WATERS
CITYLINE
FRISCO STATION
5 2 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
2022
EVOLUTION
of
SUCCESS Leaders of three top North Texas mixed-use developments reveal three keys to success— creating places where people want to be, connecting with community, and mastering the changing art of amenities. And the region’s “transactional efficiency” doesn’t hurt.
B
BY SANDRA ENGELLAND
UCKLE UP. THREE TOP NORTH TEXAS MIXED-USED
developments—Cypress Waters, CityLine, and Frisco Station—are shifting into high gear on their way to the future. Just ask the leaders who’ve driven their evolution for years. “We have a real opportunity to do something that’s great for the future,” says Lucy Billingsley, the co-founder of Billingsley Company and visionary developer of Cypress Waters. “This is an incredible time with the market we’re in, and we need to rise to the occasion and build quality improvements.” It’s the opportunity to design the “community we’re going to be living in for the next 30, 40, 50 years,” she says. It’s no secret that Dallas-Fort Worth commercial real estate is now a top draw for foreign investors. Dallas rated first among large U.S. metros for investment in the first half of 2021. And pandemic-fueled moves by people and companies mean a greater need for all kinds of development, as the region continues to lead the pack in population growth. Robert Folzenlogen, senior vice president of strategic development at Hillwood, runs point on Frisco Station. “What we have here are very business-friendly, development-friendly cultures and land so we can grow the market in density,” he says. Folzenlogen believes “we’re well positioned as a region to come out of the COVID world and continue to grow.” Michael Alost—senior vice president of development for KDC and a key leader for CityLine—couldn’t agree more. “How fortunate we are,” he says, “to be in this place at this time.” Alost says he knows why businesses are packing up shop from places like San Francisco and Manhattan to move to DFW. “Three things make us successful and give us an advantage over other metro areas,” he says. At the top of the list is the way local governments partner with businesses. The region’s economic development teams put great emphasis on
2022
“ The momentum in Texas, like many things, has been a long time in coming ” LUCY BILLINGSLEY Billingsley Company
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 5 3
5 4 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
RENDERING: BILLINGSLEY COMPANY
the benefits their citizens gain when businesses relocate to their cities, bringing more jobs. The tax base gets bigger, providing more funds for schools, parks, and improved services. Then there are the entitlements and the timely zoning approvals, which fuel a little engine called “speed to market,” Alost says. A major office expansion or redesign that could take nearly a decade in some markets can happen here in a fraction of that time. “A company today has to innovate rapidly, adjust, and evolve quickly,” he says. “They don’t want to wait 7 to 10 years to see if they can modify their workspace.” Instead, they come to Texas and find city governments that want to work with them so both the company and the city benefit from growing businesses contributing to the economy. “Speed to market is made possible by government partnerships,” he says. Alost’s colleague Walt Mountford, KDC’s executive vice president of development, calls it “transactional efficiency.” Many North Texas governments are proactive in starting on infrastructure before deals are signed. Finally, there are the hard-working people who live here. Whether they were born here or not, they tend to adopt the confident optimism that Texans are known for. Alost says he’s had a lot of friends who moved to North Texas from other places, not sure that they would like it. There are no mountains or ocean beaches, just prairie. But what ends up winning newcomers over are the friendly folks who welcome them into their communities. The values and ethics of Texans give them pride and a can-do attitude that are yielding benefits today by attracting great resources, Alost says. “We’ve created this great environment, and we need to maintain it,” he adds. The lead-up to today’s boom started well before the pandemic—and its roots are in the culture. No one knows that more than Billingsley. “The momentum in Texas, like many things, has been a long time in coming,” she says. “This state and region have a rawhide, independent, welcoming, casual, smart culture. Our values and style set the tone. Other places have different styles and culture where for years it’s getting tougher and tougher to do business, while here it’s getting better.”
AT HOME IN CY PRESS WATERS: SCORE ANOTHER ONE FOR A ‘CENTRAL LOCATION AND AMAZING AMENITIES’ At Home, the discount big-box home furnishings store, will move its headquarters from Plano to Cypress Waters in northwest Dallas late this year. “We’ve outgrown our existing facility and wanted to create a modern work environment that allows us to expand and attract the best talent out there,” said Lee Bird, At Home’s CEO and chairman. Bird said they chose Cypress Waters for its “central location and amazing amenities.” The company currently has 400 employees in a 136,000-square-foot office. The new building at Cypress Waters will offer a 260,000-square-foot headquarters that could allow for a staff of 1,000. The new
space, which will be designed by GFF and Corgan, will include a 78,000-square-foot design center with a mock store, photo and video studios, training rooms, collaboration spaces, and a coffee bar. At Home will keep its current warehouse in Plano. At Home now has 230 stores, with plans to grow to a 600-store chain.
2022
CYPRESS WATERS
PLANO-BASED RETAILER AT HOME IS MOVING ITS CORPORATE HEADQUARTERS TO CYPRESS WATERS.
CREATING PLACES
T
PEOPLE WANT TO BE HERE’S MORE TO A SUCCESSFUL DEVELOPMENT THAN
“location, location, location,” but it definitely starts there. To create a place where people want to be, you need a prime spot near major thoroughfares. Then you need visionary, hyper-motivated development teams, community buy-in, heaps of patience—and key ingredients people just can’t live without. “What we try to create are places that anyone, and all of us, consider as their own spot,” says Billingsley, the daughter of Dallas real estate titan Trammell Crow. She co-founded Billingsley Company with her husband, Henry Billingsley, in 1978. Billingsley Company is the force behind Cypress Waters, a 1,000-acre master-planned development at Interstate 635 and Belt Line Road in the northwest corner of Dallas. “It starts with a great location,” she says. “You’re really lucky if you have natural amenities like trees, water, and interesting topography.” Located just minutes from Dallas-Fort Worth International Airport, Cypress Waters centers on North Lake, built in the 1970s for a nearby power plant. After you’ve picked your spot, you turn your focus to the public realm: streets, parks, and schools, with everything integrated into nature.
2022
Next you plan for rich amenities to make the space a buzzing hub for workers and residents alike. Then you’re ready to start thinking about offices and residences, Billingsley says. Her company began buying parcels in 2003 and broke ground in 2012. It wasn’t always smooth sailing in the early days. Billingsley had to overcome huge hurdles to make Cypress Waters a reality—from dealing with multiple jurisdictions to a lack of infrastructure to lawsuits. Although most of Cypress Waters is officially in the city of Dallas with a southern strip of land in Irving, it’s located next to the city of Coppell and inside the boundary for Coppell ISD. Both entities filed lawsuits against Billingsley Co. due to concerns about strains on resources. But since then, the Billingsleys proved to be good partners, and Cypress Waters began generating
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 5 5
CITYLINE
community resources. “When we started, there was nothing in the area like what Cypress Waters has become,” she says. “We had to respect what was there and play to the market we were in, and yet work for something much more significant.” Billingsley has called the development a 25-year-vison. Today, Cypress Waters has more than 3.25 million square feet of office space and three multifamily communities, with more of both under construction, plus more than a dozen spots for a meal, a drink, or a coffee. Once completed, the development is expected to include 8 to 9 million square feet of office and retail space, 10,000 multifamily residences— comprised of distinct neighborhoods with individual personalities—along with three schools, parks, nature trails, and a town center area spread across 1,000 acres.
5 6 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
CITYLINE’S ALOST BELIEV ES A GR E AT M I X ED -USE
development needs momentum. “You want to create a critical mass from the beginning,” he says. Then there’s the “quality of the street” and a focus on making the spaces you create “feel exciting.” CityLine, a 204-acre mixed-use development bordered by the President George Bush Turnpike and U.S. Highway 75, broke ground in 2014. At the time, Toby Grove, president of KDC, said, “We were seeing more interest from corporate users in transit-oriented, live-work-play developments.” Before building began at CityLine, State Farm signed on for a regional hub, which would draw 16,000 people to the site daily. It was a critical mass that would support “the residential and the retail and provides a great environment for employees,” according to Grove. Late the next year, State Farm’s hub opened, followed by Raytheon’s intelligence, information, and services operations. Now CityLine features 2.5 million square feet of office space, more than 200,000 square feet in restaurants, retail, and entertainment, and more than 20 acres of parks. They started with open fields, but Alost says that Richardson city officials were quick to put in the initial drainage and utilities and approve the zoning. By the time State Farm signed on, they had entitlements in place. Because the city showed so much of the aforementioned “transactional
2022
A NEW TRIO OF TOWERS TO RESHAPE THE SKYLINE IN RICHARDSON CityLine developer KDC announced three new office towers last fall, which will add about 1.4 million square feet to the mixed-use development. Designed by Dallas-based Corgan, the glass-clad, build-to-suit towers range in size from 13 stories and 356,000 square feet to 18 stories and 513,000 square feet. The buildings can be connected via skyways on their fifthfloor amenities levels or be developed separately. All the buildings will have protected views unblocked by future development and face CityLine’s “signature streetscape” with wide walkways and trees, KDC says.
efficiency,” KDC could respond quickly once the deal was in place. After you identify the initial anchor, Alost says you’ve got to deliver on a well-rounded community. “In every business—the hotel business, the apartment business, the restaurant business, the corporate office business—balance is critical for us,” Alost says. If you successfully build an engaging lifestyle vision, he believes people will come. “Companies need people to innovate and grow their business,” he says. “People have to like the places they work. In our father’s or grandfather’s day, you didn’t really need to like your workplace. Today there’s an integration of work and life. That creates interesting possibilities and an improved quality of life.”
FRISCO STATION’S FOLZENLOGEN AGREES THAT CRITICAL
mass is key in the success of a development—and so are events. “You need the right mix of people living there and working there, and the amenities,” he says. “Today you’ve got to program it, have entertainment, provide open spaces and outdoor amenities, which are more popular with COVID.” Frisco Station, a 242-acre mixed-use development along the Dallas North Tollway, was first announced in 2015 as a partnership including landowner Rudman Partnership, Hillwood as the master developer, and Kansas City-based
2022
The 204-acre transit-oriented CityLine development features a mix of office buildings, apartments, restaurants, and retail, as well as parks and trails.
VanTrust Real Estate to develop the office element. In the early days of development, Hillwood President Mike Berry said they chose the name Frisco Station because “stations are places where people go to make connections.” The mixed-use project currently features more than 600,000 square feet of office space and three multifamily communities, set along a linear park and trail system. Add in three hotels and a location right next to The Star, and residents, employees, and visitors have easy access to plentiful shopping and dining. Folzenlogen says that Frisco Station has also benefited from the innovative economic development work by Frisco city leaders. He’s amazed at how fast the Dallas North Tollway corridor in Frisco has exploded, attracting great resources like the headquarters of the PGA and the new University of North Texas at Frisco campus.
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 5 7
FRISCO STATION
FRISCO STATION’S HEALTH & WELLNESS DISTRICT The Frisco Station Partnership signed a deal with Dallas-based Cambridge Holdings to take charge of the development’s 35-acre Health & Wellness District in the southwest corner of the property. Cambridge will develop a variety of healthcare projects for the site, including a variety of medical offices and wellness-related services.
DRONE DELIVERIES FROM WING AND WALGREENS
PHOTOS AND RENDING: HILLWOOD
Frisco Station’s vertiport will offer a drone delivery hub in partnership with Wing to provide drone test space and host community demos and school field trips. Wing, a subsidiary of Google’s parent company Alphabet Inc., conducted test flights at Hillwood’s AllianceTexas Flight Test Center, a UAS testing facility in Fort Worth that’s part of the larger AllianceTexas Mobility Innovation Zone, known as the MIZ.
