Dallas-Fort Worth Real Estate Review - Fall 2016

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GAME TIME IN FRISCO DEVELOPMENT INTENSIFIES ALONG THE $5 BILLION MILE, THE HOTTEST STRETCH OF LAND IN NORTH TEXAS.

POCKET MARKETS: DEEP ELLUM, HARWOOD & SOUTH SIDE TAKE OFF ROUNDTABLE: INNOVATION IN DFW REAL ESTATE

FALL 2016

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ON THE COVER: The Ford Center at The Star.

On the evening when this photo was taken, The Ford Center was hosting a high school football game between the Shelton Chargers and the Grace Prep Lions.

FALL 2016

CONTENTS

Photo by Michael Samples

19 THE CRANE REPORT

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

FOUNDATIONS DFW Market Statistics, Economic Indicators, and Commercial Real Estate News. . . . . . . . . 10

BUILDING THE FUTURE TOGETHER Spreading the Word, Face-to-Face . . . . 15

THE CRANE REPORT

34 ROUNDTABLE

Who’s Building What, Where . . . . . . . . . 19

SCORECARD DFW’s Top Office, Industrial, and Retail Leases . . . . . . . . . . . . . . . . . . . . . . 27

ROUNDTABLE Innovation: A Real Estate Revolution . . . . . . . . . . . . . . 34

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E XC L USI V E LY P UB L ISHE D B Y D MAGAZINE PARTNERS

51 FEATURE Pocket Markets:

DFWREALESTATEREVIEW.COM

Deep Ellum, Harwood & South Side Take Off . . . . . . . . . . . . . . . . . . . . 48

D MAGAZINE PARTNERS BUSINESS GROUP PUBLISHER Josh Schimmels

PUBLISHER Quincy Curé Preston 214-523-5215 quincy.preston@dmagazine.com

EDITOR-IN-CHIEF Christine Perez

MANAGING EDITOR Lance Murray

CREATIVE DIRECTOR

56 ANATOMY OF A DEAL

Michael Samples

Frisco’s $5B Mile

CONTRIBUTING WRITERS

With the Dallas Cowboys on board, “just about anything can happen” . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Kyle Moss

Changing the Rules of the Game

214-523-5247

New lease accounting rules will have a big impact on public and private company balance sheets. . . . . . . . . . . . . . . . . . . . . . . . . . 70

kyle.moss@dmagazine.com

ACCOUNT EXECUTIVE Stephanie Hermez 214-523-0311

SPECIAL ADVERTISING SECTION

stephanie.hermez@dmagazine.com

Economic Development Directory Profiles of cities around the region . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

MEDIA DEVELOPMENT MANAGER Courtney Garza

INTERNS

COMMUNITY

Catherine Durkin

The Real Estate Council, Impact Investors . . . . . . . . . . . . . . . . 73

The Real Estate Council, Associate Leadership Council . . . . 77

Dallas Regional Chamber, Top-Level Members . . . . . . . . . . . . . 74

Calendar of Events . . . . . . . . . . . . . . 78

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Hillary Lau Karen Nielsen

DIRECTOR OF SALES

TOOLBOX

The Real Estate Council Foundation . . . . . . . . . . . . . 88

Jeff Bounds

Dallas Regional Chamber, Leadership Dallas . . . . . . . . . . . . . . . 78 View From the Top: Adrian Mijares Elizondo . . . . . . . . . 80

Ana-Maria Frampton Rachel Hawkins Nealie Sanchez

M

M Dallas-Fort Worth Real Estate Review® is published for The Dallas Regional Chamber and The Real Estate Council by D Magazine Partners, 750 N. St. Paul St., Ste. 2100, Dallas, TX 75201; www. dallaschamberpublications.com, 214.523.0300. ©2016 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 Magazine Partners is a sponsor of, or committed to, the views expressed in these articles. The publisher is not responsible for unsolicited contributions.

M

M

M

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Have you mastered your real estate’s potential?

Have you mastered your real estate’s potential?

Have you Have mastered you mastered your real your estate’s real estate’s potential? potential?

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WELCOME

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

DALLAS-FORT WORTH IS NO STRANGER TO ACCOLADES

2016 CHAIRMAN OF THE BOARD Thomas W. Codd Vice Chairman, US Human Capital Leader PwC PRESIDENT & CEO Dale Petroskey CHIEF OPERATING OFFICER & CHIEF FINANCIAL OFFICER

DALE PETROSKEY President and Chief Executive Officer Dallas Regional Chamber

LINDA McMAHON President and Chief Executive Officer The Real Estate Council

This year, U.S. News & World Report identified Dallas-Fort Worth among its “Best Places to Live” list for region’s diverse quality of life.

“Offering both big-city excitement and quiet, suburban living, the Dallas-Fort Worth metro area offers an interesting mix of Texas pride and cosmopolitan offerings,” writes U.S. News contributor Amanda Casanova.

A small-town feel and Texas friendliness (many people still wave “hello” to strangers) thrive in neighborhoods and towns across the Dallas region, she notes. Also factoring into the rating are the job market, affordability, whether an area is attracting new residents, and the

quality of neighborhood schools.

Along those lines, the U.S. Department of Education awarded nine Dallas-area schools Blue Ribbon status for their academic excellence and for their successes in educating students from lower-income households. As further affirmation, Newsweek and U.S. News both recently named dozens of high schools in the Dallas region among the country’s top high schools. Despite these accolades, perhaps one of the biggest compliments anyone can give is when they vote with their feet.

The Census Bureau recently reported that people are pouring into the Dallas region at a healthy clip; Dallas-Fort Worth was second in the nation, only to Houston, for its 2014-2015 population growth, with more than 144,000 people making the move. It’s a safe bet that employment is a motivating factor for this change, particularly in the financial sector, where jobs have grown at a breakneck pace.

The Dallas region saw more than 17,000 additional jobs in real estate, insurance, and finance (among other financial services) compared to August 2015; altogether, about 117,300 new jobs were created here in 12 months’ time. Unemployment rates have stayed below both the state and national average.

Even millenials — one of the toughest demographics to please — seem content to sink roots in Dallas. The Mayflower moving company commissioned a study to identify which major metro areas millennials are most likely to move to, and perhaps not surprisingly, Dallas landed on top.

Aside from moving to Dallas for jobs, millennials told surveyors that they moved to Big D to be with or to find a romantic partner. Those new people are bringing new ideas, and different ways to do business.

It makes sense that Governing Magazine’s analysis of Census data identifies our region as a hotspot for new businesses; more than a quarter of all employees in the Dallas region work for companies for three or fewer years. Start-up blog Tech.co quotes Dallas-based consulting firm NMSA Consulting’s Kelly Cullum, on Dallas’ success in attracting start-ups: “With large companies popping up almost every day, the talent being brought here (and their significant others) is impeccable. Pair that with (a) cheaper cost of living and you have a winning combination.”

Pat Priest COMMUNICATIONS & MARKETING, SENIOR VICE PRESIDENT Darren Grubb RESEARCH AND INNOVATION, SENIOR VICE PRESIDENT Duane Dankesreiter RESEARCH AND INNOVATION, DIRECTOR Eric Griffin

2016 CHAIRMAN Diane Butler BBG VICE CHAIR Greg Kraus Invesco PRESIDENT & CEO Linda McMahon VICE PRESIDENT MARKETING & EVENTS Debby Hanson VICE PRESIDENT FOUNDATION Robin Minick CFO Carla Brandt

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

A letter from the Publisher

Dallas-Fort Worth is moving forward in 2016 with the help of innovative thinking and bold projects. In this edition of Real Estate Review, we look at the places and the people that are generating growth and reshaping communities throughout North Texas. For the fall edition, our cover story looks at the “$5 Billion Mile,” a stretch of highway in Frisco that is the home of The Dallas Cowboys’ new headquarters and training facility, the Star; Wade Park, Frisco Station, and The Gate. Each has a price tag of $1 billion to $2 billion. You’ll find the report beginning on Page 56.

Our roundtable experts discuss innovation in real estate and how it is changing how land is acquired, developed, and sold. The roundtable starts on Page 34.

We also take a look at “pocket markets” in this issue, focusing on how the top developers in the Harwood District, the South Side, and Deep Ellum are reshaping those areas in Dallas. This report is on Page 51.

In our Placemakers feature, developer Justin Springfield talks about how he helped transform downtown Roanoke into the “Unique Dining Capital of Texas.” The small Denton County city is attracting diners from all over the region to its re-imagined downtown area. You can read it on Page 79.

In Toolbox, writer Jeff Bounds explains the new lease accounting rules that will have a big impact on public and private company balance sheets in “Changing the Rules of the Game,” on page 70. The new guidelines from the Financial Accounting Standards Board, or FASB, will take effect in 2018 and 2019.

As usual, you’ll find the biggest lease transactions and new office, retail, and industrial projects throughout DFW in our Crane Report, beginning on Page 19.

And, you can always find extended content on our website, www.dfwrealestatereview.com, and our Facebook feed. Drop us a line, we always enjoy hearing from you.

Quincy Curé Preston Publisher

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FOUNDATIONS BROOKINGS: DALLAS AMONG WORLD’S ‘KNOWLEDGE CAPITALS’

A baseline for the region’s future

BY CHRISTINE PEREZ

DFW OFFICE LEASING, DEVELOPMENT MOMENTUM CONTINUES The North Texas office market is exhibiting no signs of a slowdown. To the contrary, the region continues to expand, with 3.6 percent year-over-year employment growth. That’s 120,000 jobs added in the last 12 months, and it all points to ongoing demand for office space, say analysts at CBRE. For the 24th consecutive quarter, DFW recorded positive

Citing its skilled workforce and efficiency in bringing commercial products to market, the Brookings Institution has identified the Dallas region as one of the world’s 19 ‘Knowledge Capitals.’ Two other Texas cities, Austin and Houston, also were placed in this category, joining Boston, Denver, San Jose, Chicago, Seattle, Atlanta, and eight other American markets, along with Stockholm and Zurich.

Brookings described Dallas and the other knowledge capitals as highly productive innovation centers: “These regions are at the world’s innovation frontier, and thus challenged constantly to generate new knowledge and ideas to sustain growth.”

The findings were part of a research initiative to define the world’s 123 largest metro economies. Brookings and study partner JPMorgan Chase sought to “examine what really defines a global city,” looking at economic characteristics, industrial structure, and key competitiveness factors.

In the end, it organized the markets into seven categories: Asian Anchors, Emerging Gateways, Factory China, Global Giants, Knowledge Capitals, International Middleweights, and American Middleweights (which included San Antonio).

net absorption, totaling about 1.3 million square feet for Q2 2016 and about 2.9 million square feet for the first six months of the year. Far North Dallas continues to lead the way, with 460,000 square feet of absorption for the second quarter.

The LBJ Freeway and North Central Expressway corridors performed well, too. Analysts say those markets could be seeing overflow demand from tenants along the

BUILDING BOOM RAGES ON

Developers are doing their best to meet demand. Five Class A office projects were completed SREHTOinLLthe A second quarter, totaling about 700,000 square feet. Meantime, six new projects totaling more than 900,000 square SRThis ELAbrings SELOHW /Smarket-wide RELIATER feet broke ground. the total to 7.5 million square feet under construction, with about 52 percent of the space already spoken for.

CIVRES HTbrisk LAEHin&Far NOINorth TACUDDallas, E Activity isSE especially Uptown, and Richardson, where 70 percent of all new construction is underway. Notable projects include GNIRUTCAFUNAM McKinney & Olive and Park District in Uptown, along with Liberty Mutual’s twin-tower build-to-suit at Legacy West in Plano. SEITIVITCA LAICNANIF Although owner-occupied projects aren’t included in CBRE’s construction numbers, the firm notes that seven totaling million square SECsuch IVRESprojects SSENISU B DNA L2.7 ANO ISSEFO RP feet are underway. That brings the market-wide total to 10.2 million square feet—not far off from activity in Manhattan, which had 11.4 million square feet underway at mid-year.

2016 SIGNED OFFICE LEASES

BY INDUSTRY TYPE

PROFESSIONAL AND BUSINESS SERVICES

28%

ALL OTHERS

21% EDUCATION & HEALTH

11%

FINANCIAL ACTIVITIES

16% RETAILERS/ WHOLESALERS MANUFACTURING 13%

11%

SOURCE: CBRE RESEARCH

DFW AMONG TOP U.S. DISTRIBUTION MARKETS In what will become an annual report, JLL has released its first in-depth analysis of the country’s top distribution markets. Dallas-Fort Worth came in at No. 5, behind New Jersey-New York, Southern California, Central and Eastern Pennsylvania, and Chicago-Milwaukee.

JLL evaluated 32 different metrics to rank industrial warehouse and distribution market performance from a supply-chain and logistics perspective. They included siteselection influencers such as population and demographics, labor availability, wage rates and other costs, energy costs, transportation and

Dallas North Tollway and in Uptown, where space is dwindling and rents are rising.

Office vacancy dropped from 18.1 percent to 17.5 percent for the quarter, with about 4 percent of that in the form of sublease space. Overall, Class A rents grew by 1.1 percent to $29.33 per square foot; Class B rents grew by an impressive 4.5 percent, to $19.39 per square foot.

multimodal infrastructure, industrial real estate leasing market, and investment variables, and local tax and economic incentive opportunities.

The firm found Dallas-Fort Worth to be balanced across all indicators: “Home to a huge population base, DFW is forecasted to grow by the greatest overall differential in the United States over the next five years.”

Adding to this sense of balance, JLL said, is a significant, lower-cost labor force market, as well as a growing attractiveness for business and headquarters operations given its strong pro-business environment.

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Moreover, the region has a core of Class I rail lines and intermodal operations that connect it with other major and regional markets around the country— in addition to an interstate network and major air cargo capabilities.

“All of these factors play into the substantial scoring of the industrial real estate market in our modeling,” the report said. “While vacancy is up recently as the development market heated up relative to its 10-year average, the region is home to a number of Class A space options at lease rates that provide cost savings compared to other major U.S. markets.”

TOP 10 U.S. DISTRIBUTION MARKETS 1. New Jersey-New York Metro 2. Southern California 3. Central and Eastern Pennsylvania 4. Chicago-Milwaukee 5. Dallas-Fort Worth 6. Atlanta 7. Indianapolis-ColumbusCincinnati 8. Baltimore-RichmondWashington 9. Houston-San Antonio 10. Louisville-Memphis-Nashville

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F FOUNDATIONS

As new projects begin to come online later this year and into 2017, competition among providers will increase.

North Texas data centers saw record-breaking activity in 2015, leading into a strong first half of 2016, according to CBRE Research’s secondquarter national data center report. The firm says cloud service providers (CSPs) have seen significant demand, with enterprise users adopting cloud storage at a faster rate than anticipated.

Total net absorption in Dallas-Fort Worth for the first half of 2016 came in at 6.7 megawatts. Vacancy rates dropped to 20.5 percent at the mid-year point, down from 22.5 percent at the end of 2015.

Delivery of new supply will be a big factor over the next 18 months. CBRE is currently tracking 730,000 square feet and 49 megawatts of wholesale colocation product under construction, with projects set to deliver in the next three to 12 months.

As new projects begin to come online later this year and into 2017, competition among providers will increase—especially for anchor tenants for new projects.

Haynes Strader Jr. with CBRE’s Data Center Solutions Group said he expects data center absorption to pick up significantly over the next several months. “This is as an opportune time for users and tenants to exercise the competitive nature of the Dallas market to drive pricing and terms in their favor,” he said.

MID-YEAR NORTH TEXAS RETAIL REPORT North Texas is entering a third year of record stability, as population and job growth soar and construction peaks. That’s the word from The Weitzman Group in its mid-year retail research report.

The study analyzed market activity in the state’s four largest markets.

Dallas-Fort Worth, with an inventory of 194 million square feet, has a current occupancy of 91.6 percent. That’s second only to year-end 1984, when the market was 92 percent occupied. Looking

at the other Texas markets, Houston, at 152 million square feet, is 95.5 percent occupied; Austin, with an inventory of 47.9 million square feet, has an occupancy of 86 percent; and San Antonio, at 44.9 million square feet, is 94 percent occupied.

Locally, occupancy gains in the past year were driven by new construction for anchors, limited store closings, and new retailer and restaurant tenants entering the market. They include H&M, which

opened in downtown Fort Worth and also leased space in that city’s Hulen Mall, and WinCo Foods, which took space in Carrollton’s Trinity Valley and Bardin Place on South Cooper Street in Arlington.

Lease rates in North Texas remain stable, after several years of increases, The Weitzman Group reports. Class A rates range from the mid-$20s to high $30s per square foot, with some spaces in the best-located projects going for $45 per square foot or higher.

TEXAS MARKETS SNAPSHOT DFW

HOUSTON

AUSTIN

SAN ANTONIO

194 million

152 million

47.9 million

44.9 million

OCCUPANCY

91.60%

95.50%

86.00%

94.00%

2016 CONSTRUCTION (SF)

2 million

2.9 million

700,000

1.3 million

2015 CONSTRUCTION (SF)

2.7 million

900,000

900,000

INVENTORY (SF)

SOURCE: The Weitzman Group

MULTIFAMILY DEVELOPMENT CONTINUES TO BE BRISK UNDER CONSTRUCTION: THE MAXWELL AT THE CANALS AT GRAND PARK IN FRISCO RENDERING: STREETLIGHTS RESIDENTIAL

ROBUST DEMAND FOR DFW DATA CENTER SPACE

Dallas-Fort Worth employers added nearly 110,000 jobs in the 12 months ending in July.

The employment growth has sparked a flurry of multifamily development. According to the industry research firm Axiometrics, more than 19,000 units will open in the region before the end of the year, and nearly 27,500 are projected to come online next year.

The Dallas markets of Victory Park-Uptown and Plano-Legacy West are especially attractive to developers. Density continues to increase, with a number of high-rise projects underway.

Despite the new supply, landlords were able to get average rent growth of 4.7 percent in DallasPlano-Irving and 5.5 percent in Fort Worth-Arlington in August 2016. Occupancy currently stands at 95.6 percent market-wide.

DFW INDUSTRIAL CONSTRUCTION BREAKS RECORDS

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at 11 million square feet for the first six months of the year, an increase of nearly 10 percent over the 2015 figure of 10 million square feet. Major tenants occupying space in the second quarter included Shippers Warehouse, Mother Parkers Tea & Coff ee, The Marco Co., OHL, and Genco Energy Services.

Leasing activity as of midyear 2016 was 14.3 million square feet, a decrease of nearly 14 percent when compared to last year. Submarkets that recorded the most activity included Irving-Coppell, Great Southwest-Centreport, and Alliance.

Tenants signing major leases in the second quarter included Amazon, Rheem Manufacturing, MARS

MIDYEAR INDUSTRIAL STATS 2016

2015

2Q OVERALL VACANCY

6.9%

7.4%

2Q LEASING ACTIVITY

14.3 million S.F.

16.6 million S.F.

2Q AVERAGE RENT

$4.24 per S.F.

$3.86 per S.F.

YTD NET ABSOPRTION

11 million S.F.

10 million S.F.

2Q UNDER CONSTRUCTION

23.9 million S.F.

13.1 million S.F.

MIDYEAR COMPLETIONS

8.6 million S.F.

8.5 million S.F.

Petcare, Saddle Creek Logistics, and UPS. The amount of industrial space currently under construction stands at a record 23.9 million square feet—an increase of nearly 82 percent when compared to what was underway at mid-year 2015.

The bulk of the new space, or 20.8 million square feet, is on track to be completed by the end of the year.

At the end of the second quarter, overall industrial vacancy stood at 6.9 percent, Cushman & Wakefield reports. This represents a drop of 50 basis points year-over-year.

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SOURCE: Cushman & Wakefield

Demand for industrial space in North Texas continues to outpace other intermodal hubs in the United States. Still, vacancy rates are expected to increase over the next 12 to 24 months as a whopping 23.9 million square feet of new inventory is delivered, according to an industrial market analysis from Cushman & Wakefield.

So far this year, nearly 8.6 million square feet of industrial space was added to the inventory, with nearly 80 percent of the new product being spec space. The Interstate 20 and Irving-Coppell submarkets accounted for about half of all new construction completions, Cushman & Wakefield found.

Overall net absorption came in

F FOUNDATIONS

CAPITAL MARKETS EXPERTS OFFER INDUSTRY INSIGHTS

BY CHRISTINE PEREZ

In the fourth of a five-part “Industry Insights” event series, The Real Estate Council and Real Estate Deal Sheet gathered top capital markets experts, who shared their perspectives on the latest trends in both private capital and institutional capital.

The event, held Aug. 17 at the Dallas Country Club, began with a keynote presentation from Trey Morsbach, senior managing director of HFF. It was followed by two panel discussions, moderated by Jake Fraker, vice chairman and managing partner of CBRE’s capital markets industrial practice. Here are excerpts: TREY MORSBACH, HFF: “MSCI and S&P has identified real estate as a new vertical.

This means we are real, and we have been validated as an industry asset class.

That’s a big deal. In some ways it’s a game-changer. If you look at the last 30 years of global institutional ownership, we’re talking trillions of dollars of real estate, they’ve increased their allocations from 2 percent to 10 percent. That’s a five-fold increase.

