Dallas-Fort Worth Real Estate Review - Summer 2014

D A L L A S - F O R T W O R T H

REVIEW 20 SUMMER

14

TH E C R A N E R EP O R T:

W H O ’S B U IL D IN G W H AT, W H ER E S C O R EC A R D :

TO P 2 0 14 LE A S ES

O FF IC E R O U N D TA B LE :

IN S IG H TS FR O M TO P EX P ER TS

L E T ’ S S O LV E I T.

ARIZONA | TEXAS | FLORIDA

W W W. B U RY I N C . C O M

Nowhere Is So Much, So Near.

NORTH

EAST

SOUTH

WEST WAXAHACHIE is located at the Crossroads of I-35E and Hwy. 287 linking a total of more than 3,300 miles of northsouth highways from Mexico and the Gulf to the archways of Canada. Our city is just 15 minutes from major east-west super highways I-20 and I-30. It is 30 minutes from the city limits of both Dallas and Fort Worth and the dynamic Metroplex. To the south is the portal to the Texas Hill Country and to the east is the gateway to the piney woods.

Waxahachie offers national railroad connections, a new airport with an impressive 6,500 foot runway and the buildings, land and people to make things happen for your business. Nowhere in Texas can you be so close to so much for so little. Geographically, you could not find a better location for your business. But Waxahachie is more than the interstate crossroads of our state… it is also the very heart, soul and spirit of Texas.

WAXAHACHIE

The Crossroads of Texas City of Waxahachie Economic Development · Doug Barnes, Director · 214-762-5022 · www.crossroadsoftx.com

2 4 3 , 8 7 1 S F Av a i l a b l e $3.5 million renovation completed in 2013 Located in the heart of D o w n t o w n F o r t Wo r t h For leasing information, please contact: W H I T K E L LY whit.kelly@am.jll.com 817.334.8117 BOB BOYKIN bobboykin@cousinsproperties.com 713.966.3975

Talk to Cousins.

Proud owner of landmark office towers in Dallas-Fort Worth.

1 5 8 , 7 4 2 S F Av a i l a b l e Multi-million dollar renovation, including innovative art installations, redesigned lobbies, a state-of-the-art c o n f e r e n c e c e n t e r, P u l s e F i t n e s s a n d advanced security solutions Located in the heart of the Dallas Arts District neighborhood For leasing information, please contact: B I L L B R O K AW bill.brokaw@cushwake.com 972.663.9618 C Y N T H I A C OW E N cynthia.cowen@cushwake.com 972.663.9617

cousinsproperties.com

D A L L A S - F O R T W O R T H

REVIEW 20 SUMMER

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SUMMER 2014

ON THE COVER: CITYLINE PHOTOGRAPHED BY JUSTIN TERVEEN FROM THE ROOFTOP OF TOWER 2600, MANAGED BY CBRE.

THE CRANE REPOR T:

WHO’S BUILDI NG WHAT, WHERE SCORE CARD:

TOP 2014 LEASES

OFFICE ROUND TABLE:

INSIGH TS FROM TOP EXPER TS

CONTENTS

28 ROUNDTABLE

Welcome Letter . . . . . . . . . . . . . . . . . . . . . . . . . .6 Publisher’s Note . . . . . . . . . . . . . . . . . . . . . . . . .8 35

FOUNDATIONS DFW market statistics, economic indicators, and commercial real estate news. . . . . . . . . . 10

BLUEPRINT FOR PROSPERITY Surprise! Relocation teams get an eye-opening look at DFW. . . . . . . . . . . 13

THE CRANE REPORT

75

Who’s building what, where. . . . . . . . . . . 17

SCORECARD

35E 35W

A midyear look at the region’s top office, industrial, and retail leases. . . . . 23114

121

17 THE CRANE REPORT

ROUNDTABLE

635

An insider’s view on office leasing activity in North Texas. . . . . . . . 28

75

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183

78

E XC L USI V E LY P UB L ISHE D B Y D CUSTOM, A DIVISION OF D MAGAZINE PARTNERS

38 ANATOMY OF A DEAL SPECIAL REPORT: ANATOMY OF A DEAL Building a City Within a City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Kind of a Big Deal: How State Farm’s huge lease came together. . . . . . . . . . . . . . . . . 42 State of the Art: A detailed look at the insurer’s new campus . . . . . . . . . . . . . . . . 44 A Place to Walk About: Breaking down the project’s live-work-play environment. . . . . 46

WWW.DFWREALESTATEREVIEW.COM PUBLISHER Quincy Curé Preston 214.523.5215 quincy.preston@dcustom.com EDITOR-IN-CHIEF Christine Perez PROJECT EDITOR Kerry Curry CONTRIBUTING WRITERS Tanya Rutledge Glenda Vosburgh COPY EDITOR Hilary Lau

A Day in the Life of CityLine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

ART/PRODUCTION MANAGER Michael Samples

Lay of the Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

DIGITAL IMAGING SPECIALIST Andy Rolfes

Raytheon: Creating a high-tech command center . . . . . . . . . . 52 A Multifamily Home Run . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Built to Last: The sustainable elements of CityLine . . . . . . . . . 55

CONTRIBUTING PHOTOGRAPHERS Sheryl Lanzel Ryan Tharp Justin Terveen DIRECTOR OF SALES Kyle Moss 214.523.5247 kyle.moss@dcustom.com ACCOUNT EXECUTIVE Ben Skidmore ben.skidmore@dcustom.com

TOOLBOX Operating in a Foreign Trade Zone gets easier. . . . . . . . . . . . . 56

INTERNS Kailey Gamble Suzanne Coulter Helena Bologna

SPECIAL ADVERTISING SECTION: CITY PROFILES Waxahachie . . . . . . . . . . . . . . . . . 62 Sachse . . . . . . . . . . . . . . . . . . . . . . . 64 Allen . . . . . . . . . . . . . . . . . . . . . . . . 66 Cedar Hill . . . . . . . . . . . . . . . . . . . . 67

Dallas. . . . . . . . . . . . . . . . . . . . . . . . 68 Denton . . . . . . . . . . . . . . . . . . . . . . 69 Haltom City . . . . . . . . . . . . . . . . . . 70

PRESIDENT & GENERAL MANAGER Gordon Locke CREATIVE DIRECTOR Kyle Phelps EDITORIAL DIRECTOR Amy Robinson

COMMUNITY

MANAGING EDITORS Casey Casteel Jonathan Ball

Calendar of Real Estate Events. . . . . . . . . . . . . . . 71

The Real Estate Council, Impact Investors . . . . . . . . . . . . . . . . 74

Dallas Regional Chamber, Leadership Dallas . . . . . . . . . . . . . . . 71

The Real Estate Council, FightNight XXVI . . . . . . . . . . . . . . . . 75

Dallas Regional Chamber, Top-Level Members . . . . . . . . . . . . . 72

The Real Estate Council, Associate Leadership Council . . . . 76

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DIRECTOR OF PRODUCTION Diane Testa PRODUCTION MANAGER Pedro Armstrong GRAPHIC DESIGNER Emily Slack MARKETING MANAGER Jessica Fritsche Dallas-Fort Worth Real Estate Review® is published for The Dallas Regional Chamber and The Real Estate Council by D Custom, a division of D Magazine Partners, 750 N. St. Paul St., Ste. 2100, Dallas, TX 75201; www.dcustom.com, 214.523.0300. ©2014 All rights reserved. No part of ths publication may be reproduced or reprinted without written permission. Neither the Dallas Regional Chamber nor The Real Estate Council nor D Custom is a sponsor of, or committed to, the views expressed in these articles. The publisher is not responsible for unsolicited contributions.

WELCOME

A letter from the Dallas Regional Chamber and The Real Estate Council

2014 CHAIRMAN OF THE BOARD Stephen L. Mansfield, Ph. D, FACHE President & CEO, Methodist Health System PRESIDENT & CEO

We are proud to welcome you to the all-new Dallas-Fort Worth Real Estate Review.

PAT PRIEST Chief Operating Officer/ Chief Financial Officer Dallas Regional Chamber

For the last six months, the Dallas Regional Chamber, The Real Estate Council, and D Custom have been hard at work to bring you this completely redesigned mustread quarterly outlook on the state of commercial real estate in our region.

Remastered from the ground up—and increasing publication to four times a year—the Real Estate Review is designed to engage a targeted, influential market of decision makers. We have looked at what’s come beLINDA McMAHON fore, then refined and refreshed to create this data-rich President resource that we know you and your customers will The Real Estate Council reach for again and again.

In each issue we’ll bring you the kind of information you won’t see in any other publication—such as this month’s “Anatomy of a Deal” on CityLine, Richardson’s 186-acre mixed-use development that has lured the exciting and lucrative 2 million-square-foot State Farm expansion.

Also in every issue, “The Crane Report” covers the biggest new developments in Dallas-Fort Worth at a glance, “Scorecard” tracks the latest lease transactions, and “Foundations” serves up key metrics and statistics across commercial real estate sectors.

The Dallas Regional Chamber and The Real Estate Council are not only dedicated to building a strong economic climate for our region but also to building future leaders for our community. Each issue of the Real Estate Review will feature a graduate of The Real Estate Council’s leadership development program called the Associate Leadership Council (ALC) or the Dallas Regional Chamber’s Leadership Dallas program. In this issue you’ll read about Champion Partners’ Jeff Swope, who founded the ALC class almost 20 years ago.

Combining The Real Estate Council’s influence, expertise, and network with the Dallas Regional Chamber’s perspective on data and policy with the considerable experience and insight of Editorial Director Christine Perez and Project Editor Kerry Curry, the fresh perception of the Real Estate Review puts the right information at your fingertips.

We are excited to share this inaugural issue with you and hope you will enjoy the beautiful visual presentations—both in print and a unique, multiplatform digital experience that takes the content to the next level.

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Dale Petroskey CHIEF OPERATING OFFICER & CHIEF FINANCIAL OFFICER Pat Priest COMMUNICATIONS, VICE PRESIDENT Amy Ramos BUSINESS INFORMATION & RESEARCH, VICE PRESIDENT Duane Dankesreiter RESEARCH DIRECTOR Ryan Tharp DIRECTOR OF COMMUNICATIONS Meredith Turner

2014 CHAIRMAN OF THE BOARD Paul Rowsey Compatriot Capital VICE CHAIRMAN Sue Ansel Gables Residential PRESIDENT & CEO Linda McMahon CHIEF FINANCIAL OFFICER Carla Brandt VICE PRESIDENT MARKETING & EVENTS Debby Hanson VICE PRESIDENT FOUNDATION Robin Minick

Spotlight on Haltom Road and IH 820

HalTom CITy, TEXaS

In the Heart of Tarrant County

• Commercial lots now available for new development at Haltom Road, south of IH 820 • Great highway frontage and close approximation to Interstate 35W, downtown Fort Worth and adjacent to residential growth • Tax Increment Finance Zones • Backage roads under construction will provide ample access

Haltom City Economic Development 5024 Broadway Avenue Haltom City, TX 76117 817-222-7723 EconDev@HaltomCityTX.com

UPFRONT QUINCY CURÉ PRESTON Publisher Dallas-Fort Worth Real Estate Review

A letter from the Publisher

We’re thrilled to collaborate with the Dallas Regional Chamber and The Real Estate Council to bring you the all-new Dallas-Fort Worth Real Estate Review. The publication, which will now come out every quarter, has been completely remastered. And it’s not just the print edition that has changed. Be sure to visit www. dfwrealestatereview.com to check out our digital flip book, online bonus content and videos, and interactive maps.

All of these enhancements are designed to give readers a definitive look at DFW’s commercial real estate industry—a powerful economic engine that drives regional growth. Lately, the impact is being felt more than ever, with big relocations and expansions from, among others, Toyota Motor Corp. (4,000 jobs) and State Farm (8,000+ jobs). State Farm will anchor the 186-acre CityLine project KDC is developing in Richardson. We bring you an 18-page special report on the project in “Anatomy of a Deal” (page 38).

A key resource in our effort is Xceligent Inc., a research firm that’s in partnership with the North Texas Commercial Association of Realtors. The company and its team of researchers do on-the-ground data collection, to ensure the most accurate property leasing and sales information possible. The expertise of Xceligent’s Broker Advisory Boards help guide in market/submarket creation, classifications of buildings, and fact-checking of deals.

The Dallas Regional Chamber used Xceligent’s data to create the one-of-a-kind maps that accompany “The Crane Report” (page 17), a comprehensive guide to existing and planned construction projects for the office and retail sectors, and “Scorecard” (page 23), our rundown on the top office, industrial, and retail leases for the first half of 2014.

Special thanks to Ryan Tharp with Cloudkicker Media, whose drone photography provided some terrific skyline shots; Ted Wilson of Residential Strategies Inc., who shared his helicopter photos of CityLine with us; and renowned Dallas photographer Justin Terveen, who went to great lengths—and heights—to get our cover image. (Thanks CBRE and Tower 2600, for the rooftop vista.)

The team behind Dallas-Fort Worth Real Estate Review is committed to ongoing innovation as we move forward. I’d love to get your thoughts on the publication—and how we can better serve you.

With a market this big and this active, we’re just getting started!

Quincy Curé Preston Publisher

A PARTNER YOU CAN BUILD WITH, FROM CONCEPT THROUGH COMPLETION.

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TO THE STORY

General Contracting Construction Management Design/Build Preconstruction

EVEN MORE ADDITIONAL CONENT ONLINE AT DFWREALESTATEREVIEW.COM

mccarthy.com | 972.991.5500

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T H E R E ’ S O N LY O N E .

As the tallest building in Uptown, McKinney & Olive will redefine the Dallas skyline. Featuring an iconic design by world-reknowned architects, Pelli Clarke Pelli, this multi-use project offers 480,000 square feet of Dallas’ finest office space, and 50,000 square feet of premier retail space opening onto a lushly landscaped park. McKinney & Olive.

There’s only one.

mckinneyandolive.com

214-880-4525

COMPLETION 2016 D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 9

FOUNDATIONS

> DFW MARKET STATISTICS > ECONOMIC INDICATORS > COMMERCIAL REAL ESTATE NEWS

A BASELINE FOR THE REGION’S FUTURE

MIDYEAR DFW INDUSTRIAL SNAPSHOT Commercial real estate fundamentals are the best seen since 2006, according to a new report from Cushman & Wakefield. Industrial leasing activity (new leases and renewals) totaled 13.9 million square feet during the first six months of 2014, creating a current vacancy rate of 8.1 percent. Here are additional midyear industrial stats:

OFFICE: 2 MILLION SF LEASED IN 2014 (SO FAR) Brisk activity. Demand for North Texas office space is stronger than at any point since 2006,

according to second-quarter statistics from Cushman & Wakefield. During the first six months of the year, direct absorption reached 2 million square feet—a 37 percent increase over the 1.5 million square feet absorbed during the same period in 2013. Dallas-Fort Worth office occupancy currently stands at 18.1 percent (19.1 percent for Dallas markets; 10.4 percent for Fort Worth markets.) On the Dallas side, the central business district comes in at 24.9 percent, with suburban markets at 18.2 percent. The tightest of the larger markets include Preston Center (8.9 percent) and Turtle Creek Uptown (12.7 percent). Arlington (14.8 percent), Far North Dallas (15 percent), Far North Central (15.2 percent), and Legacy/Frisco (15.4 percent) are tightening as well. Average asking lease rates for the market stand at $21.19—the highest on record. Lease rates are up an average of 67 cents per square foot in Dallas since June 2013, and $1.74 per square foot in Fort Worth. Preston Center rings in with the highest lease rates ($32.41), followed by Turtle Creek/Uptown ($30.60) and Legacy/ Frisco ($28.28). Space in the Fort Worth CBD is leasing for an average of $27.06 per square foot.

—Christine Perez, D Real Estate Daily, June 2014

DALLAS REAL ESTATE CYCLES

Region’s mature economy suggests widespread office overbuilding a relic of the past.

+41%

UNDER CONSTRUCTION

2013: 10.5 million s.f.

2014: 16 million s.f.

+51%

(MILLIONS OF SQUARE FEET)

2013: 4.6 million s.f.

2014: 6.5 million s.f.

OFFICE – CLASS A & B

NET ABSORPTION

22 375,000 JOBS

18

+25%

14

209,000 JOBS

10

+11%

149,000 JOBS

+8%

6 2 (2)

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

A new research report from JLL breaks down DFW development eras: CONSTRUCTION COMPLETIONS 2013: 1.3 million s.f.

2014: 5.7 million s.f.

+328%

OCCUPANCY RATE

2013: 90.5 percent 2014: 91.9 percent

+1.5%

SOURCE: Cushman & Wakefield

BIRTH OF MODERN DALLAS

REAL ESTATE RECESSION

RECOVERY + REBUILDING

1980-1986

1986-1993

1993-1997

NET NEW JOBS: 480,000

NET NEW JOBS: 171,000

NET NEW JOBS: 260,000

> Hyper-inflation ushers in the 1980s; prime rate hits 21.5 percent. > Oil prices double. > Job gains spike 50 percent from the mid-1970s. > DFW office building boom results in 100 million square feet in 660 buildings. > Dallas’ iconic downtown skyline created as office inventory doubles: 17 towers and 16 million square feet added.

> 1986 Tax Reform Act sets the stage for a deep real estate recession nationwide. > With the S&L collapse in full swing, Texas is an early casualty. > Momentum Place and Texas Commerce Tower (now known as Comerica Bank Tower and Chase Tower) are delivered, adding 2.8 million square feet to the downtown Dallas office inventory.

> North American Free Trade Agreement passes. > The Barnett Shale boom takes off. > Asia enters into a financial crisis. > Extended minimal office construction. > Tenants continue to restructure as secular change spreads.

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1994

F FOUNDATIONS

THE BARNETT SHALE’S IMPACT ON REAL ESTATE The oil and gas industry has been central to the North Texas economy for decades. This is especially true for Tarrant County and Fort Worth, where the Barnett Shale is anchored. Solid investment in the office sector is due in part to oil and gas exploration, according to a report from CBRE. Despite the recent closure of Encana’s office in Plano, the office sector outlook is positive. The Fort Worth CBD has the highest concentration of energy companies in DFW. Momentum is building in retail, multifamily, and hotel development activity in the Barnett region, due to broad-based economic and employment growth.

Pending the escalation of natural gas prices, the Barnett should see increased construction activity across all sectors.

SOURCE: CBRE Econometric Advisors

CRE DEVELOPMENT ACTIVITY IN BARNETT REGION, 2012-2013 Texas counties include Tarrant, Johnson, Denton, Wise, and Parker. $900 $800 $700 $600

TOTAL COMPLETED: $719.3 MILLION TOTAL UNDERWAY: $2.5 BILLION TOTAL PLANNING: $2.1 BILLION

$500 $400 $300 $200 $100 $0

COMPLETED

UNDERWAY

PRE-PLANNING & PLANNING

■ HOTEL ■ RETAIL ■ OFFICE ■ WAREHOUSE ■ MULTIFAMILY

■ NET ABSORPTION

■ DELIVERED MULTI-TENANT OFFICE SPACE

5-YEAR TOTAL JOB GROWTH

(millions s.f.)

10-YEAR TREASURY YIELD

510,000 JOBS

600 500

+9%

167,000 JOBS

300

+6%

34,000 JOBS

+1%

200

(THOUSANDS)

400

253,000 JOBS

100 0

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

5-YEAR JOB GROWTH

+23%

(100) SOURCE: JLL

TECH + TELECOM BOOM

TECH RECESSION + RECOVERY

HOUSING BOOM + RECESSION

RECOVERY + EXPANSION

1997-2001

2001-2005

2005-2009

2009-2013

NET NEW JOBS: 444,000

NET NEW JOBS: 65,000

NET NEW JOBS: 167,000

NET NEW JOBS: 253,000

> Deep telecom roots set the stage for new boom. > DFW unemployment drops to 3 percent (3.9 percent nationwide) > Richardson’s Telecom Corridor is established. > Pent-up office demand and velocity of need results in 35 million square feet in new office space deliveries. > Lag in absorption leads to vacancy rate of 19 percent.

> Tech bust hits DFW hard. > Telecom volatility results in major job and company losses. > President George W. Bush signs new tax cut package. > Oil hits 12-year high, at $56 a barrel. > New Urbanism philosophies used in the development of Legacy Town Center.

> The housing bubble hits the U.S. > DFW’s economy is impacted, selectively. > Balanced expansion in North Texas off set by 111,000 jobs lost in 2009. > Oil hits $140 a barrel. > Uptown sees a resurgence. > 19 million square feet of office space added. > Net absorption totals 15 million square feet.