5 8 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
2022
CONNECTIVITY &
C
COMMUNITY ONNECTIONS ARE HIGH ON THE LIST OF MIXED-USE
PHOTOS AND RENDERINGS: HILLWOOD
must-haves. Frisco Station, which has a prime spot on the Dallas North Tollway, links up with the 32-acre Frisco regional trail system. It also has a stake in the future of transportation with a vertiport and a different kind of connectivity—built from the ground up—with AT&T’s 5G Evolution wireless technology. When the deal with AT&T was announced in 2018 to make Frisco Station one of the nation’s first 5G “connected communities,” Hillwood’s Mike Berry said, “We believe we’re creating a high-tech environment, unlike anywhere else in the country, that has the potential to change the way people think about what’s possible in their day-to-day interactions with people and information.” Frisco Station also boasts one of the region’s few vertiports. While the business of air taxis will need time and space to develop, another use for the vertiport is ready to go. The vertiport will offer a drone delivery hub through a partnership with Wing, a subsidiary of Alphabet (Google’s parent company). Wing also plans to pilot deliveries from Walgreens to parts of Frisco and Little Elm. The hub at Frisco Station will offer deliveries, provide a drone test space, and host community demos and school field trips. Wing had already partnered with Hillwood last summer in the AllianceTexas Mobility Innovation Zone to conduct drone test flights. Frisco Station has also partnered in Texas’ first pilot project to test autonomous vehicles on public roads. The smart community also puts a premium on the social side of connection. Frisco Station hosts events within its multifamily communities, from cooking
2022
classes and yoga to happy hours and dog park get-togethers. Folzenlogen says they’re looking to add more healthy activities, like 5K runs, with the recent addition of a 35-acre Health & Wellness District. “The foundational pillars that drive our plan and program are smart, creative, and healthy,” he says. “That healthy piece has been important from Day 1—and it’s even more important post-COVID to attract talent.” In October, the Frisco Station Partnership announced a deal making Dallas-based Cambridge Holdings the exclusive provider of health-related projects in the new Health & Wellness District in the southwest corner of the property. The Cambridge deal was just part of a busy fall at Frisco Station. Two sections of the development’s linear park and trail system opened in September: a 1-acre park called Canyon East and The Bend, a 1.3-acre park that opened at the same time as Cadence, a 322-unit luxury apartment community. “COVID notwithstanding, we’ve generally delivered everything we had planned for in that time frame,” Folzenlogen says.
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 5 9
PHOTO: WING
Rooted in mobility innovation, Frisco Station was designed with futureproofing in mind, bringing next-gen mobility options to reality. Wing launched its first commercial drone delivery service in a major U.S. metro at the development last year.
CYPRESS WATERS
CURRENT OFFICE FUTURE OFFICE RETAIL MULTIFAMILY MULTIFAMILY (MID-RISE) SCHOOL TRAILS TRAILS (PROPOSED) FUTURE DART LIGHT RAIL
HERO’S HORSE MARKS THE ENTRANCE TO CYPRESS WATERS.
6 0 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
FUTURE HOME OF VERILY’S OPERATIONS HUB
PHOTO: CYPRESS WATERS
THE SOUND AT CYPRESS WATERS
INTERCONNECTION IS PART OF THE LIVE-WORK-PLAY
benefits of Cypress Waters. Waterfront living and corporate life comingled with nature is built into the master-plan vision, Billingsley says. The development also boasts two miles of paved hike and bike trails, with four more miles in the works to complete a loop around North Lake and connect to Campion Trail in Irving. Billingsley touts community pride in the hike and bike trails, great schools, dog parks, and Texas Main Street-style restaurants and shops crafted from old bricks, with some venues overlooking the centerpiece lake. Her team has added sculptures and other public artwork, all created to give a special sense of place to Cypress Waters. Then there are the events. Billingsley Co. has unexpectedly found itself in the events business, she says. They added the Sound, which includes the Rogers O’Brien Amphitheater and multiple waterfront dining options and apartment complexes. The Sound hosts events most days, from “Wine Down Wednesdays” and Trivia Nights to concerts and holiday celebrations. The development has become a destination development with restaurants and retail. Located on Interstate 635 at Belt Line Road minutes from Dallas Fort Worth International Airport, it’s slated to be on the DART Silver Line.
AT CITYLINE, AMPLE GREENSPACE IS A FOCAL POINT. The CityLine Plaza is a centrally located, one-acre urban plaza designed by the
2022
Office of James Burnett—the landscape architect of Dallas’ signature Klyde Warren Park. For an urban getaway, there are more than 20 acres in CityLine’s two city parks and plenty of hike and bike trails. One goes all the way to the University of Texas at Dallas campus, Alost says. The transit-oriented development, built for access, is located at the busy intersection of the President George Bush Turnpike and U.S. Highway 75. DART light rail runs right through it, currently with the Orange Line and Red Line. The future Silver Line, estimated for completion in 2023, will go to DFW International Airport. On the social side, Alost says that CityLine also programs a lot of activities, from a farmers’ market and concerts to yoga and tasting events. “You need programs and activities because what you want to create is really a lifestyle,” he says. “You think about what people want.”
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 6 1
CITYLINE
ON-SITE AMENITIES
C
TAKE A HOSPITALITY CUE ITYLINE IS ABOUT TO RESHAPE THE SKYLINE IN
Richardson with a new trio of towers. In September, KDC officials announced plans for three build-to-suit glass towers that will add nearly 1.4 million square feet at CityLine. The Dallas developer, which has been working on the $2 billion “city within a city” since 2013, says the towers build on the project’s success. The towers, designed by Dallas-based Corgan, range in size from 13 stories and 356,000 square feet to 18 stories and 513,000 square feet. “The concept is very flexible with the towers at different heights,” Alost says. “They have tremendous protected views that won’t be blocked by future development.” All three feature fifth-floor amenity levels, which can be linked together by skyways or kept separate, he says. The towers’ interiors will incorporate tech for occupant health and well-being, as well as state-of-the-art fresh air filtration systems and touchless fixtures. An indoor-outdoor experience is also by design, with ground level lobbies that face CityLine’s signature streetscapes with wide walkaways and sidewalk amenitites. KDC also plans some mid-rise offices for a patch of ground south of Raytheon, while continuing to infill with more retail, multifamily, healthcare, and personal services. “I think the best philosophy about development is to have a balanced
6 2 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
environment that can satisfy what people want day or night,” Alost says.
BILLINGSLEY SAYS CYPRESS WATERS
is looking at “paradigms of hotels and country clubs, places that are great at creating amenities,” she says. “How do we do that as private developers?” Country club and hotel amenities, like a nine-hole putting green, tennis courts, and pickleball courts, will appeal to both residents and employees, she says. And while other developers might be struggling due to pandemic-related trends, Billingsley says she’s “thrilled and pleased” with the momentum at Cypress Waters. A 300,000-square-foot multitenant building currently under construction will house biotech company Verily, a subsidiary of Alphabet. Drawn by the region’s growing stake in healthcare and technology, along with access to great
2022
KDC ANNOUNCED PLANS FOR THREE BUILD-TO-SUIT GLASS TOWERS AT CITYLINE THAT WILL ADD NEARLY 1.4 MILLION SQUARE FEET AT CITYLINE IN RICHARDSON.
RENDERING: KDC
talent, Verily execs plan to hire more than 100 employees for its first Texas office by the end of 2022. In Q1 of 2022, Billingsley expects construction to start on another 300,000-square-foot office building. The year should also bring the start of a 185,000-square-foot build-to-suit and three more office buildings at 250,000 square feet per building. For those of you keeping score at home, that’s more than 1.5 million square feet of office space slated for completion in the next few years, bringing the Cypress Waters total to more than 4.5 million square feet in offices. Some 600 multifamily units are also under construction, likely to open in 2023. As of 2022, more than 5,000 residents call Cypress Waters home. Billingsley projects 8 to 9 million square feet of office space and 10,000 multifamily units at build-out. Daytime office population should be around 50,000 and evenings around 20,000.
AT FRISCO STATION, ONE OF THE biggest surprises has been the success of their multifamily offerings, Folzenlogen says. “We continue to see growing demand for high-quality urban living,” he says. “It beats all expectations and speaks to the job growth we’re seeing.” Frisco Station now has about 900 multifamily units, with more than 2,400 planned
2022
“ I think the best philosophy about development is to have a balanced environment that can satisfy what people want day or night. ” — MICHAEL ALOST KDC at build-out. They also have a corporate headquarters opportunity of one million square feet on 54 acres on the north end of the property and a group of build-to-suit towers along the tollway that would add another 3 million square feet. With the pandemic hitting the retail industry hard, Frisco Station’s center of dining, shopping, and entertainment—The Hub—has been slow to develop. Folzenlogen says it’s just a matter of waiting for the right opportunities. According to Folzenlogen, two things are vital: “You have to have patience and the capital to invest in these long-term projects.”
THE DEVELOPERS OF THE THREE DEVELOPMENTS ARE
enjoying their current success. But they all continue to focus on the long game to keep moving forward. The developments all aim for success in terms of decades, and an evolutionary vision is behind their strategies. CityLine’s Alost and his team “spend a lot of time facilitating the growth of various components so we can sustain quality growth.” And Billingsley has one overall goal for the future of Cypress Waters: “I’m more and more committed to making this place remarkable.”
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 6 3
M
ount Pleasant, TX is a micropolitan city located two hours east of downtown Dallas on Interstate 30. The city is home to international manufacturers & national retailers. Mount Pleasant offers a certified industrial park on Interstate 30, continued investments in infrastructure, & plans for large mixed-use developments.
As a diverse lake community with a thriving Main Street downtown, robust medical center, & diversified employment base, the live-work balance has never been easier.
The Urby, a luxury 28-story apartment tower located in the Dallas Design District, topped out in November.
THE CRANE REPORT
2022
DALLAS-FORT WORTH | OFFICE, INDUSTRIAL, AND MULTIFAMILY
ON-TH E-G RO U N D I N SI G H TS
OFFICE
INDUSTRIAL
MULTIFAMILY
TERRENCE MAIDEN
BARRETT BUFKIN
KYLE KINATEDER
STEVE DILLON
CEO Russell Glen
Vice President esrp
Vice President and Business Unit Leader
“As we continue to adjust to this new normal, our approach to development will have to change. People will want more flexibility from their employers to work from home and the office. This option for the workforce will likely create more flex office space.”
“North Texas has a bright outlook when it comes to logistics/industrial warehousing. While the industrial land is not as prevalent as it once was, there are still opportunities for new developments throughout the region. The demand for space outweighs the supply ... we’ll continue to deal with growing pains as we deliver more product throughout the next 12-24 months.”
President and CEO Midlothian Economic Development
“Dallas-Fort Worth’s workforce, combined with our expansive network of support services, make the region a premier location for expanding manufacturers.”
“Two years ago, developers with land in North Texas would likely use it as an opportunity to start construction for an office building. However, after the digital transition we experienced with COVID-19, we’re now seeing those developers shift to multifamily.”
2022
Balfour Beatty
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 6 5
THE CRANE REPORT:
OFFICE
! !
DUCHESS OFFICE PARK
!
! ! !
ANNOUNCED PROJECTS
!!
! !
! ! !
CHARLES SCHWAB CAMPUS PHASE 2
!
! ! !
IVY ROOM OFFICE AND VENUE
!
!
MERIDIAN MEDICAL OFFICE BUILDING
!
1
HALL PARK OFFICE TOWER
SIZE: 410,000 square feet LOCATION: Frisco DEVELOPER: HALL Group DETAILS: A 16-story Class AAA office tower is part of a $7 billion mixed-use expansion of HALL Park. The new HKS-designed office building is in the first phase of the project, which also includes a boutique hotel, a 19-story luxury residential tower, and a food hall—all surrounding a community park. ! The offices are scheduled to open in fall 2023. The full master plan of 9.5 million square feet is expected to span 20 years of total development.
! !
HILLWOOD COMMONS II !
STONEGLEN OFFICE BUILDING
GRANITE PLACE AT SOUTHLAKE TOWN SQUARE II
! !! GLEN ! HERITAGE MEDICAL CENTER ! !! ! ! !
!
!
!
COMMON
!
!
LAS COLI CORPORATE CENT
!
HIDDEN RID
!
!
SLH WALN
!