We have serious tradewinds behind us in terms of real estate capital. That’s why we have seen six straight years of transactional increases. ... Foreign capital is starting to come into Dallas and other secondary markets.”

TOM MASON, HILLWOOD: “Our investors are very [internal rate of return]-driven.

We pick assets in different locations, based on our metrics, and historically, we’ve had great performance. Our investors are soverign wealth and foreign pensions. We will go to any market and look at product we believe is value-add. We’re very much job-centric. ... We are given flexibility within our funds to go where we see the opportunities. They’re looking for returns that are generally in the 16 to 18 percent range. So long as we find those opportunities, we underwrite them internally.”

PATRICK RAMSIER, LEGACYTEXAS: “We have a $2.2 billion real estate portfolio, with 92 percent of that in Texas. A good percentage of what we do is in Dallas-Fort Worth, but we’re in other markets throughout the state, including tertiary markets. We’re actually a little bit contrarian, so we’re still in Houston. Often times we’ve seen in our history that when markets slow down, that creates the best opportunity for us.”

DOUG GUNN, TRINITY PRIVATE EQUITY GROUP: “Recently the star has been value-add. The deeper the value-add, the greater the performance. I’ve been particularly impressed by what our partners have brought into us in terms of financing. I am impressed by what I see in terms of proceeds and in terms of rates, and that has translated into returns.”

BILL VANDERSTRAATEN, CHIEF PARTNERS: “Every deal we look at, we assume it’s a five-year sell. But lots of times, especially in the last three or four years, you find yourself in a position where the deal actually evolved better than you thought it was going to and it ends up being a long-term cash-flow vehicle for the family. If we do 10 or 12 deals a year, two or three become long-term holds. For the rest of them we would add value and, as they say, ‘conquer the beast and get the hell out.”

PJ BRADY, ATCAP PARTNERS: “Most of our investors are based in Texas, and they’ve been asking us to reach outside of Texas lately. I think they just feel they have overallocations in Texas real estate. We aren’t afraid of tertiary markets. ... A lot of the bigger players in our market have moved upstream. We think there is a big void for that $20 million to $70 million portfolio, which is the arena we play in.”

JOHN BERRY, IRON POINT PARTNERS: “The portfolio work we’ve done has really

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DON’T MISS THE LAST INDUSTRY INSIGHT EVENT OF 2016: NOVEMBER 16: RETAIL SUMMIT DALLAS COUNTRY CLUB

been in borrower recapitalizations. In terms of acquiring and generally looking at portfolios, we tend not to. However, in senior housing and some of the other things we do, we put portfolios together in order to sell. When you have the small dollar amounts, $5 million to $10 million of equity in each deal, generally the REITs or some of the funds that are acquiring these want larger transactions so they can move the needle.”

DAYTON CONKLIN, CLARION PARTNERS: “The fund as it sits today is about an $8 billion-in-assets fund. We try to keep about 10 percent to 15 percent of our fund in development. It’s core-plus type of returns that we’re focused on.

Fundamentals have been so strong, developments have been leasing up so quickly. With our foot on the gas pedal and pushing as hard as we can, we’re still in the range of $400 million to $600 million under development at one time.”

CARRINGTON BROWN, USAA REAL ESTATE CO.: “As a firm with 35 years of experience and a decent amount of capital, we get a lot of calls. We invest across the risk spectrum, so not only are we involved with equity but we’re also involved on debt side. Our firm is very comfortable with development, particularly on the industrial side.”

AMBER RAO, KEYBANK REAL ESTATE CAPITAL: “We have some long-standing customers, but for the most part we are actively out in the market calling on new customers and looking to form new relationships with owners of real estate that are Texas-based. ... We’ve had consistent growth year over year, especially with our commercial mortgage group.”

JENNIFER WENZEL, TEACHERS RETIREMENT SYSTEM OF TEXAS: “We are in a bit of a precarious position because we are investing or the long term for the teachers in Texas, but we’re also judged on short term, one- and three-year returns, and our partners are all incentivized on IRR.”

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ZACH FEE • TEXAS REGION CEO • UMB BANK

We moved to Dallas in 2013 and knew that choosing our flagship location was critically important. We were immediately attracted to KPMG Plaza at HALL Arts based on the high caliber of its existing tenants, and the building’s location in the Dallas Arts District, the center of connectivity for the business community, really sealed the deal.

HALL Arts currently includes KPMG Plaza at HALL Arts, the half-acre Texas Sculpture Walk and the new Stephan Pyles Flora Street Café.

FOR LEASING, CONTACT KIM BUTLER AT 214.269.9550.

K PMG PLA Z A AT HA LL ARTS • 232 3 ROSS AVENUE • DALLAS, TEXAS 75201 • H A LLA RTS .COM

HALL INSPIRES

MURPHY MURPHY

WYLIE WYLIE

PLANO PLANO

G

Y

HW

Y

HW

WYLIE WYLIE

75

75

MURPHY RICHARDSON MURPHY RICHARDSON EO GR EO

78

I-3 WYLIE 30

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78

W

Y

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GARLAND GARLAND

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PLANO PLANO DA LLAS RICHARDSON G DA LEL A S RICHARDSON G H

HW HW Y Y 75 75

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PLANO G E PLANO GB U SACHSE E SH T B U U R NPI SACHSE SH T U R NKPE RICHARDSON MURPHY IK E RICHARDSON MURPHY WYLIE 0 G

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BE UGARLAND H TUR BSUGARLAND S H T N P IK E URNP IK E

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0

B BUILDING TOMORROW TOGETHER

PHOTO: MICHAEL SAMPLES

SPREADING THE WORD THE DALLAS REGIONAL CHAMBER GETS THE MESSAGE OUT FACE TO FACE IN TOWN HALL MEETINGS

BY ERICA FLORES DIREC TOR OF ECONOMIC DE VELOPMENT, DALL AS REGIONAL CHAMBER

As a Dallas native, I make it my personal mission to help others fall in love with the place I call home. I enjoy meeting people while on business travel and have ample opportunity with our economic development efforts that have taken me across the country and even across the world. It makes sense that I do what I do for a living — recruiting corporations to relocate to DFW or expand existing operations in the region. In this position, I get to do what I love most — travel and brag about Dallas. After all, I wouldn’t be a true Texan if I didn’t tell everyone I met that I’m from the Lone Star State.

Traditionally these trips consist of meetings with C-level executives at large

FA L L 2 0 1 6

companies and include an overview of the regional business climate. However, recently, the Dallas Regional Chamber has made an effort to educate employees of a relocating company so that they can make an informed decision about their own move, and we support the company to achieve its goals for bringing employees along on the move. This falls in line with the Chamber’s strategic plan as it relates to talent attraction. These trips are similar to the corporate meetings, but they’re on a more personal level, which is what I enjoy the most. That’s where my team and I come in.

We’ve been fortunate enough to host town hall style meetings for employees of Toyota,

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

B BUILDING TOMORROW TOGETHER Kubota Tractor Corp., Jamba Juice, and Spirit Realty Capital, to name a few. It’s during these meetings that we come faceto-face with employees who have many questions — and sometimes misperceptions — about Dallas and the state of Texas as a whole, but I also learn more about Dallas and many of the things I have taken for granted. Sure, I know that the Dallas Fort Worth International Airport is bigger than the island of Manhattan, or that the DART light rail system is the longest light rail system in America, but doesn’t everyone else in other metros have the same quality of life that the Dallas region does?

Our low cost of living makes North Texas an attractive destination for job seekers, millennials, and those looking for more opportunity. MyDallasMove.com has a great Cost of Living Calculator that we use in these employee presentations, and it allows you to plug in your annual salary in your current metro and compare it with DFW. For example, if you make $80k annually and live in San Francisco, you would only need to make $43, 784 to maintain the same lifestyle in Dallas. For some families considering a move, that could open up a world of possibilities like home ownership, family planning, or just overall financial freedom. I purchased my first home when I was 22 and have been renting, just outside of downtown Dallas for 12 years, and have been fortunate enough to have never felt the burden of housing costs like other markets do. This particular comparison shows that the Dallas housing market is over 75 percent less than San Francisco, with the cost of groceries, utilities, transportation,

WE HAVE A LOW COST OF DOING BUSINESS, LOW COST OF LIVING, JOBS APLENTY AND IT’S JUST BETTER HERE. and health care all falling well below the city by the Bay. I don’t realize this is such a big deal, because for me, it just is.

Another bit of information that potential Dallasites are surprised to learn is that the Dallas region is a hub for transplants from all over. Now, to me, that seems like common knowledge. We have a low cost of doing business, low cost of living, jobs aplenty and it’s just better here. Our region currently holds at about 7 million residents with around 360 new residents added per day. Fifty seven percent of those new residents were added through net migration. Our largest net gains from other metro areas are from Los Angeles and Chicago with over 10,000 people migrating to the region between 2009-2013. New York comes in as a close third during that same time period. That’s a lot of out-of-towners. They come for work, school, family, and a variety of other reasons, but they come here and are immediately welcomed with Texas hospitality and a community of other transplants who are now proud to call Dallas home.

Others might look at me and think I love Dallas because it’s all I’ve ever known.

That’s definitely a true statement. However, I learn more from the people I meet on my travels who tell me they visited for a conference and loved it, or from people in Dallas who are surprised to learn I’m a native because everyone they know is from somewhere else. People are moving here, from all over. That speaks for itself.

WANT TO LEARN MORE ABOUT HOW TO GET INVOLVED IN BUILDING TOMORROW TOGETHER?

Contact Mike Rosa, Senior Vice President, Economic Development, Dallas Regional Chamber 214-746-6735 | mrosa@dallaschamber.org

BUILDING TOMORROW TOGETHER The Dallas Regional Chamber’s economic development program, Building Tomorrow Together, provides organizations in Dallas-Fort Worth with an accelerated investment opportunity that helps advance our region’s success. This additional investment made by more than 130 organizations in addition to annual 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.

1 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

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The Salazar Center • 14 Story building with available office space for lease • Within easy walking distance of all or most major downtown destinations.

• Office space available from 2,000 to 12,000 square feet • Ample parking, garage availability, and easy access to and from major highways such as North Central Expressway and I-30

DOWNTOWN DALLAS

FARMERS MARKET

CESAR CHAVEZ BLVD.

ARTS DISTRICT

MAIN ST.

DEEP ELLUM

• Strategically located in downtown Dallas between Deep Ellum, the Farmers Market and the Arts District

FOR MORE INFORMATION, CONTACT LETTY MARES 214-741-2514 | 2201 MAIN ST., DALLAS, TX 75201

Industry Insights: Retail Summit Despite the U.S. economy’s ups and downs, retail remains profitable

Details: Date: Wednesday, November 16 Ticket Cost: $100

in the DFW area. What game-changing trends are influencing retail

Location: Dallas Country Club

decisions for investors and developers?

Time: 7 – 9:15 a.m.

Visit recouncil.com for tickets

The Real Estate Council and Real Estate Deal Sheet have partnered to bring you unparalleled access to industry experts and networking opportunities.

PRESENTED BY

Imagine.

Empower.

Impact.

FA L L 2 0 1 6

FOR MORE INFORMATION R ECOU NCIL .COM

214 692 3600 PHONE

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

SUCCESS STARTS IN

ALLEN, TEXAS

Call Us: 972-727-0250

contact@allentx.com | AllenTX.com

DEEP ELLUM’S EPIC DEVELOPMENT

THE CRANE REPORT

Fall 2016

Developers are at work on millions of square feet of commercial space in North Texas, as companies and residents continue to make it a top relocation market. In each issue of the Dallas-Fort Worth Real Estate Review, we detail projects that are planned and underway in the region in The Crane Report. Data for the office and industrial markets is provided by Xceligent Inc. Data for the multifamily market is provided by Axiometrics Inc.

BY CHRISTINE PEREZ

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

OFFICE

SHARON FRIEDBERG

Senior Vice President, Fischer

“In the past, people moved to Dallas for the jobs. There is now a fundamental change in that jobs are moving to Dallas for the talent. Companies are spending the money on rent and interior design to attract the brightest and best.”

FA L L 2 0 1 6

KIM BUTLER

Director of Leasing, Hall Group

“Most of the absorption we’ve seen over the last few years in Far North Dallas has been the result from smaller to midsize companies moving to the submarket and the growth of the companies of that size that are already here.”

INDUSTRIAL

MULTIFAMILY

CHRIS TEESDALE

JAY DENTON

“There have been some very large leases completed with little fanfare, so the market would appear to be quiet, but that is a false assumption.

Activity has been strong in nearly all submarkets, and absorption is still outpacing new construction.”

“With the number of new units coming to market, absorption is more difficult with demand reduced, even slightly.

So property owners, especially in urban-core areas, are hesitant to raise rents too much.”

Executive Vice President, Colliers International

Senior Vice President of Analytics, Axiometrics

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

THE CRANE REPORT:

● ANNOUNCED ● UNDER CONSTRUCTION

OFFICE

GARDENIA VILLAGE OFFICE PARK CYPRESS OFFICE

OAKMONT OFFICE CONDOS BLDG 4

332 W LEBANON RD

ANNOUNCED + UNDER CONSTRUCTION

OLD TOWN BLVD NORTH BARTONVILLE TOWN CENTER

SANYO ENERGY HEADQUARTERS MEADOWLANDS ADDITION BLDG I

ANNOUNCED DEVELOPMENTS

104 COUNTRY VIEW DR

NE OF MORNINGSIDE ST AND S OAK ST

1

EPIC OFFICE

SIZE: Up to 300,000 square feet DEVELOPER: KDC LEASING AGENT: CBRE DETAILS: Deep Ellum is the latest “pocket market” to catch fire in urban Dallas. One of the biggest new mixed-use projects in the neighborhood is Epic, developed by Westdale Properties and KDC, which is handling the office component. Designed

by Perkins+Will, it will sit on Pacific Avenue at Good Latimer Expressway.

SE OF GOLDEN TRIANGLE BLVD AND OLD DENTON RD

7105 GOLF CLUB DR PAD SITE

3665 WESTERN CENTER BLVD

1501 HUGHES RD

HIDDEN RIDGE AIRPORT 161 HQ CENTER

7114 MID CITIES BLVD

TEXAS MUSIC FACTORY

THE OFFICES @ HAMPDEN WOODS 2901 WINGATE ST

TEXAS SHALE TOWER

D. R. HORTON HEADQUARTERS

FROST TOWER FORT WORTH

1201 8TH AVE CLEARFORK PHASE I

701 SECRETARY DR THE GARDENS AT TOWN CENTER I

WATERSIDE BLDG L

4015 IH 20 W

6940 HARRIS PKWY

MATLOCK PROFESSIONAL OFFICE PARK

SUMMER CREEK STATION GARDEN HULEN VILLAGE OFFICE

ONE BETHANY AT WATTERS CREEK

2 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

THE PONDS ADVENT PARC BLDG 2

CANNON PROFESSIONAL PLAZA HIGHPOINT COMMONS

THE ATRIUM REGENCY STATION

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

3

THE REALM

FREEPORT COMMONS WILCOX PLAZA AT LAS COLINAS THE APEX AT LAS ROYAL COLINAS CROSSING TOWER PHASE I PINNACLE TOWER II

PEDERSEN OFFICE PARK

NE OF W 7TH ST AND ARCH ADAMS ST

SIZE: 125,000 square feet DEVELOPER: Kaizen Development Partners LEASING AGENT: Chris Doggett with JLL DETAILS: Allen will get its first Class A office building with this new project from Kaizen Development, in partnership with the Allen Economic Development Corp. Designed by BOKA Powell, it will sit between Watters Creek and the Allen Convention Center Hotel.

SOUTHLAKE MEDICAL OFFICES CARILLON COURT

4101 HIGHWAY 121 BYPASS BLVD

801 VISTA RIDGE ENTERPRISE DR ROCKBROOK SW OF FM 2499 AND GERAULT RD RED HAWK OFFICE VILLAGE 2 GRAPEVINE PARK STATION WEST MAIN STREET COPPELL PLAZA SIGNET JEWELERS THE SOUND

SOUTHLAKE RETAIL DEVELOPMENT HIDDEN LAKES HERITAGE OFFICE PARK PHASE II

FOSSIL CREEK STATION

EXPEDITION PLAZA

2

BEAR CREEK OFFICE PARK

PRAIRIE COMMONS TROPHY CLUB TOWN CENTER

1640 FM 544 CROWN CENTRE

NORTHWEST PLAZA

TANGLEWOOD OFFICE PARK

3001 TURTLE CREEK

SIZE: 350,000 square feet DEVELOPER: Hillwood Urban DETAILS: A joint partnership with the Perot family, this latest development from Hillwood Urban will include a one-acre park that connects to the Katy Trail. It’s being designed by The Office of James Burnett, the landscape architect behind Klyde Warren Park. The 17-story office tower is being designed by Jon Pickard of Pickard Chilton in New Haven, Conn.

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WHISPERING FARMS COMMERCIAL CENTER BLDGS 1-6 THE FORUM AT PROSPER WEST

1840 LAKE FOREST BLVD

PROSPER CROSSINGS

CONLEY COMMONS PHASE II

CRESCENT PARC 6579 VIRGINIA PKWY UNIT A1

NE OF ELDORADO PKWY AND TEEL PKWY 4645 WYNDHAM LN FRISCO SQUARE BLDG B9

SUMMIT PARK II

3900 STONEBRIDGE DR

5001 COLLIN MCKINNEY PKWY

WESSEX@ ALMA ROAD

ONE FOUNTAIN COURT

940 W STACY RD

TWIN CREEKS OFFICE PARK

2

A CLOSER LOOK AT COLLIN COUNTY

CHESTNUT COMMONS PHASE II

SW OF W EXCHANGE PKWY & JUNCTION DR WATTERS JUNCTION

7638 STONEBROOK PKWY STEWART CREEK OFFICE CENTER STONEBROOK BUSINESS PARK THE FORUM AT WADE

332 W LEBANON RD WESTSIDE MARKET PHASE II

THE GATE FRISCO STATION

WATTERS CREEK OFFICE WATTERS CREEK AT MONTGOMERY FARM

STONEBRIAR COMMONS ON LEGACY

5

SW OF STATE HIGHWAY 121 & DALLAS NORTH TOLLWAY PIZZA HUT HEADQUARTERS PARKWAY PROFESSIONAL CENTER

MURPHY MEDICAL OFFICES

FRISCO HIGHLANDS OFFICE PARK

COWBOY ALLEY BLOCK A-2 NE OF OHIO DR JPMORGAN & RASOR BLVD CHASE

ONE LEGACY WEST

SPRING CREEK COMMONS WINDHAVEN PLACE ONE DEXTER US HIGHWAY 75 PROFESSIONAL @ RENNER ROAD PARK MAPLESHADE NW OF W FM 544 CREEK BLDG & N MURPHY RD INTERNATIONAL BUSINESS MAPLEPLEX PARK 190 PALISADES CENTRAL NORTH DALLAS OFFICE CENTRE MEDICAL CENTER II 399 MELROSE DR BLDG 2

INTERCERAMIC

PRESTON @ WADE CROSSING

PRESTON ONE TOWER PLAZA AT LEGACY PHASE II LEGACY BUSINESS PARK LEGACY III LAKES OF TENNYSON PROFESSIONAL

CAMPBELL CROSSING OFFICE PARK

For North Texas office developments at least 10,000 square feet in size, Xceligent reports that 40 projects totaling 9.4 million square feet are under construction Another 162 projects totaling 26.6 million square feet are planned or proposed. All are represented on this map; a sampling are labeled.

FOUR GALLERIA TOWER 200 N 5TH ST

UNDER CONSTRUCTION

PRESTON HOLLOW VILLAGE PHASE IV 8100 PARK LN UNIT G

PARK CITIES PLAZA 4401 W LOVERS LN

2505 TURTLE CREEK BLVD ROLEX TWO VICTORY PARK

FORMER CHASE BANK BUILDING

FOUR ENERGY SQUARE

3 3001 TURTLE CREEK BLVD ARTS PLAZA 4 6 TWO THE 1 SPIRE

910 N BRYAN BELT LINE RD

THE UNION

SUNNYVALE PROFESSIONAL PLAZA

SOLA ON LAMAR DAVIS STREET MARKET

5

3201 DALLAS PARKWAY

6

1900 PEARL

SIZE: 300,000 square feet DEVELOPER: Hall Group LEASING AGENTS: Kim Butler and Brad Gibson, Hall Group DETAILS: At 12 stories, the 17th building at Hall Park will be its tallest. The 162acre development off the Dallas North Tollway in Frisco already is home to 2.2 million square feet of office space, which is 96 percent leased. It’s also home to a nearly 200-piece art collection.

ONLINE EXTRA

THE CRANE REPORT: INTERACTIVE VERSION

online at dfwrealestatereview.com

4

HARWOOD NO. 10

SIZE: 226,778 square feet DEVELOPER: Harwood International LEASING AGENT: Jihane Boury with Harwood DETAILS: Designed by Dallasbased HDF, Harwood No. 10 will be ready for occupancy in the fall of 2018. As its name implies, the 22-story tower will be the 10th development in the Harwood district in Uptown. The ground level will feature more than 9,000 square feet of retail and restaurant space, with adjacent gardens and outdoor seating.