> New DFW job peak, with gains across all sectors. > 3.6 million square feet of multitenant office space is delivered on base of more than 250,000 new jobs. > 8.1 million square feet of office absorption puts DFW in top ranks of U.S. markets. > Prudent investor and bank underwriting keeps development in check.

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 1 1

THREE STARS THAT MAKE US

SHINE BIG & BRIGHT DEEP IN THE

HE ART OF T EXAS REAL ESTATE.

To Meet 3 Of Our Biggest Real Estate Stars And Find Out How Bright They Are, Give Them A Call At 214-965-1796 Or Visit Us At CTICcommercial.com

Chicago Title National Commercial Services

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Clark Pulliam, General Counsel & VP

Kyle McCartan, Sales Associate

Holden Heil, Vice President

B BLUEPRINT FOR PROSPERITY

GLOBAL GATEWAY Dallas/Fort Worth International Airport offers an extensive route network with more than 200 direct international destinations.

NEWEST INTERNATIONAL ROUTES: Airport code/ Average number of flights per week

ABU DHABI (AUH) 3

SURPRISE! RELOCATION TEAMS GET EYE-OPENING LOOK AT DFW From international access to downtown development, North Texas has a lot to offer.

BY MIKE ROSA

A WHILE BACK, I MET WITH TEAM MEMBERS from a company that was considering the Dallas area for a potential corporate relocation and presented our region’s considerable assets. As I described our region’s network of direct flights to domestic and international destinations, I mentioned a “secret” I knew would be making the newspapers the very next day, thinking it would be helpful for the delegation to have the information prior to leaving town.

I revealed that Emirates would be announcing direct air service between Dubai and DFW, and I knew immediately by the group’s reaction just how important this new information was. The

company’s interest in the Dallas area spiked because they saw a new direct flight to Dubai providing an easy connection point to India, an important market for the company. What I thought to be a simple tidbit of news was, to them, exciting information on a critical deal point that boosted Dallas’ chances.

These days, companies and those advising companies on location decisions have easy access to a great deal of data and information on just about any place they’d like to evaluate. The facts are rarely presented as visually or as smartly as found in the chamber’s economic development guide or

BOGATA, COLOMBIA (BOG) 7 DOHA, QATAR (DOH) 7 DUBAI (DXB) 7 EDMONTON (YEG) 7 HONG KONG (HKG) 4 ROATAN, HONDURAS (RTB) 1 SHANGHAI (PVG) 4

BY THE NUMBERS: Dallas/Fort Worth International Airport

On-Airport Employees: Approximately 60,000 Economic Activity Across North Texas Attributable to DFW Total Economic Output: $31.6 billion Full-Time Jobs: 143,000 Daily Passengers: Approximately 165,580

CONTINUED 3

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B BLUEPRINT FOR PROSPERITY other publications and presentations, but nevertheless are out there and accessible. What’s not as easy to get, but often more valuable to a company thinking of a move, is the foresight into what Dallas will be like in five years, 10 years, or longer, as a place to operate and for employees to live.

When executives visit Dallas, or when we take our show on the road, we are armed with a wide range of data and information critical to the evaluation process: labor force, wage rates, taxes and incentives, housing costs, real estate costs, and so forth. The region’s case is a strong one. We have such a great bundle of assets wrapped up in a cost-effective, business-friendly environment. The showstoppers seem to be the new things happening that enhance our region’s future attractiveness for companies and people, or both.

These are things decision makers don’t necessarily already know— like new direct air service to Dubai.

Air service is almost always a top driver of location decisions that go our way, and it’s surprising just how many executives outside our region remain unaware that Love Field is opening up direct flights across the U.S. this year, or that we have direct service to Shanghai, Hong Kong, Doha, and Abu Dhabi from Dallas-Fort Worth International Airport. On a recent chamber mission to Australia, each audience was excited to learn about DFW Airport’s investment in technology that will —MIKE ROSA allow Aussies rapid entry into the United States. This encouraged more of them to use DFW as their gateway instead of LAX. There are many examples of how this region continues to surprise and be enhanced as a place for companies, talent, jobs, and investment.

Warren Park, the Perot Museum of Nature and Science, the Margot and Bill Winspear Opera House, and plans for additional office towers in downtown.

We could highlight housing, point the way to regional cities and the locations of area universities, and to a new barbecue joint. We were able to give the lay of the land, from Fort Worth’s distant but visible skyline and AT&T Stadium to Oak Cliff, Fair Park, Trinity Groves, and the George W. Bush Presidential Library and Museum.

It helped our guests see the present and envision the future.

Already a strong, growing, prosperous region, Dallas-Fort Worth must not rest on its laurels. We need to work hard and cooperatively to make it better in the ways that matter most, and in ways that companies are acutely examining as they make long-term decisions. Issues that are fundamental to future success include transportation, the water supply, K-12 education, a Tier 1 research university, and greater connectivity to global markets. We are building our case not only with the current facts and figures, but forward-looking surprises.

“ALREADY A STRONG, GROWING, PROSPEROUS REGION, DALLASFORT WORTH MUST NOT REST ON ITS LAURELS.”

A BIRD’S EYE VIEW OF THE REGION All the great developments in downtown Dallas are striking to someone who has not been in town in the past few years. We see the positive reactions routinely from corporate guests at our 26th floor viewing spot in Ross Tower. “Wow, I had no idea all this was going on here!” is common to hear.

Recently, our full regional presentation was given to a group standing at our big bay windows. We did not bother to go into the conference room, where our 2D presentation was compiled and ready to view. From the window, we shared more surprises, such as DART rail connecting to the terminals at D/FW Airport this summer and the prospect of high-speed rail from Dallas-Fort Worth to Houston.

We talked about companies that have recently moved here and about Klyde

WANT TO LEARN MORE ABOUT HOW TO GET INVOLVED IN BLUEPRINT FOR PROSPERITY? Contact Mike Rosa, Senior Vice President, Economic Development, Dallas Regional Chamber 214.746.6735 | mrosa@ dallaschamber.org

BLUEPRINT FOR P R O S P E R I T Y,

BLUEPRINT FOR PROSPERITY

OUR NEXT STEPS FORWARD

region’s success. This additional investment made by more than 130 organizations in addition to annual

The Dallas Regional Chamber’s economic development program, Blueprint for Prosperity, provides organizations in Dallas-Fort Worth with an accelerated investment opportunity that helps advance our chamber membership dues allows organizations to increase their support of our efforts to further economic prosperity throughout the region. This initiative funds efforts related to direct contact with corporations and location consultants examining the DFW Region.

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COMPANIES ON THE MOVE MOVE TO ALLEN, TX

ALLEN IS MOVING FORWARD WITH TWO NEW CLASS A DEVELOPMENTS nal Air por t

Inter natio utes to DFW

25 Min

• America’s Top 25 Best Cities to Relocate - Forbes • Top 10 Best Suburbs - D Magazine

1,000,000-SF PLANNED CLASS A OFFICE PARK ADJACENT TO WATTERS CREEK

500,000-SF CLASS A OFFICE DEVELOPMENT

Allen Central Park

AllenPlace Office Complex

Bethany Drive Watters Creek

For more information contact: Dan Bowman, Interim Executive Director / CEO dbowman@allentx.com • 972.727.0252 Allen Economic Development Corporation • One Allen Center • 700 Central Expressway South Suite 210 • Allen, Texas 75013 • allentx.com

HOW FAST CAN YOU GET HERE? D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 1 5

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D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 7

FROST BANK TOWER RYAN THARP, CLOUDKICKER MEDIA

THE CRANE REPORT

Summer 2014

Shrinking vacancy rates, a rebounding economy, explosive population growth, available land, and the most talented development community in the nation are all combining to create another North Texas building boom. This time, though, disciplined capital markets are reining in unbridled optimism, staving off an oversupply.

BY CHRISTINE PEREZ

ON-THE-GRO U N D I N S I G H TS

OFFICE

INDUSTRIAL

GREG BIGGS

THOM RIDNOUR

ALLEN GUMP

STEVE TRESE

“Office market demand and absorption has increased dramatically and, as a result, we’re seeing some of the highest development totals that we’ve seen in years. This momentum has driven rents higher.”

“DFW is prospering due to the oil and gas industry, general business expansion, and the low cost of funds combined with rising corporate profi ts. Due to demand, new construction likely will continue at its current pace.”

“Lease terms are going longer, and concessions aren’t what they used to be, as there’s less available space. It’s not necessarily a landlord’s market, it’s just a more balanced market.”

“With every cycle we experience waves in deal activity. Last year the big mega-deal dominated; so far this year we’ve seen strong deal volume in the smaller tenant base, which is also indicative of strong conditions.”

Managing Director JLL

Senior Vice President Parmenter Realty Partners

Executive Vice President Colliers International

First Vice President CBRE

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 1 7

C CRANE REPORT

OFFICE

According to Xceligent, 27 DFW office projects totaling 7.2 million s.f. are under construction. Another 54 projects totaling 12.1 million s.f. are planned or proposed.

A sampling are labeled here.

BOOM

35E 35W 114

FOREST PARK MEDICAL CENTER SOUTHLAKE

USAA BUILDING

2900 LAKE VISTA DR.

121

CARILLON OFFICE BLDG 1-3 GRAPEVINE STATION

FREEPORT COMMONS

5

FAA CORPORATE CAMPUS

7

NATIONSTAR MORTGAGE HOLDINGS HQ

WESTPOINT II

183

820

FORT WORTH

2371 VICTORY PARK

SIZE: 470,000 s.f.

DEVELOPER: Hines LEASING AGENTS: Bill Brokaw, Cynthia Cowen, and Mark Dickenson, Cushman & Wakefield

NE OF W 7TH ST AND ARCH ADAMS ST

161

THE CASSIDY

5450 CLEARFORK MAIN ST

30 VICTORY MEDICAL CENTER

WATERSIDE

360

A

E

20

35W

2

McKINNEY & OLIVE

SIZE: 530,000 s.f.

DEVELOPER: Crescent Real Estate LED BY: John Goff, chairman and CEO

HE HAD A GLIMMER IN HIS EYE THAT I KNEW MEANT HE GOT IT. —JOHN GOFF, ON SELECTING FAMED ARCHITECT CESAR PELLI

1 8 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

B

THREE HICKORY CENTRE

HILLWOOD COMMONS I

ANNOUNCED OFFICE DEVELOPMENTS 1

FM 2499 AND GERAULT RD

DATA SOURCE: XCELIGENT INC., A COMMERCIAL REAL ESTATE RESEARCH FIRM IN PARTNERSHIP WITH NTCAR

3

AKARD PLACE

SIZE: 425,000 s.f.

DEVELOPER: RED Development LEASING AGENTS: Burson Holman and Shannon Brown, CBRE DETAILS: Akard Place will also include a 20-story residential highrise with streetlevel retail.

4

ALLEN PLACE

SIZE: 500,000 s.f.

DEVELOPERS: Sentinel Capital LLC, Centra Partners LLC, Triad Real Estate LEASING AGENT: Ben Appleby, Paladin Partners PROJECT DETAILS: KONE, a global maker of elevators and escalators, has signed on as the lead tenant of this $26 million, five-building office park. Designed by Goulas + Associates Inc., the development will provide relief in an exceedingly tight Allen market.

THE FORUM AT PROSPER WEST

STEWART CREEK OFFICE CENTER I

FAR NORTH DALLAS ON FIRE

SUMMIT PARK II

FRISCO SQUARE BLDG A1, B1, B9,C2, C5, C9, D1

MCKINNEY CORPORATE CENTER I

The epicenter of office development is the area surrounding the intersection of State Highway 121 and the Dallas North Tollway, home to Hall Office Park in Frisco and Plano’s Granite Park and Legacy business park—the site of a new 1.5 million-square-foot headquarters for Toyota.

ONE FOUNTAIN COURT

ALLEN CENTRAL PARK I

4

ALLEN PLACE BLDG 1, 2, 3,4

ANNOUNCED Windhaven Place One 200,000 s.f.

One Champions Park 200,000 s.f.

Stonebriar Commons on Legacy Bldg 9 100,000 s.f.

Toyota Headquarters 1.5M s.f.

Preston Bend One 109,988 s.f.

Legacy Center 169,000 s.f.

6000 Tennyson Pkwy 157,000 s.f.

Palomino Crossing Bldg A-D 540,000 s.f.

75

INTERNATIONAL BUSINESS PARK XVI

4120 MIDWAY RD

6

G

KNOLL TRAIL PLAZA

CITYLINE

H UNDER CONSTRUCTION

Dominion Legacy Office 92,250 s.f.

Legacy Towers 342,066 s.f.

FedEx Office Print Services Inc. 265,000 s.f.

Lincoln Legacy Two 134,990 s.f.

FOUR GALLERIA TOWER

635

F

75 PARK CITIES PLAZA

D

FROST TOWER

1-3

10

9

THE RICHARDS GROUP HQ

8

KPMG PLAZA AT HALL ARTS

THE ARTS DISTRICT PUTS DALLAS FRONT AND CENTER ON THE INTERNATIONAL STAGE. ...

30

— CRAIG HALL, HALL FINANCIAL GROUP

80

12

9 175

Online Extra

20

KPMG PLAZA AT HALL ARTS

SIZE: 500,000 s.f.

Developer: Hall Financial Group Lead Tenants: KPMG, Jackson Walker, UMB, Hall Financial Group, Stephan Pyles

E

DALLAS

DAVIS STREET MARKET

8

8020 PARK LN

78

NATIONSTAR MORTGAGE HOLDINGS HQ

SIZE: 175,585 s.f.

DEVELOPER: Billingsley Co. LED BY: Lucy Billingsley DETAILS: Nationstar’s new headquarters is one of five office buildings under way or planned for Billingsley’s Cypress Waters development.

PRESTON HOLLOW VILLAGE

8111 WESTCHESTER AVE PARKLAND HALL

7

THE RICHARDS GROUP HQ

SIZE: 250,000 s.f.

VALUE: $45 million ARCHITECT: Perkins + Will

Visit an interactive version of this map at www.dfwrealestatereview.com.

35E

● ANNOUNCED ● UNDER CONSTRUCTION ROGERS HOTEL OFFICE PROJECT (WAXAHACHIE: 7.5 MILES SOUTH)

OFFICE UNDER CONSTRUCTION 5

45

FREEPORT COMMONS

SIZE: 300,000 s.f.

DEVELOPER: Capital Commercial Investments LEASING AGENTS: Fletcher Cordell and Duane Henley with Transwestern

6

KNOLL TRAIL PLAZA

SIZE: 120,000 s.f.

DEVELOPER: Cawley Partners ARCHITECT: BOKA Powell

I’VE NEVER SEEN THIS VOLUME OF BUSINESS; IT’S UNBELIEVABLE.

10 FROST TOWER SIZE: 168,000 s.f.

DEVELOPER: Harwood International LEAD TENANT: Frost Bank PROJECT DETAILS: At 22 stories, Frost Tower is the seventh phase to be developed in Gabriel Barbier-Mueller’s Harwood district in Uptown.

— BILL CAWLEY, CAWLEY PARTNERS

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 1 9

C CRANE REPORT 35E

INDUSTRIAL

7

STRENGTH

SPEEDWAY DISTRIBUTION CENTER ALLIANCE CENTER NORTH 2 6 TRAMMELL CROW 35/EAGLE 8

DFW NORTH DISTRIBUTION CENTER

WAL-MART

35W

114

FREEPORT NORTH POINT WEST

DFW EAST LOGISTICS CENTER BLDG C

35W

183

820

ANNOUNCED INDUSTRIAL DEVELOPMENTS

RIVERPARK BLDG 100, 400

101 JIM WRIGHT FWY

PARK 20/35

1460 AVENUE S

FORT WORTH

30

LOGISTICS CROSSING 2

SOUTH CENTRAL DISTRIBUTION CENTER II

20

Online Extra Visit an interactive version of this map at www.dfwrealestatereview.com.

35W

● ANNOUNCED ● UNDER CONSTRUCTION

SIZE: 1.5 million s.f. (first phase) DEVELOPER: Port Logistics Realty LEASING AGENTS: Kacy Jones, John Hendricks, and Wilson Brown, CBRE

WE ARE SEEING AN INCREASING NUMBER OF CORPORATE AND E-COMMERCE USERS MOVING INTO THE SOUTHERN SECTOR. — KACY JONES

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DATA SOURCE: XCELIGENT INC., A COMMERCIAL REAL ESTATE RESEARCH FIRM IN PARTNERSHIP WITH NTCAR

3

STONERIDGE 11-13

SIZE: Three buildings: 140,000 s.f., 150,000 s.f., and 400,000 s.f.

DEVELOPER: Holt Lunsford Commercial LEASING AGENT: John Gorman

4

WILDLIFE COMMERCE PARK PHASE I

360

CARTER DISTRIBUTION CENTER BLDG C

SOUTHPORT LOGISTICS PARK

DFW SOUTHGATE

161

SIZE: 653,582 s.f.

DEVELOPER: Prologis AMENITIES: Direct access to interstates 35 and 20, expandable to 1 million s.f., Foreign Trade Zone and Triple Freeport.

2

MAJESTIC35E AIRPORT CENTER

121

RAILHEAD INDUSTRIAL PARK

1

LAKESIDE COMMERCE CENTER

ALLIANCE GATEWAY 57

POINTSOUTH LOGISTICS AND COMMERCE CENTRE

SIZE: 1,113,500 s.f.

DEVELOPER: Majestic Realty LEASING AGENT: Al Sorrels

CUMMINS SOUTHERN PLAINS

COBB BUSINESS PARK

Xceligent reports that 41 DFW industrial projects totaling 18.2 million s.f. are under way; another 94 projects totaling 46.9 million s.f. are planned or proposed.

121

75 NEBRASKA FURNITURE MART WAREHOUSE

7

SPEEDWAY DISTRIBUTION CENTER, BLDG. A

SIZE: 729,900 s.f.

DEVELOPER: IDI AMENITIES: The building offers proximity to Interstates 114 and 35W and BNSF Railroad’s intermodal facility. Also near Texas Motor Speedway.

PLANO TECH CENTER 8 ADVOCARE INTERNATIONAL

CROSBY TRADE CENTER I THREE VALWOOD

635 MERCER BUSINESS PARK

75

78

30

2040 CENTURY CENTER BLVD I-30 BUSINESS CENTER BLDG 3

DALLAS

For years, North Texas developers have predicted an industrial boom for southern Dallas. With the confluence of Interstates 20, 35, and 45 and intermodal hubs, it made perfect sense. Now the vision is finally becoming a reality.

Major tenants like Kohl’s, L’Oreal, Quaker, BMW, and Home Depot have already staked a claim. Millions of square feet of space are 80under construction or in the planning stages.

12 DEVELOPERS BETTING ON SOUTHERN DALLAS:

FIRST PINNACLE PARK BLDG B SOUTHWEST DISTRIBUTION CENTER

CenterPoint Properties Duke Realty Corp.

Hillwood Holt Lunsford Commercial IDI Gazeley IndCor Properties KTR Capital Partners Majestic Realty Co. Mountain Creek Investments Panattoni Prime 45 Development Prologis Ridge Development Seefried Properties Trammell Crow Co. Weeks Robinson Properties

175 4

20 1

5 3 STONERIDGE 11-13 SOUTHFIELD PARK 35

35E

PARK 20/35

9

RIDGE LOGISTICS CENTER

I35 INTERCHANGE I

POINTSOUTH LOGISTICS COMMERCE CENTRE

SOUTHPORT LOGISTICS PARK SOUTHPORT TRADE CENTER

2

10

DALPORT TRADE CENTER

45

INDUSTRIAL UNDER CONSTRUCTION 5

HOT CORRIDOR

SOUTHFIELD PARK 35

SIZE: 1,126,320 s.f.

DEVELOPER: SeefriedProperties and USAA LEASING AGENTS: Terry Darrow, Nathan Orbin, and Kurt Griffin with JLL

6

8

TRAMMELL CROW 35/EAGLE

SIZE: 1,041,879 s.f. and 548,495 s.f.

DEVELOPERS: Trammell Crow Co., Prudential Real Estate Investors LEASING AGENTS: Bob Scully and Steve Trese with CBRE

THIS IS ONE OF THE BEST INDUSTRIAL SITES I’VE EVER BEEN INVOLVED WITH. — BOB SCULLY

9

RIDGE LOGISTICS CENTER

SIZE: 503,880 s.f.

DEVELOPER: Ridge Development LEASING AGENTS: Chris Teesdale and Tom Pearson, Colliers International

ALLIANCE CENTER NORTH 2

SIZE: 1,002,620 s.f.