THE OFFICES AT HAMPDEN WOODS
! !! !!
4 TRIUNE CENTRE
!
!
WILLOW PARK
CLEARFORK C2
ARLINGTON DATA CENTER
! !!
THE 701
! !
!! !
!
WATERSIDE MEDICAL
!
MAYFIELD GROVES
! !
CHISHOLM TRAIL PROFESSIONAL PLAZA
!
!
CHISHOLM TRAIL PROFESSIONAL CENTER
!
URGENT CARE
!
!! !
!
2
LEGACY WEST OFFICE TOWER
SIZE: 400,000 square feet LOCATION: Plano DEVELOPER: Ryan Companies DETAILS: Designed by Gensler for Minneapolis-based Ryan Companies, Legacy West’s first Class AA multitenant office tower is slated to break ground in early 2022. The building already has its anchor tenant, with global tax services and software company Ryan LLC (not affiliated with Ryan Companies) taking half the space. JLL plans to lease the remainder. The tower’s completion is set for Q1 2024.
6 6 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
T
THE POINT
! ! ! NORTH TOWER, BUILT-TO-SUIT !! ! ! ! WEST ENTRADA ! OFFICE BUILDING ! PAYCOM ! SOUTHLAKE ! ! ! ONEFOURTEEN ! ! ! ! ! !! ! ! ! ! ! ! ! ! FREEPOR
3
ADDISON STATION OFFICE TOWER
SIZE: 250,000 to 350,000 square feet LOCATION: Addison DEVELOPER: VanTrust Real Estate DETAILS: Kansas City-based VanTrust, the office developer at Frisco Station, announced plans for a 12-story office tower at the intersection of the Dallas North Tollway and Arapaho Road, adjacent to the Addison Transit Station and DART’s new Silver Line, opening in 2023. Marketed by Colliers, the tower’s buildto-suit office space is slated for completion next year.
2022
!
UNDER CONSTRUCTION
! !
HAYS OFFICE PARK
PGA HEADQUARTERS
! !
!
AUBURN HILLS OFFICE PARK
! !
!
!!
!
!
! !! !!
! ! CHILDREN'S ADVOCACY CENTER ! OF COLLIN COUNTY !
COBB FARM WEST ! VICTORY AT ! COBB HILL MEDICAL OFFICE PARK ! ! INDEPENDENCE! COBB OFFICE !! CONDOS ! !PROFESSIONAL ! PRESTON PLAZA AT PCR CROSSING ! ! NORTH FRISCO MEDICAL OFFICES ! ! ! THE FARM IN ALLEN ! STONEBROOK ! ! !
!
THE RIDGE AT 121 !
! !
THE POINTS AT WATERVIEW
! TRINITY MILLS STATION
T GATE AT COPPELL
3
!
! VILLAGE ON THE PARKWAY FOURTEEN555 ! THE INWOOD AT ALPHA WEST
!! !! !
INAS ! ! ER III ! !
!
!
!
!! ! ! PARK TOWER AT DALLAS MIDTOWN !! FOUR !
!
LINCOLN CENTRE
THE TOWER AT PRESTON HOLLOW VILLAGE
!
!!
! !
GE TOWER !! VERIZON! ! CAMPUS ! NUT HILL
7
AT CITYLINE
ONE ADDISON PLACE !!
T NS
!
! ! ! ! MCKINNEY RANCH ! MONARCH CITY OFFICE !!! ! ! ! ! ! ! ! DENTAL DEPOT ! ! !!!!! ! ! ! ! ! ! ! COPE TOWER & ! ! FRISCO MEDICAL RESEARCH CENTER ! ! ANGEL ! EXCHANGE ! ! PRESTONWAYS COMMONS OFFICE PARK ! ! ! ONE BETHANY HQ CENTER AT TATE + TOLL !! NORTH ! ! ! MUSTANG SQUARE ! ! ! PRESTIGE OFFICE PARK ! THE ENCLAVE IN FRISCO 1 !! !!! GRANITE PARK ALLEN TECH HUB ! LEGACY WEST OFFICE TOWER !! !!!7 ! PLAZA AT LEGACY II ! ! ! 5! 2 ! ! ! ! LEGACY PARK C LEGACY CENTRAL 5 ! !PLATINUM!! ! THE HERITAGE ! TOWER ! ASSEMBLY PARK ! AT SPRING CREEK RIDGE ! ! ! MUSTANG OFFICE CONDOMINIUMS ONE HERITAGE ! 6 !! ! CREEKSIDE ! ! HERITAGE ! !! THE DISTRICT ! CREEKSIDE ! ! ! ! THE EXCHANGE ! ! ! TOWERS
! SHOPS AT LAKEFRONT MEDICAL
! !
GRANITE PARK SIX
SIZE: 420,000 square feet LOCATION: Plano DEVELOPER: Granite Properties DETAILS: Construction recently began on Granite Park Six, a Class AA 19-story office tower in Granite Park, a 90-acre mixed-use development. Designed by BOKA Powell with modern interiors by HKS Architects and general contracting from Austin Commercial, the tower has an anchor client of Stonebriar Commercial Finance and is scheduled for delivery in June 2023.
!
!
! ENERGY SQUARE 4 WEIR’S PLAZA MCKINNEY ! THE TERMINAL AT KATY TRAIL FREEMAN & LEMMON ! !!
WEST LOVE
!
!
! ! !
!
MAPLE TERRACE ! !THE QUAD ! !! !! TWO ARTS PLAZA THE DESIGN DISTRICT TOWER !!!! ! ! ! !! THE ASSEMBLY ! VICTORY ! !! ! THE EPIC ! ! ! CENTER GATEWAY ! SOLA ON LAMAR OFFICE TOWER FIELD ST. DISTRICT
!
! !
!
! !
6
! PATRIOT HILLS OFFICE
!
● ANNOUNCED ● UNDER CONSTRUCTION
INTERNATIONAL BUSINESS PARK OFFICE BUILDING
SIZE: 250,000 square feet LOCATION: Plano DEVELOPER: Billingsley Company DETAILS: Billingsley and construction partner Adolfson & Peterson Construction have broken ground on a GFF-designed five-story office building in the International Business Park, near the President George Bush Turnpike and the Dallas North Tollway. JLL will coordinate leasing.
DATA SOURCE: DALLAS NEXT RESEARCH / DALLAS REGIONAL CHAMBER RESEARCH / COSTAR / VARIOUS REAL ESTATE FIRMS
MAPS: DRC IMAGES: COURTESY OF THE COMPANIES
4
CRESCENT-FORT WORTH
SIZE: 170,000 square feet of office space LOCATION: Fort Worth DEVELOPER: Crescent Real Estate LLC DETAILS: A new mixed-use development in Fort Worth’s cultural district will include a Class A office building—the future home of Crescent Real Estate, Goff Capital, Contango Oil & Gas, and Canyon Ranch—a 200-room boutique hotel, chef-driven restaurant, and 170 luxury residential units. Designed by Denver-based OZ Architecture and Dallas’ GFF, the development is expected to open in mid-2023.
2022
5
SPRING CREEK FRISCO 45
SIZE: Four office towers with up to 1.4 million square feet LOCATION: Frisco DETAILS: Plans were filed to start preliminary infrastructure for the longawaited Spring Creek Frisco 45 mixed-use development on State Highway 121 near Grandscape in The Colony, per The Dallas Morning News. Zoning for the $850 million mixed-use project was approved in 2018. KFM Engineering and Design is working on the development that’s slated to start in early 2022. The project would be one of the largest along SH 121.
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 6 7
THE CRANE REPORT:
7
INDUSTRIAL
I-35 CONVERGENCE
TYSON FOODS DENTON POINT
DENTON CROSSING @ I-35 BLDG 2
ANNOUNCED PROJECTS
1
GATEWAY BUSINESS PARK
4
LEWISVILL DEVELOPMEN
PETTY PLACE
P
NORTHLINK C
2
PORT 156 LOGISTICS CENTER
ALLIANCE CENTER NORTH 9 ALLIANCE
CENTER NORTH 8 3 ALLIANCE
MACARTHU BUSINESS PA
CENTER EAST 1
EXCHANGE CIRCLE DFW POINT35
1
URBAN DISTRICT 35
SIZE: 440,663 square feet LOCATION: Denton DEVELOPER: Urban Logistics Realty DETAILS: Urban District 35 (UD35) is a four-building industrial park that will be located on a site next to Denton’s historic Acme Brick Company plant, southeast of Interstate 35E and U.S. Highway 377. Originally home to the Denton Pressed Brick Company, the plant was acquired by Acme Brick in 1912, and since has been manufacturing and distributing brick and masonry products nationwide. UD35 will be leased by Holt Lunsford and is expected to be completed in Q4 of 2022.
SAGINAW DISTRIBUTION CENTER
AMAZON CAYENNE KITCHEN
AIR COMMERCE LOGISTICS CENTER
PASSPORT 125
5 SYLVANIA CROSSING SYLVANIA CROSSING @ I-35W - BUILDING 2
WILDLIFE 8
PR MOUNTA BARDIN CROSSING BUILDING 1 REPUBLIC
FIRST ARLINGTON COMMERCE CENTER III
● ANNOUNCED ● UNDER CONSTRUCTION
CEDAR I-35 LOGISTICS CENTER
AMAZON
2
35 EAGLE INDUSTRIAL PARK
SIZE: 2.1 million square feet LOCATION: Fort Worth DEVELOPER: Trammell Crow Company DETAILS: Phase III of Trammell Crow’s industrial park, located at Interstate 35W and Eagle Parkway, includes fi ve buildings. Building C, at more than 1.25 million square feet, is billed as the largest speculative warehouse in the market. Four other buildings range from about 104,000 square feet to almost 325,000 square feet. The site includes 40 acres of additional land available for car and trailer parking. The project, adjacent to Alliance Airport, was set to break ground in early 2022, with completion at the start of 2023.
6 8 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
SUNRIDER MANUFACTURING
3
LOVETT LOGISTICS 35 PARK
SIZE: 646,250 square feet and 215,000 square feet LOCATION: Fort Worth DEVELOPER: Lovett Industrial DETAILS: Lovett Logistics 35 Park, located at Alliance on Keller Haslet Road near Interstate 35W, estimates a June 2022 completion and is 75 percent leased to an undisclosed tenant as of press time. Houston-based Lovett Industrial has two other industrial properties under construction in the region: a 1-million-square-foot facility at Trinity West Business Park in Dallas set to open in August and an 826,620-square-foot building at Texport Logistics in Wilmer slated for March.
MIDLOTHIAN BUSINESS PARK XCHANGE AT RAILPORT BUILDING ONE
2022
UNDER CONSTRUCTION PARK 25 COMMERCE CENTER STAR COMMERCE CENTER III
CYRUSONE PHASE II
CREEKVIEW 121 BUILDING 9
7
LE NT FIRST PARK 121
SIZE: 374,560-square-foot cold storage facility LOCATION: Denton DEVELOPER: Cold Creek Solutions DETAILS: DFW-based Cold Creek Solutions (CCS) recently announced a state-of-theart cold storage facility located on a 23acre site just northwest of the I-35E/I-35W split in Denton. CCS is partnering with ARCO National Construction, based in St. Louis, to deliver the project later this year.