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SIZE: 260,326 square feet DEVELOPER: Lincoln Property Co. LEASING AGENTS: Worthey Wiles and Jake Young with Lincoln DETAILS: This 25-story Arts District Tower will sit next to the Meyerson Symphony Center on Pearl Street, with immediate access to Klyde Warren Park. Designed

by HKS Inc., the tower is scheduled to open in late 2017.

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

DENTON CREEK BUSINESS PARK

THE CRANE REPORT:

US 380 BUSINESS PARK BLDGS 2-5

INDUSTRIAL

OAK HILL BUS PARK BLDGS 2-6

WESTGATE BUSINESS PARK

MARKET STREET INDUSTRIAL PARK BLDGS 4 & 5

5075 TIM DONALD RD

ANNOUNCED + UNDER CONSTRUCTION

LEWISVILLE CORPORATE CENTER

GATEWAY BUSINESS PARK LOTS 6-8

ANNOUNCED PROJECTS

SPEEDWAY DISTRIBUTION CENTER BLDG C METROPLEX NORTH BUSINESS PARK

1

ALLIANCE WESTPORT

I-20 COMMERCE CENTER

5

FARMER BROTHERS COMPANY

ALLIANCE CENTER NORTH 15

3 MARY KAY

LAKESIDE RANCH

PROLOGIS PARK 121 BLDG 5B

KUBOTA TRACTOR CORP

LEGO

SIZE: 900,500 square feet DEVELOPER: Copeland Commercial LLC LEASING AGENTS: Kurt Griffin and Nathan Orbin with JLL KEY PLAYERS: Powers Brown Architecture and Arch-Con Corp.

DETAILS: This new speculative industrial facility got the green light after securing $43.5 million in financing from American National Insurance Co. It will sit on Houston School Road off Interstate 20 in Lancaster.

NW OF HILLSIDE DR & N MILL ST

DCT WATERS RIDGE PARKVIEW MAJESTIC AIRPORT COMMERCE CENTER DFW CENTER

FREEPORT NORTH

PARK WEST CROSSING

12500 WILLOW SPRINGS RD 1363 BRUMLOW AVE BLDGS 1-7

12801 HARMON RD 1005 CHISOLM TRL

1001 KENNEDY LN

RAILHEAD INDUSTRIAL PARK

TTI, INC

RIVERBEND WEST DISTRIBUTION CENTER

DFW EAST LOGISTICS CENTER BLDG A

DFW/161 DISTRIBUTION CENTER 100

1815 RELIANCE PKWY

NW OF NE LOOP 820 AND IH 35 W

ROYAL TECH 18 PARC 114 BLDG 9

BLDGS I & II @ COLLEYVILLE BLVD

RIDGE RAILHEAD

SIGNET JEWELERS

NW OF CORPORATE DR LOGISTICS AND ESTERS BLVD CENTER

CENTREPORT COUNTY LINE RD PARC GSW

GSW GATEWAY II BLDG V HILLWOOD 1460 AVENUE S

4

BEAR CREEK CORPORATE CENTER RIVERPARK 1100 WILDLIFE COMMERCE PARK

WILDLIFE 360 GLOBAL COMMERCE PARK LOGISTICS PARK

2809 SHAMROCK AVE 901 S CHERRY LN

LOGISTICS CROSSING 2 2317 W ARKANSAS LN

● ANNOUNCED ● UNDER CONSTRUCTION

2

COOPER IH 20 BLDG B

SOUTH CENTRAL DISTRIBUTION CENTER II

120/161 CROSSING

KENNEDALE PKWY F

ONLINE EXTRA

THE CRANE REPORT: INTERACTIVE VERSION

online at dfwrealestatereview.com

CONSTELLATION BRANDS

2 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

MOUNTAIN CREEK BLDG 2

1102 ENTERPRISE PL

UNDER CONSTRUCTION

SIZE: 450,000 square feet DEVELOPER: Scannell Properties KEY PLAYER: Evans General Contractors DETAILS: This new center for one of the country’s largest beer and wine distributors is underway at Prime Pointe Industrial Park in Hutchins. It will sit at 1600 W. Wintergren Road and be operated by Biagi Bros., which handles shipping for New York-based constellation.

PARK 20/360 BLDGS 1-8

4900 SUN VALLEY DR

619 S WISTERIA ST HERITAGE COMMERCE CENTER BLDG 2

3

MARY KAY

SIZE: 470,000 square feet KEY PLAYERS: Jacobs Engineering, Beck Group DETAILS: This new $100 million manufacturing and R&D facility for the Addison-based cosmetics giant will sit on about 26 acres along Denton Tap Road at E. Vista Ridge Mall Drive in Lewisville. It’s expected to be ready for occupancy in the first quarter of 2018.

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PROSPER BUSINESS PARK CORPORATE DR

10401 CLARENCE DR

THE TECH CENTER ON GREENVILLE BLDGS 2 & 3 13 PRESTIGE CIR CREEKVIEW 121 BLDGS 1-4

LEGACY CENTER 5

4814 DOZIER RD

PLANO TECH CENTER 2 & 8 PLANO COMMERCE 2910 PARK SITE A GUILDER DR

For North Texas industrial developments at least 10,000 square feet in size, Xceligent reports that 67 buildings totaling 18.5 million square feet are under construction. Another 182 projects totaling 48.4 million square feet are planned or proposed. All are represented on this map; a sampling are labeled.

RAGING WIRE

Forney Features....

PROLOGIS VALWOOD CORPORATE CENTER DIPLOMAT I

SW OF MARQUIS DR AND S SHILOH RD BLDGS 1 & 2

MERCER BUSINESS PARK

SW OF MILLER RD & SANDEN DR NORTHGATE DIST CENTER

11070-11090 N STEMMONS FWY

21 Miles East of Dallas

3600 LEON RD

9749 CLIFFORD

45,000 Primary Trade Area Population

MESQUITE INDUSTRIAL BUSINESS PARK FEDEX I-30 BUSINESS CENTER BLDG 3

PROLOGIS/ BUCKNER LAND

800+ acres light industrial Land available

SOUTHWEST DISTRIBUTION CENTER

PLANNED POINTSOUTH LOGISTICS & COMMERCE CENTRE PROLOGIS PARK 20/35 LAND INTERMODAL MIDPOINT STONERIDGE BUSINESS CENTER LOGISTICS CENTER SOUTHFIELD PARK 35 SOUTHPORT LOGISTICS PARK BLDGS 1-9 RIDGE PARK I-20 SUNRIDGE DUKE INTERMODAL III TWENTY LOGISTICS COMMERCE BUSINESS CENTER SE OF PLEASANT RUN RD CENTER PARK BLDG 2 & SUNRIDGE BLVD SOUTHPORT TRADE CENTER I 35 INTERCHANGE I DALPORT TRADE CENTER DFW INLAND PORT

2

1

2,000 Acre Gateway Mixed-Use Development

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

4

MOTION INDUSTRIES INC.

SIZE: 156,000 square feet DETAILS: Industrial distributor is expanding its North Texas operations with a 200 W. Trinity Blvd. in Grand Prairie. The operation will serve more than 550 branch locations in North America. A two-story office component will house the company’s Southwest division and a visitor’s showroom.

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5

CREEKVIEW I AND II

SIZE: 193,000 square feet DEVELOPER: EastGroup Properties DETAILS: The Jackson, Miss.-based developer is expanding its Texas portfolio with a twobuilding industrial complex in Lewisville.

Phase I will be a 121,758-square-foot facility; phase II totals 70,823 square feet. Beyond that, two additional buildings are planned.

Retail sites available Access to U.S. 80 and IH-20 Forney EDC 972.564.5808 www.forneytexasedc.org Info@ForneyTexasEDC.org

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

WOODLANDS APARTMENTS I MAJESTIC ON MCKINNEY

THE CRANE REPORT:

MULTIFAMILY

SEVENTWELVE

EPIC APARTMENTS AT UNICORN LAKE

ANNOUNCED + UNDER CONSTRUCTION

DISTRICT OF HIGHLAND VILL

ANNOUNCED DEVELOPMENTS 1

RIVER WALK VI

● ANNOUNCED ● UNDER CONSTRUCTION

ELAN LAKESIDE PH

GREYSTAR CITY LIGHTS

UNITS: 365 DEVELOPER: Greystar Real Estate Partners DETAILS: South Carolina-based Greystar plans to break ground before the end of the year on its latest North Texas multifamily developoment. It will sit at Live Oak and Texas streets within its City Lights development. The 10-story second phase will include a full-service Tom Thumb supermarket at its base.

ONLINE EXTRA

THE CRANE REPORT: INTERACTIVE VERSION

VERA LUXURY APARTMENTS

online at dfwrealestatereview.com

DOLCE LIVING HOME TOWN PH 2

THE SCENIC RESIDENCES AT RIVER EAST PH I ARLINGTON COMMONS PH I

HUNTER PLAZA

ELAN AT RIVER DISTRICT

250 LANCASTER

ALTA LEFT BANK-FLATS THE KELTON AT CLEARFORK

HIGHPOINT ON SOUTH MAIN OLEANDER

RIVERVUE

101 CENTER

C

THE RESERVE IN GRAND PRAIRIE

TIMBERVIE RANCH

2

COLUMBUS REALTY PARTNERS-MCKINNEY

UNITS: 320 DEVELOPER: Columbus Realty Partners DETAILS: Multifamily pioneer Robert Shaw is expanding his reach in North Texas with this new development near McKinney’s historic town square. The project, which will include 45,000 square feet of office space and 20,000 square feet of retail space, will sit on nine cityowned acres at Davis and McDonald streets. Construction is expected to get underway in January 2017.

VILLAGGIO

THE MAIN STREET LOFTS

UNDER CONSTRUCTION 3

THE MCKENZIE

UNITS: 183 DEVELOPER: StreetLights Residential and Tricon Capital Group Inc. DETAILS: This 22-story project, underway at Harvard Avenue and Tracy Street in the Knox-Henderson area, is designed to be reminiscent of a historic luxury hotel. It will target empty-nesters, with units that range from 990 to 2,700 square feet and one to three bedrooms, as well as limited penthouses. It’s scheduled to open in early 2018.

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ADARA WINDSONG RANCH

THE GRAND ESTATES OF LINCOLN PARK

I 3EIGHTY

Y

2 THE MANSIONS OF MCKINNEY

THE EMERSON PALLADIUM AT FRISCO LITTLE ELM MARKET APARTMENTS PARKVIEW SQUARE II APARTMENTS

MAXWELL

THE STRATUS AT PHILLIPS CREEK I

AMLI FRISCO CROSSING

F LAGE

BROADSTONE LAKE RIDGE

HEBRON 121 STATION THE ELLIS

PARKSIDE AT CRAIG RANCH III

GABLES WATER STREET

RICHLAND PARK APARTMENTS LBJ STATION APARTMENTS

THE CALLIE MIDTOWN RIVERSIDE PRESTON PARK PARK HOLLOW VILLAGE ALEXAN APARTMENTS LAKE HIGHLANDS TOWN CENTER LAS COLINAS GALLERIES AT PARK LANE THE LAUREL PARC AT JEFFERSON ON WHITE ROCK THE LAKE CAROLYN ATWOOD CREST AT THE ASH AT OAK PARK THE BRANCH THE MCKENZIE

7

3

DENTON DR AND INWOOD RD THE ALEXAN MAGNOLIA STATION ADDITIONAL UNITS CYPRESS AT TRINITY GROVES

BROADSTONE COMMERCE PROJECT

4

651

6

KATY STATION

THE MALLORY EASTSIDE

CREST AT PARK CENTRAL II

MODERA GALLERIA

THE PARC AT WYLIE

AURA ONE90

JEFFERSON GALATYN PARKWAY

ALTA PALISADES I

AURA 5515 BRICKYARD AT MERCER PARK

MODERA HALL STREET

PARK AT THE GATEWAY

ALEXAN CITYLINE I BROADSTONE 5151

PARSON`S GREEN

AVILLA PREMIER PLACE

RP ON PARK

H II

RALEIGH HOUSE

TWIN CREEKS CROSSING II DOLCE LIVING TWIN CREEKS PH I

THE BRIDGE AT HERITAGE CREEK

BROADSTONE PARK PLACE

LAKEVIEW POINTE AT INDIAN CREEK

THE SOUND APARTMENTS

POST OAK APARTMENTS

CHAPEL CREEK COMMONS VERUS JEFFERSON STONEBRIAR HUNTINGTON APARTMENTS

THE GRAND AT LEGACY WEST THE HUDSON AT AUSTIN RANCH

DISCOVERY AT THE REALM

ILLAGE

THE VENUE AT CRAIG RANCH

5

UNITS: 340 DEVELOPER: Mill Creek Residential DETAILS: One of the area’s most active multifamily developers has just begun work on this project at the eastern edge of downtown Dallas. Situated on Hall Street between Ross Avenue and North Central Expressway, the project will include a dog park, resort-style pool, and fifth-floor sky lounge.

HARMONY HILL I

TERRA LAGO

VILLAGE OF ROWLETT

WESTERN RIM BAYSIDE

VILLAS AT MAGNOLIA AT VANSTON PARK LAKEWOOD PARK DISTRICT MODERA HALL STREET THE CASE BUILDINGS

BROADSTONE FARMER`S MARKET

GATEWAY OAKS

UNITS: 461 DEVELOPER: Genesis Real Estate Group DETAILS: This 30-story tower will be the tallest in Victory Park when it opens in 2017. Designed

by EDI International, the units will range in size from 614 to 3,748 sq. ft. Amenities will include a rooftop dog park and an urban cycling club.

TRINITY PRESBYTERIAN CHURCH

VILLAS CENTRAL PARK

EW

DATA SOURCE: AXIOMETRICS INC.

4

ALEXAN KATY TRAIL

UNITS: 159 DEVELOPER: Trammell Crow Residential DETAILS: Larger units are on tap for TCR’s newest multifamily project, which will be built on Carlisle Street near the Katy Trail. Designed by GDA Architects, construction kicked off in August with completion scheduled for November 2018.

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PARC AT WHITE ROCK

UNITS: 291 DEVELOPER: Richman Property Services Inc. DETAILS: Served by a DART commuter train station, this project is being built at the corner of Lawther Drive and Northwest Highway and is scheduled for completion later this year.

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S SCORECARD RENAISSANCE TOWER

THE GENERAL SERVICES ADMINISTRATION AND THE ENVIRONMENTAL PROTECTION AGENCY SIGNED A 20-YEAR LEASE AT RENAISSANCE TOWER. PHOTO: ANDREYKRAV VIA ISTOCK

SCORECARD

Fall 2016

New tenants are moving into Dallas-Fort Worth, but a great deal of the leasing activity of this past quarter has come from existing tenants expanding into larger digs. That’s why vacancies are tightening, even with new construction that’s underway. Here, we look at the top five office, industrial, and retail leases across North Texas during the past three months. As always, data is provided by Xceligent Inc.

BY CHRISTINE PEREZ

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

OFFICE

SUSAN ARLEDGE

Managing Director, E Smith Realtors

“The interest from corporations about relocating to the Dallas area continues to increase, and the DFW region continues to be at the top of most relocation decisions.”

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TREY FRICKE

Principal, Lee & Associates

“Development is perfectly aligned with demand. We have shifted from a great to a good market as we come out of the summer period, which is typically slower.”

INDUSTRIAL

RETAIL

GARY LINDSEY

MARSHALL MILLS

“The most interesting trend I’m seeing is the increase in base rents. Over the past three years, they’ve reached levels greater than what we’ve experienced prior.”

“The outlook for 2017 is good, as we’ve only begun to see the positive impact of population growth and retail demand created by the wave of new corporate headquarters. ”

Managing Director, Newmark Grubb Knight Frank

The Weitzman Group

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ARLINGTON

Perfect Location | Vibrant Economy | Can-Do Culture

ARLINGTON: WHERE DEALS GET DONE Arlington is in the spotlight and perfectly situated at the epicenter of North Texas.

Beyond our world-class entertainment is the backbone of our city: Economic vitality, a diverse, skilled workforce and a culture of global opportunities.

Office of Economic Development ArlingtonTX.gov/ecodev | 817-459-6155 | ecodev@arlingtontx.gov

S SCORECARD 3

2

OFFICE LEASES

5

4

0-5,639 SF

1

5,63918,486 SF 18,48658,214 SF 58,214130,290 SF 130,290250,000 SF 250,000750,000 SF

LARGEST OFFICE LEASES

X

1

U.S. GSA AND EPA

SIZE: 229,000 square feet at Renaissance Tower TENANT REPS: TK LANDLORD: Binyan Realty LP LEASING AGENTS: Dennis Barnes, Clay Gilbert, and Ben Davis with CBRE DETAILS: Two U.S. agencies, the General Services Administration and the Environmental Protection Agency, are leaving Fountain Place for Renaissance Tower, where they’ve signed a 20-year lease.

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2

FM GLOBAL

SIZE: 79,500 square feet TENANT REP: Mary Stoner, Colliers International LANDLORD: Blue Star Land LEASING AGENTS: Worthey Wiles, Jake Young, Chris Axley, and Eliot Prieur of Lincoln Property Co. DETAILS: FM Global will be the largest tenant at The Star’s signature office tower and home of the Dallas Cowboys in Frisco. The commercial property insurer will occupy the entire sixth floor, and space on the fifth floor, too. About 300 employees will take occupancy in June 2017.

3

BANK OF AMERICA

SIZE: 63,000 square feet TENANT REP: Russell Cosby and Steve Thelen, JLL LANDLORD: Blue Star Land LEASING AGENTS: Worthey Wiles, Jake Young, Chris Axley, and Eliot Prieur of Lincoln Property Co. DETAILS: About 200 employees of Bank America and affiliates, including Merrill Lynch and U.S. Trust, will move to Frisco’s new mixed-use complex in early 2017.

5

4

APRIMA MEDICAL SOFTWARE INC.

SIZE: 55,000 square feet TENANT REP: John Roper with CBRE LANDLORD: Momentum Commercial Realty LEASING AGENTS: Roy Greenberg and Bryan Lurie with Momentum DETAILS: The electronic health records company signed a corporate headquarters lease at 1010 E. Arapaho Road in Richardson. About 250 Aprima employees from various North Texas sites, including its former headquarters in Carrollton, began moving into the new space in August.

COCA-COLA

SIZE: 27,000 square feet at Granite Park TENANT REPS: Greg Biggs, Conor McCarthy, Torrey Littlejohn, and Brooke Armstrong of JLL LANDLORD: Granite Properties LEASING AGENTS: Aarica Mims and Robert Jimenez of Granite DETAILS: The soft-drink giant is the latest big corporate brand to pick Plano.

About 100 employees will make the move to the ninth floor of Granite Park One in December. The 10-story, 256,000-squarefoot building was developed in 1999.

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THANK YOU TO OUR SPONSORS! Thank you to our generous sponsors, members and guests for helping us raise mission-critical funds at Giving Gala for TREC Foundation’s good works in education, housing, jobs and the environment. Learn more at recouncil.com.

LIMELIGHT

SPOTLIGHT

PARAMOUNT

MEDIA

CONGRATULATIONS IMPACT AWARD WINNERS! Giving Gala honored a member, a member company and a nonprofit organization with annual Impact Awards. The Volunteer Impact Award went to Tyler Berns of Austin Commercial for volunteering the most hours over the year. The Membership Impact Award honored Jones Day for providing outstanding leadership, vision and service. The Legacy Leaders Impact Award was presented to the Dallas Police Youth Foundation for making a lasting positive impact on the community.

S SCORECARD

INDUSTRIAL LEASES 5

4

2

< 40,120 SF

3 1

40,120153,920 SF 153,920355,076 SF 355,076656,600 SF 656,6001,128,227 SF 1,128,2273,018,708 SF

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

1

ANN HUNTINGTON

4

RYAN WOLCOTT

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GEODIS

SIZE: 616,875 square feet TENANT REP: Ann Huntington with CBRE LANDLORD: Mept Gateway/Pinnacle Park LP LEASING AGENT: Bates Arnot with Hillwood DETAILS: A leading third-party logistics provider in North America, it previously operated as OzburnHessey, before being acquired by GEODIS. The company renewed its lease for its large operation in Dallas.

LARGEST INDUSTRIAL LEASES

2

GEODIS

SIZE: 190,913 square feet TENANT REP: Ann Huntington with CBRE LANDLORD: DCT La Reunion LLC DETAILS: Along with its renewal and sublease, the 3PL has inked a new lease at 3801-3875 La Reunion Pkwy.

The property sits near Interstate 30 in West Dallas.

5

VPET USA INC.

SIZE: 167,440 square feet TENANT REP: Ryan Wolcott of Stream Realty Partners LANDLORD: Huntington Industrial LEASING AGENTS: Seth Koschak and Eric Crutchfield of Stream DETAILS: Garland is expanding its manufacturing base with VPET USA Inc., a plastic bottle manufacturer based in California. The company went on to purchase 3839 Distribution Drive upon completion.

3

GEODIS

SIZE: 225,500 square feet TENANT REP: Ann Huntington with CBRE SUBLESSOR: Southwest Moulding Co. LP LEASING AGENTS: Nathan Orbin and Michael Swaldi with JLL DETAILS: In another big deal, GEODIS subleased space for a big operation at 3845 Gifford Street in Grand Prairie.

