DFWREALESTATEREVIEW.COM
ANATOMY OF A DEAL:
THE EPIC
HOW DEEP ELLUM’S massive new development Redefines the Neighborhood ALSO INSIDE:
The Rewards of Historic Redevelopment PANEL DISCUSSION: How Dallas Pursued Amazon’s HQ2 THE CRANE REPORT SPRING 2019
Empowering communities through design Supporting our communities from local offices in Dallas, Fort Worth, and Plano.
Visit us at stantec.com to learn more.
A
TEXAS DESTINATION FOR
Keri Samford, Executive Director of Development 972.624.3127 • edc@thecolonytx.org • www.TheColonyEDC.org
DESTINATION: DINING. Royal Blue Grocery, Sloane’s Corner, 400 Gradi, Southpaw’s Grill, and Roti Modern Mediterranean coming this year. #DestinationTCC
FOR MORE INFORMATION, CONTACT: Ramsey March, Sara Terry, or Scott Sowanick at 214.267.0400 TRAMMELLCROWCENTER.COM
owned by institutional investors advised by
leased and managed by
ON THE COVER THE EPIC Rendering courtesy of KDC
SPRING 2019
CONTENTS
17 THE CRANE REPORT
Welcome Letter . . . . . . . . . . . . . . . . . . . . . . . . . 6 Publisher’s Note . . . . . . . . . . . . . . . . . . . . . . . . .8
FOUNDATIONS DFW Market Statistics, Economic Indicators, and Commercial Real Estate News. . . . . . . . . 10
PLACEMAKERS Amanda Moreno-Lake. . . . . . . . . . . . . . . . . 12
BUILDING TOMORROW TOGETHER
28 PANEL DISCUSSION
Site Selection in a Box . . . . . . . . . . . . . . . . . 14
THE CRANE REPORT Who’s Building What, Where . . . . . . . . . 17
SCORECARD DFW’s Top Office and Industrial Leases . . . . . . . . . . . . . . . . . 25
PANEL DISCUSSION The Amazon HQ2 Pitch . . . . . . . . . . . . . . . . 28
SPRING 2019
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 3
E XC L USI V E LY P UB L ISHE D B Y D MAGAZINE PARTNERS
DFWREALESTATEREVIEW.COM
38 FEATURE
PUBLISHER & EDITORIAL DIRECTOR
Historic Redevelopment
Quincy Preston
Bringing new life to aging buildings in Dallas-Fort Worth . . . . . . . . 38
214-523-5215 quincy.preston@dmagazine.com MANAGING EDITOR Lance Murray
PROJECT EDITOR Payton Potter ASSOCIATE EDITOR Alex Edwards CREATIVE DIRECTOR Michael Samples CONTRIBUTING WRITERS
46 ANATOMY OF A DEAL
Jeremiah Jensen Payton Potter
The Epic
David Kirkpatrick
The high-profile development on the western edge of Deep Ellum blends the old with the new . . . . . . . . . . . . . . . . . . . . . . . 46
Nicholas Sakelaris
INTERNS Christopher Augustine Lauren Hawkins
INNOVATION
Rebeca Posadas-Nava Blair Welch
Advanced Manufacturing Designers and builders are creating functional spaces that adapt to new technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SPECIAL ADVERTISING SECTION
D MAGAZINE PARTNERS BUSINESS GROUP PUBLISHER Ernie Cote
Economic Development Directory Profiles of cities around the region . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
BUSINESS DEVELOPMENT Stephanie Mojonnet 214-523-0311 stephanie@dmagazine.com Steve Reeves
COMMUNITY The Real Estate Council, Impact Investors . . . . . . . . . . . . . . . . 61 Dallas Regional Chamber, Top-Level Members . . . . . . . . . . . . . 62 Dallas Regional Chamber, Leadership Dallas . . . . . . . . . . . . . . . 64 Calendar of Events . . . . . . . . . . . . . . 65
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214-523-5259 steve.reeves@dmagazine.com
The Real Estate Council Photos: Young Guns Casino Night . . . . . . . 66 The Real Estate Council, TREC Leadership . . . . . . . . . . . . . . . 67 View From the Top: Slavko Djukic, Chief Technology Officer, Zinwave. 68
Josie West 214-523-0384 josie.west@dmagazine.com
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. ©2019 All rights reserved. No part of this publication may be reproduced or reprinted without written permission. Neither the Dallas Regional Chamber nor The Real Estate Council nor D Magazine Partners is a sponsor of, or committed to, the views expressed in these articles. The publisher is not responsible for unsolicited contributions.