TEXAS INSTRUMENTS RFAB2
UR ARK
CCS DENTON
HORIZON BUSINESS CENTER BUILD TO SUIT
EXETER EAST LOGISTICS BUILDING 1 EAST DALLAS COMMERCE CENTER
ROLOGIS AIN CREEK 3+4
FORNEY DISTRIBUTION CENTER
6
6
POINTSOUTH BLDG 1 PROPOSED DEVELOPMENT SOUTHLINK II TRADEPOINT 20/45
SERVICES
SOUTHFIELD PARK 35 CENTRE PARK KROGER/OCADO 20/35 FIRST 20/35 NFI LOGISTICS CENTER EXPANSION
SOUTHPORT LOGISTICS CENTER ONE - BTS DUKE INTERMODAL III
67 LOGISTICS
DALPORT TRADE CENTER
TRADEPOINT 45 EAST
DFW INLAND PORT
RED OAK 252MW CAMPUS
DATA SOURCE: DALLAS NEXT RESEARCH / DALLAS REGIONAL CHAMBER RESEARCH / COSTAR / VARIOUS REAL ESTATE FIRMS
MAPS: DRC IMAGES: COURTESY OF THE COMPANIES
4
DHL SUPPLY CHAIN WAREHOUSE
SIZE: 1.2 million square feet LOCATION: Fort Worth DEVELOPER: DHL Supply Chain DETAILS: The $46 million warehouse project, designed by Harris Architects and located just south of Highway 114 on Wolff Crossing at Alliance, is expected to open later this year. DHL has already built several warehouses in north Fort Worth. In 2019, the company sold two large industrial buildings near Alliance Airport to Transwestern Investment Group.
2022
MOUNTAIN CREEK EAST LOGISTICS CENTER
SIZE: 467,541 square feet LOCATION: Dallas DEVELOPER: Eider Creek Capital in partnership with Crow Holdings Capital DETAILS: The speculative industrial development is located on 25 acres at Dan Morton Drive and Crystal Lake Boulevard, just east of Spur 408 in southwest Dallas. CBRE is set to lease the project, which has an estimated completion in August.
5
MEACHAM COMMERCE CENTER
SIZE: 1.3 million square feet LOCATION: Fort Worth DEVELOPER: McCormack Commercial DETAILS: McCormack Commercial has four buildings planned for the 87-acre site, ranging from 69,120-square-foot to 582,540-square-foot. Located on the southwest corner of Interstate 35W and Meacham Boulevard, the 334,750-squarefoot Building 1 is scheduled for completion in Q2 of 2022. Holt Lunsford Commercial is providing leasing services.
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 6 9
ALLORA DENTON
THE CRANE REPORT:
MULTIFAMILY
THE RESIDENCES AT RAYZOR RANCH EASTPARK AT RAYZOR RANCH
ELAN DENTON
HUNTERS CREEK
ANNOUNCED PROJECTS
HERITAGE TO
● ANNOUNCED ● UNDER CONSTRUCTION
THE TRAILS AT FRANKFORD S
THE CARTER
SIRE WELLINGTON
1
LANDING AT 2EIGHTYSEVEN FORENA PRESIDIUM BERKSHIRE REVELSTOKE
THE VAN ZANDT
THE LYRIC AT KELLER CENTER STAGE
OLYM
NORTHPARK LANDING
ELAN GRAPEVINE
SOLAY
SIZE: 147 units, plus 99,400 square feet of Class AA office space LOCATION: Fort Worth DEVELOPER: Goldenrod Companies DETAILS: The Van Zandt from Omahabased Goldenrod is a mixed-use development going in at the corner of West 7th and Foch Street. The development will include street-facing retail and dining spaces, an outdoor deck with a fitness center and pool, and indoor/outdoor meeting areas. Holland Basham Architects are designing the project, and Stream Realty is providing office leasing services.
JEFFERSON FOSSIL CREEK
SOVEREIGN HOMETOWN SPANOS IRON HORSE THE LOUISE
WESTSIDE HEIGHTS
ENCORE PANTHER ISLAND MUSEUM PLACE BLOCK A
EDEN TERRACE
JEFFERSON NORTH COLLINS
PRESIDI HILL STR
THE DECO 969 BURNETT LOFTS
1
COHO THE ELM AT RIVER PARK
EDEN SPRINGS
AVILLA TRADITIONS G
CREEKSIDE JEFFE VI
THE TOWN AVILLA TRAILS
LYNN CREEK
ALTA 287
THE GIN MILL DEBBIE AVILLA LAKERIDGE LANE FLATS VANTAGE AT BURLESON LANDMARK AT CROWLEY
SENDERO OAKS
THE ATWELL MAIN STREET LOFTS
HAVEN AT MANSFIELD THE SYDNEY
SHANNON CREEK II ATLANTICA AT BURLESON
2
OAK LAWN RESIDENTIAL TOWERS
LOCATION: Dallas DEVELOPER: PegasusAblon DETAILS: Real estate developer PegasusAblon plans to build two new residential towers along Cedar Springs in Oak Lawn. The developer plans to redevelop parking lots and set his towers back from the street to preserve neighborhood businesses. Groundbreaking is expected by the end of 2022 or in early 2023.
7 0 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
3
TOUCHMARK AT EMERALD LAKE
THE RILEY
SIZE: 271 units in first phase LOCATION: McKinney DEVELOPER: Touchmark DETAILS: Set to open in 2024, the initial phase of this 55+ retirement community will feature 149 independent living units, six duplexes, 84 assisted living units, and 32 memory-care residences. The 80-acre property near the intersection of Highways 75 and 380 includes a private 11-acre lake. A future phase will add another 129 units, a fitness center, salon, and restaurant-style dining. Andres Construction is the general contractor while Three Living Architecture and StudioSIX5 are handling design.
2022
PARCHAUS AT CELINA PARKWAY
THE ARTESIA I
MANSIONS OF PROSPER
PROSPER LOFTS
PROSE MAGNOLIA
OF MCKINNEY
LIV BLUEWOOD
3
MEZZO UNION PARK
UNDER CONSTRUCTION
THE LUXE OF PROSPER
PARCHAUS AT SKYLINE
THE LINKS ON PGA PARKWAY
THE TYLER
THE MANSIONS OF OAK POINT
NORTHGATE
JEFFERSON TERRACE BREA
THE DISTRICT AT LITTLE ELM MODERA FRISCO SQUARE
JEFFERSON AT THE GROVE
4 PRESIDIUM FRISCO SQUARE
AVILLA SPRINGS TOWNE CENTER SOUTHGATE
FLORENCE COLE PARK
WATTERSCAPE
ROYALTON AT CRAIG RANCH
THE CADENCE AT FRISCO STATION HALL PARK I
ALLEIA WATTERS CREEK
BOTANIC AT STONEBRIAR
7
7
THE MONTGOMERY AT WATTERS CREEK
OWERS AURA CROWN CENTRE
MAIN & MILL
WYLDER SQUARE FERRO
PLANO GATEWAY IV
STATION
MAGNOLIA GALLERIA NORTH
JEFFERSON GALLERY HOUSE VITRUVIAN WEST III
HASTING’S END AT THE SOUND
MPUS FLATS SAGE HILL
CARRIAGE THE LIVELY HOMES ON AT FIREWHEEL THE LAKE II
THE ROYALTON AT ROCKWALL DOWNES II
HAZEL BY THE GALLERIA
MERCER CROSSING
HARBOR HILL
MIDTOWN II
JEFFERSON LUMEN 880 LYN
LENOX LAKE HIGHLANDS I
8111 DOUGLAS
JEFFERSON TEXAS PLAZA SOUTH
MAGNOLIA AT WEST LEMMON
2
LENOX MAPLEWOOD II THE RESIDENCES AT MAPLE TERRACE TRUMONT THE GROUP BECKLEY DEVELOPMENT LAKE CLIFF
MODERA KATY TRAIL
HARBOR VILLAGE
SIZE: 370 units LOCATION: Allen DEVELOPER: High Street Residential DETAILS: The Montgomery is a five-story building that will include access to a sixstory parking garage, fitness center, dog park, business center with a coworking lounge, and access to Watters Creek hike and bike trails. The property, located at 1280 Montgomery Boulevard, is set to open in Q4 of 2022. JHP Architecture is designing the development, and Andres Construction serves as general contractor.
EMBREE HILL II
9353 GARLAND ROAD
JEFFERSON INNOVA ELE THE ACADEMIC
5
IUM REET
MILES ONE 90 LINZ AT THE STATION
BELT+MAIN
THE MONTGOMERY
THE WILLOW EAST QUARTER RESIDENCES CORTLAND ZANG FLATS FARMERS MARKET
AVILLA OAKRIDGE
6
ECHELON AT REVERCHON BLUFFS
HILL STREET PRESIDIUM
SIZE: 290 units LOCATION: Grand Prairie DEVELOPER: Presidium DETAILS: The 13-acre property features a resort-style pool, business lounge with WiFi and conference rooms, rooftop terrace, fitness center, on-site car wash, and pet grooming area. Located by Highway 161 and Interstate 30, the project, designed by O’Brien Architects, is slated to finish this summer and will be managed by RPM Living.
SPRINGS AT GRAND PRAIRIE THE FOUNDRY PRAIRIE GATE II
6
ERSON INE
DATA SOURCE: REALPAGE
MAPS: DRC IMAGES: COURTESY OF THE COMPANIES
4
PRESIDIUM FRISCO SQUARE
SIZE: 368 units LOCATION: Frisco DEVELOPER: Presidium DETAILS: The gated community will feature a resort-style pool, golf simulator, theater room, coworking lounge with micro-offices and podcast rooms, three courtyards with outdoor kitchens, and a dog park and dog spa. Located near the Dallas North Tollway and Main Street in a booming office, retail, and dining center, Presidium Frisco is slated to deliver its first units in June of 2023.
2022
5
THE URBY DALLAS
SIZE: 383 units LOCATION: Dallas Design District DEVELOPER: Urby DETAILS: The 28-story luxury apartment building recently topped out on its way to a Q1 2023 delivery. The tower is the first of three planned for the 4-acre site located near Turtle Creek across from the Virgin Hotel on Hi Line Drive. Amenities include a ground-floor café, outdoor forest garden, and 9-story garage. The $98 million project of New Jersey-based Urby is designed by 5G Studio Collaborative and built by Moss Construction.
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 7 1
BUSINESS WORKS BETTER HERE Dallas-Fort Worth’s business climate is more than favorable, the workforce is highly skilled and highly educated, and the location is about as close to perfect as it comes. Explore our guide: Each page contains a snapshot of the DFW region, our people, companies, and industries. Use this fact-rich tool to promote the region, attract businesses to your community, and expand existing ones. CALIBER HOME LOANS PLANS A MOVE TO THE MIXED-USE CYPRESS WATERS DEVELOPMENT AT 3401 OLYMPUS BLVD.
THE DALLAS-FORT WORTH REGIONAL ECONOMIC DEVELOPMENT GUIDE. AVAILABLE AT DALLASCHAMBER.ORG/DFWFACTS/
Walmart leased more than a million square feet at Hillwood’s AllianceTexas’ Westport 11 in Fort Worth last year. The retail giant, which has multiple hubs in North Texas, opened another 1-million-square-foot center at Alliance in 2016.
SCORECARD
LEASING ACTIVITY
DALLAS-FORT WORTH | OFFICE AND INDUSTRIAL O N -T H E - G R O U N D I N S I G H T S
IMAGE: HILLWODD
OFFICE
INDUSTRIAL
CRIBB ALTMAN
BRAD GIBSON
CONRAD MADSEN
Vice President of Leasing HALL Group
Co-founder and Partner Paladin Partners
KRISTA RAYMOND
Managing Director JLL
“Q4 office absorption in Dallas-Fort Worth was positive for the first time since the pandemic started. Nationally, tech companies were some of the quickest adopters of work-fromhome and hybrid working, but they have been the most active of any industry during the pandemic. Look for that trend to continue in DFW.”
“There’s still a large amount of vacancy in existing buildings which needs to be absorbed, but demand leans toward new or renovated product with abundant amenities.”
“There’s no end in sight for the industrial sector. We literally can’t build them fast enough today. Well-located developments have a line a mile long of tenants seeking to lease them.”
CBRE
2022
Senior Vice President, Industrial & Logistics
“We’ve seen a surge in warehouse needs as companies try to prepare for future unpredictable demands and supply chain disruptions. The pandemic accelerated e-commerce growth much faster than expected, which has also added to the demand for warehouse space for retailers.”