HOTLINE DELIVERY SYSTEM

SIZE: 110,240 square feet LEASING AGENT: Dave Anderson of CBRE DETAILS: The delivery and shipping company leased the space in International Airport Center at 615 Westport Pkwy. in Grapevine.

DAVE ANDERSON

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S SCORECARD

RETAIL LEASES

3

4 2

5

< 4,720 SF 4,72015,800 SF 15,80037,500 SF 37,50078,844 SF

1

78,844152,946 SF

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

1

HOBBY LOBBY

SIZE: 55,000 square feet LOCATION: Southwest corner of U.S. Hwy. 287 and Broad Street in Mansfield TENANT REP: Paul Burkhart with Concordia Equity LC LANDLORD: 42 HL Mansfield LP LEASING AGENTS: John Zikos, Edward Bogel, and David Davidson Jr. with Venture Commercial Real Estate DETAILS: A new store for Hobby Lobby will join Kohl’s as anchors in Mansfield Marketplace;

2

SPROUTS FARMERS MARKET

SIZE: 28,000 square feet TENANT REP: Jean Smith with CBRE LOCATION: 7100 Wildcat Way in Dallas LANDLORD: Cypress Advisors LEASING AGENTS: Jeff Kittleson and Rich Flaten with CBRE DETAILS: Sprouts will open its newest North Texas grocery store near Walnut Hill Lane in the Lake Highlands area.

LARGEST RETAIL LEASES

3

HABITAT FOR HUMANITY RESTORE

SIZE: 18,000 square feet LOCATION: 2060 W. Spring Creek Pkwy. in Plano TENANT REP: David Schnitzer with Venture Commercial Real Estate LANDLORD: WC Custer Creek Center LP LEASING AGENT: Roger Smeltzer with Vision Commercial DETAILS: Habitat for Humanity of South Collin County will open a nonprofit home improvement store and donation center at Custer Creek in Plano.

4

KIRKLAND’S

SIZE: 11,590 square feet LOCATION: Southwest corner of E. Southlake Boulevard and S. Carroll Ave. in Southlake TENANT REP: Greg Bracchi and Megan Nabholtz Trimble with EDGE Realty Partners LANDLORD: Excel Southlake I LEASING AGENTS: Tim Henson and Amy Pjetrovic with Venture Commercial Real Estate DETAILS: The home decor retailer will join REI, Luke’s Locker, and other tenants at Park Village, a 186,000-square-foot outdoor shopping center.

5

BOI NA BRAZA CHURRASCARIA SIZE: 7,579 square feet LOCATION: 300 W. Las Colinas Blvd. in Irving TENANT REP: Dennis Leibovitz with The Retail Connection LANDLORD: Ark Group of Irving Inc. DETAILS: Boi Na Braza is the latest restaurant tenant to sign on for space in the Music Factory in Las Colinas.

DENNIS LEIBOVITZ JEAN SMITH JOHN ZIKOS DAVID SCHNITZER

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GREG BRACCHI

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R ROUNDTABLE

SCOTT POLIKOV

A national leader advancing the new economics of place, Scott Polikov is known for his work in unlocking the true value of neighborhoods, focusing on public-private partnerships.

REAL ESTATE REVOLUTION HOW DALLAS DESIGNERS AND DEVELOPERS ARE LEADING THE INDUSTRY THROUGH A TSUNAMI OF CHANGE.

BY CHRISTINE PEREZ PHOTOGR APHY BY MICHAEL SAMPLES

JEFFORY BLACKARD

As founder and CEO of Blackard Global, Jeff Blackard has developed more than 20 masterplanned communities.

He’s the driving force behind the “NeoRetroism” development philosophy.

Demographic shifts and technological advancements are having a profound impact on the way people are working, shopping, and living. Designers and developers are tasked not only with keeping up with these radical changes— and the speed at which they are occurring—but also predicting what kind of space will be in demand 10 or 20 years down the line. Thankfully, DallasFort Worth is home to some of the most talented innovators in the industry. We recently gathered a panel of experts to get

MICHAEL ABLON

The founding partner of PegasusAblon runs a multidisciplinary development and investment firm focused on the integration of emerging markets and evolving demographic trends.

their insights on innovations in real estate.

Here’s what they had to say.

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R ROUNDTABLE

HEATH MAY

An associate principal at HKS, Heath May directs the firm’s Laboratory for INtensive Exploration (HKS LINE), which focuses on advancing architecture and design through technology.

CHRISTINE PEREZ: Let’s start by getting a little background info and learning a little more about what each of you do.

ROBERT SHAW

One of the region’s most active multifamily developers, Robert Shaw helped pioneer Uptown and was a proponent of walkability decades before the movement caught on nationally.

JEFF EITING

A vice president at CBRE, Jeff Eiting is co-leader of the firm’s technology and media practice in Dallas.

A trusted adviser, he works with both startup and mid-cap corporate clients.

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MIKE ABLON: I’m founding partner of PegasusAblon.

We’re a Dallas-based company that focuses on where culture meets the city fabric, and we do that specifically within real estate.

ROBERT SHAW: I’m managing partner of Columbus Realty Partners, which focuses primarily on multifamily developments. I’ve been doing it for more than 30 years, since 1987.

SCOTT POLIKOV: I’m with Gateway Planning. We’re a Dallas and Fort Worth based urban design and development consulting firm, and work all over the country.

Walkable neighborhoods are what we work on, as well as downtown redevelopment and new development primarily for legacy owners looking for long-term value creation rather than merchant building returns in two to three years.

HEATH MAY: I’m with HKS LINE, our Laboratory for INtensive Exploration. We are a design studio and a research and development team. I’m a generalist architect who works on a wide variety of projects, from sports stadiums to small residential apartments.

JEFF EITING: I’m an office tenant rep at CBRE, where I specialize in technology and media clients. I help startup companies all the way up to established companies, and everything in between, both in Dallas and nationally.

JEFF BLACKARD: I’m the founder and CEO of Blackard Global, and I build villages. I’ve done resorts and masterplanned communities and office parks, but for the last 12 years of my life, I’ve focused on building villages.

North Texas is known for its “business-asmutual” attitude, doing things like building a park on the top of a divisive highway and forming public-private partnerships. What are some other real-estate-related innovations that originated here? And in your career, what’s the most innovative thing you’ve done or seen?

SHAW: One is the creation of what’s called the “garage wrap,” which is a four- and five-story apartment complex wrapped around an elevated garage. I believe that happened in Dallas here first, and it’s been perfected here. Most of the multifamily projects being built in the country today use that. At the time it was being created, building codes didn’t really allow for it. City of Dallas staff and others were very responsive to it. You couldn’t have had the urban expansion of housing like we’ve had if it all had to be in concrete. And the fact that you could do it in a form that met your customer’s needs, and do it with wood—it has been profound.

POLIKOV: We work around the country, and I can tell

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R ROUNDTABLE you that Columbus Realty gets direct credit for that innovation.

SHAW: So, I wasn’t seeking that credit here. I was just highlighting that fact that a lot of consultants and city people had to be involved in that process.

ABLON: When I think of innovation, I think of a partner of Robert’s, Roger Staubach, and the way he pioneered tenant representation as a service sector. It was a major innovative factor for the industry on a national basis. It was fun for me early in my career to see it develop, and a lot of kudos to Mr. Staubach for doing that. Second was the invention of the internet, which led to the prevalence of a just-in-time product coming on and its direct correlation to the industrial sector. Dallas was very much at the front end of the warehouse becoming a logistics facility. The way those buildings were built to innovate in real time to keep up with the changing world of distribution and logistics was remarkable.

EITING: For me, it’s Trammell Crow. He started his business here, and started the partner model of real estate. And then you look at the Dallas landscape and across the country, at how many leaders started at Trammell Crow and built companies with that partner model.

It was before my time, but everybody in our company—CBRE merged with Trammell Crow Co.— definitely tries to carry that flag forward.

POLIKOV: Tax Increment Financing is a tool that many states now use around the country.

Texas has been a leader in using that to facilitate public-private partnerships. One example is a project we worked on, taking a very valuable hard corner at U.S. 75 and State Highway 190, creating a design that would be enduring through multiple cycles, driving long-term value. It allowed us to sell the property at a very strong fair market value price to KDC. And that TIF was also sold to KDC. What’s interesting about that is that the TIF reimbursements were used to write-down the effective longterm lease to State Farm. State Farm was happy to pay a few dollars over per-square-foot for a highly amenitized environment, but not the total cost. So Richardson effectively participated as a partner in that ability to attract State Farm. I think a lot of people misunderstand that properly used, tax increment financing actually is a core partnership tool.

ABLON: Well, it was very instrumental in the Design District. They set up a TIF there, and it helped take a 60-year-old city fabric into a new

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fabric. For redevelopment, is an incredibly helpful instrument.

POLIKOV: If the cities and counties don’t participate through these long-term reimbursements for the right projects, then there is pressure on the developers to really dumb-down the projects so they can work financially.

Any other innovations?

POLIKOV: I’d like to mention one more, which involves collaboration. TxDOT deserves a lot of credit for leading the Dallas CityMAP project. We were on a team with HNBT for the design and development analysis for the corridors that surround Interstate 345 and what to do with them. Patrick Kennedy and D Magazine first raised the issue, but the collaboration between the city, the county, the development community, DART, and TxDOT—it’s unparalleled in the country. I think TxDOT completely changed the dialogue by taking the lead, and of course Commissioner Victor Vandergriff deserves a lot of credit, too. I think North Texas will be put on the map in terms of absolutely influencing the rest of the country in that regard. They took a risk, and it worked.

The world as we know it is changing, with a tsunami of new technologies and trends changing the way people work and live. What’s the most significant example of this that you have noticed?

ABLON: Dallas was clearly a post-World War II suburban city from the infrastructure and mentally. And the leading industry of Dallas for the last 50 years has clearly been in-migration. It’s not technology. It’s not manufacturing. It’s in-migration. As much as the internet connected people, it has disconnected them. In return, there has been a desire to get back to a little more connectivity. It’s interesting to watch any suburban city’s high growth turn into itself and start to urbanize. From what Robert was doing years ago on McKinney Avenue to the notion of the Design District and the notion of Preston Center. Walkability has become necessary—a check box on a matrix to get a project done. The duality of continued suburbanization and urbanization is a pretty neat combination.

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R ROUNDTABLE

SHAW: Office tenants are looking for walkability because they want to employ the millennials who want to be in walkable, mixed-use environments. That’s what drove CityLine in Richardson, and that’s what’s driving Toyota, JP Morgan, Liberty Mutual, and others in Legacy West. It’s all the same. It’s urbanism suburban markets. Addison Circle was a great example of that. Legacy Town Center was a great example of that. But what we have now today is the corporate support. That has been a significant driver. Another big thing is going on, demographically, is what we call this “extended adolescence,” of the “odyssey years,” which is a deferment of marriage. People in their late 20s are living in apartments longer—and they want nicer apartments, too. They aren’t as price-sensitive as they might have been at one time. We’re also seeing baby boomers return to apartments. … That’s propelling all the high-rise (multifamily) development—a belief that the market will be there.

ABLON: If the 28-year-old is an extended adolescent, what do you call the 60- or 65-year-old? A return to adolescence?

SHAW: Yes. A return to adolescence.

MAY: We are talking about the tsunami of technology and the trends; I think it’s interesting to dig into why those trends are happening. What is the technology enabling? What’s underlying how these people are changing the way they live, based on the changing world? I’ve been reading lately a book by Alvin Toffler— you guys have all probably read it—called Future Shock. He says sometimes it’s not the change that’s problematic, but it’s the rate of change. And what we are seeing now—it’s a drastic swing. He says if you divide human history into 800 generations, more has changed in No. 800 than in the previous 799. When you think about that, it’s fascinating, because we’re now on 801, and it’s probably going to continue to change at that rate. When you unpack why are people looking for these new products, well, they have different values. For many of the millennials we hire, it’s not just the bottom line they’re looking for. They want meaningful work and they want a meaningful life. Work is part of that, but it’s not all of that. That’s going to drive new desires.

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ABLON: With the word millennial, we tend to inadvertently assume they’re all the same. We’ve actually looked at a different context and called it Generation C or Generation Connected. The influence in driving change isn’t only in that new group. They’re just the vanguard. The millennial is nothing but a vanguard, the first defector of a larger group that also includes 40-, 50-, and 60-year-olds. It’s not an age-based demographic, it’s a lifestyle-based overlay. For both multifamily and office, it’s a different context, but it isn’t just the millennial. All of us are going there as fast as we can. The young subset is just less obligated. They don’t have houses.

They don’t have children. They are not as obligated to make the change faster. They have more freedom. They also probably have more baggage to unpack. Following Robert’s lead — and we’ve innovated it in our own way — we developed (apartments in the Design District).

One of the shockers for us was the average age (of the renters) was well into the 40s. It told us that we weren’t really serving the millennial. We were serving a generation that is now connected.

POLIKOV: The word vanguard is interesting.

We worked on a transit project in the Salt Lake City region. A very fast-growing tech company out of California was looking to relocate there, and one of the brokers was talking about the

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R ROUNDTABLE

JEFFORY BLACKARD

site selection group that came in. Seven of the 12 people were women; everybody was under 35, and they said, fundamentally, only show us sites that have direct access to transit and walking distance to urban housing. Think about that. It’s a complete flip from just five years ago (when cost was the big driver in decisions). The same is true in housing. It’s not an income issue, it’s a cultural preference.

We’re now delivering housing for extended families, for example, that has multiple entryways, construction types where you can actually reconfigure the units easily, if the developer finds that the mix has changed. These are innovations that architectural firms like HKS can really jump on. To me, that’s an unmet need where innovation can really be advanced.

We’re all talking about how these are all new trends. But, Jeff, your belief is that this development style is actually very old. Can you talk about what you learned in Croatia, and the philosophy you call NeoRetroism?

BLACKARD: Sure. I did a development called Adriatica in McKinney. It was modeled after an old fishing village in Croatia, but it’s really about the philosophy behind how we approach real estate. I’ve come to believe that how we develop in America is completely wrong. We use zoning to segregate our society.

I came to these conclusions after studying Old World villages that have survived for centuries in Europe. So I visited with some of the great planners in the world today, and I asked them, “What are we trying to be?” We had the subdivisions of the 1940s and ’50s and ’60s, then the master-planned communities and the gazebos, and then we got to new urbanism. I realized that what we are really trying to create is a village. But we are driven by Wall Street, which dictates certain things. What Wall Street hasn’t figured out is that a village has less risk. So that’s my passion. I’ve only done one little $200 million experiment, but I’m working on another village in Corpus Christi.

My whole belief is this: I think the philosophy should drive the design. It’s not something I invented; this development approach has been around for a long time. We’ve got to fix it here, and we have to stop our disease from spreading to other countries.

Your approach goes beyond new urbanism to include mixed income levels and mixed

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uses all sharing the same space, not segregated within a development. It goes back to flexibility and connectivity, which is what’s driving everything we’re talking about. So how could the North Texas real estate industry be more innovative? And what unique ingredients does DFW have to unleash the innovation tsunami? Conversely, what’s standing in the way?

POLIKOV: I think Jeff already said it. We have to break the hold on real estate finance. As long as we have the single uses and cash flows that are driven by real estate, it’s basically just a commodity that represents a cash flow as opposed to underwriting to a more complex set of diverse factors that will reduce risk—which in single cash flow underwriting actually is viewed as the opposite. With village environments, you have more diverse-use cash flows mixed together. I think we can innovate financially instead of our simplistic underwriting, which our big institutional investors require. And I think Dallas-Fort Worth can actually stand up and say, “Nope. We could actually return present-value greater returns than what your model suggests.” As things currently stand, stratification is forced just going by the underwriting. Smaller, newer developers want to do it, but unless they have a special angel or a private equity source that gets it, a lot of times they can’t get financing.

SHAW: The institutional market wants the cash flows associated with walkable, urban mixed-use. But you’re right. They are very complicated, and the sponsor matters. These are big deals—a $200 million project on four city blocks that has 130,000 square feet of retail, 130,000 square feet of office, 700 apartments—they are just not going to do that with anybody, because it’s just too big.

POLIKOV: The small ones tend not to get financed if they have a lot of moving parts.

SHAW: Yeah, I get you. But I’m telling you, the core funds, the pension core funds are now looking for that product because they have confidence in this financial performance over a long period of time. Our partner in Legacy West, which is a $400 million project, is a core fund. They don’t ever want to sell it. They want to own that forever.

POLIKOV: I think that’s the exception.

SHAW: But, there’s an appetite for that type of real estate project. Now, to respond to your question about what opportunities we have to unleash innovation. First, there’s a lot of real estate talent here in Dallas. There are a lot of very smart, very

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good people in real estate and city government, believe it or not, who get it.

From Fort Worth to Dallas to Plano to McKinney, they get it. And then you’ve got a lot of policymakers who are searching for the truth and helping build their cities for the future. We’re very fortunate that we don’t have a lot of the barriers that other cities have; some communities like to assign this “bad intent” on a developer when they’re trying to do the built environment. When you bring all that together, DFW is responding and delivering a lot of things that speak to what Jeff ’s talking about, but also perform financially. That gives me a lot of optimism, and whether it’s technology-led or customer-driven, or whatever, we’re going to respond, because of the ethos of this place.

ABLON: There’s a difference between place-making and building a retail center. A lot of the reference here has been place-making, whether it’s a village or whether it’s some kind of urban fabric, and there’s a place for both. Our company tends to migrate to something that is place-making because it has an identity, it has an ethos, it has a vibe. When you talk about great cities you don’t talk about the city, you talk about moments within the city, the sequence of great moments— Chelsea, Soho. In Dallas, a young city that’s now maturing, you talk about the Cedars, you talk about Uptown, and now Legacy West and its urban moments.

There’s a defined difference between having the capacity to build an apartment complex or a strip center or office building and place-making. That’s a different talent. It’s much more multidimensional and requires a number of skills. Over the next 15 years, it’s going to be really fun to watch and participate in the place-making in Dallas-Fort Worth.

MAY: You know, that’s so true. A city or anywhere that is fully inhabited is about a sequence of moments. From a design standpoint, where we can improve at the very fundamental core of what we do is kind of synthesized. I think we can do better in working with developers and working with policymakers to help to investigate and experiment with standards.

That’s one thing that’s holding us back. I think we could have a series of these talks to better understand the trending asks of the market. Understanding what people expect now is not going to be what people are going to expect in 10 years, right?

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They have different expectation, and they may not want the typical floor-to-ceiling glass in an office building. They may value that their building is more sustainable from an energy standpoint, and that’s just one example.

BLACKARD: There’s too much pressure on the architects and planners today. Developers go to them and say, “I own 10 acres or 50 acres.

I would like to do apartments.” And then you design it. What the developer should say is, “I want this, this, this, and this.” And I don’t see that. Robert should get a gold star for his work at Addison Circle. I mean, that was the first village-building, really, in Dallas. I can remember the structured parking with apartments and retail on the first floor. Other developers need to be more educated about their projects and what they’re trying to accomplish — and give designers the freedom to stretch that far.

POLIKOV: I have a little bit different view. As a planner and designer, I think the planners and designers don’t take enough responsibility in terms of working with the developer.

Robert and I were just talking. He’s struggling under some of our design codes that are now more than 10 years old. We’ve learned over time, but I think it’s the planner’s and designer’s responsibility to actually engage the developer — stand in the shoes of the developer and ask themselves: Is it financeable? Is it constructible? For me, the test is over a 20or 30-year life cycle. Will that neighborhood, that village, that strip center, whatever it is, will it reinvent itself ? In other words, when it ages, will an investor come in and buy it and rehab it —or is it going to be depreciated in an amortization schedule because it’s designed

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ROB RINER

WE ARE VERY LUCKY. DALLAS IS A BREEDING GROUND FOR SOME OF THE BEST DEVELOPERS AND ARCHITECTS IN THE WORLD. IF YOU CAN MAKE IT HERE, YOU CAN MAKE IT ANYWHERE. — JEFFBLACKARD to check a box, and the first in makes the money, hopefully, and then nobody cares after that. I think that’s the planner and designer’s responsibility as much as it’s the developer’s responsibility.

BLACKARD: I’m not pointing at anyone when I say developers. Let me be clear.

POLIKOV: One other thing. Earlier there was the mention of “businesses as mutual.”

There is a different culture in Dallas-Fort Worth, and you alluded to it, Mike. Great neighborhood development requires integration, cooperation, private-private, public-private. I don’t know of any other place in the country as regional ethos that does it better than DFW. The reason that’s super important is a lot of the Sunbelt regions are focused on reinventing the core, and then they hope the suburbs are just going to be OK. Here, we’re working on villages and neighborhood centers—some reinvented that are old and some are new—in the suburbs. So people in this region don’t have to go into the core of Dallas or Fort Worth to get that urban experience.

Culturally, that is something. Regionalism is really the analog to businesses as mutual. Of course, DFW International Airport probably broke the mold. The pain that Dallas and Fort Worth and Grapevine and other cities went through to get DFW Airport done was the game changer that actually changed the regional culture, because it required everybody to work together in a way that others don’t.

BLACKARD: We are very lucky. Dallas is a breeding ground for some of the best developers and architects in the world. If you can make it here, you can make it anywhere.