DEVELOPER: Hillwood AMENITIES: Access to Alliance Airport and frontage along Interstate 35W.

NORTH FORT WORTH HAS SEEN UNPRECEDENTED LEASING ACTIVITY OVER THE LAST 24 MONTHS. — TONY CREME, HILLWOOD

TRADE 10 DALPORT CENTER SIZE: 1,564,800 s.f.

DEVELOPER: Panattoni LEASING AGENT: Terry Darrow, JLL DETAILS BEHIND THE DEAL: Key players will only reveal the tenant’s code name: “Project Sunrise.” The company that’s leasing the space plans to use it as a distribution center.

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 2 1

IIPOD Union Pacific Intermodal

Baylor Sammons Cancer Center

Photo: Kimley-Horn & Associates Inc.

Photo: Baylor University Medical Center at Dallas

DART Mockingbird Station

Photo: DART

Photo: The Urban Fabric

Photo: Glenn James/NBAE/Getty Images

University of Texas Southwestern Medical Center

Photo: UTSW

Photo: The Urban Fabric

AT&T Performing Arts Center

Downtown Dallas Skyline

Dallas Mavericks

Dallas Love Field

Magnolia Pegasus

Photo: The Urban Fabric

DFW International Airport

Photo: DFW International Airport

Photo: Tim Hursley

Klyde Warren Park

Photo: Dillon Diers Photography

Dallas-EcoDev.org 214.670.1685

S SCORECARD

FOUNTAIN PLACE

SCORECARD

Summer 2014

Leasing activity across North Texas is brisk, buoyed by relocations and population growth. The demand is affecting all sectors: midyear office leasing stands at 2 million square feet, the industrial vacancy rate has dropped to 8.1 percent, and a number of specialty grocers and other chains are expanding across DFW.

BY CHRISTINE PEREZ

ON-T H E-G RO U N D I N S I GH TS

OFFICE

INDUSTRIAL

RYAN EVANICH

BARBARA HOULIHAN

CRAIG JONES

MICHAEL SPAIN

“The top three factors driving DFW prosperity are Rick Perry, a pro-business environment, and quality of life, in that order.

Companies want to operate as efficiently as possible, with minimal government interference or taxation.”

“Generally, business owners today are looking for a location that speaks to their workforce and image. It’s less about the convenience of the decision-makers and more about the employees.”

“Leasing activity continues at a feverish rate, causing competition among tenants for quality industrial space.

This is especially true for ‘bread and butter’ deals of 20,000 to 150,000 square feet.”

“Moving allowances have just about disappeared. Free rent is still available, but not at the level it was a couple of years ago, when you’d expect one month of free rent for every year on the lease term.”

Vice President, Stream Realty Partners

Senior Vice President, Peloton Commercial Real Estate

Industrial Division President, NAI Robert Lynn

Senior Vice President, Bradford Commercial Real Estate Services

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 2 3

S SCORE CARD

OFFICE LEASES

5

1 75

35E

35W 114

121

3

635

4

78

30

183

820

FORT WORTH

2

161

80

DALLAS

30

12

46 5,169 SF 5,169 16,500 SF

360

16,500 41,419 SF

175

20 20

35W

41,419 109,000 SF

35E

109,000 265,000 SF

45

LARGEST OFFICE LEASES

<< FedEx’s new office is being built on former JC Penney land off State Highway 121, immediately east of a new headquarters for Toyota. Both projects are being developed by KDC.

1

FEDEX OFFICE

DEAL: 265,000 s.f. build-to-suit at Legacy West

OCCUPANCY: 2015 DEVELOPER: KDC

2

TENET HEALTHCARE CORP.

DEAL: 242,000 s.f. at Fountain Place in Dallas

OCCUPANCY: Expansion and renewal LEASING AGENTS: Johnny Johnson and Lauren Napper with Cassidy Turley TENANT REPS: Phil Puckett, Harlan Davis, and Chris Hermann with CBRE

DETAILS: Tenet, which has occupied Fountain Place since 2009, expanded its lease by about 30 percent in May, signing on for 242,000 square feet through 2025. The 58-story Fountain Place was sold in June to Goddard Investment Group and an affiliate of Metropolitan Life Insurance.

3

ENVOY

DEAL: 142,000 s.f. at 4301 and 4401 Regent Blvd., Irving

OCCUPANCY: July 2014 LEASING AGENTS: Johnny Johnson and Rodney Helm with Cassidy Turley TENANT REPS: Steve McCoy and Alan Harrington with Transwestern; Troy Baron with Weston Commercial.

WITH ENVOY’S TRAINING FACILITY ON SITE, THE HOTELS IN THE AREA ARE GOING TO BE VERY BUSY.

4

ENERGY TRANSFER PARTNERS

DEAL: 130,000 s.f. at 8111 Westchester in Preston Center

OCCUPANCY: Early 2015 DEVELOPER: Bandera Ventures TENANT REPS: Randy Cooper and Dan Harris with Cassidy Turley

TOYOTA MOTOR CORP.

DEAL: 125,742 s.f. at The Campus at Legacy in Plano

OCCUPANCY: Summer 2014 LEASING AGENTS: Chuck Sellers, Russ Johnson, and Lauren Perry with Peloton Commercial Real Estate represented the landlord, Spear Street Capital.

TENANT REPS: Paul Whitman, Brad Selner, and Brooke Armstrong with JLL

5

2 4 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

—PEDRO FABREGAS, PRESIDENT AND CEO, ENVOY

<< Designed by BOKA Powell and developed by Bandera Ventures, the 197,000-square-foot 8111 Westchester will also house Chief Oil and Gas, a partner in the project.

DETAILS: Toyota announced in April that it was relocating its U.S. headquarters from California to Plano—a move that will bring 4,000 new jobs to North Texas. While its new campus is being built near the northwest intersection of the Dallas North Tollway and State Highway 121, the automaker has leased space at the nearby Campus at Legacy, giving it room to grow.

INDUSTRIAL LEASES

35E 75

35W

4

121 114

635

75

161

78

30

183

820

80

DALLAS

30

FORT WORTH

12

31,000 130,128 SF

360 20

175

2 20

3

1 5

2 3 4 5

821,502 1,564,800 SF

45 DATA SOURCE: XCELIGENT INC., A COMMERCIAL REAL ESTATE RESEARCH FIRM IN PARTNERSHIP WITH NTCAR

LARGEST INDUSTRIAL LEASES

1

130,128 360,000 SF 360,000 821,502 SF

35E

35W

180 31,000 SF

DALPORT TRADE CENTER

DEAL: 1,564,800 s.f. distribution center in Wilmer

OCCUPANCY: Fall 2014 LEASING AGENT: Terry Darrow with JLL

WILLIAMSSONOMA INC.

DEAL: 821,502 s.f. at Arlington Commerce Center

OCCUPANCY: May 2014 LEASING AGENT: Dave Anderson with CBRE represented landlord, Exeter Property Group TENANT REPS: Tom Pearson and Chris Teesdale with Colliers International

WHIRLPOOL CORP.

DEAL: 725,709 s.f. at Carter Industrial Park

OCCUPANCY: February 2014 LEASING AGENTS: Trey Fricke and Reid Bassinger with Lee & Associates TENANT REPS: Tom McCarthy and George Curry with JLL

ALLIANCE GATEWAY 1

DEAL: 499,797 s.f. at Hillwood’s Alliance Gateway 1

OCCUPANCY: July 2014 LEASING AGENT: Tony Creme, Hillwood TENANT REP: Sharon Morrison, E Smith Realty Partners

JC PENNEY

DEAL: 420,000 s.f. lease renewal at 1650 S. Highway 67 in Cedar Hill

OCCUPANCY: Renewal LEASING AGENT: The property owner, AP Cedar Hill LLC, was self-represented.

TENANT REPS: Nathan Orbin, Melissa Holland, Kurt Griffin, and Greg Matter with JLL

DETAILS: This massive new building is being developed off Interstate 45 by Panattoni for an unnamed tenant, which will use the space as a regional distribution center.

THE INTERSTATE 20 CORRIDOR PROVIDES EXCELLENT ACCESSIBILITY TO A GREAT LABOR FORCE. —TOM PEARSON, COLLIERS INTERNATIONAL

DETAILS: Whirlpool, a former occupant of the building, re-leased this state-of-the-art distribution center because, among other things, it provides a strategic central location to distribute goods manufactured in Monterrey, Mexico, to U.S. markets.

<< With LG Electronics moving into its new 1.1 million-s.f. home at Alliance, an unnamed tenant has signed on to take occupancy of LG’s former space at Alliance Gateway 1.

DETAILS: Plano-based JC Penney did a lease renewal for its South Dallas distribution hub in early 2014.

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 2 5

S SCORE CARD

RETAIL LEASES

75 35E

35W 121 114

635 75 78 30 183

820

FORT WORTH

161

80

DALLAS

30

12

3,85013,000 SF

360

13,00030,000 SF

175

20

1753,850 SF

20

30,00060,858 SF

35E 35W

60,858123,000 SF

45 DATA SOURCE: XCELIGENT INC., A COMMERCIAL REAL ESTATE RESEARCH FIRM IN PARTNERSHIP WITH NTCAR

LARGEST RETAIL LEASES

1

KROGER MARKETPLACE

DEALS: 123,000 s.f. at North Tarrant Marketplace in North Richland Hills, 123,000 s.f. at S.H. 121 in Castle Hills in Lewisville, and 123,000 s.f. at Lantana Town Center in the Denton County town of Bartonville. In early July, Kroger also purchased a 13.35-acre tract at Burleson Commons for a new 114,000s.f. Marketplace store.

KEY PLAYERS: Cencor Realty Services, an affiliate of The Weitzman Group, is developing the Lewisville store; the other two properties are being developed by NewQuest Properties. The stores will open in 2014 and 2015. Mark Reeder and Tyler Isbell with SRS Real

MARK REEDER

DETAILS: The Colleyville theater, which opened in April, features eight screens and more than 1,000 seats. The new venue in Lewisville will feature 10 screens and more than 1,300 seats.

Estate Partners represented Cullinan Properties Ltd. In the Burleson land sale.

DETAILS: Kroger’s $150 million expansion plan for North Texas includes fi ve new “Marketplace” stores, a concept that goes beyond groceries to include furniture, housewares, toys, and jewelry.

2

FITNESS CONNECTION

DEAL: 52,688 s.f. at Mills Pointe in Carrollton KEY PLAYERS: Maury Levy and Robert Luleff with UCR represented the landlord, 2810 E. Trinity Mills Holdings Ltd. Wyatt Russo and Sherman Hinkebein with The Retail Connection represented the tenant.

DETAILS: Based in McLean, Virginia, Fitness Connection is a new and fast-growing fi tness chain that’s backed by a $500 million private equity fund. Its new Carrollton gym will be its fourth, with other centers in Allen, Arlington, and Garland.

2 6 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

JOHN ZIKOS

3

STUDIO MOVIE GRILL

DEALS: 51,935 s.f. at the southeast corner of S.H. 26 and Hall Johnson in Colleyville, 40,000 s.f., and 40,000 s.f. in Lewisville Towne Crossing at 4740 State Highway 121 in Lewisville (The Colony trade area).

KEY PLAYERS: In Colleyville, Larry Leon and John Zikos with Venture Commercial represented the property owner, ANB Special Assets LLC. In Lewisville, Kendall Ibsen and Jim Weir with The Retail Connection represented the landlord, Endeavor RE Management LLC. The Retail Connection (Alan Shor and Ross Golman) also represented Studio Movie Grill.

4

TOM THUMB

DEAL: 45,256 s.f. lease renewal in Arapaho Village at 819 W. Arapaho Road in Richardson.

KEY PLAYERS: Robert Luleff and Maury Levy with UCR represented the landlord, 819 W. Arapaho Road Holdings LP.

5

LA FITNESS

DEAL: 37,000 s.f. at Custer Road and Virginia Parkway in McKinney.

KEY PLAYERS: Jean Smith with UCR represented the landlord, Biruk Partners Ltd. The tenant was represented by Jonathan Cooper and John Zikos with Venture Commercial and Walt Brown Jr. and Tim J. Dollander with Diversified Partners LLC.

2 8 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

R ROUNDTABLE

THE FUTURE LOOKS BRIGHT TOP COMMERCIAL REAL ESTATE EXECUTIVES GIVE AN INSIDER’S VIEW ON OFFICE LEASING ACTIVITY IN NORTH TEXAS—AND WHAT LIES AHEAD

BY C H R I ST I N E P E R E Z

SHERYL LANZEL

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 2 9

Weâ&#x20AC;&#x2122;re only midway through 2014, but already the year is shaping up to be a banner one for commercial real estate in North Texas, with big relocation announcements and huge development projects under way.

Whatâ&#x20AC;&#x2122;s driving activity? Where are the greatest opportunities? And what challenges stand in the way? To tackle these topics, we gathered seven top industry experts for a roundtable discussion. Participating were Susan Arledge with Cresa Dallas, Kim Butler with Hall Financial Group, Jack Eimer with Transwestern, Steve Everbach with Cushman & Wakefield, Johnny Johnson of Cassidy Turley, Phil Puckett with CBRE, and Steve Thelen with JLL.

MEET THE REAL ESTATE EXPERTS

SUSAN ARLEDGE

PHIL PUCKETT

JACK EIMER

As managing principal of Cresa

Phil Puckett is an executive vice

Jack Eimer is Central region

Dallas, Susan Arledge represents

president of CBRE in Dallas, where

president of Transwestern, leading

business and corporate clients

he specializes in office tenant

a team that provides property and

locally, regionally, and nationally.

representation in the downtown

facilities management, leasing,

Prior to taking the helm of Cresa

and Uptown submarkets. A

development, investment sales,

Dallas, she led Arledge Partners

significant portion of his 4.2 million

tenant representation, and

Real Estate Group, a firm she

square feet in transactions have

corporate advisory services. He also

founded in 1993.

been for law firm clients.

serves as a company director.

3 0 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

DFW REAL ESTATE REVIEW: Let’s start by getting a midyear update on office leasing activity. How is 2014 shaping up so far?

PHIL PUCKETT: We just finished our first-quarter reports, and they show that the first quarter of 2014 has been the best—maybe the best quarter that we’ve seen in history—in terms of absorption. We had 1.1 million square feet of absorption in the first quarter alone. So, yes, I think we’re off to a great start. Not since 2007 or 2008 has vacancy dipped below 18 percent citywide; that’s another positive. We’re currently at about 16 to 18 percent, which is pretty exciting.

JOHNNY JOHNSON: The reason that’s significant, that 18 percent, is because we came off of a point. Back in 2010, vacancy was more than 23 percent. So in a market our size, with more than 200 million square feet, going from 23 percent to under 18 percent is a huge milestone. If you break it down even further, in some key submarkets we’re seeing single digit vacancy. Just look at Far North Dallas, Richardson, and Plano, where’s there’s a miraculous turnaround with some of the relocations we’re seeing.

JACK EIMER: And over the years our central business district market has driven up our vacancy. What’s really exciting this time around is that we’re starting to see some true absorption downtown. I think we’re going to start getting back to a vacancy of 15 percent or less across all submarkets, and that’s going to be a huge positive.

KIM BUTLER: That’s the big difference. A couple

of years ago, we were talking about the submarket haves and the have-nots. You had Uptown and Far North Dallas/Frisco. Now, if you look at the activity, Las Colinas is doing great. And look what’s happening in Richardson and Plano. The wealth is abundant, and it’s great for the region.

STEVE THELEN: Leasing activity is much better than expected. You’ve got the bigname deals like Raytheon, FedEx, and Nationstar. And then you start going down to those submarkets that are hot at the vacancy level. Preston Center and Uptown is 10 percent, Far North Dallas/Legacy is 14 percent. What that has done is drive up net rents—some have gone by 25 percent in the last 12 months.

SUSAN ARLEDGE: Clients are confused about that vacancy rate, though. When they’re from out of town and look at that 18 percent, then they come to Dallas and are surprised there’s no space. And the space they do find is much higher than what they expected to pay.

JOHNSON: Phil, if you’re looking for a block of space or even a full floor in Uptown right now, there are, what, two options? Or, say they need 40,000 square feet.

ARLEDGE: Take a sublease.

PUCKETT: Maybe a sublease …

JOHNSON: For a 14 million-square-foot market, that’s impressive.

PUCKETT: The rates at our building in Uptown just went to more than $46 per square foot, plus electric. When we moved in four years ago, it was about $29 per square foot.

EIMER: That’s the exciting thing. When the occupancy in a submarket gets up into the high 80s, low 90s, rates don’t go up 5 percent or 7 percent—they spike. They go up 25 percent, 30 percent, and that’s what we’re starting to experience. At least on the investor side, that’s pretty exciting.

ARLEDGE: Just look at Advancial Tower off Woodall Rodgers. It was leasing for $19 to $21 per square foot, and now, when renovations are complete, the rates will be in the $30s. Buying that building, at that location, was brilliant.

JOHNSON: And then you’ve got deals like State Farm at CityLine in Richardson, which has turned the market upside down. It has grown to 2.5 million square feet.

Then the announcement of Toyota, at 1 million square feet. There are probably five deals in the market today that are between 500,000 square feet and 1 million square feet. When we’d have roundtable discussions like this 10 or 15 years ago, if there was a 200,000- or 300,000-square-foot relocation, it would be a big deal.

KIM BUTLER

STEVE EVERBACH

JOHNNY JOHNSON

STEVE THELEN

Kim Butler, director of leasing,

As senior managing director and

As executive managing director

As a managing director for JLL,

oversees marketing and leasing of

market leader, Steve Everbach

and principal, Johnny Johnson

Steve Thelen leads office tenant

Hall Financial Group's 2.5 million-

oversees Cushman & Wakefield in

co-leads marketing and leasing

representation teams that deliver

square-foot office portfolio,

North Texas and the firm’s U.S. Agency

services for Cassidy Turley

real estate solutions that align with

including the award-winning

Leasing practice group. During his

clients in Dallas and Houston. He

his clients’ business objectives. He

Hall Office Park in Frisco and the

career, he has completed more than

has closed more than 14 million

has been involved in some of the

new Hall Arts development in the

8 million square feet of transactions,

square feet of transactions

most notable lease transactions in

Dallas Arts District.

with a value of $1.5 billion.

during his 26-year career.

North Texas.

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 3 1

Today the question is: Are huge deals the new norm? Is the new norm for Dallas 1 million square feet?

BUTLER: Everything’s bigger in Texas.

It used to be front-page news when a project would create 200 new jobs. Now the announcements are in the thousands.

ARLEDGE: And people forget about Parkland. When the new Parkland opens next year, I believe they’re creating another 2,000 jobs with the biomedical facility and the research facility. Many are coming in from other major medical universities. It’s going to be huge. That medical district is just exploding down there.

THELEN: I think the biggest impact is going to be how it affects buildto-suit costs in that area. Land in the area has already escalated 20 percent to 25 percent, and it has continued to rise. Construction costs have gone up by 11 or 12 percent over the last year and a half. All of that has caused build-to-suit expense to go up by $5 a square foot in that market over the last 12 to 18 months. That means developers are going to try to get higher density on that land, because it has gotten so expensive. There will be more mixed-use.

JOHNSON: We were involved with part of that deal, the land transaction. Two years ago, land was under $5 a square foot. Now it’s up the mid-teens, thereabouts. But from where Toyota is coming from (California), and what they’re seeing in other parts of the country where they’ve looked, it’s a tremendous value.

STEVE EVERBACH: Toyota’s decision sends a number of messages about the Dallas-Fort Worth area to the country. First, it’s a very prestigious trophy for DFW, as a headquarters location for Toyota.

They’ve been in California for 40 or 50 years. Think about all the ancillary companies that serve Toyota and deal with Toyota. Many are going to end up opening offices here because of those relationships.

Then there’s the perspective of companies from across the country, looking at the decision. Other markets—the upper-Midwest, for example, it’s a different economy. It’s not as strong as what we’re seeing here. Everyone sitting around this table is busy every minute of every day.

ARLEDGE: I spoke with an executive at the regional chamber in Charlotte, N.C., a city that competed early on for Toyota, too. He said, “What are you guys doing right? We need to understand what it is that’s so attractive.” I said, “Well, our Dallas Regional Chamber started marketing to California companies two or three years ago. It also helps to have a governor who’s pro-business and who doesn’t mind aggravating other governors with his radio campaigns and his blitz through their states. It has an impact. CEOs listen to that.