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 7 3
S SCORECARD The DFW office market enters 2022 with encouraging trends
OFFICE LEASES
The office market in Dallas-Fort Worth showed signs of life at the end of 2021, although vacancies remained high, says a Q4 report from CBRE. The increases in office market absorption, construction, and deliveries indicate that “broker sentiment remains cautiously optimistic after a strong ending to a tumultuous year.” Net absorption gained almost 800,000 square feet, a 1.4-millionsquare-foot increase since Q3 2021. Despite rising absorption, vacancies increased slightly to 25.3 percent, up 20 basis points, compared to 50 and 60 bps earlier in 2021. Quoted average rent rates inched up from $26.85 to $27.37. —Sandra Engelland
The nearly 145,000-square-foot lease to JPMorgan Chase in the Hunt Consolidated building at 1900 North Akard Street in Dallas is among the largest leases of 2021. The financial institution plans to relocate 600 workers to the building in 2022.
74 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
2022
BIG DEALS | NOTABLE OFFICE LEASES IN 2021 CBRE
FDIC
SIZE: 200,000 square feet LOCATION: Uptown Dallas SIGN DATE: December 2021 DETAILS: CBRE, the global real estate services company that recently relocated its headquarters from Los Angeles to Dallas, will take up almost a third of the available office space at Trammell Crow’s 2401 McKinney Avenue skyscraper.
SIZE: 163,005 square feet LOCATION: Dallas SIGN DATE: June 2021 LEASING AGENTS: Include Kim Brooks and Justin Miller from Transwestern Real Estate Services TENANT REPS: Include Keith M. Lavey and Victoria Abbasi from Colliers International DETAILS: Yes, that FDIC. The Federal Deposit Insurance Corp. signed a long-term lease at the Plaza of the Americas, 600 North Pearl Street, in the Dallas Arts District. According to Transwestern, it ranks as one of the top five largest leases in the CBD over the last decade.
JPMORGAN CHASE BANK N.A.
AMN HEALTHCARE
SIZE: 144,780 square feet LOCATION: Dallas SIGN DATE: November 2021 DETAILS: New York-based banking and financial services company JPMorgan Chase Bank signed a lease at the Hunt Consolidated building at 1900 North Akard Street with a move-in date of October of this year.
SIZE: 108,502 square feet LOCATION: Coppell SIGN DATE: January 2021 DETAILS: AMN, which offers healthcare staffing solutions for both temporary and permanent positions, is headquartered in the Cypress Waters mixed-use development, where the company signed a new lease in early 2021.
JLL
CATERPILLAR
SIZE: 95,882 square feet LOCATION: Dallas SIGN DATE: February 2021 LEASING REPS: Include Anthony B. Click and John L. Zogg Jr. of Crescent Real Estate DETAILS: Commercial real estate firm JLL signed a lease in February for a December move-in date at 2401 Cedar Springs Road in Uptown. Based in Chicago, JLL has five offices in North Texas.
SIZE: 81,509 square feet LOCATION: Irving SIGN DATE: May 2021 LEASING REPS: Bill Brokaw and Karch Schreiner with Hillwood Urban. TENANT REPS: Ned Franke and Matt Heidelbaugh with Cushman & Wakefield DETAILS: The world leader in the manufacture of construction equipment is opening a regional office at Williams Square in Las Colinas. Caterpillar’s Irving office will be home base to the Illinois-based company’s new electric power division.
TRINTECH INC.
APEX CAPITAL CORP.
SIZE: 64,582 square feet LOCATION: Plano SIGN DATE: August 2021 TENANT REPS: Craig Wilson and Randy Cooper of Stream Realty Partners DETAILS: The cloud-based financial software solutions company is relocating its headquarters from Addison to Granite Park in Plano. The fast-growth tech firm, which offers employees a hybrid of three days in the office and two days WFH, was in the market for more space and more amenities.
SIZE: 61,994 square feet LOCATION: Fort Worth SIGN DATE: November 2021 LEASING REP: Robert Gamblin with City Center Management TENANT REPS: Patrick McDowell and Matt Montague with JLL DETAILS: Apex, a leading freight factoring company for the trucking industry, is planning to move into downtown Fort Worth’s Bank of America Tower. Apex employs more than 300 people and specializes in helping small- to medium-sized trucking companies with day-today back-office support.
DXC TECHNOLOGY SIZE: 152,840 square feet LOCATION: Plano SIGN DATE: January 2021 DETAILS: The IT services and consulting company headquartered in Ashburn, Va., is expanding its presence in DFW with this lease at 6901 Windcrest. DXC Technology already occupies offices in a few other nearby buildings.
INTEGRITY MARKETING GROUP SIZE: 104,379 square feet LOCATION: Dallas SIGN DATE: June 2021 LEASING REPS: Include Fletcher Cordell and Dennis Barnes of CBRE DETAILS: Integrity Marketing Group, one of the nation’s largest independent distributors of life and health insurance products, signed a lease to move from Cypress Waters to I.M. Pei’s iconic Fountain Place tower last year. The move was one of many highlights for Integrity, which landed a $1.2 billion investment for its insurtech platform.
RUSHMORE MORTGAGE SIZE: 81,045 square feet LOCATION: Irving SIGN DATE: August 2021 LEASING REPS: Rhett Miller and Tim O. Terrell with Stream Realty Partners DETAILS: Irvine, Calif.-based Rushmore Loan Management Services is expanding its North Texas presence with a new office in Irving. The home mortgage company, currently with an office in Farmers Branch, plans to move into its Irving space in March.
CAROFFER SIZE: 61,826 square feet LOCATION: Addison SIGN DATE: January 2021 LEASING REP: Brian Brooks with Foundry TENANT REPS: Preston Lynn and Clay B. Vaughn with CBRE DETAILS: CarOffer, which matches a pre-owned car to the highest offer in the country with a quick survey of thousands of dealerships, is more than doubling the size of its headquarters in a move from Plano to Addison.
DATA SOURCES: CO-STAR, DRC, DALLAS NEXT RESEARCH 2022
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 7 5
S SCORECARD Industrial market momentum continues
INDUSTRIAL LEASES
Experts believe that 2022 will continue the momentum of 2021, which was a “banner year,” according to Cushman & Wakefield analyst Christopher Grubbs, who says that the DFW industrial market is a vital, sought-after logistics hub that has been resilient throughout the pandemic. Historic low vacancy rates and record high rents, along with continued population growth, should continue absorbing space and driving rent growth in 2022 and beyond, according to a recent Transwestern report, which also says that industrial rents are up 10.5 percent over 2021, and that the 12-month net absorption posted a record high of 41.7 million square feet. —Lance Murray
Industrial megadeal: The 20-year, more than 1-million-square-foot buildto-suit lease to Homegoods at Carter Park East in south Fort Worth was one of 2021’s biggest in DFW.
IMAGE COURTESY STREAM REALTY
7 6 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
2022
BIG DEALS | NOTABLE INDUSTRIAL LEASES IN 2021 HOMEGOODS SIZE: 1,033,760 square feet LOCATION: Fort Worth SIGN DATE: June 2021 LEASING REPS: Seth Koschak, Jeff Rein, and Forrest Cook of Stream Realty Partners TENANT REPS: Tony Kepano and Nathan Lawrence of CBRE DETAILS: HomeGoods, the home décor store that’s part of Massachusetts-based The TJX Companies’ discount retailers that include TJ Maxx and Marshalls, will open a distribution center in south Fort Worth to serve stores in the region. The lease start date is October 2022.
HENRY SCHEIN INC. SIZE: 810,908 square feet LOCATION: Fort Worth SIGN DATE: April 2021 LEASING REPS: Reid Goetz and Samuel Rhea of Hillwood DETAILS: This medical and dental supply company based in Melville, N.Y., has a handful of “mega distribution centers,” including this new space at Alliance.
WALMART DISTRIBUTION CENTER SIZE: 1,002,536 square feet LOCATION: Fort Worth SIGN DATE: February 2021 LEASING REP: Reid Goetz of Hillwood DETAILS: Walmart currently has 210 distribution centers in the U.S., with 19 of them in Texas, including this one at AllianceTexas. The discount retail giant has 593 stores and employs more than 170,000 associates in Texas alone. Progressive Grocer notes that some of Walmart’s largest distribution centers are in North Texas.
WOODS DISTRIBUTION SOLUTIONS SIZE: 707,000 square feet LOCATION: Fort Worth SIGN DATE: July 2021 LEASING REP: Ryan Wood of TCRG Properties TENANT REP: Becky Thompson of Lee & Associates DETAILS: The North Texas-based transportation and logistics solutions company, just signed its biggest lease to date for warehouse space in north Fort Worth. It offers last-mile delivery, food-grade storage, contract packaging, and fulfillment, among other services.
SADDLE CREEK LOGISTICS SERVICES SIZE: 861,840 square feet LOCATION: Burleson SIGN DATE: September 2021 LEASING REPS: Stephen Koldyke and J. Scott Moore of CBRE TENANT REP: Gary Lindsey of Newmark DETAILS: Saddle Creek, a third-party logistics provider based in Lakeland, Fla., offers omnichannel fulfillment, warehousing, and transportation. The new facility in south Fort Worth will provide a centralized hub to grow Saddle Creek’s business, per Fort Worth Business Press.
PETCO SIZE: 608,939 square feet LOCATION: Dallas SIGN DATE: February 2021 LEASING REPS: Nathan Lawrence and Krista Raymond of CBRE DETAILS: It’s where the pets go, or rather where their products go—to San Diego-based Petco’s regional warehouse distribution center in west Dallas, near Interstate 30 and Loop 12. According to the American Pets Products Association, Americans spent a record $99 billion on their pets in 2020.
THREDUP
COMPTREE
SIZE: 595,148 square feet LOCATION: Lancaster SIGN DATE: October 2021 LEASING REPS: Krista Raymond and Nathan Lawrence of CBRE TENANT REP: Melissa Holland of JLL DETAILS: This online thrift store is the world’s largest fashion resale platform, so they need a large distribution center in the fashion-conscious Dallas area. And because it’s reusing clothing on a global scale, thredUP is fashion conscientious, too. The lease start date is March 2022.
SIZE: 576,123 square feet LOCATION: Grand Prairie SIGN DATE: April 2021 LEASING REPS: Tyler Riek and William Mundinger of Crow Holdings Industrial TENANT REPS: Reed A. Parker of Lee & Associates DETAILS: Southern California-based Comptree provides office and home furniture, fitness equipment, print products, and more, through a variety of platforms from Amazon and Walmart.com to eBay and its own websites. The e-commerce distributor is new to North Texas, with other U.S. warehouses in L.A. and New Jersey.
TRI-STATE ENTERPRISES
KENCO GROUP
SOLO BRANDS
SIZE: 485,238 square feet LOCATION: DeSoto SIGN DATE: July 2021 LEASING REPS: Include Craig A. Jones and Terry Darrow of JLL DETAILS: Kenco Group offers third-party logistics management solutions and warehousing services. The DeSoto warehouse will be the Chattanooga-based company’s seventh warehouse in North Texas.
SIZE: 432,320 square feet LOCATION: Grapevine SIGN DATE: April 2021 LEASING REPS: Include Trey Fricke and Reid Bassinger for Lee & Associates TENANT REPS: George Curry and Blake Rogers of JLL DETAILS: Hot on the heels of an October IPO, Solo Brands moved its headquarters, showroom, and fulfillment center from Southlake to bigger digs in Grapevine. Best known for its smokeless firepits, outdoor apparel, inflatable paddle boards, and folding kayaks, Solo Brands is sizzling in the camping/outdoor adventure market.
SIZE: 492.500 square feet LOCATION: Arlington SIGN DATE: May 2021 TENANT REPS: Include Brian Gilchrist and Stephen Koldyke of CBRE DETAILS: This Arlington-based wholesale distributor of automotive parts, paint, mobile audio and electronics, and truck accessories opened its largest facility to date near Interstate 30 and President George Bush Turnpike.