SHAW: But don’t leave city staff and policymakers out of that. There are a lot of good people with good intent, seekers of the truth who are trying to do well by their communities.

POLIKOV: A lot of them are risk-takers, and that’s hard when you’re on the public side.

SHAW: Dallas-Fort Worth is kind of self-selected for collaborative, good people

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ECONOMIC DEVELOPMENT DEPARTMENT 35W

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377 114 121

114 377 26

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trying to help create a great environment. We’re the beneficiary of that. Jeff mentioned Addison Circle. Addison Circle would not have happened if there had not been mayor’s approval there. I get some of the credit, but obviously the city of Addison deserves a lot of the credit because they were there in the partnership with me. The same for the city of Dallas and Uptown. They don’t get credit for it, but the policymakers, the media, and others were very supportive and nurturing that creation of Uptown. I was just the kind of arms and legs and helped the city.

I tell cities this all the time. I’m just the arms and legs helping you fulfill your vision for your city, whether it’s downtown McKinney or the city of Plano.

Let’s focus on the built environment itself. What trends are shaping the future of architecture and design, both in commercial and residential space?

DFW Airport Downtown Fort Worth Alliance Airport

POLIKOV: I would like to hear Jeff talk about how the preferences are changing from the tenant perspective in terms of office space. The office market is really something that is obviously very different today than it was even five, or six, or seven, eight years ago. Where for example when I go to work, none of us are in our formal offices. We always go to the conference room and sit together. I have millennial partners. I never want to go into my office, but the building is designed around a building that’s 15 or 20 years old.

EITING: From the office tenant perspective it’s all about community and community-building. It’s about shared space. A lot of people nationally are talking about the co-working trend and what co-working really means. Is it in Dallas, or is it going to come here? As you look forward, you see owners and others investing in co-working. They have a floor and a building that they own and they create a come-and-go type space. Mobility is everything. People are doing business in cars or doing business from their homes. It’s really the ability to do things on their own time, in their own environment, wherever they are. At CBRE we call it “Office 360.” We have a check-in time arrangement where I’m out of the office 50 percent to 60 percent of the time. And I’m not out playing golf. Companies are really looking at their footprint and saying, “Look. If we have vacancy for this period of time, how do we manage that? How can we compress our footprint?

And if we’re taking away space, how can we still provide amenities to our staff ?”

Outdoor also is big; I’ve never had discussions about outdoor space more than I am right now. This has already happened in other parts of the country. But because of our climate, I think that a lot of people put that up as a barrier. Now, it’s coming here because so many folks from other areas are relocating here. People

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JEFF EITING

FROM THE OFFICE TENANT PERSPECTIVE IT’S ALL ABOUT COMMUNITY AND COMMUNITYBUILDING. IT’S ABOUT SHARED SPACE. A LOT OF PEOPLE NATIONALLY ARE TALKING ABOUT THIS COWORKING TREND AND WHAT COWORKING REALLY MEANS.

BRENT JACKSON

— JEFF EITING from the coasts want that in their work environments and (landlords) are starting to build it.

MAY: That’s an interesting point … considering urban downtown environments as an amenity.

The city becomes the amenity space. You don’t have to provide a cafeteria in your building, because people can walk down the street and have three different food and beverage venues.

That’s something Dallas is starting to catch on to. We’re responding to in a way that is encouraging to me. But the co-working thing, that’s so interesting. There have been detractors, but then you look at somewhere like (co-working company) WeWork—and I think their recent evaluation was $16 billion earlier this spring. ... We’ll see where it goes, but they are obviously responding to something. In terms of other things influencing the work environment, we’re working with a behavioral human scientist on staff and a design anthropologist, and we’re starting to really dig in and understand what types of spaces people want to work in.

We’re then using technology to layer on top of that. So you can do things like when you check into your hotel, within your office, even finding a space that has the right temperature or has the right lighting conditions. There are people creating applications on your phone.

One of the West Coast architects has one called Goldilocks where you can say, “I want the room (with) lighting of this level, a temperature of this level and will hold five people.” It will tell you, “Go to these three different rooms that are

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open right now.” It’s a smarter way to use space. We’re using less of it and being a lot more efficient with it.

EITING: I like your analogy about the city being the amenity. I’m a little biased, but I’m ready for Dallas to stop saying “live, work, play.” It’s a buzz word that people from outside of Dallas are hearing and are saying, “What do you mean by that?” I think it’s just, it’s your place, wherever you are. Because of the nature of our community, because of our sprawl, I think it’s a buzz word that’s caught on here. But if you look at what’s going on in the urban core of Dallas, it’s everything. If you project out what our city is going to be—there are going to be very few barriers to the urban core. Uptown is going to bleed into the Design District, which is going to bleed into Trinity Groves. The Cedars and South Dallas and Deep Ellum are all going to be the urban core.

ABLON: On all of our product that we build, no matter the asset class, we formally talk about the third room. The third room is that outside room. And that outside space is an integral part of the actual design concept of the actual building we built. That can be a relationship to the trail, like the Katy Trail. Up north, we built a pocket park and operated around it. And Preston Center, it’s the street. The street is a room. So we very much focused on that third room. We’ve formalized that as an integral piece of not just how you face it but what we actually build and don’t put in a building. … I’ve enjoyed watching McKinney and Olive. In jest I call the building 2.0. It’s the first building of a new typology that’s more externally focused on the street than it is internally as a building. And if you look at a conventional office building, you say, “Where is my front door and where is my lobby?”

And that’s your sequence. You have arrival, and you have reception, and you have an elevator. McKinney & Olive is quite different. It’s very focused on the street.

EITING: It’s also causing their neighbor, the Ritz, to reorient itself to complement the street.

ABLON: The part that’s fascinating about that is you have a building affecting a city fabric the same way Rockefeller Center and its urban room affected the traffic around it. It’s 2.0 for Dallas. It’s going to be really fun to watch, as opposed to having a space and buildings around it. The new format starts to change the way all the spaces are constructed. That’s really great for a city fabric.

POLIKOV: That’s why it’s fun to be in this business right now. Jeff was talking about what’s old is new. The street is everything. I think that’s the biggest opportunity

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ROBERT SHAW

CHRIS TEESDALE

McKINNEY Situated for business.

in Dallas-Fort Worth. We have so much city fabric to work with. When we were doing the plan in downtown McKinney, we asked them why they had three lanes of traffic going in each direction going through the square. When we reinvented that square and went to two lanes each way and slowed the traffic down, Rick of Rick’s Chophouse said within six months, his business went from one-third walking and two-thirds reservations to two-thirds walk-in traffic and one-third reservations. Our test for the planning and design of the urban fabric is: Is somebody willing, when the temperature allows, to sit outside at a cafe environment?

Is the speed of the traffic going by or is the street design such that they are willing to spend 50 bucks a person on a meal sitting outside in front of the building? I call it the hang-out factor. And if they’re not willing to hang out in front of that building, then that street is improperly designed. I think retrofitting streets is really a big opportunity for Dallas. Look at Main Street in downtown. Look at Commerce Street in downtown.

BLACKARD: All our answers are overseas. Everything we talk about in architecture and the streets … all the answers are right there. We got it wrong for such a long time. Now, we’re trying to fix it.

POLIKOV: I think what we have to do is do what Robert said: We have to support the public side. We have to give the city managers, the engineers, the finance directors, the planning directors, and then ultimately the planning commission and city councils the cover to say, “If we’re not getting any public spaces correct, then how do you expect that the private development will be successful?” A lot of times that means that you slow down traffic, and it will take people a few more seconds to get through an intersection. What a lot of cities forget is that when you blow out an intersection, you’re just making it easier for somebody to drive through your city and go spend their money elsewhere.

BLACKARD: That’s like Wick Allison talking about tearing down Interstate 345— that’s genius. It’s as genius as Klyde Warren Park. At first, I didn’t understand it.

But as you talk about things, the more people understand. This city needs to do more of that.

ABLON: I challenge one thing you said a little bit. You said all the answers are overseas. We have so many new pieces that affect how we live and what we do. We still have the human condition. That hasn’t changed. We still have two legs. We still function, you know, in a human interactive way. In a world that’s changing

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R ROUNDTABLE that much, some of the answers aren’t there yet. I think you’re seeing some of it being written here. When you go travel over there, you can see a 2,000-year-old city that has morphed over time, typically to engage the ethos and fabric of its culture. Dallas is a 100-year-old city in a sense, that has doubled in size five times in that 100 years. It’s still establishing itself. I don’t think all the answers are (overseas).

I think some of them are going to be here, because some of the answers aren’t written yet.

BLACKARD: But as far as how we evolve as a people group, the answers are there.

ABLON: It’s inseparable.

SHAW: Look at what technology is doing in the retail industry today. Clearly we don’t know where it’s all going to end.

ABLON: Right.

SHAW: It’s profound how many things are being delivered to our homes now. Forget about going anywhere. The first go-to place is Amazon Prime. So, what does that mean for retail when so much of what we buy, we get off the internet?

POLIKOV: I think Jeff ’s right in one sense. I’m on the national board of the Congress for New Urbanism, and we convinced them to have their annual congress here last year. People were blown away when they got here. They had no idea we were doing some of the best urbanism in the country. From a design and development standpoint, I think we are definitely the bellwether in the country. Where I think we can learn from, say Europe, is the notion of mixed housing. That is the key to me. It’s the front line. It speaks directly to the challenges we have in this country on race. We are not encouraging people to live with others of different incomes and different ethnicities. People self-select, but we have zoning standards that require stratification and separation of housing types. Whether it’s the Design District or Addison Circle or Adriatica—you all have been the leaders—but for the most part, developers run into the zoning rules at the cities that actually require them to not mix housing.

Switching gears a bit, Hillwood brought an expert from the Center of Brain Health to help design its new headquarters, to look at how people work and productivity.

And in some cases, social anthropologists and environmental scientists are also weighing in on space decisions, as you touched on, Heath. At some point, policymakers may also get involved. How

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SCOTT POLIKOV

BRENT JACKSON

have you seen strategies like these play out in North Texas?

MAY: I think interdisciplinary teams are most effective. I look for the edges in anything I do. That’s where the interesting overlaps occur and that’s where we can truly learn something new. When we relocated HKS’ office (to downtown Dallas), we didn’t have the benefit of having a design anthropologist on our team. But we did some post-evaluation of the space and we are using it to learn what we did wrong and what we did right. Mostly what we did was wrong. We’re taking that information and experimenting as we’re moving and finishing up another floor. We’re making changes based on that information, and that’s kind of closing a feedback loop. It’s really important to measure, so we can understand. I also worked with Sandy Chapman at the Center for Brain Health. And she would visit our office and sit at my desk. It’s a standing desk but I’m in a very large open space, and she told me I wasn’t getting anything done, because I couldn’t concentrate. That flies in the face of the idea about these open office environments. She gave me some literature and educated me a bit on how the creative mind works and the need to have the collaboration but then to retreat and process that information. Those are things that we’re just learning about and they’re a bit contradictory to the way we have been designing office space. But I think that input from the anthropologist, the behavioral human scientists, and then just polling people at the end of the day— that’s what’s really beneficial and allows us to take the next step. We have to be open-minded. I can’t approach a project thinking I know how to lay out an office.

If I do that, I’m going to leave a lot of potential on the table. But if I come in and ask questions, we might discover something new or do something better.

What were some of the things you think you did wrong and are changing with the new space?

MAY: One thing we discovered is that, even though we tried to get our ratio of what we call “me space” and “we space” correct, we were severely lacking in our “we space.” So places that people could have impromptu meetings of three to four to five people were lacking. And then conversely, when people are in an open environment, the auditory, or the pollution of the noise, really affects some people more than others. Even being able to have a private phone conversation becomes an issue. We’re all wearing headsets, but still people want to be able to get into a private, closed-off room to have some conversations. We also have what’s called

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MICHAEL ABLON

CHRIS TEESDALE

R ROUNDTABLE

DALLAS IS A 100-YEAR-OLD CITY IN A SENSE, THAT HAS DOUBLED IN SIZE FIVE TIMES IN THAT 100 YEARS. IT’S STILL ESTABLISHING ITSELF. —MICHAEL ABLON

desking. We were trying to balance what we needed to work in an office environment but also allow the proper daylight into the space. We had to keep the partitions low to be able to have views of the outside and to let the light in. But we found the partitions were about four inches too low, that most people sitting down could still see right over the edge. And that’s just enough to get people off of their rhythm. So sometimes it’s the little things that you learn. In the new space, we’re raising the partitions, and we’ll see if that helps.

ABLON: To your point, it’s fascinating right now because there are two radical influences that are very powerful and very profound going head to head. You have the WeWork, the open collaborative drive; you have synergy and random collision and creativity. And you hear that, and you see it, and everybody is trying to get to it. It’s also more human in a certain sense. And then you have the science of it all saying, that approach actually doesn’t work the way you think it does. It’s actually counterproductive. You have to have the safety zone where you can have your focus time. And those two approaches are colliding in the office design sector. And there isn’t an answer yet.

MAY: And now you have all this data. WeWork is starting to collect this information, taking post-occupancy evaluation to a new level. They’re collecting all kinds of data. They allow people to track their personal devices to see where they congregate in a space, and they’re adjusting to that. As they keep moving forward, their prototype keeps changing and it keeps evolving. It’s really interesting, and it’s fun to be part of the experience.

EITING: Most of WeWork’s competitors and even WeWork itself is redoing their model or building out to be a more office-intensive environment. So there are four-person offices, six-person offices, even a bunch of single-person offices.

But really when people say coworking, it’s an office-intensive environment, just with a spin on the community piece — a highly curated community component, which is the sticky stuff that gets people that want to be there when you compare it to what’s going on with the traditional executive suites. It’s Regis 2.0 basically.

It’s glass interior offices with an expansive community space.

Let’s talk next about investments. There are more sources of capital today and lower barriers to entry. What impact has innovation had on buying and lending, and what challenges still exist?

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SHAW: Well, the institutional interest in multifamily in the last five or 10 years has been pretty profound and had a big impact on the nature of the product and the durability and locational aspects of it. They’re investing with a long-term view. And that has been very good for multifamily—and probably the biggest thing in the sector, transitioning away from the mom-and-pop, the 1031 tax buyer, the individual to the core fund out of San Francisco.

Institutional investors bring a much different view than the guy who is just squeezing every nickel to try to make it work today and two years from now — and then he’s moving on.

ABLON: In my mind, there are three major trends driving changes in real estate finance, and they’re all coming from radically different places. First, there’s crowd-funding, a technology-driven model for the smaller constituent. Then, in a Wall Street model, real estate has become its own sector. Therefore, more money will have to be allocated to it because all these funds have a requirement of diversified investment. That’s the second one.

But the third one is also really interesting. It’s the flight for safety of capital from sovereign funds and overseas investors, whether that’s for currency inflation, whether it’s from negative interest rate environments, whether it’s from the concern of sovereignty and wealth being taken away. It’s all migrating here or to Canada. In Canada, it buys a passport and in America it comes here for safety. It typically will come to a higher valued Class A product

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of whatever type that is. Each of these things are driving pricing in real estate; it’s not just market dynamics or supply and demand.

POLIKOV: One of the innovations that’s happening but has not really caught on is what Monte Anderson is doing. He’s a very successful South Dallas developer; we worked in Duncanville with him on the Main Street project. He has brought in 20 different businesses down there (as tenants). Virtually none of them had credit-worthiness. But what he has done as a developer is figure out a way to create owner-occupiers, to get the small businesses into that village fabric. You can only scale that so far, but I think one of the things we need to see is cities taking the responsibility to work with the owner and developer to figure out a way to underwrite the non-credit worthy tenants that are small and have demonstrated success but they don’t currently meet underwriting standards, either under federal banking regulations or from a fund perspective. That’s where Monte is breaking new ground, and I think we should take a hard look at that model. Owner-occupier businesses are sort of the touchstone of Jeff ’s point about villages. They tend to take better care of their small building than somebody who’s just a transitory tenant.

building 400 apartment units with HUD financing in one location. Build little villages down there, so communities can protect themselves and be self-sustaining. Put in a little bit of housing, a little bit of multifamily, a little bit of retail. I would love to go down to Bonton and do a little village to show that it will work there. It’s a passion of mine to go to South Dallas and show how a little village could have a profound impact.

POLIKOV: Everybody on the public side, the finance side, and the infrastructure side needs to figure out how to make it easy for small developers and small developments. They’re always looking for the large developer and the large developments.

That is a challenge, especially because of the baked-in misconception about what’s happening in the southern sector. For a lot of small developers, there are actually high barriers of entry for them. If we make it easier, they’re going to literally, block by block, building by building, make a difference. It has already started to happen.

When you reinforce what’s already working down there—for example, talking with Monte Anderson about how he’s been able to pull it off.

ABLON: Those are very positive small moves. And through the confetti they start to fill it in. The bigger move, the halo effect where you drop it and have waves that come off it—would have an investment of content creation, a university that creates intellectual capital, a manufacturing piece—you do that and you create content, you create talent, you create product, and therefore you create income. And if you can create income, then everything else will follow.

POLIKOV: That model has really shown through in West Philadelphia.

ABLON: It is a historically proven model. Go back to cities. All cities age, but they don’t age in the same way. And even within cities, pieces of every city age differently.

But frequently you will see something come in that’s a driver.

BLACKARD: We created the problem in southern Dallas. Because we continually zoned and pushed groups until we got them on the other side. We’re guilty of it, but we don’t even realize that we did it.

What do we do about development in southern Dallas? What innovative solutions can be employed to take advantage of the greatest landmass we have, with the greatest opportunity?

BLACKARD: I’m excited about proving my theory over and over again across the country. And getting developers to understand what I’m really saying. Everyone has a preconceived notion of what they think a village is; I want them to understand that it serves the needs of a people group and what that really is and how we design and build things.

EITING: I’m excited to be in Dallas. If you look at the entrepreneurial spirit that has

BLACKARD: Quit going down there and

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What are you most excited about in the future with regard to innovation in real estate?

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DFW METROPLEX

YOU FOUND THE SWEET SPOT. Welcome to Addison, where you’re 15 minutes from anywhere in Dallas. There are more than 1,600 businesses here, surrounded by 180 restaurants, 22 hotels and the number one ranked general aviation airport in Texas. With over 10 million square feet of office space, highly qualified workers in every field close by and a city government dedicated to helping you succeed, it’s no wonder NerdWallet voted Addison the #1 city in Texas to start a business.

AddisonED.com • 972.450.7076

R ROUNDTABLE always been here, and you look at what’s going on from a technology perspective, we’re just sort of at the very tip of the internet of things and our industry, real estate, is one of the last industries to be transformed. If you look 10 or 15 years out, things are going to be dramatically different. I’m excited to be a part of it.

MAY: The challenges are always what excite me the most. And I think something that is very challenging to me but also is a tremendous opportunity is thinking about complexity and complication. We are understanding more and more about what people want and what they need. But the challenge is to design buildings that are more simple. It sounds contradictory, but I think to facilitate the complex systems, the communities, the cities that we live in, a simple building has the flexibility we need. Because we don’t know what’s going to happen in the future. There’s conjecture about what might happen five or 10 years down the road. We have to provide buildings that are flexible enough to allow the systems to grow.

As demand for cars continues to drop, could the office tower where half the floors are for parking, could those start to infill with housing? Things like that can transform cities, and I think are where our mindset needs to be from a building standpoint.

POLIKOV: I’m excited that the value proposition in real estate design, development, and finance has shifted from looking at the product to looking at the happiness of the person in the neighborhood that they are living in or locating their business in. It’s what Mike said about the cruise. It’s also exciting that the real estate community is now looking more outside the

HEATH MAY

BRENT JACKSON

building for the value proposition than inside the building, and I think that will create more multigenerational stability.

SHAW: So I’m going to attribute this quote to Trammell Crow. I’m sure it was him.

Later in his life, someone asked him the same type of question, and he said, “Well, America isn’t built yet.” At the time, it was profound to me and it still resonates with me. Today, America’s not built yet, and I can continue to have a part in building it. So that’s what has me excited.

ABLON: I would have a very similar feeling of gratitude. There are moments of windows in the larger span of history when Gutenberg has the printing press and James Watt perfects the steam engine where entire worlds change very radically in short windows of time. We are living in one of those periods—all of us. And I am absolutely grateful that I am living in a time of radical change—and not just the change itself but the speed of that change is radical. It’s fun to begin to see where the demographics and the culture and the technology overlap on a city fabric and work in that, especially a very open-minded and entrepreneurial city. I’m just grateful to be here right now.

For extended content, go online to

dfwrealestatereview.com

INNOVATION AND

REAL ESTATE 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

What trends are shaping the future of architecture and design, both in commercial and residential space?

How is virtual reality helping developers or communities see the future of their development?

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OFFICE/FLEX • INDUSTRIAL • RETAIL • RESIDENTIAL AWARD-WINNING COMMERCIAL DEVELOPMENTS A GROWING, EDUCATED POPULATION BUILDING FOR THE FUTURE UPSCALE LIVING & RECREATION IN THE HEART OF D/FW METROPLEX Top 10

Most Affordable Homes in the U.S.

in Best Suburbs List

Top 25

Top 15

CNN/Money Magazine

D Magazine

Safewise

of 50 Safest Texas Cities

Keri Samford, Economic Development Director 972.624.3127 • edc@thecolonytx.org • www.TheColonyEDC.org

F FEATURE

DISTINCTLY HOW THREE LOCAL DEVELOPERS HAVE DRIVEN THE GROWTH OF URBAN “POCKET MARKETS,” EACH WITH ITS OWN SENSE OF CULTURE, PERSONALITY, AND APPEAL.