EIMER: We did a little research and looked at when Exxon relocated here, and found there was very little ancillary business that came along with that. This time, the vendor chain of suppliers and others related to this company—it’s going to be very significant. I was living in Atlanta in the late 1980s, early ’90s, and Atlanta was competing dramatically for big corporate relocations. Within about a 12-month period, as I recall, they got FedEx and Holiday Inn—huge relocations

3 2 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

SHERYL LANZEL

What impact will Toyota’s decision to relocate its corporate headquarters to North Texas have on the market?

WE HAVE A GREAT, DIVERSE, STRONG WORK FORCE IN THIS AREA, AND THAT IS PART OF THE ATTRACTION. — STEVE THELEN

at that time. That opened the floodgates. Atlanta had another 10 years of growth that were just incredible; I think this move could be a large moment for this city.

THELEN: You remember Exxon? We heard there were 100 executives that had incomes over $1 million dollars a year, and they bought all the big houses in Las Colinas. Imagine 4,000 people coming in from California buying homes in Frisco, Plano, McKinney, Prosper, Celina—think about what that’s going to do to that housing market up there.

The average salary for those 4,000 people, according to Forbes, is $100,000 or more—six figures. That’s a lot of money coming in.

ARLEDGE: If they all choose to relocate. There will be a lot of attrition.

JOHNSON: There will be many who move, though, too. When companies offer relocation packages, if 50 percent or maybe 60 percent take the package, that’s high. Our tenant rep team is working on State Farm, and more than 82 or 83 percent of the people who were offered relocation packages came to Texas.

Toyota’s not going to be any different. People

want to be here. The chamber no longer has to do the marketing—the word’s out.

People who have experienced living here and the quality of life here, the schools and everything else—it has become a known fact that Texas is a place where companies and people want to be.

ARLEDGE: The groundwork has been laid; the word is out because that happened years ago. We’ve been building on that, and it has paid off.

With all of the companies relocating and expanding here, how are we situated there in terms of employees?

THELEN: We have a great, diverse strong work force in this area, and that is part of the attraction. It’s not just the cost of living and the quality of life, but our strong work force. This fact is well known due to labor analytics studies. Dallas always shows up as having a great work force.

BUTLER: We were recently talking with a relocation prospect about our work force. Everybody wants to hire the best and the brightest. In the northern sector, we’ve got young workers. I think the average age is 34. And 65 percent or more have a bachelors degree or greater. That’s huge. Companies are going to go where the talent is. And people are just going to keep migrating here because they know the job market’s great.

EIMER: And relatively speaking, it’s very affordable labor compared to most other cities.

EVERBACH: And real estate … very affordable real estate.

Do you think we’ll continue to see more relocations?

ARLEDGE: Oh, yeah.

JOHNSON: It’s the tip of the iceberg.

ARLEDGE: There are at least 20 projects right now that are looking at Dallas.

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 3 3

Steve Everbach of Cushman & Wakefield (left) and Johnny Johnson of Cassidy Turley.

SHERYL LANZEL

We won’t get them all. We’re competing with other cities. I think there will be some concern for entry-level employers that, between State Farm, Toyota, Nationwide, all of the big jobs that have come in, that it will be harder to hire people at a certain range here. There might be some impact if you’re looking for workers below $20 an hour.

BUTLER: Our chamber folks are out there working with all sorts of companies. In our office park in Frisco, we have 180 tenants. I’m talking to six of them that are planning major relocations of other divisions here. Their headquarters may already be here or they may be somewhere else, but they’re moving their sales offices, they’re moving their manufacturing, and other divisions; it’s accretive.

EIMER: Or like State Farm, which is consolidating on a regional basis.

ARLEDGE: The mayor of Torrance, Calif., Toyota’s current home base, was quoted in a newspaper basically saying, “When you look at the package they got to relocate, it makes it incredibly hard to do business here.” Well, let’s just throw in the towel.

JOHNSON: It’s not all relocations. A lot of activity is being driven by expansions.

The economy is doing well, and companies overall are doing well. Whether it’s a 2,000-square-foot tenant or a 100,000-square-foot tenant, the demand for more space is across the board. Raytheon is a good example of a great company that has been here for years. The new campus they’re doing in Richardson was due to expansion of its internal operations. And look at Las Colinas, which has always been driven by corporate America and the Fortune 500 world. It’s experiencing a big comeback.

PUCKETT: What do you think is different from 2006 and 2007, when we had a pretty strong market. What’s different from that and today?

JOHNSON: The economy back then was different from the evolving economy now.

Today it’s much more global. And U.S. companies have really gone through a tough time, from the bust in 2008 and in 2009 and 2010, when everyone was just reeling.

Companies were shell-shocked and just holding on. As businesses started coming back, there was a lot of pent-up demand. And then when it really turned, they were all

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well ahead and prepared to grow again. They had a lot of cash reserves, and now we’re seeing the benefit of that.

ARLEDGE: Investors have real money in their projects today, too. The banks were so leveraged back then and projects were highly leveraged, and now investors—whether they are REITs or individuals or corporate investors—have real money in these deals, and they’re more viable.

THELEN: What I’ve seen with my clients today is they’re looking more at the ability to recruit and retain good quality employees. They’re putting that first and foremost. If you look at a company’s expenses, probably 70 percent is labor-payroll cost and the real estate is maybe 10 percent. So they’re looking at it correctly. They’re looking at Dallas and they say, “Listen, we can get a good strong workforce here, and by the way, real estate is low cost as well.” So they’re making decisions to expand here, to move here.

EIMER: At the end of the day, for our business, it always comes back down to job growth. In the last study, from February to February, we recorded 81,000 new jobs for this market. That’s phenomenal. That ranks in the top five by just about anybody’s standards. And that’s what has drawn us out of this previous recession.

WITH THE DENSITY TRENDS COME NEW CHALLENGES; COMPANIES WANT LESS SPACE BUT MORE PARKING. ..

— PHIL PUCKETT

Our research group is projecting, I think, 77,000 new jobs on average for the next three years. Well that gives you a pretty good sense of where this market’s going to be going.

What kinds of trends are you seeing with regard to suburban markets and urban markets? With regard to activity, what are the parallels, and what are the differences?

BUTLER: I think suburban markets are trying to be urban. Urban is cool.

Everybody wants density—it’s beyond mixed use. It’s creating huge areas of critical mass where there’s office, restaurants, hotels, schools, etc. Then there’s the Arts District, which also is going live-work-play, and we’ve needed it there. We’ve had the play; we needed the live and the work. We have residences now, with Museum Tower, once it fills up, and Hall is going to build residences.

There’s a school, houses of worship, entertainment, everything literally all within a four- or five-block area.

EVERBACH: Companies are being smarter about their real estate today. Ten, 15, 20 years ago, real estate was a place where you sat rear ends in seats, with a phone and a computer. Now there are two focuses.

One is that real estate can be the identity of a company. It’s branding. You also have to have that economic eye, to make sure you’re using the space as efficiently as possible. To Jack’s point on job growth, we need the job growth in order to have the absorption. That’s because tenants

are using space more efficiently. A 100,000-square-foot user today may need 60,000 feet in redesigned space that’s more efficient and also brands their company differently and better. A lot of large renewals are taking less space and putting it back on the market. Yet we’re still getting 1 million square feet in net absorption for the first quarter, which is fantastic.

PUCKETT: With the density trends come new challenges—companies want less space but more parking. This is something we need to address sooner rather than later, particularly downtown. The demand is coming, and it’s coming in a big way.

JOHNSON: Phil and I are working right now on a deal where parking is an issue.

PUCKETT: Following up on Steve’s point about branding, it’s not just the building, it’s the location, whether it’s Uptown or the Arts District or wherever.

They’re repositioning their companies and deciding where they need to be to recruit and retain talent. We’re seeing that particularly with law firms. But yes, parking is an issue. Kim is smiling because she has the best parking in town.

BUTLER: We Texans like our cars.

ARLEDGE: You’re not going to get lawyers to ride DART. JOHNSON: People want to be efficient, and occupancy costs matter, but it’s really all about retention and attracting employees in a very competitive environment.

So building features in facilities that go beyond the conventional … food service, and fitness and wellness—that’s the new norm.

Just North of Dallas.

Far from Ordinary.

Close to Perfect.

McKINNEY ECONOMIC DEVELOPMENT CORPORATION

McKinneyEDC.com D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 3 5

JOHNSON: We won’t go too far.

BUTLER: You’ve got the balance of construction costs.

EIMER: That, too. And you hate to have to rely on it, but I hope that the lending community doesn’t ease up, or ease up dramatically. Pre-leasing in Dallas has always been the amount of leasing you do after you break ground and before you get finished. Well, this cycle we have real pre-leasing requirements.

If the capital is there and the restraints aren’t, well, we have the best development talent in the world sitting right here in Dallas, and they’re ready to develop.

Do you think that we will get into a situation in the near term where a lack of supply could constrain growth?

SHERYL LANZEL

Jack Eimer of Transwestern and Kim Butler of Hall Financial Group.

EIMER: And all of a sudden we’ve got a huge generational gap. Decision-makers are trying to decide, how do I attract the highest class of millennials? And what should the space be like to help them be the most efficient? Because it’s probably different than what made me the most efficient. At the same time, they don’t want to get too trendy.

THELEN: Tenants are also starting to realize that they may need to compete for space.

Many of my clients are becoming more decisive, because they know they’ve got to make a decision or the space can go away. That’s one of the trends I think we’ll see for the next 12 months, as there’s going to be more demand than there is supply.

So what does that mean for development?

JOHNSON: It’s here. We’ve got a lot of land. The growth is going to continue to the north and now the northeast to some degree, and the northwest corridor is going to continue to evolve.

PUCKETT: But will it be excessive? Will we overbuild?

JOHNSON: It feels like it’s manageable. As we’re talking to prospects, it doesn’t feel like people are way out over their skis. They’re still careful about their decisions. And financing will evaluate whether it makes good sense or not. But the reality is, for these big, big deals, the only alternative is a build-to-suit.

EVERBACH: You hit on a good point: The lenders are helping us help ourselves.

ARLEDGE: Yes, forcing us. Forcing us.

EVERBACH: The money is available, but it is only available for developments that actually make sense and are not fee-driven. The worst headline I’ve seen in the last month was, “Lenders easing restrictions.” That’s a drug we don’t need here, because look at what happened the last three or four cycles. This time, development is restricted by capital, which is good. I think that’s the best medicine we can have. Keep it under control. I don’t think any of us want to see another bubble on the supply side.

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EIMER: I think that’s a legitimate question.

JOHNSON: For deals that are moving fast, for really large deals that just don’t have options, they might consider another city if they can’t find the options they want here in a timely manner. But those are few and far in between.

You still got a market that has 18 percent vacancy. In key markets, there is a shortage of large quality blocks of space, but there are still ample options.

Looking ahead, what are the biggest challenges the DFW office leasing market office will face this year?

EIMER: I was asking some of the brokers in our shop about that, and their response was: managing client expectations—on both sides.

PUCKETT: That’s a good point.

EIMER: We’re in a market—it’s a sliver of time in Dallas called a landlord’s market. And it doesn’t last very long, usually. You’ve got landlords now getting pretty aggressive. On the other hand you’ve got tenants trying to get deals that maybe their friends got just a year ago. They don’t understand why they can’t get the same deal.

It’s an interesting point, and it’s on both sides of the spectrum.

THELEN: Long-term, I think our biggest challenge could be our water solution, as we start approaching 10 million people in this area.

Short-term, I think it’s the demand on construction services. We’ve got Midland competing for it, we’ve got Houston competing for it— people are being drawn all over the state. And then I think we’ve got to make sure our trans-

portation network stays ahead of the growth.

We don’t want to be a bottleneck community.

We want to make sure DART works and that our highway systems work. I think we’re heading in the right direction with that, but I think those are the concerns I have, short- and longterm.

BUTLER: I agree that we’re making a lot of progress, but the water issue is something we need to look at. Just recently out in Frisco, we were installing a new type of grass. It’s actually combination of five different grasses. It was developed at the University of Texas, and it’s used at the Bush Library. It requires very little water.

The education of developers and corporate users that are building their own facilities, on how we can conserve our natural resources better—I think that’s going to be key.

EIMER: We know that we’re going to be facing rising interest rates. We’re in an abnormal period of time. And we’re all learning to live within the low interest-rate environment. It’s affecting everything. It is going to change. It has to, and it will be interesting to see what impact that has.

EVERBACH: And as rates go up, one side, seller or buyer, is going to have to accept a lower return. Last time this occurred, the buy side accepted a lower return. That will probably happen again, because there’s so much cash available. Currently, there’s a tremendous amount of capital looking at Dallas. From a stability standpoint and an attractiveness standpoint for that capital, Dallas, unlike five or seven years ago, is a bull’s-eye on the map. It was the coasts, and then Houston worked its way in there because of the energy concentration and the attractiveness of that market as the third coast. But now, the DFW area is very well positioned, and I think that will continue for the foreseeable future.

ARLEDGE: All that capital that had been on the sidelines is now in the field.

THELEN: An expression I heard is, “You’re never as good as you think you are, and you’re never as bad as you think you are.” We’re somewhere in between.

PUCKETT: In terms of challenges, I go back to downtown. Our city will always need a healthy CBD. The great news is that good things are happening downtown again. But if we don’t get focused on this parking issue, we’re going to have some serious problems. The city, or whoever

IT’S EASY TO BE SLOPPY IN A GOOD MARKET. BUT NOW’S THE TIME TO BE THOUGHTFUL AND VALUE YOUR CLIENTS. — JOHNNY JOHNSON

needs to get this going, needs to get it going now. The good news with our CBD is we’re getting great new ownership of many properties; good things are happening.

JOHNSON: For a long time, people talked about revitalizing downtown; and, with such strong sponsorship, it’s finally happening. Fountain Place is a good example. A new owner is coming in who will transform the asset, address the parking issue in a huge way, play into what the neighbors are doing all around the building. It’s going to help transform part of downtown that for too many years languished.

ARLEDGE: People can do what Craig Hall did: build a parking garage and share the facility, utilizing it for different amenities. There have to be more opportunities to do public-private opportunities like that for parking.

Let’s close by getting everyone’s general outlook with regard to office leasing activity for the next 12 months.

PUCKETT: Extremely optimistic, based on current workload.

EIMER: Yeah, very optimistic. This is a time when the sun’s shining, and you’ve got to take advantage of it. If there was ever a time to work real hard, it’s now.

BUTLER: Fortunately, we have great city leaders and heads of companies looking at the city and the vision and how do we protect its health going forward. That’s something other cities also enjoy, but I think in the Dallas region as a whole, we have more leadership in place solving the problems of the future. So I feel great about it.

EVERBACH: If you’re on the investor/owner side, your returns are going to increase for the foreseeable future. If you’re on the tenant’s side, your rent’s going up. So, I’m optimistic for the DFW area, cautiously optimistic nationally.

JOHNSON: Now’s the time to not just work hard, but work smart. Clients need us now more than ever. Work smart for them. It’s easy to be sloppy in a good market, but now’s the time to be thoughtful and value your clients.

ARLEDGE: I wouldn’t have said this two years ago, but now’s a great time for young college graduates, 20-somethings, to get into the real estate business. We’re starting to see more graduates look at commercial real estate as an option again.

THELEN: I’m optimistic. Everything looks good. Companies are going to continue coming to Dallas. We’re going to see more development in Uptown and Preston Center, and we’ll see a lot of build-to-suits in the northern suburbs, as there’s a lack of that type of space up there right now.

Well, it sounds like the future looks bright. Thanks to everyone for sharing your insights and perspectives today.

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Itâ&#x20AC;&#x2122;s hard to appreciate of the size and scope of CityLine without a little perspective. Consider that in 1940, a century after Richardson was first settled, the small town was home to just 740 people.

By 1961, it had about 16,800 residents. When CityLine opens in late 2015, the development will have a daytime population of more than 16,000. In other words, it will replicate growth that its hometown took 120 years to achieve.

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A ANATOMY OF A DEAL

BUILDING A CITY WITHIN A CITY

By Kerry Curry

S

TED WILSON

DALLAS REGIONAL CHAMBER

o, what does it take to build a city within a city? A huge team of players at the top of their game—and plenty of cooperation. At full build-out, CityLine will contain 6 million square feet of office space, 300,000 square feet of retail space, and thousands of apartments.

Already, State Farm has signed on for 2 million square feet of office space, and Raytheon will take another 500,000 square feet. A 150-room Aloft hotel is in the works, as are a Cinemark movie theater, a 17,000-squarefoot fitness and wellness facility, numerous shops and restaurants, more than 500 apartments, and a shopping center anchored by a specialty grocer.

City Manager Dan Johnson credits former civic leaders with recognizing the importance of mass transit.

Richardson has four rail stops on the Dallas Area Rapid Transit’s red line, including one that’s part of the CityLine development. The city also sought to keep the land as one large tract to attract a large-scale, high-impact project, Johnson says. “Truly, if you really study the story of this, it is an anatomy of decades,” he says. “It is the result of many prior leaders and administrators doing the right thing on their watch in order for it to be ready to be developed by the current team.”

Another key factor was the construction of the President George Bush Turnpike, which provides important access to the property. In 2010, approvals were secured for form-based zoning, which allow a developer to meet timeframes with minimal red tape. The city also put into place a tax increment financing district, as it knew the

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 3 9

THANK YOU For a project to accomplish great success, it takes a great team. Cassidy Turley is thankful to have had the opportunity to work with such talented companies, and want to say thank you to State Farm, KDC, Corgan and all the other members of the team.

Discover Success in Tenant Representation www.cassidyturley.com | 972.692.1750 Property Management / Capital Markets / Corporate Services Tenant Representation / Project & Development Services / Project Leasing

CITYLINE NUMBERS

1.1 MILLION MAN HOURS

HAVE BEEN PUT INTO THE CONSTRUCTION IN ONE YEAR.

108,000 CUBIC YARDS OF CONCRETE JUSTIN TERVEEN

HAVE BEEN POURED.

MORE THAN

site would require a significant investment in infrastructure. It was a strategic move to foster interest in the land, Johnson says.

KDC, which had developed other large projects in Richardson, began looking at the property in 2012. “We were seeing more interest from corporate users in transit-oriented, live-workplay developments,” says Toby Grove, president of KDC. The company began master-planning the site and pursuing build-to-suit opportunities. It was then that discussions with State Farm began.

KDC put the 186-acre tract under contract, and closed on its acquisition in December 2013.

By March 2014, it was breaking ground on State Farm’s new campus.

“We’ll have roughly 16,000 people on this site on a daily basis in a relatively short time frame,” Grove says. “That supports the residential and the retail and provides a great environment for employees.”

THE RIGHT FEEL To help create CityLine’s flow and sense of place, KDC turned to a team of experts, including Omniplan, which established criteria for

things such as streetscapes, storefront design, and lighting. It set requirements on how wide sidewalks could be and how parking should be configured.

“I think the whole project is interesting because it underlines how the workplace is changing,” says Tip Housewright, principal at Omniplan. “Young employees want to work in a vibrant workplace. Here’s a major corporation [State Farm] that is partnering with KDC to reinvent the workplace.”

Omniplan collaborated with a number of other firms, including Corgan, Good Fulton & Farrell, the Office of James Burnett, Kimley Horn, and Retail Street Advisors.

Once CityLine is developed, Transwestern will oversee property and facilities management for the whole shebang. The commercial real estate firm beat out several other contenders to secure the plumb assignment—the largest in Transwestern’s Central region.

“This is a phenomenal development with so many different facets,” says Jack Eimer, regional president of Transwestern. “It’s going to really anchor Richardson and transform the market.”

12,000 TONS OF REBAR

HAVE BEEN INSTALLED.

AN AVERAGE OF

950 WORKERS HAVE BEEN ON SITE ON A DAILY BASIS.

MORE THAN

2.5 MILLION SQUARE FEET

OF OFFICE SPACE ARE INCLUDED IN PHASE 1 AND 2.

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 4 1

A ANATOMY OF A DEAL

In April of 2012, execs from State Farm got in touch with their longtime North

KIND OF A

BIG DEAL State Farm’s four-building, 2 million-square-foot lease at CityLine is the largest office transaction in DFW’s history.

Here’s a behind-the-scenes look at how it evolved.

By Christine Perez

TIMELINE Since 2012, State Farm has leased more than 4 million square feet of DFW office space.

Texas real estate brokers, Randy Cooper and Craig Wilson of Cassidy Turley, to talk about a top-secret expansion the company was considering. It was a deal that could potentially be as large as 500,000 square feet, maybe one day expanding up to 750,000 square feet. The insurer was thinking it would look for an existing facility with land for expansion, or perhaps it would build from the start, a typical campus of tilt-wall buildings with surface parking.