GOOD SPORTSMAN MARKETING SIZE: 494,238 square feet LOCATION: Irving SIGN DATE: May 2021 LEASING REPS: Charles Brewer and Blake Kendrick of Stream Realty Partners TENANT REP: Sarah Ozanne of Stream Realty Partners DETAILS: From ground blinds by Ameristep to synthetic baits and lures by Yamamoto, Irving-based Good Sportsman Marketing dba GSM Outdoors operates more than 40 brands of products related to hunting and fishing.
DATA SOURCES: CO-STAR, DRC, DALLAS NEXT RESEARCH 2022
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 7 7
"There is no better place in Dallas to make connections, grow your career, and invest in our community than The Real Estate Council." TREC CHAIR KIM BUTLER, HALL GROUP
Imagine. Empower. Impact.
Join TREC today and Build the City You've Imagined. RECOUNCIL.COM 214.692.3600 PHONE 3100 McKinnon Street No. 1150, Dallas, TX 75201
RENDERING FROM THE NEWLY ADOPTED “DOWNTOWN COMPLETE STREETS MASTERPLAN” FEATURING GATEWAY LANDMARK AND OPEN-AIR PATIO.
SPECIAL ADVERTISING SECTION
CEDAR HILL’S ROLE IN THE NORTH TEXAS EXPANSION Currently only 50% developed—amid one of the largest and fastest-growing economies in the nation—Cedar Hill’s sound planning, friendly, stable environment, and distinctive character continue attracting businesses from all over. An innovative, sustainable land use plan also balances growth with a deep commitment to preserving and connecting the city’s natural spaces. Add to this significant transportation infrastructure enhancements currently under construction, such as the future Loop 9 thoroughfare. Plans will connect Cedar Hill’s industrial and commercial regions directly to Interstate 45 and Interstate 35. The city is poised to provide more options for residents, businesses, and visitors, to reach destinations within our expansive, rapidly growing trade area. Cedar Hill’s growth is primarily fueled by young families and business professionals looking for a place to call home that has small-town ambiance and big-city amenities. Located a short 20 minutes from downtown Dallas, the city, along with the regional area, continues booming with new employment opportunities. Cedar Hill is meeting market demand with newly constructed multifamily housing at the entrance of our signature “Balcones Del Norte Trail and Nature Corridor.” New single-family lots are available for custom homes, as well as boutique-style living in our historic downtown. Also, a 150-unit active senior housing complex is nearing completion to provide apartment and resort-style villas. Cedar Hill continues serving as the retail hub to the better part of a four-county area, currently hosting 3-million-plus square feet of retail and Class A office space. While the city remains innovative when planning for developments within a 36-square-mile boundary, discernment to protect 20% open space will achieve the “city within a park” atmosphere perceptive residents are
2022 SPECIAL ADVERTISING SECTION
seeking. Cedar Hill is situated perfectly to meet market demands of residents and commercial development in Southwest Dallas County.
MEETING THE NEEDS OF BUSINESS IN SITE SELECTION
DALLAS
Cedar Hill approaches site selection as it does all city operations, with an open dialogue and a trusting environment where relationships go the distance. Proper planning from the city has helped facilitate site selection, whether it be retail, office, or light industrial operations. Forward-thinking concepts make connecting the dots much easier for business owners and city officials alike. Cedar Hill continues driving new commercial models, including adaptive reuse of existing structures located in the historic downtown area. Lake Moreno Partners and the city are working on a downtown vision that will soon welcome 40,000 square feet of mixed-use including retail, restaurant, and office space, paired with newly established Ash & Ember Brewing Co. & Saviana Winery opening doors this year. Brand retailers are finding success, too, like Fuel City, Total Wine & More, and soon Spec’s Wine, Spirits & Finer Foods, within the city’s retail core. Cedar Hill’s unique natural qualities, strategic central location, excellent accessibility, and solid infrastructure support a wide range of business sectors. The ease of connectivity to the region, availability of freight-rail, and appeal to well-educated human capital promote growth and profitability in industries from metal fabrication and distribution centers to commercial fixture and aeronautical component manufacturing. The metroplex offers a world-class workforce to support C edar Hill’s diversified companies, but only from Cedar Hill can your company experience a view of DFW from the top in North Texas.
CEDAR HILL
CEDAR HILL POPULATION
49,000+
IN CEDAR HILL
500,000+
IN 15 MIN DRIVE-TIME
COUNTY
DALLAS & ELLIS COUNTIES TOP INDUSTRIAL EMPLOYERS: TOTAL HIGHWAY MAINTENANCE DMI CORPORATION MJB WOOD GROUP P&W QUALITY MACHINE CENTRAL STATES MANUFACTURING PEPWEAR DALLAS AERONAUTICAL SERVICES
CONTACT CEDAR HILL ECONOMIC DEVELOPMENT OFFICE 972.291.5132 CEDARHILLEDC.COM
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 7 9
SPECIAL ADVERTISING SECTION
FALL IN LOVE WITH LANCASTER, THE SHINING STAR OF TEXAS! DALLAS LANCASTER
LANCASTER LOCATION
LESS THAN 15 MINUTES FROM DOWNTOWN DALLAS CONTACT SHANE SHEPARD DIRECTOR OF ECONOMIC DEVELOPMENT MSSHEPARD@ LANCASTER-TX.COM 211 N. HENRY ST. LANCASTER, TX 75146 WWW.LANCASTER-TX.COM
80 /
Lancaster is a hidden gem located in North Texas. It is one of very few communities that provide a rural ambiance while being less than 15 minutes from downtown Dallas. Lancaster has a clear sky where the sun shines in the day and the stars flicker crystal clear at night—a rarity in the region. Where else in the world can you live on an acre of land only minutes away from world-class sports, dining, and entertainment? Residents and visitors enjoy unique restaurants and the special flavors of the city, such as Casserole Soul, Taste of Jamaica, Hickory House BBQ, Roma’s Italian Restaurant, and the legendary Lovin’ Oven Bakery. Lancaster ISD has one of the best STEM programs in the state of Texas. Students have the opportunity to continue their education in familiar settings as they advance to a two-year degree at Cedar Valley College and an advanced degree at the University of North Texas at Dallas. The community is conveniently located between Interstates 20, 35E, and 45. DART services the community college, and rail is less than a quarter mile north of town to park and ride. Lancaster has the only southern sector airport in the region and is 20 minutes from Love Field and 35 minutes from the Dallas Fort Worth International Airport! Take a deep breath of fresh air away from the city
D A L L A S | C O M M E R C I A L R E A L E S TAT E
as you go fishing and enjoy a stroll along the many creeks and trails. Enjoy two nature preserves, an indoor aquatic center, the Country View Golf Course, the State Auxiliary Museum, and more— all in Lancaster. Start a business or develop property in Lancaster. The city features highly sought-after land for industrial development with easy highway access and proximity to the inland port of Dallas. Everyone is welcomed with smiles when they come to Lancaster. Come discover and enjoy the city you will soon call home.
2022
LANCASTER is a vibrant and growing community where residents enjoy the LANCASTER is a vibrant and growing comfort and safety of friendly community where residents enjoy the neighborhoods only a few minutes comfort and safety of friendly from world-class entertainment and neighborhoods only a few minutes activities in Downtown Dallas. from world-class entertainment and activities in Downtown Dallas. Sitting squarely within the boundaries of three major freeways I-35, I-45, and Sitting squarely within the boundaries I-20, the city is in close proximity to of three major freeways I-35, I-45, and xas DFW while maintaining a quaint I-20, the city is in close proximity to community where you can still see the DFW while maintaining a quaint stars flickering at night. xas community where you can still see the stars flickering at night. Lancaster is recognized as an All-America City, Scenic Lancaster is recognized as an City, Tree City USA, & All-America City, Scenic Playful City USA, City, Tree City USA, & offering a variety Playful City USA, of natural beauty offering a variety and amenities of natural beauty that create a and amenities great place that create a to live, learn, great place work, and to live, learn, play. work, and play.
Bike Trails
15 Square Miles of Undeveloped Land R
R
T
T
LANCASTER LANCASTER The Shining Star of Texas The Shining Star of Texas
Visitor Center and State Auxiliary Museum
Near Cedar Valley College and UNT Dallas 2 Nature Preserves: Ten Mile Creek Preserve Bear Creek Nature Park
Regional Airport
Indoor Aquatics Facility with a 2 Story Water Slide & Lap Lanes
Regional Airport Recreation Center
Recreation Center Country View Golf Course
Country View Golf Life Course Full-Service Senior Center x . c Full-Service Parks Senior and Life Center Municipal Hike & Bike Trails Municipal Hike & c xParks and . Bike TrailsMiles of Undeveloped Land 15 Square
www.Lancaster-Tx.com
o w w wm .Lancaster-Tx.com
Hometown Feel & Authentic Food, Art, & Entertainment
o
m
15 Square Milesand of Undeveloped Visitor Center State AuxiliaryLand Museum VisitorCedar CenterValley and State Auxiliary Museum Near College and UNT Dallas
Award-Winning Public School District 5th Consecutive School Year
Near Cedar Valley Ten College and UNT Dallas 2 Nature Preserves: Mile Creek Preserve
Bear Creek Nature Park 2 Nature Preserves: Ten Mile Creek Preserve Bear Creek Nature Parkwith a 2 Story Water Slide & Lap Lanes Indoor Aquatics Facility
Indoor Aquatics with aFood, 2 Story Water Slide & Lap Lanes Hometown FeelFacility & Authentic Art, & Entertainment Hometown FeelPublic & Authentic Art,5th & Consecutive Entertainment Award-Winning SchoolFood, District School Year Award-Winning Public School District 5th Consecutive School Year
communityrelations@lancaster-tx.com 972-218-1300
communityrelations@lancaster-tx.com 972-218-1300 ster-tx.com communityrelations@lancaster-tx.com
0
972-218-1300
SPECIAL ADVERTISING SECTION
MESQUITE: REAL. TEXAS. BUSINESS. DALLAS MESQUITE
MESQUITE POPULATION
150,018 LOCATION
12 MILES TO DOWNTOWN DALLAS 11 TH LARGEST CITY IN DFW, 22 ND LARGEST CITY IN TEXAS ANNUAL VISITORS TO TOWN EAST MALL
12 MILLION 80 PARK FACILITIES CONTACT CITY OF MESQUITE ECONOMIC DEVELOPMENT MESQUITEECODEV.COM
82 /
Mesquite is one of the few places where real, authentic Texas culture is still thriving. Declared the Rodeo Capital of Texas by the governor, Mesquite is home to the traditions of rodeo, BBQ, and industry. Mesquite has excellent access to the Dallas-Fort Worth Metroplex through four major highway systems (IH-20, 30, 80, 635 and future SH 190) as well as over 1 million prime-age workers within 30 minutes. Mesquite’s metro airport has a plane take off or land every 6 minutes. Thirty-nine miles away is Dallas Fort Worth International Airport, and Love Field Airport is 25 minutes away. Union Pacific has a Railroad intermodal in Mesquite that’s open 24 hours a day, 7 days a week. Mesquite has over 44 million square feet of industrial, retail and other commercial space and 10,617 new homes with an average purchase price of $300k on the horizon. New residents, as well as visitors, can enjoy the Mesquite Arts Center, Town East Mall, Downtown Mesquite, Mesquite BBQ and of course, the Mesquite Rodeo. International companies who have chosen Mesquite include Ashley Furniture, Orora Visual, Iris
D A L L A S | C O M M E R C I A L R E A L E S TAT E
USA, Pepsi Co, Benjamin Moore Paints, and Elements International. Recent development announcements include the $130 million Alcott Logistics Station industrial park, Elements International and Ashley Furniture expansions, and more. Mesquite is home to the Dallas College Eastfield Campus, which
has 14,000 students as well as Mesquite Independent School Districts’ (MISD) new Career and Technology High School, Vanguard. The later has 42,000 students on 47 campuses. Career preparation takes place at every MISD high school campus, with 80 programs and 25 certification opportunities.