BY HIL ARY L AU

Like other major markets across the country, Dallas is in the midst of an urbanization boom, with millennials, Gen-Xers, and baby boomers in pursuit of a high-density lifestyle. The demographic shift has led to a burst of development and redevelopment in neighborhoods that surround the urban core.

As they grow, these “pocket markets” are evolving into distinct communities with unique amenities and eccentric personalities.

This has certainly proved to be the case with three neighborhoods on the leading edge of change—Deep Ellum, the South Side, and the Harwood District. Here’s a look at the pocket markets, and the developers who are playing a key role in shaping them.

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F FEATURE

DEEP ELLUM

Scott Rohrman

FO U N D E R , 4 2 R EA L ESTAT E

SCOTT ROHRMAN STANDS OUTSIDE DOT’S HOP HOUSE & COCKTAIL COURTYARD, WHICH WILL HAVE THE LARGEST OUTDOOR BEER GARDEN IN DEEP ELLUM AT 10,000 SQUARE FEET. IT WILL HAVE 99 BEERS ON TAP. PHOTOS: CATHERINE DURKIN

shop, a cold-pressed juice shop, a popsicle store, three new bars, and two new restaurants. Most of the brands are new to North Texas, he says.

One of his favorite new projects is Radiator Alley, which connects Elm and Main streets with what will be 12 restaurants and retail shops. An ice cream shop called Chill 360 has already opened in the passageway.

A key focus has been on restoration, rather than demolition. “We’re trying to save as many buildings as possible, and bring out the bones of them rather than hiding the bones— expose the wood beams and the brick,” Rohrman says. “And we’ve taken more paint off the walls than you can imagine.”

PHOTO: HANNAH RIDINGS

This eclectic neighborhood on the east side of downtown Dallas has been an important part of the city’s historical and cultural fabric for the last century. Through the years, what once was a factory stronghold evolved into an entertainment district and a popular home for startup tech companies. Developer Scott Rohrman, who has snapped up more than 50 properties in the district in recent years, calls it a true melting pot within the city.

“The character—it has an accepting nature; it accepts anybody no matter who they are,” he says. “And because there’s not a set genre of people, that means nobody fits, but everyone belongs.”

Before devising a plan to revitalize the neighborhood with plazas and pedestrian-friendly amenities, Rohrman interviewed people who lived and worked in Deep Ellum, from property and business owners and bartenders to nightclub operators, musicians, and artists—to find out what they already loved about the community, and what they’d like to see change. He found one thing to be on everyone’s minds: accessibility. And Rohrman concurs. “We think there ought to be a transportation line from Fair Park to Trinity Groves, running through Deep Ellum and downtown, and it ought to be on a straight line back and forth so that anyone can know exactly where it’s going to be and when,” he says.

“Urban planning doesn’t always fit a regional transportation mindset, so walkability, interaction with transportation—all those things—can really affect the quality of life of a community.

If quality of life of a specific micro community is not taken into consideration, then essentially you’re destroying the fabric of that micro community—and our region is made up of them.”

Rohrman’s conversations with the people of Deep Ellum has driven a lot of the strategy behind 42 Real Estate’s planning and development. Although he couldn’t share specifics at press time, Rohrman says there are a few exciting things coming to the neighborhood, including a bowling alley, an olive oil store, a taco

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HARWOOD DISTRICT

Gabriel Barbier-Mueller

F FEATURE

FOU N DE R & C EO, HA RWOOD I N T E R NAT IO NAL

PHOTO: CATHERINE DURKIN

GABRIEL BARBIERMUELLER

PHOTO: HARWOOD

When you drive around the Harwood District on the northwest edge of Uptown, it’s impossible to miss the Swiss cow-adorned cranes hovering above you. That’s because Harwood International, led by Switzerland-born founder and CEO Gabriel Barbier-Mueller, has several new projects underway in the 18 city blocks that comprise the Harwood District.

It all started with Harwood No. 1, or the Rolex Building, a build-to-suit for the Swiss watchmaker that Barbier-Mueller developed in 1984 as Uptown’s first office building. It was followed by Harwood No. 2 at 2728 N. Harwood, a 10-story office building designed by architect Richard Keating and that houses Marie Gabrielle Restaurant and Gardens. Harwood No. 3 at 2727 N. Harwood, also designed by Keating, came in 1999 and today is home to Magnolias: Sous Le Pont restaurant.

Harwood No. 4 at 2828 N. Harwood was built in 2000 and features a collection of antique horses and mounted knights in full armor atop an under-lit glass aggregate of more than a million blue glass rocks.

Barbier-Mueller and company took a short break before building Harwood No. 6, now known as Saint Ann Court, in 2009. This building is home to Saint Ann Restaurant & Bar, as well as The Ann & Gabriel Barbier-Mueller Museum: The Samurai Collection.

Harwood No. 7, Frost Tower, came in 2015 with Polsinelli and Rochon Family Office as lead tenants.

Current occupancy in the portfolio stands at 96 percent.

The developer says his strategy is to leave an 18-block family footprint in Dallas by introducing urban planning techniques borrowed from his favorite international cities. “These models in2727 N. HARWOOD clude lively interactions on the ground level of our

high-rise developments within our master plan, European patio gardens, al fresco dining, and many architectural vignettes [that] provide the comforts needed within a bustling city environment,” he says. Art is a big part of his development strategy, too.

Barbier-Mueller has several new projects underway, including the 22-story Harwood No. 10, a Class AA office tower with 9,000 square feet of retail and restaurant space and adjacent gardens; and Harwood No. 8, a “twisted tower” for Rolex designed by famed Japanese architect Kengo Kuma and HDF, Harwood’s in-house design group. Landscape architect Sadafumi Uchiyama is creating tiered gardens with waterfalls that cascade over the side.

Lately, the Harwood District is emerging as a restaurant hot-spot, with Happiest Hour, Mercat Bistro, and Dolce Riviera all among the newest offerings. Next summer, Harwood will open Blue Ciel, a 33-story luxury condo tower, featuring two- and three-story homes whose prices will start at about $800,000. It will join Azure, a 31-story luxury tower built in 2007.

After decades of effort, Barbier-Mueller says Dallas is finally coming into its own. “The city and Harwood are finally getting the international attention they deserve in business, architecture, and art,” he says. “I’m proud of the Dallas culture and its transcending energy.”

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F FEATURE

SOUTH SIDE

Jack Matthews

P R ESI D E N T, MAT T HEWS S OU T HW EST

JACK MATTHEWS

PHOTOS: CATHERINE DURKIN

No one has had a bigger impact on the South Side district than Jack Matthews, who’s largely responsible for creating it. Beginning with his transformation of a former Sears Roebuck & Co. merchandise center in the late 1990s, Canada-born Matthews has transformed the area around South Lamar Street into a bustling residential, retail, and entertainment district that’s also home to the Dallas Police headquarters.

SouthSide on Lamar, the former Sears building, is now home to 457 residential lofts, 25 artists’ lofts, and 120,000 square feet of office and retail space. Matthews says the property was redeveloped with its rich history in mind. “We really just tried to keep as much of that building as we could,” he says. That meant everything from the boiler doors and metal work to its original brick walls and columns. “We believe that people like history, and they like being able to touch it, feel it, and understand it,” Matthews says. “This offered us the ability. The more of it we could keep, the more people liked it.”

The president of Matthews Southwest went on to develop Gilley’s Dallas, which sits near SouthSide on Lamar and has a large ballroom that can accommodate up to 3,800 music fans. He also led the development of the $500 million Omni Dallas Convention

Center Hotel, which opened ahead of schedule in 2011. A year later, he opened another hotel, the 76-room boutique NYLO Dallas South Side.

Throughout it all, Matthews says he aims to blend the old and the new.

“We convinced Bill’s Records to come into the area just because we like the idea of an old record store,” he says. “We also like to have effectively no national brands. It’s not that we don’t like national brands; we want something unique. … If you come to that area, you’re experiencing part of real Dallas.”

Matthews recently brought the “last piece” to the South Side neighborhood with Alamo Draft House, because he says he liked the vibe of the much-loved theater chain. Wildly successful, Matthews says it’s coming close to doubling the nighttime population of the neighborhood. Another addition, Opening Bell Coffee, was chosen in favor of a big-box coffee brand for its own unique personality—and the fact that it fits in well with the neighborhood by offering live music six nights a week.

The developer’s work in the South Side is far from finished. Plenty of things are in the works, but the biggest, he says, is the Dallas hub for the proposed 240-mile “bullet train” connecting Dallas and Houston. “The highspeed rail comes into the north corner of it, and we’re working on more residential,” Matthews says. “There’s an old building that’s right beside South Side Studios—it’s quite large, it’s an old cotton building—and we’re getting ready to dust that off and try to put some more residential in. … We really want to be open to every type of person.”

PHOTO: MICHAEL SAMPLES

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“We’re empowering people to discover more.”

“DART provides mobility, stimulates economic development and improves quality of life. We’re proud to help people from all walks of life discover the places they want to go.”

Gary C. Thomas President/Executive Director, Dallas Area Rapid Transit

214.979.1111 DART.org

A ANATOMY OF A DEAL

FRISCO’S

WIN

WITH THE DALLAS COWBOYS ON BOARD, “JUST ABOUT ANYTHING CAN HAPPEN” ALONG THE CITY’S $5 BILLION MILE.

PHOTO: MICHAEL SAMPLES

BIG FRISCO STATION

BY K AREN NIELSEN

For more than a decade, Frisco planners have strategically put together an impressive collection of public-private sports partnerships. The city-owned destination venues—Dr Pepper Arena (Dallas Stars), Dr Pepper Ballpark (Rough Riders), and Toyota Stadium (FC Dallas) – have proven to be an economic boon. But they would also serve as the testing ground for what would become the city’s biggest win yet.

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A ANATOMY OF A DEAL

WADE PARK

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THE GATE

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A ANATOMY OF A DEAL

RENDERING: GENSLER

In August, the Dallas Cowboys debuted its new headquarters and training facility at The Star, anchoring a 91-acre development that also includes a hotel and office and retail space.

It’s ground zero for Frisco’s so-called “$5 Billion Mile,” a stretch of the Dallas North Tollway between Warren Parkway and Lebanon Road that’s home to The Star and three other huge mixed-use projects. (Despite its name, the projected capital value of investments stands $6.2 billion—and growing.) They are: Frisco Station, a $1.7 billion project adjacent to The Star, developed by Hillwood, VanTrust Real Estate, and the Rudman Partnership; Wade Park, a $2 billion development from Thomas Land & Development; and The Gate, a $1 billion project from Invest Group Overseas.

Three years ago, few people imagined that the Dallas Cowboys would choose Frisco for its headquarters—a move that has created a domino effect of high-end, destination-style projects. “I think as time goes on we’re going to see a lot of things we didn’t think would happen in Frisco,” says Jim Gandy, president of the Frisco Economic Development Corp. “When you have a world-renowned company like the Dallas Cowboys, just about anything can happen.”

At full buildout, within the next two decades or so, the $5 Billion Mile is anticipated to total more than 15 million square feet of commercial space and employ about 44,800 people.

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Frisco, which is situated within both Collin and Denton counties, is no stranger to construction cranes—or moving vans. U.S. Census Bureau figures show the city continues to be one of the fastest-growing in the country; it was ranked No. 1 nationally for growth from 2000-2009. Its population has risen more than 300 percent since 2000, going from 33,714 to 157,040 residents. When it matures, the city will be home to an estimated 375,000 people.

“It’s fair to say that the majority of people who are going to live in Frisco aren’t even here yet,” Gandy says.

DESTINATION VS. SUBURB

It was never Frisco’s intent to be a suburban bedroom community. City leaders long have pushed the notion that unique destination venues, coupled with the Frisco Independent School District’s small-school model—which caps high school population at 2,100 students, allowing for more extracurricular participation— would differentiate it from other cities. Much of Frisco’s feverish growth can be attributed to the FISD, which adds about 3,500 new students a year, making it the fastest-growing school district in the state and one of the top in the nation.

For the 2016-17 school year, the district has more than 55,000 students enrolled; that number is expected to climb past 69,110 students by 2020. For some perspective, consider that in 1996 FISD had five schools, including one high school. Today there are 68 schools in the district, including nine high schools, with more in the works.

Developers and residents agree that Frisco operates like a well-oiled machine.

City officials and economic development teams work in tandem with the school district to support initiatives that are in line with its mission and long-term goals. “Partnerships are really central to Frisco’s growth,” Frisco Mayor Pro Tem Tim Nelson says. “The strength of a partnership is defined solely by the quality of the partners, principal among them is the Frisco ISD. We know in Frisco that what is good for the school district is good for the city of Frisco, and we know that a big part of the economic engine of Frisco is driven by the partnership we have with Frisco ISD.”

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JERRY JONES

FROM THE GET-GO, THE MOST IMPORTANT THING THAT FRISCO ISD AND [SUPERINTENDENT] DR. LYON BROUGHT THROUGH THE DOOR WAS THAT RELATIONSHIP WITH AMATEUR ATHLETICS AND THAT RELATIONSHIP WITH FRISCO. PHOTO: MICHAEL SAMPLES

— Dallas Cowboys owner Jerry Jones

PHOTO: MICHAEL SAMPLES

Dallas Cowboys owner Jerry Jones agrees. The Star’s Ford Center is said to be the only NFL training facility in the country that’s shared with a public high school athletic program. The 12,000-seat multi-use arena is owned by the city of Frisco, but managed by the Cowboys. “From the get-go, the most important thing that Frisco ISD and [Superintendent] Dr. Lyon brought through the door was that relationship with amateur athletics and that relationship with Frisco,” Jones says.

Clarity of vision and leadership longevity have benefited the city. Gandy joined in 1996, George Purefoy is Frisco’s first and only city manager, and Maher Maso began serving on the City Council in 2000 before becoming mayor in 2008.

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A ANATOMY OF A DEAL “They are very open to business and development and want to do it in the right way and in a high-quality way,” says Mike Berry, president of Hillwood Properties, master developer of Frisco Station. “It makes for a pretty strong package if you’re a company looking to locate in the area.

They welcome people with open arms.”

NORTHERN SPRAWL

Location also is a key driver in Frisco’s growth, as regional development pushes its way north.

The Dallas North Tollway’s office corridor and Preston Road’s retail corridor both run through the city, bordered by State Highway 121 and U.S. Highway 380, which also are seeing rapid growth. About 62 percent of Frisco’s 70.2 square miles has been developed so far.

The Rudman family has owned multiple parcels of land there for more than five decades, including 333 acres within the $5 Billion Mile.

A few years ago, the Rudmans sold 91 acres to a developer who later fell on hard times. The property reverted back to the lender, GE Capital.

A broker called Gandy to let him know the land was up for grabs. “I recall the 91 acres was on the market for $20 million,” he says.

The Frisco Community Development Corp. bought the land. After talks with Nebraska Furniture Mart didn’t pan out – the Berkshire Hathaway company chose The Colony instead of Frisco – a new prospect emerged.

“It wasn’t long after that happened that the opportunity to locate the Dallas Cowboys on that 91 acres surfaced,” Gandy says. It took 90 days to close the deal — a remarkable feat considering the players involved an NFL team, the city, FISD, FCDC, and the FEDC. The city now owns 20 acres at The Star, including the Ford Center and two outdoor practice fields, while the Jones family owns the rest. The Rudman Partnership owns the remaining 242 acres that wraps around The Star, and is working with developers to build Frisco Station.

The different types of housing options, walkable amenities, and other offerings within the $5 Billion Mile are expected to attract educated workers and millennials—a plus for corporations and others targeting those highly desired employees. “All of these are real high-end developments because the influence and property values along the Dallas North Tollway make it a premier location,” Gandy says. “It’s been absolutely incredible. It appears the opportunities could be unlimited.”

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A ANATOMY OF A DEAL

RENDERINGS: GENSLER

THE STAR

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Along with the headquarters and training facility for the Dallas Cowboys, The Star features retail, dining, entertainment, athletic, medical, event, and hotel space. At this point, it’s pegged as a $1.5 billion development. At its heart is The Ford Center, a multi-use, 510,000-squarefoot indoor athletic facility that’s shared by the Cowboys, the city of Frisco, and Frisco ISD’s eight high schools. The 12,000-seat arena is owned by the city of Frisco, but managed by the Cowboys.

The city and Frisco ISD will host football and soccer games, academic, fine arts, and entertainment events in the building. The partnership gives Frisco students an experience that’s unprecedented in high school sports, and also allows the fans and community to experience the Dallas Cowboys in ways they’ve not been able to before. “This is a championship venue,” says team owner Jones. “It will inspire not only students here in Frisco, but inspire the Dallas Cowboys.”

Those who work and play at The Star will have plenty of options to immerse themselves in the Cowboys experience. Soon, there will be 200,000 square feet of restaurant and retail space spread among 14 buildings. The growing roster of tenants includes Cane Rosso, the Common Table, Liberty Burger, Dee Lincoln Prime, Mi Cocina, Nestle Toll House Café by Chip, Tupelo Honey Café, City Works, Neighborhood Services, and Next Step Dance Initial designs called for 396,000 square feet of office space, but Blue Star Land announced plans in late August to add a second office building to meet demand. Tenants include the Cowboys, Bank of America, and FM Global. Also in the works is a 300,000-square-foot Baylor Scott & White Therapy and Research Center and a 300-room Omni Frisco Hotel. When the hotel opens next summer, the 17-story tower will be the tallest in Frisco.

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At 242 acres, Frisco Station is the largest mixed-used project in the $5 Billion Mile. It sits on the west side of the Tollway, just north of Warren Parkway, surrounding The Star. The Rudmans have taken on two partners—Hillwood Properties, which is serving as master developer, and VanTrust Real Estate, which is overseeing the office component.

The $1.7 billion development will offer a mix of more than 5 million square feet of corporate, creative, and medical office space, along with 2,400 multifamily units.

Additionally, NewcrestImage is developing a four-brand, 600-room “lifestyle hotel campus” that will link to “The Hub,” a 200,000-square-foot centerpiece of restaurant, entertainment, and retail space.

Construction is expected to get underway before the end of the year on Station House, a 302-unit multifamily project, and on VanTrust’s seven-story, 228,000-square-foot speculative office building. Hotel development will occur in two phases, with three of the four hotels—Marriott AC Hotel, Residence Inn, and Canopy Hotel by Hilton–scheduled to break ground in January 2017. Construction on Hyatt Place is expected to begin later next year.

“The exciting thing for us is everything is in forward motion,” Hillwood Properties’ Berry says. “It’s almost an infill site with everything going on.”

Berry says the star of Frisco Station is its extensive park and greenbelt system, which complements other health and wellness aspects in the development. “We think it will become a community area and not just a project amenity,” he says. “It will be like a smaller version of the Katy Trail.”

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A ANATOMY OF A DEAL

RENDERINGS: THOMAS LAND & DEVELOPMENT

WADE PARK

On the east side of the Dallas North Tollway at Lebanon Road sits Thomas Land & Development’s 175-acre mixed-use project, Wade Park. The Atlanta-based company bought the property in 2013 from the Wades, a prominent local family that had held onto the land for more than 100 years.

Wade Park signed its first anchor tenant, Whole Foods Market, in February 2014, and broke ground in August 2014. Set to open next fall, Wade Park will include more than 600,000 square feet of retail space. The tenant mix will include iPic Theaters, Pinstripes Bowling, Bocce, Bistro, Yard House, Steak 48, Free Range Restaurants, Luna Grill, Thirteen Pies, Steel City Pops, Torchy’s Tacos, Bread Zepplin, Arhaus, Sur la Table, Paper Source, Tyler’s, Blo Blow Dry Bar, MiniLuxe, The Lash Lounge, Anthropologie, and Free People.

Upon completion, Wade Park will have more than 1 million square feet of retail space. Developer Stan Thomas says tenant interest has been strong, particularly from higher-end retailers. Wade Park, he adds, complements the other $5 Billion Mile projects. “All of those types of uses are great neighbors and generators of traffic and great people,” he says. “They’re all an asset, because none of us are doing the same thing.”

The $2 billion Wade Park also will feature up to 6 million square feet of commercial office space and 2,800 luxury apartments, condos, and single-family homes. A boutique Hotel ZaZa and a high-rise Langham Hotels & Resorts hotel are planned to open in 2018.

Several large tenants have expressed interest in the office space, but Thomas says he’s waiting to see what type of product to deliver. He expects one tower out of the box over the retail.

Thomas says he wants Wade Park to be known for its heart and soul, and high-quality tenants and amenities. The city of Frisco requires that utilities and roads be ready before construction can start, so expect a flurry of activity later this year, he says, when work on the Whole Foods store begins.

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A ANATOMY OF A DEAL

RENDERINGS: GENSLER

THE GATE

The Gate is a 41-acre mixed-use project located just north of The Star, at the tollway and John Hickman Parkway. Dubai-based Invest Group Overseas owns the property and will serve as master developer, but it’s also looking to sell some of the parcels to development partners or buyers.