By the summer of 2012, Cooper and Wilson had taken different State Farm execs on tours of numerous sites. After one such tour, the brokers gathered with their clients in a hotel lobby to recap the possibilities. It just so happened that a number of different division heads were there, and they used the opportunity to have an internal meeting. Each leader talked about anticipated employee counts for certain divisions within the organization. Cooper and Wilson took notes and did some quick math. The numbers added up to about 7,500 jobs.

The brokers looked at each other, silently reaching the same conclusion: State Farm was going to need a whole lot more than 750,000 square feet.

There had also been some discussions that maybe a tilt-wall campus wasn’t the way to go. Instead, what if the company created a place that would help it recruit and retain a vibrant workforce as an “employer of choice.” What if it created an exciting environment where people would want to spend their entire careers?

After that, everything changed. Because of the larger size requirement, developing a new campus was the only real possibility. But State Farm didn’t want to delay its growth. So that meant also finding large blocks of existing space where it could bring on new employees. On top of everything else, the company needed a place to house its large catastrophic operations center.

“The market was really confused,” Cooper says. “We were looking for temp space and long-term space, no one knew who the client was, and we were all over the city.”

A KDC-controlled site near the intersection of State Highway 190 and U.S. 75 quickly emerged as a front-runner for State Farm’s campus. The tract offered access to a deep labor pool, both within Richardson and other cities in all directions, with its on-site DART station. And the design possibilities were endless. In one development meeting, the team was talking about the efficiencies of value office buildings with 40,000-square-foot floorplates. Steve Van Amburgh, CEO of KDC, looked at the group and said: “You’re going to need 40 of those!”

September 2012 State Farm leases 405,000 s.f. from Brookfield for a national catastrophic operations center at Regent Commons in Irving.

January 2013 State Farm enters into lease agreement with Champion Partners for 311,000 s.f. in two building at 2375 N. Glenville in Richardson.

2 0 12

April 2012 Cassidy Turley kicks off “Project Guapo” for State Farm.

2 0 13

August 2012 State Farm enters into a lease with Champion Partners for 291,000 s.f. at 1011 Galatyn Parkway in Richardson.

4 2 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

December 2012 State Farm leases 1.52 million s.f. from KDC for the first three office buildings at CityLine in Richardson.

June 2013 State Farm leases 812,000 s.f. from Cawley Partners and the owners at Lakeside Campus in Richardson.

June 2013 State Farm renews its lease with UBS at 8222 Belt Line in Irving for 135,000 s.f.

2014

April 2014 State Farm enters into a 530,000 s.f. lease with KDC to construct a fourth building at CityLine.

JUMPING THROUGH HOOPS

Randy Cooper

Craig Wilson

HELENA BOLOGNA

Van Amburgh went on to explain that State Farm could have all of the efficiencies of tilt-wall buildings by building taller buildings of varying heights—that it could create the exciting “city” environment the company wanted. “It was a great moment,” Cooper says.

Critical to making it work was the availability of large vacant blocks where State Farm could take immediate occupancy.

Market conditions worked in State Farm’s favor, and the company was able to secure about 2 million square feet in various facilities. Local ownership and cooperative existing tenants (see “Jumping Through Hoops” at right) helped everything come together.

The landlords—Jeff Swope and Steve Modory at Champion Partners and Bill Cawley with Cawley Partners—saw a revenue opportunity, but they had their civic hats on, too, Wilson says: “They were just as excited about the economic impact and what it meant for Dallas.”

State Farm will be an outstanding corporate citizen, Cooper says. “If you look at their track record, they’re all about em-

ployee retention and community involvement,” he says. “They have a strong history of being a key component of any community they’re in.”

The assignment meant about two years of nearly nonstop work—nights, long weekends, and missed summer vacations. “It was stressful, it was fun—it was all worth it,” Wilson says. “It was one of those things you hope you get to experience again, but know you probably never will.”

A critical element in paving the way for State Farm to expand in North Texas was finding large blocks of space for the company to occupy while its CityLine campus was being built. This was complicated by the fact that three of the spaces were occupied by other tenants. State Farm’s brokers, Randy Cooper and Craig Wilson of Cassidy Turley, had to secure triparty agreements with the existing tenants—all huge corporations— agreeing to early move-outs:

CITIGROUP

405,000 s.f.

Regent Commons, Irving

BANK OF AMERICA

311,000 s.f.

2375 N. Glenville, Richardson

S TAT E FA R M D A L L A S H U B AT C I T Y L I N E

DESIGNING FOR WHAT’S NEXT

ARCHITECTURE

DALLAS REGIONAL CHAMBER

|

INTERIOR DESIGN

ERICSSON

812,000 s.f Lakeside Campus, Richardson

|

CORGAN.COM

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 4 3

A

SKYBRIDGE

ANATOMY OF A DEAL

STATE OF THE ART

> Connects One and Two CityLine at the sixth level to connect conference and training areas at all three buildings. > 203 feet long overall. > Primary span of 145 feet was constructed almost entirely on the ground and this nearly 100-ton piece was lifted into place with a single crane. > The bridge also carries chilled water piping and other utilities between buildings to allow for a single Central Utility Plant to serve all three.

KEY PLAYERS DEVELOPER: KDC | TENANT: State Farm CONSTRUCTION TEAM

DESIGN TEAM Architect: Corgan

Contractor: Austin Commercial

Interior Design: Corgan

MEP: Brandt

Civil: Kimley-Horn

Concrete Formwork: Capform

Landscape Architect: Office of James Burnett

Concrete Formwork: Potter

Structural: L.A. Fuess

Concrete: TXI

Concrete: Southern Star

MEP/FP/Security: Telios Roofing: Amtech

Precast Concrete: Gate Precast

Parking: HWA

Glazing: Harmon

Code: Aon

Drywall: Drywall Interiors

Door Hardware: Allegion

Access Flooring: Prestige Interiors

Vertical Transportation: HH Angus

Millwork: Woodhaus Elevators: Thyssen Krupp

Accent Lighting: LuM Acoustical: Jaffeholden Signage / Wayfinding: RSM Envelope: Vertical Solutions Wind Engineer: CPP (Cermak, Peterka, Petersen) Audio Visual: GAP Solutions Group

State Farm lobby

GOING UP

2014

2 0 15

2 0 16

LIVE-WORK-PLAY July 2014 Four buildings under construction

May 2015 Two CityLine to be occupied January 2015 One CityLine and Three CityLine to be occupied

4 4 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

Employees will have easy access to many amenities.

Q1 2016 Four CityLine to be occupied

689 MILLION POUNDS OF CONCRETE

OPEN AIR PLAZA

One, Two, Three, and Four CityLine will use a projected 170,000 cubic yards of concrete upon completion. That would weigh about 689 million pounds.

From the start, State Farm's new campus will house more than 8,000+ employees—a ready consumer base for retail and restaurant tenants.

The focal point of the initial phase will be CityLine Plaza, a centrally located urban plaza designed by the Office of James Burnett, the landscape architect of Dallas’ Klyde Warren Park. The natural looking landscaped plaza will off er open space for outdoor concerts and festivals, shaded gathering spots for meetings or meals and walkways for pedestrian experiences.

GLASS AND STEEL AT TWO CITYLINE

ON A PEDASTAL

An 80'x50' glass-enclosed corner element will culminate in a series of illuminated fins that extend another 50 feet above the highest concrete roof, using more than 60 tons of steel.

Each building sits atop a fi ve-level parking structure over ground-floor retail space.

IMMEDIATE IMPACT

STATE FARM’S

LEASED SPACE IN CITYLINE TOTALS

2 MILLION SQUARE FEET

SOURCE: CORGAN, L.A. FUESS, DALLAS-FORT WORTH REAL ESTATE REVIEW RESEARCH

150-ROOM ALOFT HOTEL

403 APARTMENT UNITS

300 APARTMENT UNITS

20,000 SQUARE FEET OF ENTERTAINMENT SPACE

CITYLINE PLAZA More than 92,000 square feet of retail, restaurant, and entertainment venues with sidewalk cafes and patio seating will frame CityLine Plaza and State Street.

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 4 5

A ANATOMY OF A DEAL

Not everyone has a vision

A PLACE TO

WALK

ABOUT

BY KAILEY GAMBL E

Most cities grow in random fashion, evolving bit by bit over time. Imagine having the opportunity to design a community for more than 16,000 people—from scratch. That’s exactly what a collaborative team of designers have had the opportunity to do with CityLine.

They’ve been able to consider pedestrian traffic flow and how the different components should best interact.

“What’s exciting about the CityLine project is that it’s a state—if not national—example of where contemporary office and residential mixed-use development is going,” says Dan Johnson, Richardson’s city manager.

The opportunity to plan such a development is rare.

It’s all made possible by the fact that CityLine is anchored by at least 2.5 million square feet of office space for State Farm and Raytheon. That creates a readymade base of consumers to support the simultaneous development of residential, hotel, medical, entertainment, and retail space.

The walkable urban development will promote a healthy lifestyle and provide plenty of opportunities to get outside. The first phase will include two parks, the 1.3-acre CityLine Plaza and the 3.5-acre CityLine Park.

Both are being designed by renowned landscape architect the Office of James Burnett, designer of Dallas’popular Klyde Warren Park. On the east side of the project, nearly 20 acres are currently set aside for green space.

CityLine Park will provide a welcome respite from the hustle and bustle of work, Johnson says, with a quiet wooded area right next door. “There are some very tall trees—some that have been there for decades,” he says. “Other trees will be planted. The meandering trails will create almost a treehouse-effect, because of the terrain that falls down below.”

Many companies want to create their own campus and have their own amenities. CityLine goes well beyond that and takes a new approach, says Joe Haver, project manager with Corgan.

“The live-work-play, this excitement, this vibrancy—I think it’s going to be a really neat place to be,” he says.

CONGRATULAONGRATULATIONS LATIONS Proud to be a part of CityLine MEP Engineering Technology Commissioning Owner Representation

Listen Solve teliospc.com 4 6 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

GETTING OUTSIDE Two parks will be developed as part of CityLine’s first phase:

CITYLINE PLAZA SIZE: 1.3 acres LOCATION: Centrally located within the development FEATURES: A naturallooking landscaped plaza will off er open space for outdoor concerts and festivals, shaded gathering spots for meetings or meals, and inviting walkways for an enjoyable pedestrian experience. More than 92,000 square feet of retail, restaurant, and entertainment venues with sidewalk cafés and patio seating will frame CityLine Plaza and State Street.

CITYLINE PARK SIZE: 3.5 acres LOCATION: Western side of phase one, bounded by the DART red line.

FEATURES: The park will off er expansive open space, a hike-and-bike trail that will ultimately extend as far south as White Rock Lake, an amphitheater, and a children’s play area.

OUTSIDE. IN THE CITY. In Line With The Future. A new mixed-use development at George Bush Turnpike and Central Expressway. Coming summer 2015. Office, restaurant and retail spaces available now.

CITYLINE DFW.com D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 4 7

Thank you, KDC, for selecting A&P as your builder for Raytheonâ&#x20AC;&#x2122;s new Richardson campus.

innovate. collaborate. outperform.

4 8 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

A ANATOMY OF A DEAL

Communities typically evolve and grow over time. But the pure scale of CityLine’s office component— more than 2.5 million square feet—means immediate support for residential, retail, hotel, entertainment, medical, and other uses. With so many amenities on site, here’s how a typical CityLine worker might spend his or her day.

6:30 A.M. Hit the snooze button for an extra 15 minutes in your CityLine apartment—no traffic jams for you. Wake up, walk the dog, and start your day.

7:00 A.M. Stroll through the plaza to drop off dry cleaning.

7:15 A.M. Head to the wellness center for yoga class.

Hit the showers to get ready for the work day.

8:30 A.M. Stop off at a Grab-nGo station for coffee, a banana, and a muffin.

8:45 A.M. Arrive at the office.

NOON Meet a friend at the DART's red line station, then walk to a fastcasual restaurant. Get lunch to go and eat outdoors in the plaza.

1:00 P.M. Stop off at the apartment to check on the dog. Call CityLine hair salon to confirm the next day’s appointment, then pick up a prescription on the way back to work.

1:30 P.M. At the office again.

3:00 P.M. Walk to the Aloft hotel to meet out-of-town co-workers arriving for a two-day conference.

3:30 P.M. Back to the office for meetings.

Administrative assistant brings in trays of goodies from the first-floor deli.

5:00 P.M. Take advantage of the nice weather and catch up on emails using the free Wi-Fi in the plaza.

5:30 P.M. Head to the tavern for happy hour.

6:30 P.M. Walk back to the apartment, take the dog for a walk around CityLine park, then get ready for the evening.

7:30 P.M. Walk to the plaza and have dinner with outof-town co-workers.

8:45 P.M. Make a quick stop at Whole Foods for some milk, produce, and organic dog food.

Run into neighbors on the walk back to the apartment.

9:30 P.M. In for the night.

Congratulations KDC, and Welcome State Farm and Raytheon

State Farm at CityLine, Richardson, TX INNOVATION | EXPERIENCE | SERVICE

CityLine is transforming Richardson’s skyline www.telecomcorridor.com D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 4 9

A ANATOMY OF A DEAL

State Farm's office towers are situated on five-level parking structures, along with ground-floor retail space.

PRESIDENT GEOR A DART plaza welcomes transit riders and encourages them to shop and dine. Parking for DART Bush Turnpike rail station is under the Bush Turnpike overpass.

GE BUSH TURNPI

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5 50 0 // DDAA LL LL AASS -- FFOORRTT W WOORRTTHH RREEAALL EESSTAT TATEE RGEUVI IDEEW

1 CityLine One State Farm Office 360,000 s.f.

2 CityLine Two State Farm Office 710,000 s.f.

3 CityLine Three State Farm Office 450,000 s.f.

4 CityLine Four State Farm Office 530,000 s.f.

5 Aloft Hotel 150 Rooms 6 CityLine Plaza

19 26

CITYLINE DRIVE (PLANNED)

11

LAY OF THE LAND

23

16

4

N. PLANO RD.

1

L RE RAI DAR T

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Once the initial phase is complete, the daytime population at CityLine will top 16,000.

KE

5

ALOFT HOTEL

The $1.5 billion CityLine sits on 186 acres.

KDC thought the name "CityLine" was especially appropriate because the project will be an instant "city within a city."

At full build-out, the project will include 5 million square feet of office space, 300,000 square feet of retail space, 3,925 apartments, and two hotels.

24

ECONOMIC IMPACT OVER A 10-YEAR PERIOD

KDC plans to achieve LEED Silver certification from the U.S. Green Building Council.

THE PROJECT WILL DIRECTLY AND INDIRECTLY EMPLOY

About 1,700 employees will operate out of Raytheon's new CityLine campus

25

WYND

28

HAM LN.

27

17,000 PEOPLE IN THE DFW AREA IT WILL DIRECTLY AND INDIRECTLY LEAD TO

When Raytheon was evaluating real estate options, it discovered that the center point of employeesâ&#x20AC;&#x2122; homes was just a couple of blocks east of CityLine in Richardson.

$7.3 BILLION DOLLARS IN SALARIES PAID THE CITY OF RICHARDSON WILL RECEIVE

$13.5 MILLION IN PROPERTY TAX REVENUE

An on-site shopping center will be anchored by a 40,000 s.f.

Whole Foods.

29

IT WILL ALSO RECEIVE

7 Multifamily 220 units

14 Office 500,000 s.f.

22 Whole Foods 40,000 s.f.

8 Multifamily 150 units

15 Office 700,000 s.f.

23 Office, 300,000 s.f.

9 Multifamily 300 units

16 Office 900,000 s.f.

10 Multifamily 300 units

17 Multifamily

25 Multifamily 200 units

18 Entertainment Complex

26 Multifamily 400 units

19 Multifamily 200 units

27 Multifamily 400 units

20 Multifamily 200 units

28 Raytheon Campus 600,000 s.f.

21 Multifamily 300 units

29 Office Campus 400,000 s.f.

11 CityLine Park 3.5 acres 12 Multifamily 400 units (Third Party) 13 Multifamily 400 units (Third Party)

$7.2 MILLION IN SALES TAX REVENUE

Subterranean loading will allow the functional elements of restaurants and retail at CityLine Plaza to be hidden and not detract from shopping and dining experiences.

5

SOURCE: City of Richardson

DART BUSH TURNPIKE STATION

24 Multifamily 200 units DARKSERGE20

Runners and cyclists will ultimately connect to a trail system that runs as far south as White Rock Lake.

30 DART Bush Turnpike Station 31 Entertainment complex 32 Medical office building 42,000 sf 33 Anchored retail center 11.33 acres 34 Hotel SOURCE: DALLAS-FORT WORTH REAL ESTATE REVIEW RESEARCH

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 5 1

LOCATION

A ANATOMY OF A DEAL

30.5-acre tract at the southwest corner of State Highway 190 and Wyndham Lane.

CREATING A HIGH-TECH

COMMAND

CENTER

BY CH RI ST I N E PE RE Z

Raytheon isn’t one to move around a lot. In fact, its current Jupiter Road complex in Garland, which houses its Intelligence, Information and Services (IIS) operations, dates back to the 1950s. But things are about to change—in a big way.

The defense contractor will join State Farm as an office anchor of CityLine, occupying a new three-building campus KDC is developing at the southwest corner of State Highway 190 and Wyndham Lane in Richardson.

In announcing the news, Lynn Dugle, president of Raytheon IIS, said the development would allow for expansion as the business unit grows. “Our new offices will also help us support the missions of our customers and will better reflect our role as a global technology and innovation leader in such areas as information processing, big data, cyber security, and weather data exploitation,” she said.

About 1,700 employees will move to the new campus when it’s complete in late 2015 or early 2016. Most will have a much shorter commute. When Raytheon was evaluating real estate options, it discovered that the bullseye of a scatter map of employees’ homes was just a couple of blocks east of CityLine in Richardson.

In May, Bill Foley, director of operations for Raytheon, told a crowd at a Richardson Chamber of Commerce luncheon that the company picked the CityLine site because the location provided access to a young, technical workforce. The look and feel of the campus, designed by Dallas-based HKS Inc., will be more in line with the defense and aerospace industry, he said, and is destined to become a DFW engineering hub.

In addition to Richardson’s highly skilled labor force, access to DART’s Bush Turnpike Station was key factor in Raytheon’s selection of CityLine.

Toby Grove, president of KDC, said the new tenant will fit right in, complementing the entire development and enabling Raytheon “to attract and retain the best possible talent for years to come.”

The company was represented in its search by Brad Selner and Stephen Holley with the Dallas office of JLL, along with Michael Condon and Brendan O’Shaughnessy with JLL’s Los Angeles office.

Raytheon has about 8,000 employees in the North Texas region, including those who work for the IIS division. Other operations include Raytheon’s Missile Systems division and its Space and Airborne Systems group, which last year moved to McKinney from Southern California.

THE LOOK AND FEEL OF THE CAMPUS, DESIGNED BY DALLAS-BASED HKS INC., WILL BE MORE IN LINE WITH THE DEFENSE AND AEROSPACE INDUSTRY.

5 2 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

KEY PLAYERS DEVELOPER: KDC TENANT: Raytheon DESIGN TEAM Architect: HKS Inc. Interior Design: HKS Inc. Civil: Kimley-Horn Landscape Architect: TBG Structural: RLGoodson MEP/FP/Security: Syska Hennessy Group MP Design Build: TD Industries Electrical Design Build: Walker Engineering Roofing: Amtech CONSTRUCTION TEAM Contractor: Adolfson & Peterson MP: TD Industries Electrical: Walker Engineering Fire protection: North Star Earthwork: Vilhauer Concrete: Osburn Site Utlities: Wright Construction Steel: Thornton

COMPONENTS Two three-story, 145,719 s.f. office buildings; one four-story 194,773 s.f. office building, and one single-story 4,000 s.f. storage and distribution facility.

TIMING Construction kicked off in July 2014; completion is scheduled for late 2015 or early 2016.

SECURITY The campus will be secured by a 6-foot fence and have 24-hour manned guard shacks at all three entrances.

Source: City of Richardson

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 5 3

A ANATOMY OF A DEAL

A MULTIFAMILY

HOME RUN

BY G L E N DA VO S B U RG H Thousands of workers will converge upon CityLine when State Farm and Raytheon move into their new office buildings in 2015. Some will have just a short walk to work, with residential options conveniently located on site.

Construction will begin in early August on the first of two planned luxury apartment communities. Dallas-based JLB Partners is pairing up with CityLine developer, Dallas-based KDC, to build the multifamily components.

JLB’s projects will provide 532 apartment units in the heart of the development, CityLine Plaza. The yet-to-be-named communities will sit just south of the office buildings being built on Plano Road. The first phase will be a four-story project wrapped around a parking garage that sits above ground-level retail. The second phase will be five stories tall.