2022
Our burns bright for Manufacturing and Industrial. Mesquite, Texas has more than 13 million square feet of industrial square footage with an additional near-million under construction. The City has a prime age labor force of 47,692 and over a million of the same within a 30-minute commute. With our local education partners, we are developing a pipeline of high-demand talent through leading edge career tech education and training programs. With its’ corporate municipal airport, 39 miles to Dallas Fort Worth International Airport, and five major highway systems, Mesquite offers excellent access to the larger region and vice versa. Things are hot in Mesquite - find out more at MesquiteEcoDev.com.
SPECIAL ADVERTISING SECTION
NORTH RICHLAND HILLS: CENTRAL TO SUCCESS NORTH RICHLAND HILLS
FORT WORTH
NORTH RICHLAND HILLS AVERAGE NEW HOME VALUE
$400,000+ BRICK & MORTAR BUSINESSES
1,200 MILES OF HIKE & BIKE TRAILS
30 CONTACT
84 /
With benefits like a central location, an educated and abundant workforce, and superior quality of life, North Richland Hills (NRH) is the perfect place for business success. Strategically located 15 minutes from DFW Airport, the Alliance Global Logistics hub, and downtown Fort Worth, NRH offers a seamless balance of suburban amenities with CITY POINT RENDERING — CENTURION AMERICAN DEVELOPMENT GROUP easy access to urban resources. make way for a project called City Point. City Point The city of 70,000 residents and its public schools is a planned development with a mix of uses that enjoy an “A” rating by niche.com while also being includes 370 single-family dwellings, 400 multiconsistently ranked as one of DFW’s safest cities. family units, and approximately 70,000 square feet This past year, NRH welcomed over $180 million of commercial space, including four restaurants in new construction, 84 new businesses, and over and a hotel. The development will be completed in 280 single-family starts. In 2020, construction bephases and is expected to take five years to reach gan on a mixed-use development on the former site build out. of North Hills Mall. Similar to the Collin Creek Mall Learn more at www.NRHED.com and follow us on development, Centurion American Development LinkedIn at www.linkedin.com/company/nrhed. Group purchased the former mall property to CRAIG HULSE, CECD, DIRECTOR OF ECONOMIC DEVELOPMENT 817-427-6091
D A L L A S | C O M M E R C I A L R E A L E S TAT E
|
CHULSE@NRHTX.COM
SPECIAL ADVERTISING SECTION
2022
IMPACT INVESTORS
Each year, The Real Estate Council receives both financial and volunteer support from funding partners and member companies. Special thanks to each of you for contributing your time, talent, and resources to help us achieve our mission.
Kim Butler, Chair Trey Morsbach, Chair-Elect/ TREC Community Investors Chair
JPMorgan Foundation
DPR Construction, Inc.
Maynard Cooper & Gale
Constantin Foundation
Eastdil Secured
MUFG Union Bank
Moody Foundation
EY
Munsch Hardt Kopf & Harr, P.C.
Impact Dallas Capital
42 Real Estate, LLC
NexBank SSB
The Craig and Kathryn Hall Foundation
GFF
Northmarq Capital
Wells Fargo Foundation
Granite Properties
PNC Bank
Thompson & Knight Foundation
HALL Group
Prosperity Bank
Balfour Beatty Construction
Hill & Wilkinson
Republic Title, Inc.
Bank of America Merrill Lynch
Hillwood Properties
Rosewood Property Company
Bank of Texas
Hines Interests LP
Ryan, LLC
Billingsley Foundation
HKS
S2 Capital, LLC
Brasfield & Gorrie
Holt Lunsford Commercial
Stewart Title
Capital One Bank
HPI Real Estate Services & Investments
Stream Realty Partners
Cawley Partners
Hunt Realty Investments, Inc.
Texas Capital Bank
CBRE
Invesco Real Estate
Thirty-Four Commercial, Inc.
CDFI Fund
Jackson-Shaw
Todd Interests
Charles Schwab
Jackson Walker LLP
Transwestern
Corgan
JLL
Turner Construction Company
Crow Holdings Capital Partners, L.L.C.
JPI
Vari, LLP
D Magazine
KPMG
Walker & Dunlop
The Dallas Morning News
LandDesign, Inc.
Winstead PC
Davidson & Bogel Real Estate
Locke Lord LLP
Younger Partners
Deloitte.
Matthews Southwest
WHO WE ARE TREC is where 2,200 commercial real estate professionals spark community transformation, influence policy, and propel careers in DFW and beyond. Only TREC provides the road map for success and the platform to Build the City You’ve Imagined. 2022
Learn more at recouncil.com or by calling 214-692-3600. D A L L A S | C O M M E R C I A L R E A L E S TAT E / 8 5
C COMMUNITY
TREC 2021 EVENT ROUNDUP
THE ASSOCIATE LEADERSHIP COUNCIL CLASS OF 2021 AT FIGHTNIGHT: THE COMEBACK.
FIGHTNIGHT: THE COMEBACK CHAIR RICK PERDUE, 2021 TREC CHAIR MIKE ABLON, AND JASON MCCANN, CEO OF WORLD CHAMPION FIGHTNIGHT SPONSOR VARI.
YOUNG GUNS PROJECT CHAIRS PATRICK HENNING AND TARA HARANDI (CENTER) CUT THE RIBBON ON THE WE CREATION INNOVATION CENTER ALONGSIDE FELICIA PIERSON OF TREC COMMUNITY INVESTORS (FAR LEFT) AND JULIE SAQUETON OF ST. PHILIP’S SCHOOL AND COMMUNITY CENTER (FAR RIGHT).
THE MLK FOOD PARK UNITED TREC COMMUNITY INVESTORS, BETTER BLOCK, AND SEVERAL COMMUNITY ORGANIZATIONS IN FEEDING THE FOREST DISTRICT COMMUNITY AND PROVIDING ECONOMIC OPPORTUNITY TO LOCAL FOOD VENDORS AND ENTREPRENEURS IN THE SOUTH DALLAS AREA.
OFFICIALS FROM CORNERSTONE BAPTIST CHURCH AND TREC COMMUNITY INVESTORS CUT THE RIBBON ON THE SOUTHPOINT COMMUNITY MARKET, THE 2021 TREC YOUNG GUNS COMMUNITY INVESTMENT PROJECT, ON JUNE 19, 2021.
8 6 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
ROSS PEROT JR. (LEFT) IN CONVERSATION WITH GRANT MOISE, PRESIDENT AND PUBLISHER OF THE DALLAS MORNING NEWS, DURING TREC’S BANK OF TEXAS SPEAKER SERIES EVENT IN OCTOBER 2021.
2022
C COMMUNITY
CALENDAR OF EVENTS MARK GIBSON OF JLL CAPITAL MARKETS-AMERICAS PRESENTED HIS ANNUAL “CAPITAL MARKETS UPDATE” DURING TREC’S MARKET MATTERS EVENT IN NOVEMBER 2021.
MARCH 1 Young Guns About Town: The Village Dallas 4:30 to 6:30 p.m., The Village Dallas
FOUNDING TREC MEMBER WILL MUNDINGER MET WITH MEMBERS DURING A TREC TALKS PRESENTATION IN NOVEMBER 2021 ABOUT HIS NEW ROLE LEADING THE CITY OF DALLAS’ BUILDING DEPARTMENT.
Join the Young Guns for a TREC-exclusive tour of the newest developments at The Village Dallas apartments and living complex. This 300-acre development is now known as North Texas’ largest rental community with over 7,000 apartments and is home to dynamic food and beverage concepts. Space is limited; you must be an active Young Guns member to register. Tickets are available at recouncil.com/events [TREC]
MARCH 8 Women’s Business Conference Hyatt Regency Dallas
One of the most dynamic, engaging, and exciting events in the Dallas Region, this event brings together regional executives and young professionals who will convene for a day of celebration, encouragement, and critical thinking with influential speakers and leaders. Now in its 24th year, the 2022 program falls on International Women’s Day with a focus on the resurgence, reinvention, and resiliency of women. Featuring three keynote sessions: JPMorgan Chase senior executive Jennifer Barker; Jess Huang, a driving force behind McKinsey’s Women in the Workplace; and Diana Trujillo, Mission Leader on the Mars Perseverance. [DRC]
MARCH 30 AMANDA MORENO-LAKE OF JIM LAKE DISCUSSED THE EVOLUTION OF THE BISHOP ARTS DISTRICT DURING TREC’S YOUNG GUNS FORUM ON DECEMBER 8, 2021.
Market Matters
7:30 a.m. to 9:00 a.m., Arts District Mansion [TREC]
SEPTEMBER 29 FightNight XXXII The Hilton Anatole Join TREC ringside at the Hilton Anatole for one of North Texas’ largest philanthropic events! Since 1989, FightNight has raised more than $27 million to support TREC Foundation’s community investment initiatives. Tickets are available at recouncil.com/events [TREC]
Q4 2022 State of the Workforce
DAVID SPENCE OF GOOD SPACE TALKED ABOUT HIS WORK IN THE BISHOP ARTS DISTRICT DURING TREC’S YOUNG GUNS FORUM ON DECEMBER 8, 2021.
2022
This signature event brings together business and thought leaders to explore key issues related to workforce access, skills development, and the continued expansion of the Dallas Region talent pipeline. [DRC]
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 8 7
C COMMUNITY The Dallas Regional Chamber recognizes the following companies and organizations for their membership investment at one of our top levels. Bolded companies are represented on the DRC Board of Directors. For more information about the benefits of membership at these levels call Meghan Kelley Wehner at (214) 746-6614.
1820 Productions 7-Eleven, Inc. ABC Home & Commercial Services Accenture LLP Acme Brick Company Active Network AECOM AJC – American Jewish Committee Akin, Gump, Strauss, Hauer & Feld LLP AlixPartners LLP Alkami Technology Allan Bailey Johnson Group, LLC Allegiance Title Company Alston & Bird LLP Altair Global Amazon Amegy Bank of Texas American Airlines, Inc. American Heart Association, Dallas Division American National Bank of Texas AMN Healthcare Andrews Distributing Company of North Texas Aon Arcosa Armstrong Relocation At Home AT&T Atmos Energy Corporation Austin Industries AustinCSI AvreaFoster Axxess Baker & McKenzie, LLP Baker Botts L.L.P. Balfour Beatty Bank of America Bank of Texas Baylor Scott & White Health BBVA Bell Bell Nunnally BGSF Billingsley Company BKD LLP BlackRock Asset Management 8 8 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
Blue Cross and Blue Shield of Texas Boeing Global Service BOKA Powell Bombardier Aviation Bottle Rocket Brasfield & Gorrie Brinker International, Inc. Buckner International Business Jet Center BuzzBallz/Southern Champion Capital One Bank Carrington, Coleman, Sloman & Blumenthal, L.L.P. Cawley Partners CBRE Group, Inc. Cenero Centurion American Development Group CENTURY 21 Judge Fite Company Champion Partners Charles Schwab Chickasaw Nation Children’s Health Chime Solutions Cicero Group Citi City Electric Supply City Hospital at White Rock City of Lancaster CitySquare CKP Group Clark Hill PLC Cleaver-Brooks Sales and Service Coca-Cola Southwest Beverages Colliers Comerica Bank Commemorative Air Force Cook Children’s Health Care System Copart Corgan Corrigan Investments, Inc. Cousins Properties CP&Y, Inc. Crescent Real Estate Equities, LTD. Cristo Rey Fort Worth Crow Holdings
Crowe LLP CSRS CyrusOne Dallas Baptist University Dallas College Dallas Mavericks Dallas Stars Hockey Club Dallas Summer Musicals Dal-Tile Corporation De La Vega Development DECA Dental Group Decima International DeGolyer and MacNaughton Deloitte LLP DENSO Products and Services Americas, Inc. DeVry University DFW International Airport DHD Films Diodes Inc. DLR Group | Staffelbach Dominus Commercial Inc. Dreien Opportunity Partners LLC E Smith Advisors Ebby Halliday Companies Edelman EisnerAmper Encore Bank ENO8 Ernst & Young LLP ESRP Advisory Dallas, LLC Estrada Hinojosa & Company, Inc. European Wax Center Exeter Finance Exxon Mobil Corporation Faegre Drinker FedEx Office Fidelity Investments Fifth Third Bank Financial Additions Flowserve Corporation Fluor Corporation Headquarters Foley & Lardner LLP Forest City Texas Inc Fossil Group, Inc. Fox Sports Southwest Freese and Nichols, Inc.