@alexandra.holmen
@APImages
SEE YOURSELF IN FRISCO
Imagine living and working in Frisco, Texas. It’s 25 miles from DFW International Airport and downtown Dallas, and eight professional sports organizations call it home. Imagine working with a highly skilled and educated workforce, and sending your kids to one of the most sought-after public school systems in America. Can you see yourself in Frisco? You’ll fit right in.
Visit FriscoEDC.com to find out more.
Frisco Economic Development Corporation
972.292.5150 FriscoEDC.com
WELCOME
A letter from the Dallas Regional Chamber and The Real Estate Council 2019 CHAIRMAN OF THE BOARD Chris Nielsen
MEETING THE CHALLENGE OF EXPANDING
Executive Vice President Product Support & Chief Quality Officer Toyota Motor North America
WORKFORCE TRAINING, HEAD-ON
PRESIDENT & CEO Dale Petroskey
certificates or degrees, with targeted goals for Hispanic, African-American, and economically disadvantaged individuals.
LOOKING TO THE FUTURE
DALE PETROSKEY President and Chief Executive Officer Dallas Regional Chamber
LINDA McMAHON President and Chief Executive Officer The Real Estate Council
The seven colleges that comprise the Dallas County Community College District (DCCCD) fill a unique gap in the talent pipeline for the Dallas Region. They align learning, educational
experiences, and training with industry needs and, in the process, help graduates attain meaningful, living-wage employment.
EXPANDING ACCESS AND OPPORTUNITY
Dallas County has exploded in population, adding more than 166,000 new residents since 2013, a 7 percent growth rate. DCCCD enrollment has not only met the challenge of serving more students, but has expanded access even faster, growing by 13 percent over the same period to more than 82,000 students. Much of this enrollment growth is attributable to the expansion of Pathways in Technology Early College High Schools (P-TECH), along with the launch of DCCCD’s innovative student access program, Dallas County Promise. Through Dallas County Promise, participating colleges provide “last-dollar scholarships” to students who graduate from one of 43 Promise high schools. The Promise scholarship covers the gap between need-based financial aid and the cost of tuition up to a time limit or the completion of a degree per institution. Programs such as these are instrumental in reaching the statewide goal of 60 percent credential completion by all 25- to 34-yearolds in Texas by 2030—a total of 3.4 million
To support the influx of new students and expansion of its innovative programs, DCCCD won voter approval in May 2019 of a $1.1 billion bond proposition that will result in better training and better jobs for young adults and career seekers. This was DCCCD’s first bond election in 15 years and only the third bond election in the District’s 53-year history. THE BOND WILL FUND THREE STRATEGIC PRIORITIES:
CHIEF OPERATING OFFICER & CHIEF FINANCIAL OFFICER Angela Farley COMMUNICATIONS & MARKETING, SENIOR VICE PRESIDENT Darren Grubb RESEARCH AND INNOVATION, SENIOR VICE PRESIDENT Duane Dankesreiter
> $235 million for industry-aligned projects and programs to meet the workforce needs of the North Texas region
RESEARCH AND INNOVATION,
> $332 million for student-related instruction and programs to support DCCCD’s continuous enrollment growth
Eric Griffin
MANAGING DIRECTOR
> $535 million for the construction of a new Dallas Education and Innovation Hub, including: > Construction of an all-new, consolidated downtown campus, which includes a redesign of El Centro College > Creation of a technology and innovation center > Development of a new business training center
The Dallas Education and Innovation Hub investment is particularly exciting. The concept of creating a new downtown Dallas campus for El Centro College and leveraging the input of corporations in the region will be a powerful new “Corporate U”—the kind of strong workforce development asset that could attract new companies and further strengthen talent development for our existing businesses. The Dallas Regional Chamber and The Real Estate Council are proud to support the Dallas County Community College District, which is critical to our regional economy and talent pipeline. We must continue to provide better training, better access, and better jobs for our entire community. DCCCD has met this challenge head on, and we’re excited about the many new opportunities ahead.