Current plans for the $1 billion, 2.3 million-square-foot project include four, eight-story Class A office buildings totaling 876,000 square feet, two, 10-story luxury condo towers, 980 apartment units, 100,000 square feet of restaurant and retail space, and a 150-room boutique hotel, according to the Frisco Economic Development Corp. Residential construction is expected to begin next year.

A water feature and pond will figure prominently at The Gate, which is designed to be a luxurious, walkable development, says Barry Hand, principal in charge of the project at Gensler. “While some larger projects may require multiple market cycles to fully realize, the components of the relatively compact village are fully achievable at a quicker pace,” he says.

Anas Kozbari, CEO of Invest Group Overseas, says Frisco’s booming economy attracted him to the project. After meeting with city officials, he says, he was convinced “this was the right place for us.”

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A ANATOMY OF A DEAL

THE $5 BILLION MILE FRISCO STATION

THE GATE

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The Campus at Frisco Station Health and Wellness District The Offices at Frisco Station Urban Living The Hub The Towers at Frisco Station

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The Ford Center Dallas Cowboys Headquarters office Omni Hotel Retail Office Miked Use

THE GATE

WADE PARK THE STAR

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WADE PARK 1 Office 2 Residential 3 Mixed Use

THE GATE

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SPECIAL ADVERTISING SECTION

ECONOMIC DEVELOPMENT DIRECTORY Addison is a bustling town alive with entrepreneurial spirit. It’s where startups come to life and where major corporations such as Mary Kay and Hitachi Consulting flourish. Within a compact urban center, Addison has a unique combination of quality office buildings, upscale shopping, beautifully landscaped New Urbanist residential communities, award-winning parks, 24 hotels and 180 restaurants—all within 4.4 square miles. Addison is located 17 minutes north of downtown Dallas, 18 minutes northeast of DFW airport, 15 minutes north of Love Field airport and steps away from The Dallas Galleria. Addison Airport is Texas’ most successful general aviation airport and a perfect way for charter and private planes to arrive. NerdWallet ranks Addison as the No. 1 place in Texas to start a business. Addison is the sweet spot in the Dallas-Fort Worth Metroplex!

ADDISON ECONOMIC DEVELOPMENT & TOURISM

14681 Midway Road, Suite 200 Addison, Texas 75001 972.450.7076 addisontexas.net

Allen is a vibrant community of creative and talented people driven by achievement. Allen’s success is no accident—it is a testament to the community spirit of amazing people who want a better place for their families. A pro-business environment and a superior quality of life come together to empower Allen’s residents and businesses to achieve higher levels of success.

Be Part of Something Bigger– Allen’s community spirit, high-performing schools, family friendly recreation, and vibrant economy continue to attract business and residents to our city. We can rattle off the standard stats and accolades, but we do things differently.

And that is what makes us great–we are a vibrant and active community that connects our businesses, workers, and residents together to open the door for new opportunities.

ALLEN ECONOMIC DEVELOPMENT CORPORATION 700 Central Expy S No. 210, Allen, Texas 75013

Perfectly situated in the heart of North Texas and only 8 miles from Dallas Fort Worth International Airport, Arlington enjoys unparalleled access to the Metroplex. Its convenient location, combined with a strong economy, business-friendly environment, and a skilled, diverse workforce continues to attract high-profile investments to the city.

Arlington has an extensive track record of recruiting globally recognized corporations and developing large-scale projects.

Arlington is home to the only General Motors assembly plant that builds GM’s award-winning, full-size SUVs. It is also home to the University of Texas at Arlington, Texas Rangers’ Globe Life Park, Six Flags Over Texas, and the Dallas Cowboys’ $1.2 billion AT&T Stadium.

Arlington is increasingly becoming known as a hub for engineering, advanced manufacturing, technology and medical sciences. This emerging innovation center is fueled in part by Arlington’s skilled, educated workforce.

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BRUCE PAYNE, Economic Development Manager CITY OF ARLINGTON ECONOMIC DEVELOPMENT 101 West Abram St. PO Box 90231 MS 01-0300, Arlington, Texas 76004 bruce.payne@ arlingtontx.gov arlingtontx.gov

Opportunities grow naturally in Cedar Hill, with its vibrant businesses, natural beauty, and a family-friendly quality of life. With a location just 20 minutes from downtown Dallas, 30 minutes from Dallas Fort Worth International Airport, and 40 minutes from downtown Fort Worth, Cedar Hill offers outstanding amenities for business growth and relocation.

ALLISON J.H. THOMPSON, Director CEDAR HILL ECONOMIC DEVELOPMENT 285 Uptown Blvd., Bldg. 100 Cedar Hill, Texas75104 972.291.5132 ext. 3 allisonthompson@cedarhilltx.com cedarhilledc.com

The Colony is a growing city on the east side of Lewisville Lake, 25 minutes from downtown Dallas and 15 minutes from the Dallas Fort Worth International Airport, located along the Sam Rayburn Tollway. Home to approximately 40,000 residents with businesses and retail locating here daily, The Colony continues to maintain its “hometown” feel.

Affectionately known as “the city by the lake,” The Colony features 23 miles of shoreline along Lewisville Lake and two lake parks with boat ramps,

camping and many other amenities. Golf courses within the city all provide outstanding lake views with two courses being recognized among Golf Magazine’s top-five in Texas in 2010.

The Colony is the proud home of the nation’s largest home furnishings store, the new Nebraska Furniture Mart of Texas, anchoring the 400-acre Grandscape development.

KERI SAMFORD, Economic Development Director THE COLONY ECONOMIC DEVELOPMENT CORPORATION 6800 Main St., The Colony, Texas 75056-1133 972.624.3127 edc@thecolonytx.org thecolonyedc.org

The City of Dallas Office of Economic Development is a full-service shop that offers business development and area redevelopment programs, small business assistance, and innovative programs such as the City of Dallas Regional Center and New Market Tax Credits. We can successfully usher a project from beginning to end. The Office of Economic Development offers a range of programs and services to assist developers, investors, and businesses looking to expand or relocate, and small businesses looking to grow.

With innovative programs, a supportive business climate and a city full of opportunities, we are ready to make your project a success.

HAMMOND PEROT, Assistant Director, Business Services CITY OF DALLAS OFFICE OF ECONOMIC DEVELOPMENT 1500 Marilla St. Dallas, Texas 75201 214.670.1685 joseph.perot@dallascityhall.com dallas-ecodev.org

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ECONOMIC DEVELOPMENT DIRECTORY Conveniently located 21 miles east of Dallas, Forney provides businesses and residents access to big city amenities in a peaceful environment. Complete with U.S. Highway 80 and Interstate 20, Forney offers a coast-tocoast transportation network and plenty of room to grow, including 800+ acres of available light industrial land. Forney’s primary trade area population of 45,000 offers businesses a built-in workforce of white and blue collar employees, along with an average household income of over $97,000. In addition, our quality of life is hard to beat, complete with state recognized public schools, a 170-acre park, community festivals and a unique historic downtown. When it comes to opportunity, Forney knows no boundaries. That’s why we’re called the “City Without Limits.”

community atmosphere. They gather for Christmas parades on Main Street, and catch games at Dr Pepper Ballpark. Locals love Stonebriar Centre and Frisco Square, both filled with upscale stores, tiny restaurants, and street musicians. Kids adore Frisco’s abundance of playgrounds, such as the special-needs-friendly Hope Park, and with some of the best schools in North Texas, Frisco is a family’s dream. Luxe mixed-use communities, a pedestrianfriendly atmosphere, and the laid-back bar scene draw young professionals, too. Frisco has unbounded potential, and today is just the beginning.

JAMES L. GANDY, CECD, CCIM, President FRISCO ECONOMIC DEVELOPMENT CORPORATION 6801 Gaylord Parkway, Suite 400 Frisco, Texas 75034 972-292-5150 / JGandy@ FriscoEDC.com www.friscoedc.com

WARREN KETTEMAN, Executive

Director Forney Economic Development Corporation 101 E. Main St., P.O. Box 826, Forney, Texas 75126 (972) 564-5808 wketteman@cityofforney.org www.forneytexasedc.org

Frisco is DFW’s boomtown. It’s hard to believe the area was a stretch of farmland a decade ago; now, it’s exploding with urban growth, and its population and skyline continue to reach new heights. The city is located across Collin and Denton counties, and boasts an easy 25-mile commute to downtown Dallas.

Frisco’s residents have pride, and they’ve created a close-knit

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Centrally located between DFW Airport and Downtown Fort Worth in affluent Northeast Tarrant County, North Richland Hills (NRH) is the third largest City in Tarrant County behind Fort Worth and Arlington.

Rapidly growing, NRH added over 500 new single family homes valued over $350,000 in the past three years within the highly rated Birdville and Keller ISDs. Growth is expected around two transit oriented developments (TODs) along the Fort Worth Transportation Authority’s new commuter rail system - TEXRail. Scheduled for 2018, TEXRail will run along the famous Cotton Belt line connecting Downtown Fort Worth to DFW Airport along two separate NRH rail stops.

Late 2015 business additions include the expansion of Santander Consumer USA into 200,000 SF and 1,650 employees, the new addition of Southwest ADI, a distributor that purchased and converted a former Sealy bedding plant into its corporate headquarters, and the addition of Digital Alchemy, a technology company occupying 24,000 SF of office space.

The McKinney Economic Development Corporation (MEDC) was created in 1993 to support the development, expansion, and relocation of new and existing companies.

The MEDC is an organization with a mission to work to create an environment in which community-oriented businesses can thrive.

CRAIG HULSE, Director of Economic Development 7301 NE Loop 820, North Richland Hills, Texas 76180 chulse@nrhtx.com / 817-4276090 www.nrhed.com

DARRELL AUTERSON, President and CEO MCKINNEY ECONOMIC DEVELOPMENT CORPORATION / CITY OF MCKINNEY 5900 S. Lake Forest Dr., Ste. 110 McKinney, Texas 75070 info@mckinneyedc.com 972.547.7651 mckinneyedc.com

Rockwall Economic Development Corporation assists new and existing companies, both large and small, in the development, modernization, and expansion of business in a booming global economy.

We are dedicated to your company’s growth through incentive programs, financial

assistance, comprehensive sites, and resource collaboration.

While collaborating with city leaders, we have secured the necessary infrastructure, services, and high-tech amenities to maintain thriving, profitable businesses. Rockwall has big-city conveniences yet maintains a small-town atmosphere. Rockwall offers quality of place and peace of mind.

SHERI FRANZA, President and CEO ROCKWALL ECONOMIC DEVELOPMENT CORPORATION 2610 Observation Trail Rockwall, Texas 75032 972.772.0025 sfranza@rockwalledc.com rockwalledc.com

The mission of the Sachse Economic Development Corporation is to act on behalf of the City of Sachse in promoting and developing authorized projects, while supporting economic development activities to retain, expand, and attract businesses for the purpose of diversifying the tax base and improving the quality of life of the citizens of Sachse.

LESLYN BLAKE, CEO 3815 Sachse Road, Bldg. B Sachse, Texas 75048 469.429.4764 lblake@cityofsachse.com sachseedc.com

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T TOOLBOX

PHOTO: IVANMIKHAYLOV VIA ISTOCK

CHANGING THE RULES OF THE GAME NEW LEASE ACCOUNTING RULES WILL HAVE A BIG IMPACT ON PUBLIC AND PRIVATE COMPANY BALANCE SHEETS.

BY JEFF BOUNDS

Companies that rent real estate should consider restructuring leases to be ready when recently announced changes in accounting rules take effect in late 2018 and 2019, experts say.

The changes, designed to provide outside parties a clearer view of a business’ financial picture, will force businesses to recognize nearly all their leases as debt on their balance sheets.

This will cause many businesses – especially those that lease large amounts of real estate, such as retailers – to appear to have significantly more debt than they do now.

Companies’ financial statements must disclose all lease obligations under existing rules. But for now, their balance sheets account only for what amount to rent-toown obligations, and not shorter-term lease deals.

As a result, footnotes in financial statements of some lease-heavy businesses disclose billions of dollars of shorter-term rent contracts.

Starting in 2018, lease agreements of at least 12 months will appear on balance sheets as debt for all U.S. companies that follow generally accepted accounting principles, or GAAP, experts say.

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“It will definitely impact companies that have more real estate (under lease) than those that own or have minimal rental obligations,” says Maureen Kelly Cooper, a Dallasbased senior managing director at Cushman & Wakefield. “It’s an added component when evaluating the pros and cons of leasing versus owning.”

When the new rules kick in, they will apply retroactively to all leases an organization in effect at that time.

Since rental agreements of commercial real estate typically last at least five years, it is vital for tenants to factor the upcoming guidelines into rent contracts they are signing today, experts say.

“Surprisingly, a lot of our clients haven’t tackled this issue yet,” says Torrey Littlejohn, a Dallas-based senior vice president at JLL. “These changes will most likely require additional administrative manpower to accurately track and implement. We are ensuring we keep clients abreast of the pending changes, deadlines and resources to help them deal with this.”

LEASE: OPERATING VS. CAPITAL The rule changes affect how companies account for what are known as “operating” leases.

Historically, GAAP considered operating leases roughly akin to what many people may think of as rentals, covering a small amount of the useful life of a piece of property.

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DOING BUSINESS DOWNTOWN?

Your #1 source for doing business Downtown downtowndallas.com/business downtowndallas.com/business

T TOOLBOX

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This means financial statements currently do not include operating leases on balance sheets, which show what an organization owns and what it owes.

For now, the opposite type of rental arrangements under GAAP are called “capital leases” These are similar to installment-based loan agreements to purchase properties, except that legal ownership of the properties remains with the party that is leasing it out until all payments were made.

The new rules give capital leases a new name: Finance leases.

The new rules come from the Financial Accounting Standards Board, or FASB, a nonprofit that sets accounting rules for U.S. organizations that follow GAAP. Under FASB’s existing rules, leases are treated as the capital variety if they meet any of four tests, such as the duration of the contract exceeding 75 percent of the life of the asset.

Those tests will remain essentially the same for finance leases under the new rules, experts say.

After nearly a decade of work, FASB in February announced new rules that will require all leases of more than 12 months to be recognized on balance sheets.

Although leases of more than 12 months may fall under the “operating” or “finance” categories, both will be part of balance sheets under the new rules, experts say.

“Real estate leases typically qualify as operating leases,” said Michael Bodwell, a Dallas-based partner at Whitley Penn.

“The way we think about operating leases is changing.”

The rule changes could have some affect on landlords, as certain tenants might gravitate toward short leases to minimize impacts on the balance sheets, according to Greg Greene, senior vice president at CBRE’s capital markets group.

“The impact of this should be minimal” for building owners, he added. “I do not expect tenants to move to less expensive space only for this reason.”

Ultimately, the new rules are of most concern to organizations that lease real estate, according to Tom Wilkin, the New Yorkbased US REIT leader at PwC. “The bigger impact is how tenants might react, and the impact on real estate and real estate valuation,” he said.

DEBT/EQUITY, EBITDA, OR NET INCOME The new rules mean all tenants should evaluate the structures of their real estate leases to ensure they help meet the goals they have for their businesses, according to Karra Guess, chief financial officer at E Smith Realty Partners.

Here are three examples: LARGE DEBT LOADS:

EBITDA-FOCUSED:

PUBLIC COMPANIES:

Heavily leveraged firms should avoid leases with “material” up-front incentives, such as free rent, Guess said.

In this context, material refers to anything large enough that, if omitted from financial statements, could result in those financial statements misstating the organization’s financial position.

“Under the new rules, the right to use an asset – the real estate space, in this case – means incentives like free rent wind up shrinking the value of the asset on the balance sheet,” Guess said.

Meanwhile, the amount of debt – that coming via the lease — remains the same under the new rules, Guess said.

“Much like a homeowner who owes more on their mortgage than their house is worth, this can worsen the ratio of a business’s debt to its shareholders’ equity,” Guess said.

If that ratio increases, that can mean the company may violate its covenants on existing debt it holds.

For public companies, that could negatively impact the trading value of their stock, she said.

“Firms that have been purchased by private equity investors, or that have done large expansions, should be wary of up-front incentives,” Guess said.

Private companies seeking either minority investors or to sell themselves outright may do better with finance leases under the new rules, Guess said.

The values these firms receive from investors typically are multiples of their “EBITDA,” or earnings before interest, taxes, depreciation and amortization.

EBITDA essentially measures how much profit a firm’s operations generate.

The advantage from finance leases for EBITDAoriented companies stems from the fact that these leases include interest, which the tenants can deduct from their taxes, Guess said.

“This can help boost their EBIDTA - which does not include interest – and potentially mean better valuations from investors,” she said.

Even better, the company’s payments on finance leases will include more interest during the early years of the lease, the time frame when the business likely will be seeking outside investment.

Companies seeking to maximize net income under GAAP – something most lay people equate with profit – should opt for operating leases under the new FASB rules, Guess said.

This includes most public companies.

“Under the new rules, operating leases essentially provide predictable expenses year after year. Finance leases wind up costing more in the early years, and less in later years,” she said.

Operating leases, therefore, have a consistent impact the impact on a firm’s net income throughout the durations of the leases.

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C COMMUNITY

Diane Butler, Chairman Greg Kraus, Vice Chairman

CHAMPION’S CIRCLE

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.

PRESIDENT’S CIRCLE

Billingsley Company

Kane Russell Coleman & Logan PC

Bank of Texas / BOK Financial

BBVA Compass

Bradford Companies

KeyBank

Bank of America Charitable Foundation & Bank of America Merrill Lynch

Beck Group

CallisonRTKL

Kimley-Horn and Associates, Inc

Corgan

Capital One Bank

Lincoln Property Company

Deloitte.

DPR Construction, Inc.

Capital Title of Texas

Locke Lord LLP

EY

Chicago Title Company/Fidelity National Financial (FNF)

Matthews Southwest

Chief Partners LP

Mill Creek Residential Trust LLC

Colliers International

ORIX Real Estate Americas

Cortland Partners

Peloton Commercial Real Estate

EMJ Corporation Fischer & Company

Prudential Mortgage Capital Company

Frost Bank

Regions Bank

Gables Residential

Sarofim Realty Advisors

CHAIRMAN’S CIRCLE

Goldman Sachs

Balfour Beatty Construction

Invesco Real Estate

BBG

Jackson-Shaw

CBRE

Jones Day

Compatriot Capital

JP Morgan

Crow Holdings Capital Partners, L.L.C.

KDC

Cushman & Wakefield of Texas, Inc.

Stream Realty Partners

KPMG

Meyers Research, LLC

Gaedeke Group LLC

Strasburger & Price, LLP

Granite Properties

StreetLights Residential

Gardere Wynne Sewell LLP

Thackeray Partners

HFF

Wells Fargo Bank

Gensler

The Howard Hughes Corporation

Jackson Walker L.L.P.

View Glass

GFF

The Retail Connection

Grant Thornton

The Spencer Company

Hall Financial Group

Todd Interests

Haynes and Boone, LLP

Trammell Crow Company

HKS

Trammell Crow Residential

Holt Lunsford Commercial

Union Bank Foundation USI Southwest

JLL LegacyTexas

BENEFACTOR’S CIRCLE

Munsch Hardt Kopf & Harr P.C.

AECOM

NorthMarq Capital

AG&E Structural Engenuity

Republic Title of Texas, Inc.

American National Bank of Texas

Stantec

Bank of the Ozarks

Stewart Title

BB&T

Humphreys & Partners Architects LP

Winstead PC

Berkadia Commercial Mortgage

Hunt Realty Investments, Inc.

WHO WE ARE TREC is where 1,900 commercial real estate professionals spark community transformation, influence policy, and propel careers in DFW and beyond. Only TREC provides the road map for success and the platform to Build the City You’ve Imagined.

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Learn more at recouncil.com or by calling 214-692-3600.

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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. Bolded companies are represented on the DRC Board of Directors. For more information about the benefits of membership at these levels call Diana Rivas-Smith at (214) 746-6744.

STRATEGY BKD Texas Instruments Toyota Motor North America

CATALYST Active Network AT&T Baylor Scott & White Health Capital One Bank Chase Chickasaw Nation Comerica Bank Dallas Fort Worth Int’l Airport Hilti North America Hunt Consolidated Inc. ONCOR Wells Fargo

ADVOCATE 7-Eleven Inc. Akin Gump Strauss Hauer & Feld Amegy Bank of Texas American Airlines Axxess Baker Botts LLP BB&T BBVA Compass CBRE Group Inc. Children’s Medical Center Citi Copart Corrigan Investments Inc. Dallas Morning News Dal-Tile Corp.

Deloitte LLP Dr Pepper Snapple Group Energy Future Holdings Exxon Mobil Corporation EY FedEx Office Fidelity Investments Fluor Corp.

Forest City Texas Inc. Frito-Lay North America Glazer’s Golden Living Haynes and Boone LLP

HEB and Central Market Highland Capital Management LP HKS IBM Corp.

Invesco Jones Day KPMG LLP Kroger Food Stores Littler Mendelson PC Locke Lord LLP Lockheed Martin Manpower Medical City Dallas Hospital/ Medical City Children’s Hospital Methodist Health System Microsoft Corp.