Frito-Lay North America Frost Bank Frost Brown Todd LLC Funneled Through Furniture Marketing Group Gaedeke Group George W Bush Foundation Gibson Dunn & Crutcher LLP Globe Life Goldman Sachs & Co, LLC Google Granite Properties Grant Thornton LLP Green Brick Partners Greenberg Traurig Gulfstream Aerospace Corporation Gupta & Associates Inc. Hall Group Harmony Public Schools - DFW District Harness Dickey Hawthorne Family Fund Haynes and Boone, LLP Heady Investments, Inc. H-E-B/Central Market Hill & Wilkinson General Contractors Hill+Knowlton Strategies Hillwood Development Company, LLC Hilti North America Hilton Anatole Hines Interests LP HKS Inc. HNTB Corporation Holmes Murphy HOLT CAT Hoque Global Real Estate HP Village Marketing Group, LLC HPI Real Estate Services & Investments/Ross Tower HSBC Bank USA HUB International Insurance Services Hunt Consolidated, Inc./ Hunt Oil Company Iconic IT Independent Financial 2022
C COMMUNITY InfoVision Inc. Interceramic International Leadership of Texas Intuit, Inc. Invesco Real Estate Invitation Homes Jackson Spalding Jackson Walker LLP Jacobs Engineering Group Inc. JBJ Management JE Dunn Construction JLL Jones Day JPMorgan Chase & Co. JSX Kanarys, Inc. KDC Real Estate Development & Investments Ketchum Public Relations Kimberly-Clark Corporation Kimley-Horn and Associates KIPP Texas Public Schools Kirkland & Ellis KPMG LLP L.A. Fuess Partners Structural Engineers Latino Center for Leadership Development LaunchBio Inc. and BioLabs LLC Law Offices of Erika N Salter, P.C. LH Capital Linebarger Goggan Blair & Sampson, LLP Link America LLC Littler Mendelson, P.C. Locke Lord LLP Lockheed Martin Lockton Dunning Benefits Lyco Holdings Lynn Pinker Hurst & Schwegmann, LLP MAPP, LLC Mary Kay Inc. Match Group Matthews Southwest McCarthy Building Companies, Inc. McGlinchey Stafford McGuire, Craddock & Strother, PC McGuireWoods LLP McKesson McKinsey & Company, Inc. McLarty Diversified Holdings Medical City Healthcare - HCA North Texas Methodist Health System Metrocare Services 2022
MHBT, a Marsh & McLennan Agency LLC company Microsoft Corporation Mr. Cooper Group Munck Wilson Mandala LLP Munsch Hardt Kopf & Harr, P.C. MV Transportation, Inc. MW Logistics, LLC NDBT NEC Corporation of America NGV Global Group Inc. Northern Trust Norton Rose Fulbright NTT DATA Inc. Omni Dallas Hotel Omnitracs, LLC Oncor On-Target Supplies & Logistics Ltd Optimal Partners Inc Options Clearing Corporation Origin Bank Pacific Builders Pape-Dawson Paycom Penske Motor Group Perkins and Will Perkins Coie LLP PlainsCapital Bank PMG PNC Premier Truck Group Prime 45 Development LLC Prosperity Bancshares, Inc. PSA Management, Inc. PwC Qatar Airways Raising Cane’s Raytheon Company RealCom Solutions RECARO Aircraft Seating Americas, LLC Reef Technology Regions Bank Reimagine RedBird Reliant, an NRG company Risch Results Romark Logistics RSM US LLP Ryan LLC Salesforce Santander Consumer USA Scheef & Stone, LLP SCHMIDT & STACY Consulting Engineers, Inc. Scovell Family Foundation
Sendero Sewell Automotive Companies Shackelford, Bowen, McKinley & Norton LLP Shearman & Sterling Sidley Austin LLP Simmons Bank Slalom Smoothie King SMU - Southern Methodist University Southern Glazer’s Wine and Spirits Southwest Airlines Southwest Office Systems, Inc. Spacee Inc. Spectra Spencer Fane LLP Stanley Black & Decker Starbucks Coffee Company State Farm Insurance Companies Steinhart Family Advised Fund Steptoe & Johnson PLLC Stinson Leonard Street Suffolk Construction Swinerton Builders T.D. Jakes Foundation Talent Suite Tangram Interiors Target Tavistock Investment Group TDIndustries Team One Teladoc Tenet Healthcare Texas A&M University Texas A&M University Commerce Texas Capital Bank Texas Central Texas Christian University Texas Health Resources Texas Instruments, Inc. Texas Mutual Insurance Company Texas Scottish Rite Hospital for Children Texas Woman’s University Texas Women’s Foundation The Beck Group The Boston Consulting Group The Brierley Group LLC The Commit Partnership The Craig + Kathryn Hall Foundation The Crowther Group The Dallas Morning News
The Fairmont Hotel The Kroger Co. The Salvation Army The University of Texas at Arlington Thompson & Knight LLP Thomson Reuters TIAA Tom Thumb - Albertsons Tourmaline Capital Partners Town of Addison Toyota Motor North America Trinity Groves, LLC Trinity Park Conservancy TruePoint Communications Truist Bank Turner Construction Company TXU Energy U.S. Bank Uber Technologies, Inc. UMB Bank N. A. UnitedHealthcare University of Dallas University of North Texas at Dallas University of North Texas System University of Texas at Dallas UPS USAA UT Southwestern Medical Center Vanguard Veritex Holdings Verizon Wireless South Central HQ VIP Waymo Weaver Weil, Gotshal & Manges LLP Wells Fargo West Coast University Texas West Monroe WFAA-TV Whitley Penn Willis Towers Watson Winstead PC Woods Capital work/REFINED, LLC Zillow Zirtue
D A L L A S | C O M M E R C I A L R E A L E S TAT E / 8 9
DEVELOPER PERSPECTIVE
DALLAS 2036
BUILDING THE FABRIC FOR THE GREAT AMERICAN CITY BY MIKE ABLON
IN 1936,
DALLAS HOSTED THE CENTENNIAL EXHIBIT FOR THE 100th ANNIVERSARY OF THE REPUBLIC OF TEXAS. IN JUST LESS THAN 15 YEARS, DALLAS SHOULD HOST THE STATEWIDE CELEBRATION FOR THE BICENTENNIAL. When we do this, the Dallas-Fort Worth area is projected to have a population of 10.2 million. When my father was four years old, he attended the Texas Centennial Exposition at the newly built fairgrounds in Fair Park. At that time, the local population was only 234,000. Thereafter, the population of DFW started doubling every 10 to 20 years. This stunning growth has brought unending opportunities and incredible job opportunities, as well as unanswered questions and unfulfilled gaps. From here, how do we answer the question: How do we grow our economy in the next decade, recruit talent, recruit new companies, incubate new homegrown companies, and simultaneously fulfill our best destiny as a city—for all its current and future citizens? Simply asked, what will Dallas become? What will be our destiny? Before answering this question, it is healthy to look outside ourselves for a moment. We are reminded that we are living in a time of accelerated change in technology, which affects every aspect of our personal and business lives, bringing substantial generational differences, changing demographics, a rapidly evolving knowledge economy, and global drivers with which we have close associations and no immunities. It might well be argued that the answer to these questions (What will Dallas become? What will be our destiny?) may largely be found in the confluence of two things: our current status and the state of our given advantages, and how we harness these paradigm shifts to our advantage. So we need to harness our strengths, mitigate our weaknesses, and strategically position ourselves with actions. Our to-do lists could be written from many perspectives—all carrying strong currency of thought, importance, relevance, and actionable items. But we should always remember that we will prosper to the highest level only if we all benefit and prosper together. One of the least discussed, and most interesting opportunities, lies in the articulate and focused intention of reformatting our city in a
9 0 / D A L L A S | C O M M E R C I A L R E A L E S TAT E
manner that builds the city fabric and directly recruits the talent and businesses we desire. After all, at their core, cities are neighborhoods, communities, and the ties that bind. In the past decades, we have chased corporate relocations with incentive packages. That was a different time, a different economy, and though it seems not so long ago, a different corporate America. Today’s corporate America no longer choses its location and expects talent to come to it. Today’s businesses understand that talent migrates to where it wants to live, MIKE ABLON and that they must go there—to the talent. Therefore, to harness growth, a city should no longer chase businesses as a primary objective. Cities should chase talent as their prime objective, knowing that companies will immediately follow. In this brave new world, business follows talent, and talent moves to where it believes it will find opportunity, happiness, and prosperity. Positive and prosperous growth will go disproportionately to cities that invest in the day-to-day lives of their citizens. It is that simple. This means investing in distinct neighborhoods, supporting all communities, and building the hard and soft infrastructure that together forms the ties that bind. The ties that bind include public parks, mobility and transportation systems, education systems, housing and food to support challenged citizens, and security and health care supporting all. For Dallas, growth will come to us; this has been the paradigm for the century since the Texas Centennial Exposition, and all trend lines indicate this will keep up. In other words, Dallas will continue to become more dense. Momentum will bring many good things of their own accord; but unchecked and unattended, momentum can also exacerbate the difficulties that challenge larger cities. The heart of the Dallas miracle has always been based on community and a can-do, handson spirit. If these words applied in the early days of Dallas’ growth, they apply even more in this internet age of systemic transformations moving at radical speeds. Nothing replaces the human
touch, or the emotional fulfillment found in neighborhoods, communities, and the ties that bind. When cities invest in building and nurturing what can’t be bought or found in the virtual world of the internet, they create unique places where we want to live and work. Dallas’ history was built by bold moves. The shift away from Love Field and Meacham Airports seemed almost incomprehensible 50 years ago, and today we almost underappreciate the catalytic engine that Dallas Fort Worth International Airport provides for us as one of the largest airports in the world. With DFW Airport, we are no more than one touch removed from most of the globe. Moves like this require big aspirations and bring big payoffs. We should continue these moves. Current examples include the complete redevelopment of the Kay Bailey Hutchison Convention Center Dallas and a major reenvisioning of Fair Park for the 2036 bicentennial. At the same time, we must remember that, for every colossal endeavor we have undertaken and should undertake, as great and catalytic as they all are, the lives of the people now in Dallas (and those yet to come) play out almost entirely, from one day to the next, in our neighborhoods and communities. No big projects will ever replace the warmth of belonging, the hopes that come with the infrastructure that gifts us aspirations, and the feeling that there is a powerful hand out there that we all provide for each other. We will be the third-largest city in America in 15 short years—that is our destiny. The only question is—through aspiration, strategy, and dedication to following through—how great a city we can become for all of us. It should have always been, and should always be, about all of us prospering together. In a world of growing binaries, “One Dallas” must remain our aspirational calling card. It is aspirational. We aren’t there yet. No city ever truly gets there. But a deep belief in the potential of neighborhoods, communities, and the ties that bind, for all of us, is the fundamental building block—it’s the first step. Mike Ablon is past chairman of The Real Estate Council and a founding partner of PegasusAblon, a commercial real estate development, investment and management company based in Dallas.
2022
The Urban core of one of the world’s most dynamic and diverse economies. Home to the 5th largest Tech Workforce in the U.S. & the largest in Texas! CONNECT WITH US!
Office (214) 670 -1685 EcoDevInfo@Dallascityhall.com www.DallasEcoDev.com
DALLAS ECONOMIC DEVELOPMENT
CELEBRATING
innovation
Cedar Hill, TX proudly welcomes the Class A High Point 67 Center. Hillwood will soon transform the city’s southern industrial area into a 180-acre, master-planned industrial campus, bringing jobs, activity, and further progress as a cornerstone to the Loop-9 Corridor.
cedarhilledc.com