Apartment units will range from one to three bedrooms and 573 square feet to 1,550 square feet. Amenities include resort-style swimming pools, fitness centers with cardio and strength training options, and pet-friendly perks, including a dog park and dog washing station. The properties also will offer bicycle storage for residents who want to take advantage of the city of Richardson’s nearby trail system.

“From the ground up, this is going to be a very urban environment and it’s going to happen very quickly, instead of evolving over time as some mixed-use developments do,” says Walt Mountford, vice president of KDC. “When the office component is done in May 2015, we will have 900 apartments ready for residents, along with the hotel and restaurants.”

The massive development also is sparking additional construction nearby.

Immediately south of CityLine at Plano and Renner roads, Zale/Corson Group Inc. is developing The Standard at CityLine. Comprised of four- and five-story, urban-style residential buildings with retail on the ground floor, the first section of phase one is expected to open in November.

The Standard will include a total of 836 multifamily residential units with structured parking. Teresa Nix, a spokeswoman for Zale/Corson, says the firstphase units will range from 540-square-foot efficiencies to 1,008-square-foot one-bedrooms. Two-bedroom units will start at 984 square feet; three-story townhomes will be as large as 1,949 square feet, with 3.5 baths and attached two-car garages.

Interiors will feature granite in kitchens and bathrooms, 13-foot ceilings on the first level and 10-foot ceilings on other floors, and large walk-in closets. Amenities will include a large fitness studio with a spin room, a lap pool with a fountain, sun deck, outdoor grills, cabana, a two-story clubhouse, business center, conference room, game room, and a café lounge with Wi-Fi.

THE MASSIVE DEVELOPMENT ALSO IS SPARKING ADDITIONAL CONSTRUCTION NEARBY.

5 4 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

The Standard will feature urban-style residential buildings.

THE STANDARD AT CITYLINE UNITS: 836 units total 403 units in Phase I ARCHITECT: JHP Architecture/ Urban Design PC INTERIOR DESIGN: Moore Design Group CIVIL: Kimley-Horn and Associates Inc. STRUCTURAL ENGINEER: Urban Structure ELECTRICAL ENGINEER: H.E.C Holdings Electrical LANDSCAPE ARCHITECT: Studio Outside MEP/FP/SECURITY: PHA Consulting Engineers GENERAL CONTRACTOR: Zale Properties Inc. DEVELOPER: Zale/Corson Group SOURCE: Zale/Corson

CITYLINE PROJECT (NOT YET NAMED) UNITS: 532 DEVELOPER: JLB Partners ARCHITECT: Good Fulton Farrell INTERIOR DESIGN: HBC Design Group CIVIL ENGINEER: Kimley Horn STRUCTURAL ENGINEER: United Structural Consultants ELECTRICAL ENGINEER: Jordan and Skala LANDSCAPE ARCHITECT: Enviro Design MEP/FP/SECURITY: Jordan and Skala GENERAL CONTRACTOR: JLB Builders

A DEVELOPMENT THAT'S

BUILT TO LAST

SUSTAINABLE STRATEGIES LEED initiatives at CityLine include:

BY KAILEY GAMBLE

>> Development density and community connectivity—dense urban development.

With CityLine, KDC and its design and construction partners aren’t just developing a

>> Alternative transportation—easy access to DART's Bush Turnpike Station.

master-planned community for today—they're keeping tomorrow very much in mind.

That means a commitment to sustainability. For the office components, LEED Silver certification from the U.S. Green Building Council will be pursued, which involves using recycled and renewable materials and water- and energy-efficient strategies.

Density plays a key role, says Joe Haver, project manager at Corgan, which designed State Farm’s campus. Environmental impact will be lessened by building up, rather than out. “You’ve also got the live-work-play, with retail and residential,” Haver says. “So people can do all three of those things without having to get in their cars and leave the site.”

Security and sustainability are the two most important considerations for Raytheon, says Brady Ream, project executive with Adolfson & Peterson, which is constructing the defense contractor’s three-building office campus at CityLine. The company and its subcontractors are using energy-efficient materials and heating and cooling systems. “And we’re recycling a ton of concrete,” Ream says.

>> Water-efficient landscaping—native plant materials with low water consumption. >> Energy optimization—high-performance building envelope (roofs, ceilings, exterior walls, windows, doors, etc.); efficient lighting. >> Recycled content—use of environmentally sensitive products. >> Regional materials—use of locally sourced materials. >> Low-emitting materials—use of low-VOC products for sealants, paints, and flooring systems.

SOURCE: Corgan

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 5 5

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WHAT IS AN FTZ? A Foreign Trade Zone is a parcel of land deemed to be outside of the United States for purposes of duty assessment. Companies located in an FTZ are able to defer, reduce, and/or eliminate import duties.

5 6 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

A

mong the many advantages DallasFort Worth has to offer is access to Foreign Trade Zones, which can save companies millions of dollars in taxes. A new fast-track approach opens the program up to more companies—and reduces the cost.

For Dallas-Fort Worth, this has led to a boost in FTZ participation and import volume. Approved in January 2010, the expedited procedures were created to help make domestic businesses more competitive internationally. Called Alternative Site Framework, or ASF for short, the program is available to companies that aren’t located inside pre-designated FTZ sites but are within the eightcounty Dallas-Fort Worth service area. Those companies must submit an application to the U.S. Foreign Trade Zone Board in Washington, D.C., to designate their building as a “usagedriven site.”

Companies that are located within a predesignated FTZ site simply need to file an activation application with U.S. Customs and Border Protection, a process that also comes with assistance from the FTZ grantee. An FTZ grantee sponsors companies that are working to get FTZ designation. As such, they file necessary applications on behalf of the company. They don’t assist monetarily in the process. In fact, a company that applies has to pay the grantee a fee (see checklist for fees) to file and review the applications and assist the company through the process. Grantees also help manage and maintain FTZ designations throughout the metro area.

Under the new system, the time to gain approval for an FTZ designation has been shortened from about a year to 45 days, or sometimes as quickly as three weeks.

Created in 1934, FTZs allow businesses to delay, reduce, or eliminate customs duties

DFW-AREA FOREIGN TRADE ZONE SPONSORS

on material, parts, components, or finished products imported from other countries. This, in turn, lowers the cost of engaging in international trade. Other benefits include paying no state or local personal property taxes on imported inventory or domestic inventory held for export.

Since the ASF was put into place, there has been an increase in demand from companies applying to establish zones within the service area. Zones are essentially the same as an FTZ and are established and operated within the confines of a company’s warehouse. Officials with the Dallas-Fort Worth International Airport FTZ, known officially as Foreign Trade Zone No. 39, said that between January 2010 and April 2014, the DFW Airport Board, which is the grantee for No. 39, has set up 11 new zones in the area, with two more in the works. By comparison, in the 31-year period between August 1978 (when DFW became a zone grantee) and January 2010, a total of 16 zones were established.

FTZ NO. 39 DALLAS/FORT WORTH

Grantee/Operator: Dallas/ Fort Worth International Airport Board

FTZ NO. 168 DALLAS/FORT WORTH

Grantee: Metroplex International Trade Development Corp.

Operator: Foreign Trade Zone Operating Co. of Texas

FTZ NO. 196 FORT WORTH

Grantee: Alliance Corridor Inc. c/o Hillwood Development Corp.

FTZ NO. 113 ELLIS COUNTY

Grantee: Ellis County Trade Zone Corp.

CONTINUED 3

DALLAS-FORT WORTH FOREIGN TRADE ZONES For 70 years, the historical concept of FTZs was location-specific. Now, with federal government approval, it is possible to pre-designate regions as FTZ eligible so that specific businesses wanting the designation can receive approval for their specific operations at their business location in 30 days.

FTZ ELIGIBLE REGIONS For the North Texas region, 8 counties have this predesignated status.

GRAYSON

PRE-DESIGNATED "MAGNET SITES" DENTON

ALLIANCE AIRPORT

COLLIN

HUNT

COMPANY/SITESPECIFIC FTZs

DALLASFORT WORTH INTERNATIONAL

TARRANT

Any company may locate on this land and simply activate with Customs.

DALLAS KAUFMAN

For companies wanting FTZ status but which cannot locate in an existing magnet site.

ELLIS Sources: www.ita-web. ita.doc.gov, Dallas-Fort Worth Real Estate Review research

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 5 7

FTZ FACTS

14%

$732B

SHIPMENT VALUE

The 2012 U.S. FTZ shipment value was $732 billion, up 14 percent over the prior year

Alliance

$2.5 billion

$3.4 billion

(2013 numbers are not yet available)

DFW

THE TOTAL

A total of $3.4 billion in merchandise was received into the AllianceTexas FTZ in 2013, and more than $2.5 billion in merchandise was received into DFW’s FTZ.

NO . 1 VALUE

The AllianceTexas FTZ is the No. 1 general purpose FTZ in the U.S. in terms of value of foreign-status merchandise processed through the FTZ.

Although DFW officials credit the streamlined movement for a large part of that uptick, they said other factors, such as an economic upturn and the growth of industrial development on airport property, also played a role.

DFW officials helped six businesses set up company-specific FTZs, or subzones, outside of the pre-designated FTZ areas, between 1978 and 2009, before the ASF was in effect. Since 2010, four companies have established usageBill Methenitis, driven sites, and two global director additional companies of customs and are currently working international trade through the FTZ appliat EY LLP, says cation process. the streamlined Bill Methenitis, global procedures have director of customs and encouraged more international trade at EY midsize companies LLP who specializes in to consider operating in an FTZ. FTZs and works closely with DFW and FTZ applicants, said the streamlined procedures have encouraged more companies to consider operating in an FTZ. “We’ve seen more activity from medium-sized companies that previously had faced too many significant barriers in terms of upfront costs and the length of time of the approval process,” Methenitis says. “The return on investment for these smaller companies has been significantly accelerated.”

Christina Wood, manager of lease and property management at DFW Airport, says companies should first undertake an internal due-diligence process to make sure that the savings associated with operating in an FTZ justify the set-up and ongoing maintenance costs associated with the benefit. Although the status can provide a significant cost benefit for certain companies, it’s not for everyone. “Across the board, it really depends on their business model and whether they can reap enough of the benefits to offset the costs that come with setting it up,” she says.

Methenitis points out that those costs have been reduced from tens of thousands of dollars

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to between $5,000 and $10,000. In addition to applying to get the geography of the FTZ approved, companies can expect to incur costs to set up internal controls, systems, and reporting procedures that are necessary to stay in compliance.

In the case of Coppell-based Matrix Network Inc., a manufacturer and distributor of closed circuit television equipment to the video security and surveillance industries, that initial outlay of time and money made sense, considering that the company imports about 95 percent of its CCTV products from Korea, then packages and distributes them throughout the United States from its FTZ. But about four months after receiving approval to operate as a “user-driven site” within a designated FTZ service area, Matrix Network got an unexpected boost by the passage of the Korean Foreign Trade Act, which provided much of the same duties benefits to the company.

Still, Andi Hemann, Matrix Network’s vice president of operations, says the company continues to benefit from its designation in the form of reduced property taxes and merchandising processing fees. “We still save money in other ways,” she says. “It has been a real benefit to us.”

Because both the cost and the time frame have been reduced, Methenitis and Wood say the potential user base for FTZs has been considerably expanded. Companies that might only benefit from one smaller aspect of the FTZ may still find it a money-saving proposition. “The focus of the program has been broadened so that a wider set of

"The focus of the program has been broadened, so a wider set of companies are going to be interested. We've seen more activity in the past two years than we've seen in a long time."

—Bill Methenitis, EY companies are going to be interested,” Methenitis says. “We’ve seen more activity in the past two years than we have in a long time.”

Steve Boecking, vice president of Hillwood Development Corp., which, through Alliance Corridor Inc., is the grantee of FTZ No. 196, says the ASF has essentially eliminated a barrier for entry CONTINUED 3

FAST TRACK APPROVAL CHECKLIST Applying for a Foreign Trade Zone designation doesn’t have to be complicated—or time-consuming—if companies follow a few simple guidelines for undertaking the process.

APPLICATION PROCESS

STEP 1 File a written request to either the Dallas/Fort Worth International Airport Board (DFW) or Alliance Corridor Inc., which are the entities that submit applications to the Foreign Trade Zones Board on behalf of North Texas companies seeking FTZ status. The request must include the full name of the company, a description of business that will be conducted at the site, the address of the site, legal description of the site and a map showing the site boundaries.

STEP 2 Provide support letters from the city, county, and school district within which the site is located.

It is the responsibility of the company, or the company’s hired consultant, to obtain these letters.

STEP 3 STEP 4

Submit a one-time payment of $6,000 (if DFW) or $5,000 (if Alliance).

Provide a usage-driven site operating agreement.

STEP 5 STEP 6 Once the materials are received and reviewed, DFW or Alliance will request approval from the U.S. Bureau of Customs and Border Protection. Activation must then be requested by the company after the FTZ board approves designation of the site.

Usage-driven site designation usually takes about 60 days from the time DFW receives the material package from the company.

With the approval of new streamlined procedures in January 2010, the time it takes to gain approval for an designation as a “userdriven site” (for companies not operating within the boundaries of an FTZ) has been shortened from several months—and sometimes up to a year—to about 45 days, or sometimes as quickly as three weeks. Under the new program, the six-county Dallas-Fort Worth area became preapproved by the federal government as eligible FTZ property under the supervision of two FTZ grantees, the Dallas/ Fort Worth International Airport Board and Alliance Corridor Inc. That means that with the agreement of local officials, the federal government will provide any eligible business with FTZ designation on an expedited and simplified basis. A company’s address determines under which Grantee Service Area they will apply and operate their FTZ. DFW Airport covers the entire region except for the Alliance Corridor along I-35 West in North Fort Worth.

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T TOOLBOX for companies that are not sitting in a designated FTZ area but are within a service area, which covers most of the Dallas-Fort Worth area.

In the past, he says, it would typically cost a company thousands of dollars and could take up to 18 months for approval if the business was not already sitting in an FTZ, and the long approval process was extremely onerous.

Boecking says the service-area rules helped the region retain a Fortune 500 company.

7 FTZs are The company was located administered outside Alliance’s FTZ zone but by the Foreignwithin the service area. The Trade Zones business was expanding, and Board, under the was going to consider movU.S. Department ing out of state if it didn’t win of Commerce. approval as a user-driven site, 7 The FTZ Board Boecking says. But after receivgives privilege ing a quick approval under ASF, to FTZ grantees the company opted to stay and to establish, expand in Fort Worth. operate, and In another case, a medical maintain FTZs; company that had moved into approves the area but was not in a desigapplications nated FTZ also quickly gained for companies approval through ASF. setting up FTZs; “Neither of these two comand authorizes panies would still be players specific manufacturing in our area if it weren’t for activity allowed ASF,” Boecking says. “This rein FTZs. ally opens up the world to us.”

Methenitis says the DFW 7 FTZ activity is area has been a model for the supervised by rest of the country in terms U.S. Customs of taking advantage of its and Border status as an eligible FTZ area Protection. and of the increased ease of gaining approval that was SOURCE: Dallas-Fort Worth brought on by the ASF rules.

International Airport He adds that the executive director of the FTZ board was very complimentary of the region’s utilization of the program during a trip to North Texas about a year ago.

“There was a lot of positive feedback about how the DFW area embraced the new program and used it to provide maximum benefits,” Methenitis says.

“It’s something that is not paralleled anywhere else in the country.”

FTZ FACTS

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CASE STUDY

‘YOU HAVE TO BE PERSISTENT’ Tapping experts and asking questions helps move Foreign Trade Zone process along.

BY TANYA RUTLED GE

JUST A MONTH AFTER MATRIX NETWORK INC. RECEIVED approval to operate as a Foreign Trade Zone site, Vice President of Operations Andi Hemann attended a forum about how to expand international trade through the use of FTZs. Although informative, the forum came a bit too late for Hemann, who led her company’s process of applying for FTZ status. Matrix Network— an original equipment manufacturer and distributor of closed circuit television equipment to the video security and surveillance industries—received its FTZ designation mostly by trial and error, she said. The process involved asking a lot of questions and sometimes talking to the wrong people.

Matrix Network applied for designation as a “usage-driven site” several months after the expedited Alternative Site Framework was passed; still, the entire process took more than a year. That was due, in part, to timing. The Coppell-based company submitted its application in November 2010, during a time of government cutbacks when things were moving more slowly on state and national levels. These days, the approval portion of process typically takes only about a month.

“I essentially had to give myself a crash course in learning how to navigate this process,” Hemann says. “It’s not a hard process, but if you don’t know it, there can be a lot of stuff that you are unaware of.”

Hemann says hiring an FTZ consultant along the way helped Matrix Network officials get a better grasp on FTZs and made things go more smoothly. But everything became more clear after she attended the first-ever North Texas Foreign Trade Zone Forum in January 2013, a month after Matrix Network had received its approval.

“There was so much information there that I had to learn the long way, the hard way,” Hermann says. “I learned to call a lot of people and ask a lot of questions, but the information is so much more readily available now.”

Matrix Network manufactures about 95 percent of its CCTV products in Korea, then brings them into the U.S. and packages and distributes them from here. Some manufacturing is also performed in Taiwan and Hong Kong. FTZs allow businesses to delay, reduce or eliminate customs duties on material, parts, components, or finished products imported from other countries, which in turn lowers the cost of engaging in international trade. Other benefits include paying no state or local personal property taxes on imported inventory or domestic inventory held for export, as well as other logistical and process savings.

Hemann said using tools such as hiring consultants, attending forums, and even engaging experts within the grantee organizations can help boil down what may seem like an overwhelming process to a few simplified steps. Still, in the case of Matrix Network, the key to making the process seamless came down to asking the right questions.

“You have to be persistent,” Hemann says.

SPECIAL ADVERTISING SECTION

CITY PROFILES Looking for the best city in which to headquarter your business?

Consider this the start to your search.

When deciding to relocate your business, there are infinite factors to take into consideration. You already know that the DFW area is a great place to do business, with its attractive quality of life, strong regional and state economy, low cost of living, young and skilled labor force, and absence of corporate and personal income taxes. Did you also know that DFW ranks among the top three U.S. metropolitan areas for business expansions, relocations, and employment growth? So really, the question is, â&#x20AC;&#x153;Which DFW city is best for my company?â&#x20AC;? Let this compilation of some of the best and most rapidly-growing cities in DFW be your guide to helping you to make that all-important decision.

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 6 1

SPECIAL ADVERTISING SECTION

DALLAS WAXAHACHIE

WAXAHACHIE POPULATION SIZE IN CITY LIMITS

31,700 POPULATION IN PRIMARY TRADE AREA

74,000 WORK FORCE WITHIN A 30 MINUTE DRIVE TIME

419,000

WAXAHACHIE, TEXAS – CROSSROADS OF TEXAS Nowhere in Texas can you be so close to so much for so little.

Waxahachie is located at The Crossroads of Texas. Conveniently located at the intersection of Interstate 35E and U. S. Highway 287, this prime location is less than 35 minutes to Downtown Dallas to the north, less than 60 minutes to Waco and the Texas Hill Country to the south, 18 miles to I-45 and the Piney Woods to the East, and 45 minutes to Downtown Fort Worth to the west.

Over 80,000 vehicles travel through this intersection every day, making Waxahachie an ideal location for a variety of business and industry. Medical, manufacturing, technology, retail and many other businesses continue to choose Waxahachie as their home.

AVERAGE HOUSEHOLD INCOME:

$80,073 CONTACT DOUG BARNES 469-309-4121 DBARNES@WAXAHACHIE.COM 401 S. ROGERS ST. WAXAHACHIE, TEXAS 75165

HISTORY Since it was founded in 1850, Waxahachie has benefited from its prime location. In the late nineteenth century, Waxahachie grew rapidly largely due to the area’s prosperous cotton industry. This industry was advanced by local rail transportation and the highways that traveled

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right through the heart of Waxahachie’s central business district. Soon, one of the country’s first textile mills was built and the rest is history.

Fast forward over a hundred years, and Waxahachie continues to experience a healthy and graceful rate of growth. In fact, the same places where cotton barons traveled to market and the historic Shawnee cattle trail passed through, is where today’s companies are enjoying success in tourism, retail, medical, service, and manufacturing industries.