NEC Corp. of America New York Life Regional HQ Omni Dallas Hotel Omnitracs PwC Reliant Energy Rent-A-Center Sheraton – Dallas TDIndustries Teledoc Tenet Healthcare Corp.

Texas Central Partners Texas Health Resources Texas Scottish Rite Hospital for Children Thomson Reuters, Tax & Accounting TM Advertising Tom Thumb Food & Pharmacy Torchmark Corp.

TXU Energy UT Southwestern Medical Center LegacyTexas Bank Winstead PC

BOARD OF ADVISORS Abilene Christian University Acadian Ambulance Accenture ActivTek Global LLC Adastra Airbus Helicopters Inc. Alix Partners Americas Auto Auction Ameriflex

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Andrews Distributing Andrews Kurth LLP Army & Air Force Exchange Arthur J Gallagher & Co. AustinCSI Austin Industries Avanade Baker & McKenzie LLP Bank of America Bank of Texas, N.A. Barnes & Thornburg BDO USA, LLP The Beck Group Blue Cross and Blue Shield of Texas Big 12 Conference Bracewell & Giuliani LLP Boomtime Boston Consulting Group Brierley & Partners Brink’s Inc. Brinker International Inc. Bury C.C. Young Cantex Continuing Care Cassidy Turley Century 21 Judge Fite Co. Choctaw Casino Resort CHRISTUS Health Civitas Capital Group CIGNA Healthcare CliftonLarsonAllen LLP ClubCorp Inc. Coca-Cola Refreshments Colliers International Commemorative Air Force Commerce Bank Consolidated Conway MacKenzie Communications Cook Children’s Healthcare Corgan Associates Inc. CP&Y Inc. CSI GlobalVcard Cushman & Wakefield Dallas County Community College District Dallas Cowboys Football Club

Dallas Marriott City Center Dallas Stars Hockey Club Dallas Women’s Foundation Dean Foods Co. DFW Excellerator DHD Films Dunavant Distribution Group E Smith Realty Partners Ebby Halliday, Realtors Edelman PR Worldwide EF Johnson Technologies Elemetal Recycling EN Consulting Inc. Etihad Airways The Fairmont Dallas FastSigns Federal Reserve Bank of Dallas Flowserve Corp.

Fossil Fox Sports Southwest Freeman Frost Bank Furniture Marketing Group Gardere Wynne Sewell LLP Generational Equity Gensler Grant Thornton LLP Greatbatch Inc. Greenberg Traurig, LLP Gulfstream Aerospace Corp.

Gupta & Associates HDBD HDR Inc. Heritage Health Solutions HFF Hill & Wilkinson Hilton Anatole Hilton Worldwide HNTB Corp.

Holland & Knight LLP HollyFrontier Corp.

Hoar Program Mgmt.

HOLT CAT HPI Real Estate & Ross Tower HUB International IBC Bank InStaff Interceramic Inc. Int’l Leadership of Texas Invitation Homes Jackson Walker LLP FA L L 2 0 1 6

Jacobs JE Dunn Construction JLL Johnson Controls Inc. LeTourneau University Life School Linked Executive Search Live Nation Lockwood, Andrews, & Newnam McKissack & McKissack MHBT Inc. Midway Press, LTD Mission Foods Moss Adams LLP NACD North Texas Chapter Neiman Marcus Nextt Northwood University NTT Data Inc. Oliver Wyman ORIX USA Corporation Oscar Health Insurance Parker University Parkland Foundation PDS Technical Services Perkins Coie LLP People Performance Resources PlainsCapital Bank Point B Poo-Pourri Premier Truck Group Reflect Systems Regions Bank Responsive Ed Solutions RML Automotive Rosewood Crescent Hotel Rosewood Property Co. Santander Consumer USA SAP- America Saulsbury Industries Schneider Electric SCORE Dallas Showcall Sidley Austin LLP Slalom Consulting Southern Methodist University Southwest Airlines Southwest Office Systems Squire Patton Boggs (US) LLP Staffelbach Inc. State Farm Insurance Strasburger & Price LLP Strategic Staffing Solutions Susan G. Komen Taste of Dallas TDJ Enterprises Texans Can Academies Texas A&M University Texas Star Alliance Texas Woman’s University TGI Fridays

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Thompson & Knight LLP Time Warner Cable TopGolf Town of Addison Trane Commercial Systems TravisWolff LLP TrustPoint Management Turner Construction Co. Universal Mind UMB Bank N.A. University of Texas at Arlington University of Texas at Dallas UnitedHealthcare URS Corporation Verizon Wireless Village Green Holding LLC Vinson & Elkins LLP Walgreen’s Co. Weber Shandwick Southwest WFAA-TV Whitley Penn, LLP Weil, Gotshal & Manges LLP WFF Worldlink

LEAD 1820 Productions AAA Texas Inc. Account Control Technology, Inc. Ackerman McQueen Acme Brick Co. Adolfson & Peterson Construction Adolphus Hotel Advocare International LP Alcuin School Alliance Data Allsteel Wilson Ameriflex APAC - Texas Inc. Ash Grove Cement Co. Aviall, A Boeing Co. Bain & Company Inc. Balfour Beatty Construction Beasley, Hightower & Harris, P.C. Berger Engineering Co. Beshear Group BMO Transportation Finance BOKA Powell LLC Brunswick Group LLP Business Jet Center Carlo’s Bakery Carrington, Coleman, Sloman & Blumenthal LLP Cawley Partners Champion Partners Chandler Signs LLP CityDoc Urgent Care Commercial Metals Co. Community Coffee Consumer Credit Counseling Service of Greater Dallas Inc. Costco

Crowe Horwath LLP Dallas Foundation Dallas Mavericks Dave and Busters DCT Industrial DeGolyer and MacNaughton Domain at Midtown Park Essilor of America Inc. Estrada, Hinojosa & Company Inc. Four Seasons Resort & Club at Las Colinas Gables Residential Trust George W. Bush Foundation Guardian Mortgage Co. Gibson, Dunn & Crutcher LLP H Mart Companies Inc. Halff Associates, Inc. Hampton Inn & Suites Hart Group Inc. Hazel’s Hot Shot Inc. Hill + Knowlton Strategies Holmes Murphy and Associates Huawei Technologies Huddle Productions Hunt Construction Group Hunton & Williams LLP Huselton, Morgan & Maultsby PC Imaginuity Interactive Inc. In-N-Out Burger J-BJ Marketing LLC Joule, A Luxury Collection Hotel Kiewit Infrastructure South Co. Kimberly-Clark Corp.

LBJ Infrastructure Group LLC Linebarger Goggan Blair & Sampson, LLP Linkex Inc. Lucas Group Martin Marrietta Mary Kay Inc. McAlister’s Deli – Dallas McKinsey & Co. Inc. Mend Metl-Span LLC Metrocare Services Monogram Apartment Collection MW Logistics LLC MWH Americas Inc. Munsch Hardt Kopf & Harr PC National Math & Science Initiative Nationwide Networking Results Inc. New York Life Regional Headquarters North Central Surgical Hospital Ocean Prime Restaurant One Uptown Apartments Peter O’Donnell, Jr. Polsinelli PC Post Properties Inc. Prudential Asset Resources

Questcare Medical Services The Ritz-Carlton, Dallas Rehab Synergies Republic Title of Texas Rising Fall Rone Engineering Services Ltd. Ruth’s Chris Steak House Russell Reynolds Associates Inc. ScienceSoft Securadyne Systems Serta Mattress Co. Sewell Automotive Companies SevenTablets Inc. Signet Jewelers Limited Smile Workshop Stream Realty Southwest International Trucks Sparks Agency Stahls’ State Fair of Texas Stream Realty Partners Structure Tone Southwest Sun Holdings LLC Texas A&M University Texas Capital Bank Texas Oncology Texas Rangers Baseball Club The Taylor The Westin Dallas Downtown Towers Watson Tradition Senior Living Trinity Basin Preparatory Triumph Learning Uber Technologies Union Pacific Railroad United Site Services University of Phoenix University of South Carolina Career Center USAA VeepWorks Virgin America Airlines VNA Vonage Business VOX Global W Dallas – Victory Hotel WageWorks Walter P. Moore & Associates Walton Development and Management Weaver Westin Galleria Dallas Woodbine Development Corporation Yates Construction YP Marketing

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C COMMUNITY

THE REAL ESTATE COUNCIL FOUNDATION Each year, TREC members provide more than $500,000 worth of their architectural, construction, design, or project management skills to revitalize neighborhoods, schools, parks, and communities. Their donated time and expertise is invaluable to TREC Foundation’s grantees. This year, our members have already donated more than 1,500 hours.

They’ve helped design a new entryway at Austin Street Center, transform a former nightclub into an athletic fieldhouse at St. Philip’s School and Community Center, renovate a camping area at the Girl Scouts of Northeast Texas’ new STEM center and so much more.

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L LEADERSHIP

LONG-LASTING CONNECTIONS, EXPERIENCES The Real Estate Council’s Associate Leadership Council provides experiences for participants to use throughout their careers.

BY LANCE MURRAY

Kimberly Byrum, senior vice president-advisory at Meyers Research, was a member of the 1999 class of The Real Estate Council’s Associate Leadership Council, and she still uses what she learned in the 10-month program, and relies on the contacts she made.

Byrum came to Dallas in 1991 after graduating from Texas A&M University with a degree in agricultural economics. She says she was a computer whiz, and used those skills to land a job in market research with Irving-based JPI. She left JPI in 2008 and joined Alvarez & Marsal Real Estate Advisory Services. Byrum took her current position at Meyers in 2013.

She continues to be active with The Real Estate Council, serving on the TREC Foundation’s board of directors, and she was a member of the ALC’s steering committee in 2013. She says the ALC is a program any young real estate professional should aspire to because it exposes them to the full breadth of real estate.

“I always say this,” Byrum said. “It really is every aspect of real estate.”

Working on TREC Foundation board has been important to Byrum.

“My passion is the TREC Foundation,” she said. “I like to see what the nonprofits are doing.”

In her professional life, Byrum’s work mainly is in the multifamily arena of real estate, but she said the ALC has been a valuable resource in her career because when she has a question about any aspect of real estate, “ I know who to call.”

Her time in the ALC also facilitated two life-enhancing experiences.

“MY PASSION IS THE FOUNDATION,” SHE SAID. “I LIKE TO SEE WHAT THE NONPROFITS ARE DOING.” — KIM BYRUM

First, she rode with a police officer from the Northeast Station in Dallas as he patrolled his assigned neighborhood on the same night in 2000 when a tornado hit downtown Fort Worth.

“I was really impressed that this officer knew every home in his neighborhood,” she said.

Byrum said she was struck by the “help has arrived” expressions of those needing assistance.

The second experience was when the ALC group toured the Juvenile Justice Center in Dallas.

Byrum grew up in McAllen and feels a strong calling to advocate for Hispanic families. The visit to the Juvenile Justice Center prompted her to become a mentor for kids who were on probation.

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 future leaders. For more details, visit recouncil.com.

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CALENDAR OF EVENTS Make plans now to attend these upcoming real estate and business events. For information on programs hosted by The Real Estate Council, visit recouncil.com. For details on events presented by the Dallas Regional Chamber, visit dallaschamber.org.

OCTOBER..

OCTOBER 13 YP Summit, 8:00 AM–4:00 PM, The Westin Dallas Downtown YP is excited to host Roger Staubach, Executive Chairman of JLL Americas, and Anne Motsenbocker, South Segment Manager, Middle Market Banking at Chase, as our 2016 YP Summit keynote speakers. Both individuals will provide insight into their own careers and share advice for young professionals. During the day, attendees will also have the opportunity to network and select breakout sessions depending on their interests.

OCTOBER 20 Lt. Gov. Dan Patrick’s Vision on Education for Texas, 12:00–1:30 PM, Belo Mansion & Pavilion Lieutenant Governor Dan Patrick will discuss current policy issues, share his goals for the upcoming legislative session, and discuss his views on public education. Evan Smith, CEO and Co-Founder of the Texas Tribune, will moderate the conversation with Lt. Gov. Patrick.

NOVEMBER..

NOVEMBER 10 Economic Outlook Summit, 7:30–9:30 PM, Sheraton Dallas Downtown Join us for a roundtable discussion between well-known national experts, including Dr. Ray Perryman, CEO of the Perryman Group, and Ben White, Chief Economic Correspondent with Politico, as they discuss the current economic climate and the results of the Presidential Election, and how that might affect your business in 2017.

NOVEMBER 16 Retail Summit, 7 a.m., Dallas Country Club Despite the U.S. economy’s ups and downs, retail remains profitable in the DFW area. What game-changing trends are influencing retail decisions for investors and developers? TREC and Real Estate Deal Sheet have partnered to bring you the Industry Insights series, presented by D CEO.

DECEMBER..

DECEMBER 1 Bank of Texas Speaker Series presented by The Dallas Morning News, 7:30 a.m., Hilton Anatole How Private Philanthropy can Change a Community?

Join us for our next Bank of Texas Speaker Series presented by The Dallas Morning News to hear Dallas family foundations discuss how private philanthropy can change a community.

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L LEADERSHIP

THE VALUE OF EDUCATION The DRC’s Leadership Dallas reinforced how important good schools are to JLL’s David Carroll.

BY HEATHER NOEL

As a market director for commercial real estate firm JLL’s south central region, David Carroll knows quality education is key in attracting companies to a community.

“I think any investment that we can make in the local schools whether we live in Dallas proper or kids go to public schools or private schools, it’s an investment in our community that will help us all,” Carroll says.

In 2014, Carroll had the chance to make an impact at area schools with Dallas Regional Chamber’s Leadership Dallas program.

Carroll, who currently serves on the Chamber’s advisory board as well DAVID CARROLL as The Real Estate Council board, says his Leadership Dallas experience helped him get to know the city better and understand areas that work well and those that need attention.

He also had a chance to meet like-minded folks across a variety of industries — both for-profit and nonprofit.

His group’s class project transformed existing classrooms into innovation labs at four Uplift Education schools.

“We had very talented people in the class and everyone brought their life experiences, work experiences altogether to benefit the kids,” Carroll says.

From concept and fundraising to installing the new equipment in the spaces, Carroll and his classmates were involved every step of the way. They talked with school leadership to tailor each space based on the school’s individual needs.

“It was really a mini learning and engineering laboratory they were trying to strive for,” he says.

Outside of the innovation lab work, Carroll and his teammates found time to talk with kids about their individual jobs.

“We were across a variety of industries and professions and charities, so it was great for the kids to see all of the possibilities that are out there just with our small class,” Carroll says.

Carroll still hears updates through the Chamber about the Uplift campuses, which provides further proof of the project’s outcome.

“Everybody was happy with the results,” Carroll says. “We all walked away thinking we made a difference there with those schools and helped them on their mission with those kids.”

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 dallaschamber.org for more information.

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P PLACEMAKERS

DEVELOPER’S FOCUS ON RESTAURANTS A RECIPE FOR COMMUNITY BUILDING Old Town Development’s Justin Springfield has helped turn Roanoke into the ‘Unique Dining Capital of Texas.’

JUSTIN SPRINGFIELD

PHOTO: LANCE MURRAY

BY LANCE MURRAY

A little more than a decade ago, Roanoke was a quiet Denton County community best known as the home of the late legendary golfer Byron Nelson and for the original Babe’s Chicken Dinner House, where people tailgated or lined the street for up to an hour or more to get a plate of its mouth-watering fried chicken.

Now, Roanoke is known as the “Unique Dining Capital of Texas,” having been declared that by the State Legislature in 2009. It’s a city that’s made an amazing transformation with 54 restaurants and counting – that’s one restaurant for every 122 of its roughly 6,600 residents.

Much of the credit for that transformation can go to Justin Springfield and his partner, Chris Gordon, of Old Town Development. Springfield recently took time to talk about how he and Gordon took a chance on Roanoke, tying their business success to a vision of how a small city’s downtown could be re-invigorated as a magnet for diners and tourism.

“Downtowns have always been near and dear to my heart,” he said.

Springfield moved to nearby Trophy Club from Arkansas in 2001. He and Gordon both were in the pharmaceuticals industry. Springfield’s father was in banking, and was picked by the Walton family to run the Walton Charitable Trust.

“I had sort of this front-row experience of the proliferation of big-box, thoroughfare locations, huge parking lots,” he said.

“Cool buildings in downtowns just started going dark,” he said. Big box stores offered access and convenience, “but I think what people really want is an authentic experience,” Springfield said. “When I started looking down here, Scott Polikov of Gateway Planning had put together a zoning overlay for the area.”

The city had hung a poster with a vision for what it wanted outside the old Rock Hotel on Oak Street before it was renovated.

“I thought it made a lot of sense,” Springfield said said of the vision.

Springfield had a family friend named John Beeson, who was a real

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estate developer in Houston. He became Springfield’s mentor.

“At the time I was thinking I would buy an existing building and fix it up, and help revitalize an area by making an old ugly building look good again,” Springfield said. He later envisioned a new structure on his property.

“I thought it would be a good restaurant location because of Babe’s,” Springfield said.

He began looking for tenants who had success in other downtown areas.

“I wanted an owner-operator tenant, and at the time, Twisted Root had one location in Deep Ellum. I brought him (owner Jason Bosso) out here, and he saw people tailgating at Babe’s,” Springfield said.

Springfield said he talked with former Roanoke City Manager Jimmy Stathatos.

“For a long time, nobody would take me seriously, but he was one who did,” Springfield said. He took Stathatos and Mayor pro tem Holly Gray McPherson to meet with Bosso.

Bosso was interested, needed the city totake away his “risk.”

Stathatos went to Roanoke’s Economic Development Corp. and it came up with incentive money. Springfield offered a significant finish-out allowance. The rest is history.

“All of a sudden, he (Bosso) gets a turn-key opportunity where he just walks in, kicks the doors open, and moves in his tables and chairs and equipment, and he’s open for business,” Springfield said.

Twisted Root opened in 2007 in Springfield’s new structure across from Babe’s on Oak Street. It was an immediate hit.

Soon, Springfield lured Cowboy Chow (now Tacos and Avocados) Brix, now called Enzo’s, and Hard Eight BBQ. Those restaurants and others joined longtime restaurants in Roanoke such as Reno Red’s and Classic Café.

Old Town Development is continuing its community-oriented spirit by developing the new Bread Winners Café & Corner Bar in Trophy Club.

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VIEW FROM THE TOP

BY LANCE MURRAY

ADRIAN MIJAREZ Chief Executive Officer Cinépolis USA

WHAT PROMPTED YOU TO MOVE THE COMPANY FROM LOS ANGELES TO DALLAS? We thought we could recruit and retain better talent in Dallas because of several reasons, one of them being the cost of living — it’s very expensive where we were before and we thought we could give them a better workplace balance because of commutes and other circumstances, and also because of state taxes. The second was the central location — the availability of the airports and having the biggest airline in the world here in Dallas. It’s much easier for us to reach the whole country for construction and for development, plus the time zone.

Finally, we have flight options and shorter flights to our head office.

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PHOTO: CINÉPOLIS USA

Cinépolis USA relocated its headquarters in June from Los Angeles to Dallas. The company is the U.S. arm of Cinépolis, the Mexico-based theater company that is the fourth-largest theater company in the world.

It has 506 theaters in 13 countries with 4,348 screens and more than 30,000 employees.

The chain is known for its luxury amenities.

Adrian Mijares, CEO of Cinépolis USA, joined the company in 2011 as head of procurement and supply chain management in Mexico. He became CEO in the United States in 2013 and was responsible for the company moving to Dallas. We recently talked with Mijares about the move and his company’s experience in North Texas.

WHAT MADE YOU CHOOSE DALLAS OVER ONE OF THE SUBURBAN CITIES? We really like the location where we’re at, which is Beltline and the Tollway, because we felt like from here, we could recruit from Uptown, Downtown, from Frisco, from Arlington, from many different areas. ... It gave us a really nice recruiting radius. And, at the same time, the people we were bringing from Los Angeles — some of them are single, some of them have families — we felt like we could give them more options to live around the office for different lifestyles.

Some of them went to Plano, the ones with families. We have people in the Arts District; we have people in Uptown. Also, important to us was access to the airports, which we have from here.

WHAT CULTURAL AND ENVIRONMENTAL CONSIDERATIONS WERE IMPORTANT TO YOU? Specifically talking about business, I’ve been very surprised about how amazingly business friendly the Dallas community is.

We’ve been amazed. For me personally, the parks and how green Dallas has been. We have kids, and I think that it’s been really great for some of us. And, then — a bit of a surprise — it’s crazy how the people are here with the sports. … The sports culture here is over the top, and that’s very good for us. The other day someone from Los Angeles was telling me that he did a high school football game on Friday, a college game on Saturday, and the Cowboys on Sunday, and the guy was like — he couldn’t believe it.

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CONFIDENTLY GLOBAL. EXPERTLY LOCAL. CUSHMAN & WAKEFIELD is a leading global real estate services firm that helps clients transform the way people work, shop, and live. We provide strategic real estate solutions to clients in Dallas-Fort Worth and around the world.

With our deep local knowledge, relentless curiosity and rigorous focus, we position our clients at the center of everything we do.

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