The success of the early cotton barons has left a legacy that is still enjoyed today in the form of beautiful Victorian homes and grand historic buildings that frame the most photographed courthouse in the state of Texas. For more than 150 years, historic downtown Waxahachie has been a destination for locals and visitors alike. It is still the place for delicious restaurants, boutiques, antiques, and much more. Downtown Waxahachie is also home to many festivals and special events that are attended by an estimated half million people

SPECIAL ADVERTISING SECTION

throughout the year. And best of all, while you’re in town, you’ll enjoy the kind of downhome hospitality that will have you looking forward to your next trip back.

A REGIONAL CENTER FOR COMMERCE Waxahachie is the county seat of Ellis County which also makes the community a regional center for commerce. Retailers throughout Waxahachie have enjoyed success for decades and continue to prosper today. Many new retail developments such as Waxahachie Crossing and Waxahachie Town Centre, have been added to the community since 2000.

Several professional service companies also enjoy the amenities Waxahachie has to offer. Some, such as Southwest Data Solutions, have offices in the historic downtown area while some are located in one of the many office centers located along the US Hwy 287 Bypass. Waxahachie’s numerous manufacturers and close proximity to the DFW Metroplex make building a customer base a breeze.

Waxahachie’s industrial companies are from a broad range of sectors. Some of the largest companies include a Walgreens distribution center, Dart Container Corp., Owens-Corning Fiberglass, C. R. Laurence, and Rock-Tenn. These companies have made Waxahachie home for the obvious reasons: excellent transportation corridors, quality workforce and training, cost-effective land development, a business-friendly environment, and a wonderful quality of life.

OPTIONS FOR RESIDENTIAL, EDUCATION AND MEDICAL The community’s quality of life is bar-none with a variety of residential options, an excellent education system, convenient shopping and dining, progressive medical care, and easy access to all the metropolitan amenities that the DFW Metroplex has to offer.

Waxahachie’s residents have a number of options when it comes to choosing a home. From historical Victorian homes and executive estates on the lake to condos and apartments convenient to higher education, shopping and the interstate, Waxahachie has the perfect place for you.

Waxahachie’s exceptional education opportunities consist of an award winning

OVER 80,000 VEHICLES TRAVEL THROUGH THE INTERSECTION OF I-35E AND US HWY 287, MAKING WAXAHACHIE AN IDEAL LOCATION FOR A VARIETY OF BUSINESS AND INDUSTRY.

4A school system that includes a STEM academy, Navarro College and Southwestern Assemblies of God University. A number of private and charter schools are also available.

Medical amenities in Waxahachie from the Baylor Scott & White Medical System are about to be even better with the construction of a new 120 bed regional hospital and medical complex.

The $175 million hospital is slated for completion in November 2014 and will only improve the quality of healthcare that residents enjoy.

A PROVEN TRACK RECORD FOR SUCCESS Conveniently located at the intersection of Interstate 35 and Highway 287, Waxahachie is the perfect home for a wide variety of businesses. Technology, medical, retail, and many other companies continue to choose to make Waxahachie home. The community has a proven track record for success, and most Waxahachie firms have continued to thrive, even during times of uncertainty. You are invited to experience that same success for your business by making Waxahachie your company’s home.

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{

HAVE YOU LOOKED AT SACHSE LATELY?

to Major Markets

› Ample Supply of Land; Competitive Building Costs and Lease Rates

PLANO

35

190

}

› Average Household Income – $103,341 › Pro-business Environment › Customized Incentive Packages › Well-connected Location with Proximity

75

MCKINNEY NATIONAL AIRPORT

SACHSE

PRESIDENT G EO RG ADDISON E

BU SH RICHARDSON GARLAND 78

AIRPORT

114

635 IRVING DFW INTERNATIONAL AIRPORT

DALLAS LOVE FIELD

183 161

ROWLETT

DALLAS

30

MESQUITE

ROCKWALL

LAKE RAY HUBBARD

12

30 6 4 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

FIREWHEEL TOWN CENTER

KE PI RN TU

ADDISON

80

N

WELCOME TO SACHSE The City of Sachse and the Sachse Economic Development Corporation (SEDC) are committed to the promotion and retention of high-quality development and to maintain an exceptional quality of life for its citizens.

City leadership facilitates a local environment that is responsive and beneficial to business. They are prepared to advance public-private partnerships intended to help Sachse grow and prosper in a partnership that generates new job opportunities, increased capital investment and overall community improvement.

AS SACHSE GROWS, SO DO NEW INCENTIVES TO EXPAND RESTAURANT BASE The City of Sachse offers three categories of incentives designed to recruit regional and national sit-down restaurants to the community. The incentive packages offer varying percentages of deductions based on assessed values, sales taxes, financial help and permit fee waivers to help minimize start-up costs for new restaurants.

These incentives are the investment that Sachse is willing to make in order to ensure that it has the businesses, the increased tax base and jobs.

DEMOGRAPHIC SNAPSHOT 2014 › Population – 22,411 › Households – 7,238 › Average Household Income – $103,341 › Median Age – 36 › Bachelor’s Degree or Higher – 32% › Median Home Value – $195,534

BUSINESS RECRUITMENT INCENTIVES › Start-up Cost Assistance › Expedited Permitting › Tax Abatement › Tax Increment Financing (TIF) › Infrastructure Incentives › Fee Waivers

$1 BILLION IN RETAIL POTENTIAL 2014 › Retail Trade Area – 12-minute drive time › Total Population – 162,981 › Total Households – 52,024 › Average Household Income – $99,646 › Annual Retail Leakage – $84,881,904

THE GOOD LIFE › Woodbridge Golf Community › Woodbridge Village › Woodbridge Commons › Hawaiian Falls Adventure Park › Firewheel Town Center › Lake Lavon › Lake Ray Hubbard › Lake Lewisville

Source: Nielsen SiteReports 2014

SACHSE IS CONNECTED President George Bush Turnpike/190 runs straight through the southern section of Sachse connecting north to US 75 and south to I-30. Sachse offers prime developable land with 190 frontage for retail and restaurants. With the expansion of Highway 78 to six lanes, the opportunities for a major retail corridor are available for development.

Woodbridge Parkway at Highway 78 opens yet another business district of the city that is anchored by a 152,000 sf Walmart Supercenter. A vibrant city economy, commercial and residential development, access to the DART Downtown Rowlett and Garland Stations and a pipeline of projects now make Sachse an excellent choice for those wanting to live “the good life”.

COMMUNITY PROFILE

› Location – The City of Sachse is located 20 miles northeast of downtown Dallas

› Population – 22,411 › Educational Attainment – 90% High ›

› › › › ›

School Graduates; 32% Bachelors or Greater Education – Garland and Wylie ISD – Richland College Garland Campus – Collin College Plano Campus – Texas A&M-Commerce at Rockwall Parks – Seven Area Lakes – Three Public Golf Course – One Eight Miles Multi-use Trail Voted 5th Safest City in Texas – Safewise 2013

Leslyn Blake, CEO

Sachse Economic Development Corporation 3815-B Sachse Road, Sachse TX 75048 469.429.4764 lblake@cityofsachse.com sachseedc.com D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 6 5

ALLEN SPECIAL ADVERTISING SECTION

DALLAS ALLEN TRAVEL TIME TO DFW AIRPORT

25 MINUTES AMERICA’S TOP 25 BEST CITIES TO RELOCATE - FORBES

TOP 10 BEST SUBURBS - D MAGAZINE

CONTACT DAN BOWMAN EXECUTIVE DIRECTOR/CEO 972.727.0252 DBOWMAN@ALLENTX.COM

ALLEN ECONOMIC DEVELOPMENT Allen, Texas has become a premier location for businesses and families alike.

Positioned at the interchange of US 75 and SH 121, Allen’s connectivity makes the city ideally suited for commercial development. Access to global markets within a 25-minute drive via DFW International Airport and Dallas Love Field has led to the development of the city’s newest Class A Office Park, AllenPlace Office Complex. KONE Elevators is the first tenant in the park, which will be under construction in Q3/2014 and available for 2015 occupancy.

With over 2 million square feet of new retail space, Allen is home to Watters Creek, Village at Allen and Cabela’s. PFSweb, KONE, Frontier Communications and MonkeySports recently located corporate regional offices in Allen, leasing over 200,000 square feet and creating over 1,200 jobs.

Allen’s corporate and technology parks are designed with dual-feed electric power from separate substations, redundant fiber optics and abundant water resources. Designed to meet the city’s high aesthetic standards, these business parks are built for high tech, telecom, medical and defense-related users, data centers, and the new corporate workplace. Allen draws from a labor pool of more than 3 million workers in a 30-mile radius. Close proximity to some of the nation’s finest universities ensures a continuous stream of talent.

The Allen Independent School District (AISD)

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is one of the premier school districts in the Dallas area. Allen High School students gain real world experience through coursework and internships at the new $21 million Career and Technology Center.

Allen residential communities offer a variety of housing options, including residential subdivisions, townhomes, and multi-family complexes. Allen recently moved to the forefront of suburban development as the first neighborhood in Texas to participate in the Leadership in Energy and Efficient Design – Neighborhood Program (LEED-ND).

“TOP 20 BEST PLACES TO LIVE IN AMERICA.” – MONEY MAGAZINE Allen boasts over 1,000 acres of parks and recreational areas, including the largest in-line skate park in Texas and an enclosed competition swimming pool and water park. The city is also home to two championship public golf courses (Twin Creeks Golf Club and The Courses at Watters Creek), a Top Golf entertainment complex, the Hydrous Wakeboard Park and the beautiful Allen Event Center. It’s no wonder that Allen was ranked among the Top 10 in the nation by Family Circle as “Best Places to Live.”

SPECIAL ADVERTISING SECTION

DALLAS

WHERE OPPORTUNITIES GROW NATURALLY

CEDAR HILL

CEDAR HILL

To facilitate and energize development, Cedar Hill offers progressive economic development incentives.

Opportunities grow naturally in Cedar Hill. Our city is full of vibrant businesses, natural beauty and a family-friendly quality of life. Located in the DFW Metroplex less than 20 minutes from downtown Dallas and 40 minutes from downtown Fort Worth, Cedar Hill has multiple thoroughfares to the rest of the DFW Metroplex. A 30-minute drive will take you to DFW International Airport or Dallas Love Field.

For executive air travel, Dallas Executive Airport is only 15 minutes away. BNSF rail serves the Cedar Hill Business Park as well as other available sites in the City.

With regional advantages and a ready workforce, Cedar Hill offers outstanding amenities for business growth and relocation. Strayer University, Cedar Valley College, a TEA-recognized school district, the BEST Southwest SBDC, a responsive city government and an active business community all make locating and growing a business in Cedar Hill an easy decision.

The Hill Country of the Metroplex, Cedar Hill has commitment and passion for the environment.

Travel along mature tree-lined roadways and winding pathways to view impressive residential and retail developments. Add to this a commitment

to 20% open space and 67 city parks. Cedar Hill State Park is nearly 2,000 acres and located on 75,000 acre Joe Pool Lake. The rolling hills and scenic beauty of the area combined with over 100 miles of shoreline and water-based recreation activities make the park a major attraction for hiking, biking, camping, boating, and one of the most visited state parks in Texas. The nationally recognized Dogwood

“THE HILL COUNTRY OF THE METROPLEX, CEDAR HILL HAS A COMMITMENT AND PASSION FOR THE ENVIRONMENT.” Canyon Audubon Center at Cedar Hill is situated on 205 acres of Dogwood Canyon, which contains the widest variety of rare species in North Texas. Plants and animals from east, west and central Texas converge there.

For more information about Cedar Hill, visit www.cedarhilledc.com or call the Cedar Hill Economic Development team at 972.291.5132.

TRAVEL TIME TO DOWNTOWN DALLAS

20 MINUTES US 67/RAIL-SERVED BUSINESS PARK WORK FORCE WITHIN A 30 MINUTE DRIVE TIME

OVER 1 MILLION OVER 3 MILLION SF OF RETAIL, AND CLASS A OFFICE SPACE

CONTACT ALLISON J. H. THOMPSON CEcD, EDFP - DIRECTOR 972-291-5132 EXT.3 ALLISON.THOMPSON@ CEDARHILLTX.COM

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 6 7

SPECIAL ADVERTISING SECTION

DALLAS

DALLAS POPULATION SIZE

1,241,162 WORKFORCE WITH BACHELOR DEGREE OR HIGHER

29.0% MEDIAN AGE

32.4 AVERAGE HOUSEHOLD INCOME:

$41,354 CONTACT J. HAMMOND PEROT 214.670.1685 JOSEPH.PEROT@ DALLASCITYHALL.COM 1500 MARILLA STREET, 5CS DALLAS, TEXAS 75201

CITY OF DALLAS OFFICE OF ECONOMIC DEVELOPMENT Dallas is all ways connected — from business to geography, talent to culture, technology to infrastructure.

With a rich history of success, entrepreneurship, art, and family, Dallas is a perfect reflection of an increasingly connected world.

To The World. Centrally located in the continental U.S., Dallas’ strategic location achieves worldwide market access through international logistics and transportation. Dallas’ two commercial airports, DFW International Airport (DFW) and Dallas Love Field (DAL), combine for 7,067 weekly non-stop flights to 187 global destinations. Dallas is less than 3.5 hours from North America’s business centers by air and 98% of the U.S. is within 48 hours by ground. Dallas’ cargo airports, intermodal rail yards and five major highways provide easy product delivery to the east and west coasts of the U.S. as well as to Mexico and Canada.

To Talent. Dallas is the 9th largest city in the U.S. with a population of over 1.2 million. Dallas is the cultural and economic core of the internationally important Dallas/ Fort Worth (DFW) Metropolitan area with access to over 6.8 million people. Educational opportunities abound in the Dallas area; more than 25 colleges and universities provide a trained and ample workforce.

To Business. Dallas has over 65,000 businesses and 269 corporate headquarters that each employs more than 1,000 globally, and those numbers continue to grow. Leading Dallas headquarters include AT&T,

6 8 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

MoneyGram, Southwest Airlines, Comerica, Tenet Healthcare, Brinker International, Texas Instruments, Neiman Marcus and Dean Foods. Other industry clusters are high-tech manufacturing, food processing, construction, healthcare, entertainment, energy, and transportation, providing a diversified Dallas economy.

To Affordability. The ACCRA Cost of Living index consistently reports that it is less expensive to live in Dallas than in other large U.S. Metro areas. In 2010, Forbes magazine ranked Dallas the 14th most affordable city in America. Dallas offers a combination of low taxes, reasonable housing prices and low costs of living and doing business providing the environment and support your company needs to succeed and grow.

To Lifestyle. From world-class sporting events to a bustling nightlife and music scene, some of the best food and shopping in the U.S. to exquisite museums, parks, architecture, and art — Dallas offers a truly diverse mix of culture and lifestyle. The Dallas Arts District is the largest urban cultural district in the nation. The Dallas parks and recreation system covers 21,000 acres and includes lakes; jogging and bike trails; recreation centers; sports complexes; playgrounds and picnic areas; pools; golf courses; driving ranges, and the Dallas Zoo. Dallas is a pro-business city that has many advantages to offer any company. For more information on Dallas, please visit www.dallas-ecodev.org.

DENTON SPECIAL ADVERTISING SECTION

DENTON ECONOMIC DEVELOPMENT PARTNERSHIP

FORT WORTH

Denton, Texas is an economically diverse business community with a development friendly atmosphere, unique culture, and engaged citizens.

Denton, Texas has received a lot of attention from manufacturers recently, and it’s easy to see why.

According to Aimee Bissett, Director of Economic Development, location is a major factor, “We are just north of Dallas and Fort Worth at the convergence of I-35 East and West. Manufacturers can bring in supplies and ship out products by truck, rail, or air. It’s an ideal situation for anyone with critical logistics needs.”

Of course successful manufacturers have needs beyond logistics. That’s why Denton has focused on training the next generation of manufacturing professionals. Denton’s state-of-the-art Advanced Technology Complex gives high school students hands-on experience with the latest equipment through its Applied Technology and Aerospace Manufacturing programs.

Denton is home to The University of North Texas (UNT) and Texas Woman’s University (TWU). These universities bring over 50,000 students to Denton, ensuring that employers can draw from a large, well educated workforce.

UNT’s Research Park is training tomorrow’s leaders in advanced engineering and applied materials science. This facility operates as a world

DALLAS

DENTON

class research and development lab, offering dedicated space, technology, and expertise to local industries.

“... IT’S AN IDEAL SITUATION FOR ANYONE WITH CRITICAL LOGISTICS NEEDS.” Westpark is Denton’s 800-acre industrial park strategically located adjacent to Interstate 35 and Highway 380. Westpark offers easy highway access and is located adjacent to Denton Enterprise Airport.

This municipally-owned airport has a 7,000 foot runway with air traffic control and two FBOs. Denton also has the strategic advantage of a municipallyowned electric utility, giving Denton the flexibility to work with industrial customers to create custom solutions quickly. Denton’s electric utility offers more wind power than any other city in the nation. It makes locating in Denton an easy way to help manufacturers reach their financial and sustainability goals.

Visit www.DentonEDP.com to find out more about Denton.

HIGH TECH HOT SPOT #6 IN US

MOST LIVEABLE CITY IN TEXAS MOST WIND ENERGY IN NATION CONTACT AIMEE BISSETT ECONOMIC DEVELOPMENT DIRECTOR 940.349.7774 AIMEE.BISSETT@ CITYOFDENTON.COM ADAM GAWARECKI CHAMBER ECONOMIC DEVELOPMENT VICE PRESIDENT 940.382.7151 VP@DENTONEDP.COM

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HALTOM CITY

FORT WORTH

HALTOM CITY POPULATION SIZE

42,409 DISTANCE TO ALLIANCE AIRPORT

±11 MILES DISTANCE TO DFW AIRPORT

±14 MILES AVERAGE HOUSEHOLD INCOME:

$66,112

(based on a 12 minute drive time)

TRAVEL TIME TO DOWNTOWN FORT WORTH

10 MINUTES

SPECIAL ADVERTISING SECTION

NEW ROAD CONSTRUCTION FUELING DEVELOPMENT Be on the lookout…Big things are coming our way!

Haltom City presents opportunities for commercial growth with easy access.

Some cities may view road construction as a nuisance, but for Haltom City it’s an opportunity. The NE Loop 820 widening project has opened up more than 300 acres of land for development on both sides of the freeway in Haltom City. The new design gives the town better accessibility than ever before. To further enhance development opportunities, the city is adding north and south backage roads to provide ample access for future development. Although the leading development expected will be commercial, a residential developer will be building new homes in the area as well. Tax Increment Finance (TIF’s) Zones will add to incentives for sustainable economic development along the corridor.

In addition to the emerging, new commercial growth, revitalization is occurring in older commercial sectors. East Belknap, the road that originally helped spur business growth in Haltom City, is experiencing a new surge of businesses. A variety of unique Asian restaurants and businesses make East Belknap their home and the area will continue to grow into a destination for diners and shoppers. Utilizing a grant from TxDOT, the City is redesigning the intersection of East Belknap and Highway 377. This will create four distinct corners for new development near the

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historic Haltom Theater.

Another distinctive commercial corridor in Haltom City is Highway 121 Airport Freeway. This stretch of highway is home to more than 20 flooring and building supply businesses. The clustering of these stores makes it convenient when shopping for materials for new construction and remodeling projects.

Passenger rail is in Haltom City’s long-term plans.

The T has been working to develop the TexRail line from downtown Fort Worth to Grapevine, and extending to the north entrance of Dallas-Fort Worth Airport. Haltom City is lobbying for a rail stop near Denton Highway so that it can promote transitoriented development on the adjacent 42 acres near the rail line. The T is targeting the new rail line to be complete in 2017.

Similar to the TIF’s along the NE Loop 820 corridor, Haltom City offers many types of incentives to encourage business development throughout the city. Two cash grants are offered to help assist businesses and include a $50,000 economic development assistance grant and a $10,000 property enhancement grant. Tax abatements, foreign trade zones, enterprise zones, and triple freeport are other incentives that are available.

E EVENTS CALENDAR

L LEADERSHIP

= CHAMBER EVENT

AUGUST August 1 The Real Estate Council Foundation Applications due for 2015 Community Initiatives August 19 Real Estate 101 11:15 AM Center for Nonprofit Management

August 26 Insiders Roundtable Water Conservation Tool Kit 12 PM The Real Estate Council Congressional Forum 12-1:30 PM Location: TBD

August 21 Associate Leadership Council Applications due for 2014-2015 class SEPTEMBER September 16 State of the District 12-1:30 PM Belo Mansion

September 29 Women in Philanthropy Dinner Featuring Lyda Hill (By invitation only.)

September 23 Real Estate 101 11:15 AM Center for Nonprofit Management OCTOBER October 2 Bank of Texas Speaker Series Presented by The Dallas Morning News Featuring Gary Kelly, CEO Southwest Airlines 7:30 AM Belo Mansion October 3 Women’s Business Conference 8 AM-2 PM Hilton Anatole

October 9 Young Guns View From the Top 5:30 PM October 10 YP Summit 8 AM-4 PM, Winspear Opera House October 16 PAC reception with Harvey Kronberg 5:30 PM October 23 Giving Gala 6:30 PM, Hilton Anatole Hotel

LEADING THE WAY The Dallas Regional Chamber’s 39th Leadership Dallas class partnered with Uplift Education to design and construct four innovative MakerSpace classrooms in high schools throughout the city of Dallas.

“From the moment our class selected this project, I knew it would be special,” says Chad Prochaska of Turner Construction and a member of the LD Class of 2014. “We researched and toured MakerSpaces and teamed with the Perot Museum of Nature and Science and Uplift educators to transform classrooms into an oasis of learning.”

MakerSpace classrooms are a popular new concept for teaching students science, technology, engineering, math, and art through handson, stimulating, and interactive projects. In their workshops, students use engineering and design tools to make things and reuse everyday materials in exciting ways. From woodworking and plaster casting to electronics and 3D printing, the MakerSpace labs encourage experimentation and open-ended exploration.

“The teamwork and dedication of our class was instrumental in the success of the project,” Prochaska says. “It’s something we can all look at and be inspired to create future opportunities for students and scholars.”

NOVEMBER November 6 Economic Outlook 7:30-10 AM SMU

November 13 Dallas Regional Chamber Blueprint Awards 11:30 AM-1:30 PM, Hyatt Regency Hotel

The MakerBot Replicator 2

DECEMBER December 2 State of the City 12-1:30 PM TBD

December 4 Bank of Texas Speaker Series Presented by The Dallas Morning News Featuring Capital Markets Panel, moderated by JLL 7:30 AM, Belo Mansion

For more information about The Real Estate Council’s programs and events, please visit www. recouncil.com or call 214.692.3600. For more information about Dallas Regional Chamber events see www.dallaschamber.org/events/

Leadership Dallas, the flagship program of the Dallas Regional Chamber for leadership development, is aimed at increasing the leadership pool for community activities in the Dallas area. Visit www.dallaschamber. org for more information.

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C COMMUNITY The Dallas Regional Chamber recognizes the following companies and organizations for their membership investment at one of our top levels. Bold-faced companies are represented on the DRC Board of Directors. For more information about the benefits of membership at these levels, call 214.746.6600 .

STRATEGY BKD Chase Texas Instruments

CATALYST AT&T Baylor Scott & White Health Capital One Bank Chickasaw Nation Comerica Bank Dallas/Fort Worth Int’l Airport Hunt Consolidated, Inc. JC Penney Company, Inc. MV Transportation ONCOR Raytheon Company Tom Thumb Food & Pharmacy Wells Fargo

ADVOCATE 7-Eleven, Inc. Akin Gump Strauss Hauer & Feld Atmos Energy Corporation Axxess Baker Botts L.L.P. BB&T BBVA Compass CBRE Group, Inc. Children’s Medical Center Citi Copart Corrigan Investments, Inc. Dallas Morning News Dal-Tile Corporation Deloitte LLP Energy Future Holdings Exxon Mobil Corporation EY FedEx Office Fidelity Investments Fluor Corporation Frito-Lay North America GE Capital Glazer’s Golden Living

Haynes and Boone, LLP Highland Capital Management LP HKS IBM Corporation Jones Day KPMG LLP Kroger Food Stores Littler Mendelson, P.C. Locke Lord LLP Lockheed Martin Luminant Medical City Dallas Hospital/ Medical City Children’s Hospital Methodist Health System Microsoft Corporation NEC Corporation of America Omni Dallas Hotel PwC Reliant Energy Rent-A-Center Sheraton – Dallas SunTrust Robinson Humphrey SWS Group, Inc. TDIndustries Tenet Healthcare Corp.

Texas Central High-Speed Railway, LLC Texas Health Resources Texas Scottish Rite Hospital for Children TM Advertising TXU Energy UT Southwestern Medical Center ViewPoint Bank Winstead PC

BOARD OF ADVISORS Abbott Labs Accenture Aetna AIG Airbus Helicopters, Inc. Alcatel-Lucent Andrews Distributing Company Andrews Kurth LLP

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Army & Air Force Exchange Service Arthur J Gallagher & Co. Austin Industries Baker & McKenzie, LLP Bank of America Bank of Texas, N.A. BDO USA, LLP The Beck Group Blue Cross and Blue Shield of Texas Boy Scouts of America Bracewell & Giuliani LLP Brinker International, Inc. Brinkmann Corporation Bury C.C. Young Cassidy Turley CCS Medical CHRISTUS Health CIGNA Healthcare City Credit Union Civitas Capital Group ClubCorp Inc. Coca-Cola Refreshments Colgate Oral Pharmaceuticals Colliers International Composite Technology Inc. CompuCom Systems, Inc. Connextions Consolidated Communications Cook Children’s Healthcare Corgan Associates, Inc. CP&Y, Inc. Cresa Dallas LLC Cushman & Wakefield of Texas, Inc. Dallas County Community College District Dallas Cowboys Football Club Dallas HD Films Dallas Marriott City Center Dallas Stars Hockey Club Dean Foods Company Dell Services Dialog Direct E Smith Realty Partners

Ebby Halliday, Realtors Edelman Public Relations Worldwide Emerson Process Management EN Consulting, Inc. Eulen America The Fairmont Dallas Fisher & Phillips, LLP Flowserve Corporation Fossil Freeman Frost Bank Fujitsu Network Communications, Inc. Furniture Marketing Group Gardere Wynne Sewell LLP Generational Equity Gensler Global Power Equipment Goldman Sachs Grant Thornton LLP Greatbatch, Inc. Greenberg Traurig, LLP Gulfstream Aerospace Corp.

Hall Financial Group Hill & Wilkinson Hilton Anatole Hilton Worldwide HNTB Corporation Holland & Knight LLP HollyFrontier Corporation Holman Boiler Works, Inc. HOLT CAT Humana Inc. InStaff Interceramic, Inc. International Leadership of Texas Jackson Walker L.L.P. Jacobs JE Dunn Construction JLL Johnson Controls Inc. LegacyTexas Bank Lincoln Property Company MHBT, Inc. Midway Press, LTD

Minerva Real Estate Mission Foods Munck Wilson Mandala, LLP Munsch Hardt Kopf & Harr, P.C. Neiman Marcus Nestle Waters North America Norton Rose Fulbright The Novo Group NTT Data, Inc. NYLO Hotels, LLC ORIX USA Corporation Parker University PDS Technical Services People Performance Resources Pioneer Natural Resources, LLC PlainsCapital Bank Pollock Paper Distributors Publicis Dallas Quality Art House Rexel Holdings USA RIB U.S. Cost Rosewood Crescent Hotel Schneider Electric SimplexGrinnell Softlayer Technologies Inc. Southern Methodist University Southwest Airlines Southwest Office Systems, Inc. Staff elbach, Inc. State Farm Insurance Companies Stellar Strasburger & Price, LLP Symantec Corporation TDJ Enterprises Texas Oncology Texas Woman’s University Thompson & Knight LLP Time Warner Cable TopGolf Town of Addison Trane Commercial Systems TrustPoint Management Turner Construction Company UMB Bank N.A. University of Texas at Arlington URS Corporation Verizon Wireless Village Green Holding, LLC Vinson & Elkins L.L.P. Weber Shandwick Southwest WFAA-TV Whitley Penn, LLP WinStar World Resorts Women’s Food Service Forum

LEAD AAA Texas, Inc. Ackerman McQueen Acme Brick Company Adolfson & Peterson Construction Adolphus Hotel Advocare International, L.P. Allegro Development Alliance Data AlliedBarton Security Services Alvarez & Marsal American Bank of Commerce APAC - Texas, Inc. Arise Virtual Solutions Ash Grove Cement Company Ashton Atkins of North America Automatic Data Processing Aviall, A Boeing Company Bain & Company, Inc. Balfour Beatty Construction BancTec, Inc. Belk Berger Engineering Co. Beshear Group Bethel University The Black-Eyed Pea Boka Powell, LLC Boston Consulting Group Brunswick Group, LLP BullsEye Telecom Careington International Corporation Carrington, Coleman, Sloman & Blumenthal, L.L.P. Carter Financial Management Champion Partners Chandler Signs L.L.P. Coldwell Banker Residential Brokerage Commercial Metals Company Community Trust Bank Concentra Consumer Credit Counseling Service of Greater Dallas, Inc. Crowe Horwath LLP CyrusOne Dallas Center for Rehabilitation Dallas Foundation Dallas Lighthouse for the Blind Dallas Mavericks Dalworth Restoration Databank, Ltd. DeGolyer and MacNaughton Denali Construction Services Duro-Last Roofing, Inc. ECS Refining, Recycling and Asset Management

EnLink Midstream LLC Essilor of America, Inc. Estrada, Hinojosa & Company, Inc. Evergreen Life Services Federal Reserve Bank of Dallas Fonality, Inc. FPL Fibernet, LLC Fresh Point Gables Residential Trust Gateway Canyons Resort LLC George W. Bush Foundation Gibson, Dunn & Crutcher LLP GLP & Associates Halff Associates, Inc. Hart Group, Inc. Hazel’s Hot Shot, Inc. Hill + Knowlton Strategies Holmes Murphy and Associates HRSmart Huawei Technologies Hunt Construction Group Hunton & Williams LLP Huselton, Morgan & Maultsby, PC Hyatt Regency Dallas Hyatt Regency DFW iFLY Dallas Indoor Skydiving Imagetek Office Systems Imaginuity Interactive, Inc. In-N-Out Burger JMP Engineering Joule, A Luxury Collection Hotel Kaplan College - Dallas Kimberly-Clark Corporation LBJ Infrastructure Group LLC Le Meridien Dallas, The Stoneleigh Linebarger Goggan Blair & Sampson, LLP Lucas Group Manhattan Construction Company Marsh USA, Inc. Mary Kay Inc. McAlister’s Deli – Dallas McKinsey & Company, Inc. Metl-Span, LLC Monitronics International, Inc. MW Logistics, LLC MWH Americas, Inc. Networking Results, Inc. New York Life Regional Headquarters North Highland Company Ocean Prime Restaurant Office Depot Business Solutions OHL Park Inn by Radisson

Peter O’Donnell, Jr. Polsinelli PC Post Properties, Inc. Prudential Asset Resources Ragan’s HOPE Foundation The Ritz-Carlton, Dallas River Ranch Educational Charities Rush Truck Center – Dallas Light and Medium Duty Russell Reynolds Associates, Inc. Schwan’s Home Services, Inc. Sewell Automotive Companies Shannon Gracey Ratliff & Miller, LLP Sleep Apnea Treatment Centers of America Smart Cookie Southwest International Trucks Sparks Agency Spine Physicians Institute Spring Hill Suites Dallas Downtown – West End State Fair of Texas Sterling Hotel Structure Tone Southwest Sun Holdings, LLC TelePacific Communications Texas A&M University Commerce Texas Institute for Surgery Texas Rangers Baseball Club Towers Watson TracyLocke Tuesday Morning Corp.

TXD Investment Company TXI/Texas Industries, Inc. Union Bank Union Pacific Railroad United Surgical Partners International University of South Carolina Career Center University of Texas at Dallas USAA U.S. Memory Care Virgin America Airlines VOX Global W Dallas – Victory Hotel Walnut Hill Medical Center Warrior Group, Inc. Weaver Westin Galleria Dallas Weston Solutions Winston School Woodbine Development Corporation Younger Partners Zale Corporation

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C COMMUNITY 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.

Paul Rowsey, Chairman Sue Ansel, Vice Chairman

CHAMPION’S CIRCLE

CHAIRMAN’S CIRCLE

PRESIDENT’S CIRCLE

BENEFACTOR’S CIRCLE

Bank of America Merrill Lynch

BBVA Compass

Balfour Beatty Construction

Amegy Bank

Bank of Texas

BURY

Beck Group

Capital One Bank

Chicago Title Company/Fidelity National Financial (FNF)

Butler Burgher Group

Behringer

Cassidy Turley

CBRE

Breitling Royalties

Chief Partners LP

Citigroup Foundation

Goldman Sachs

Champion Advisory Partners

Compatriot Capital

Granite Properties

Comerica Bank

Cushman & Wakefield of Texas, Inc.

Deloitte.

HFF

Corgan

E2M Partners, LLC

JP Morgan

Holt Lunsford Commercial

Fischer & Company

Hunt Realty Investments, Inc.

Crow Holdings Capital Partners, LLC

Jackson-Shaw

EY

Gables Residential

Jones Day

Gaedeke Group LLC

Gardere Wynne Sewell LLP

KPMG

Invesco Real Estate

Good Fulton & Farrell

Munsch Hardt Kopf & Harr PC

Jones Lang LaSalle

Haynes and Boone, LLP

NorthMarq Capital

KeyBank

Republic Title of Texas, Inc.

Kimley-Horn and Associates, Inc.

Highland Capital Management LP

Stewart National Title Services

Frost

Hines

Lincoln Property Company

Hudson Americas

Schwob Companies

Jackson Walker LLP

Thackeray Partners

PlainsCapital Bank

The Howard Hughes Corporation

Regions Bank

ViewPoint Bank

The Retail Connection

Wells Fargo

US Bank

StratfordLand

Winstead PC Learn more at www.recouncil.com or by calling 214.692.3600

THE INTERACTIVE CRANE REPORT ONLINE AT DFWREALESTATEREVIEW.COM

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It was another full-house crowd of more than 1,200 when pro boxers took to the ring for a good cause at The Real Estate Council’s FightNight XXVI. The black tie extravaganza was held April 24 in the Hilton Anatole’s Chantilly Ballroom and featured casino gaming, Vegas-style entertainment, and amazing networking with the who’s who of the commercial real estate industry.

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1 Randy Fleisher, Jeff Staubach, and Tim Jordan-JLL 2 Terrence Maiden and Frank Mihalopoulos-Corinth Properties, Jerry Allen-City Councilmember 3 Dennis Noebel-Chicago Title, Diane Butler-Butler Burgher Group 4 A crew from Crow Holdings 5 Peter Graf, MaryBeth Shapiro, Bo Feagin-Republic Title 6 Mitch Paradise and Jack Matthews-Matthews Paradise Development 7 Trey Morsbach-HFF, Sue Ansel-Gables Residential, Paul Rowsey-Compatriot Capital 8 Dallas Cowboys players with Dallas Mayor Mike Rawlings and Roger Staubach-JLL 9 Patricia Gibson and Mark McClanahan-Hunt Realty Investments

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FightNight has grown into one of North Texas’ largest philanthropic events, raising more than $23 million over the past 26 years to support The Real Estate Council Foundation and its good works.

These funds are leveraged with the pro bono expertise of The Real Estate Council members to support projects impacting the foundation’s four target areas: affordable housing, education, economic development, and the environment.

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Photography by James Edward

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L LEADERSHIP

SHAPING THE NEXT GENERATION OF LEADERS The Real Estate Council’s Associate Leadership Council fosters involvement among young professionals.

BY TANYA RUTLEDGE

When Jeff Swope founded The Real Estate Council’s Associate Leadership Council two decades ago, he didn’t realize it would one day come full circle. But that’s exactly what has happened. Swope’s 33-year-old son, Tobin, an associate at Winstead PC, is a member of this year’s ALC class.

The elder Swope was The Real Estate Council’s first chairman and a member of the founding board, back when the organization was launched in 1990. The group quickly established itself as an advocacy group and a model for industry and civic leadership. Swope formed the ALC in the mid-1990s to help young real estate professionals understand and become involved in their community. It’s a 10-month leadership development program where each class, which is typically limited to 25 to 30 participants between the ages of 27 and 37, performs a real estate-related community service project.

Swope, managing partner of real estate development and investment firm Champion Partners Ltd., says the ALC helps members gain a deeper understanding of the local market and the sense of pride that comes from giving back.

“There were so many young people who didn’t have any perspective on Dallas but who really wanted to get involved,” Swope says.

“We wanted to develop a give-back philosophy, which people may not have in their DNA. These young people had an innate desire to give back, but didn’t always know how. The idea is that giving back is a skill that can be learned.”

Swope says the ALC typically receives be-

ALC ALUMNI Some of the area’s most successful commercial real estate players are graduates of the ALC program and involved in its alumni association, which has grown to more than 400 members.

“THESE YOUNG PEOPLE HAD AN INNATE DESIRE TO GIVE BACK, BUT DIDN’T ALWAYS KNOW HOW.” —JEFF SWOPE tween 50 and 60 applications for the 25 to 30 spots that are available each year. ALC members are given access to opportunities for education, networking, leadership training, and community service, and must commit to serve 20 hours per month.

As part of the program, members meet each month to create and implement a renovation project in the community. Last year’s class selected REAL School Gardens as its project. Members built learning gardens at two different Dallas Independent School District elementary schools. The effort included manual labor as well as raising funds to cover costs over what The Real Estate Council Foundation provided. This year’s project, for the East Dallas Boys & Girls Club, is expected to cost more than $100,000, all of which will be raised in cash and through in-kind donations.

“The program took off from the very beginning,” Swope says. “So many young people want to be involved in their community, and this provided them with a way to do that.”

ASSOCIATE LEADERSHIP COUNCIL The Real Estate Council’s Associate Leadership Council (ALC) is a 10-month leadership development program for 27- to 37-year-old commercial real estate professionals designed to inspire and educate our future leaders. For more details, visit www.recouncil.com.

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Graduates include: Michael Ablon, Pegasus Ablon Jon Altschuler, Altschuler + Co. Sue Ansel, Gables Residential Steve Aldrich, Hillwood Lee Belland, Stream Realty Partners Glenn Callison, Munsch Hardt Kopf & Harr PC Tony Creme, Hillwood Brad Selner, JLL Steve Modory, Champion Partners Denton Walker, Trammell Crow Co. Michele Wheeler, Jackson-Shaw Josh White, CBRE Craig Wilson, Cassidy Turley Manny Ybarra, Pillar Commercial

MAKING A DIFFERENCE Here’s a list of ALC community improvement projects over the years: 4523 Congo Street Boys & Girls Club of East Dallas Boys & Girls Club of Greater Dallas Boys & Girls Club of Oak Cliff Girls Inc. of Oak Cliff Girls Inc. South Dallas Center La Calle Diez Community Park Lifenet Community Behavioral Health Mi Escuelita Oak Cliff United Methodist Church Child Care Park South YMCA—Champion City Promise House REAL School Gardens Short North Dallas (Hall Street) SouthFair Community Development Corp.

Vogel Alcove St. Philips School and Community Center We Over Me Farm at Paul Quinn College YMCA South Oak Cliff

JOIN US AND BUILD THE CITY YOU’VE IMAGINED

The Real Estate Council is Texas’ largest and most influential organization of its kind representing more than 1,400 members and 500 companies. We strengthen our industry and community by connecting our members, developing leaders, advocating for business, and investing financial and human resources in good works.

MID-YEAR PRICING IS NOW AVAILABLE FOR NEW MEMBERS. Visit recouncil.com/join or call 214.692.3600 and join at halfprice now so you won’t miss these upcoming events: August 26, 2014—Insiders Roundtable: Water Conservation Toolkit October 2, 2014—Speaker Series: Gary Kelly, CEO Southwest Airlines October 23, 2014—Giving Gala: Under the stars at the Hilton Anatole Sculpture Park December 4, 2014—Speaker Series: Capital Markets, moderated by JLL

A Prime Location for Business and Industry

Build-to-suit Sites Available

THIS is Cedar Hill

L A N D OF OP P OR T U N I T I E S Cedar Hill is booming with new development and has become a prime location for industrial, commercial, residential, retail and recreational opportunities. Located in the beautiful hill country environment of Joe Pool

° Pro-business environment with a skilled workforce of over 1 million within a 30-minute drive time

° Low taxes, low cost of living, quality education,

over 3 million sf of retail, and Class A office space

° To facilitate and energize relocation and

expansion, Cedar Hill offers aggressive economic development incentives

Lake and the Cedar Hill State Park, Cedar Hill is the natural choice for those who want big-city amenities with a small-town ambience.

° 20 minutes from Downtown Dallas ° US 67/Rail-served Business Park 285 Uptown Boulevard • Bldg 100 • Cedar Hill, Texas 75104

Allison J. H. Thompson, CEcD, EDFP - Director ° allison.thompson@cedarhilltx.com ° 972.291.5132 ext.3 ° cedarhilledc.com Rolling Hills and Panoramic Vistas

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