2019 CHAIRMAN Jim Knight FM Engineering & Design VICE CHAIRMAN Bill Cawley Cawley Partners PRESIDENT & CEO Linda McMahon VICE PRESIDENT, LEADERSHIP & CULTURE Holland Morris CFO Carla Brandt
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SPRING 2019
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, 24 hotels and the top-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
UPFRONT QUINCY PRESTON Publisher Dallas-Fort Worth Real Estate Review
A letter from the Publisher
North Texas has become a leader for adaptive redevelopment of aging and long-vacant buildings by developers with the skills and vision to give new life to old structures. Todd Interests’ revival of the 52-story First National Bank Tower in downtown Dallas—the region’s latest urban restoration announcement—is expected to be one of the largest in the U.S. at $450 million. The iconic black and white high-rise was the tallest building west of the Mississippi River when it opened in 1965. Now, the developer plans to turn the 1.5-million-square-foot landmark into apartments, hotel rooms, retail, and office space. Some industry experts say it’s a new era for adaptive reuse projects, and writer Jeremiah Jensen looks at the advantages of urban restoration in the region—as well as the challenges of the “unknown unknowns” that may come with the territory—beginning on Page 38. A new mixed-used development rising on the western edge of historic Deep Ellum has a name that describes the impact it could have on the neighborhood—The Epic. The project sits on an 8-acre tract that includes the landmark Knights of Pythias Temple and combines the authenticity of adaptive reuse projects with the efficiencies and amenities of new construction, offering modern residential, retail, hotel, and office amenities that will reflect the area’s past. Writer Payton Potter gives us a close look at The Epic in our “Anatomy of A Deal” cover story, beginning on Page 46. Another adaptive reuse pioneer in the region, Amanda Moreno-Lake, shares her insights on taking old, long-ignored locations and returning them to vibrancy in our Placemaker feature on Page 12. Her developer’s touch—rooted in her childhood and driven by her persistent nature—is evident in Bishop Arts, Waxahachie, and other North Texas communities. During most of 2018, city leaders across the country were on the edges of their seats—who would win Amazon’s HQ2? In a panel moderated by Christine Perez, Dallas economic development and real estate leaders took us behind the scenes of the region’s effort to lasso HQ2, beginning on Page 28. Dallas got close, and we “checked all the boxes.” The work by the Dallas Regional Chamber and others has laid down a road map for what’s next in the region. You’ll also find the biggest lease transactions in the office and industrial sectors in Scorecard, Page 25, and the latest in North Texas construction projects in the Crane Report, Page 17. And we’ve got DFW market statistics, economic indicators, and commercial real estate news in Foundations, Page 10. As always, you can find news updates in our Twitter feed and view extended content on our website at dfwrealestatereview.com. We want to hear from you, so stay in touch.
Quincy Curé Preston Publisher
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SPRING 2019
Onward and Upward
The Link at Uptown Dallas, Texas
FOUNDATIONS
A baseline for the region’s future
CAPITAL MARKETS SURVEY
DALLAS-FORT WORTH IS A TOP INVESTMENT TARGET current market fundamentals, which are stronger than ever, but by the long-term view that DFW and Texas as a whole will continue to outpace the country in population and job growth, translating to long-term asset appreciation.” Multifamily has seen strong absorption and rent growth. “In terms of multifamily investment, DFW has been attractive to capital due to the staggering economic growth we have seen through this cycle, resulting in strong absorption and rent growth in the multifamily space,” Jeremy Faltys, CBRE’s senior vice president for Multifamily said. “This economic growth paired with multifamily being viewed as the most recession-proof asset class has led to unprecedented flows of capital into the multifamily space.” The survey indicates investors will remain active in commercial real estate markets this year, with 98 percent of respondents telling CBRE they intend to make acquisitions. CBRE said there has been a “pronounced shift toward greater caution,” with the share of investors planning to either maintain or increase spending in 2019, dropping to 75 percent from 88 percent in 2018. “Continued strong real estate fundamentals, combined with historically deep debt and equity capital markets, provide good momentum for 2019. Investors are reducing risk and protecting income streams through diversifi cation. Pricing is at or near the previous peak for most asset types in prime locations, so investors are seeking yield in secondary markets and alternative asset types,” said Chris Ludeman, global president, Capital Markets, CBRE.
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Which city in the Americas do you believe is most attractive for property investment? METRO AREA
2019 RANK
Los Angeles/Southern California Dallas-Fort Worth Washington, D.C. San Francisco/Northern California Seattle Denver Atlanta Orlando New York Nashville Houston Chicago Phoenix Boston Miami/South Florida Minneapolis/St. Paul Las Vegas Toronto Austin San Diego Mexico City Tampa/St. Petersburg Portland ■ TIER I
■ TIER II
■ TIER III
1 2 3 4* 4* 5* 5* 6 7 8* 8* 8* 9 10 * 10 * 10 * 11 * 11 * 11 * 12 13 * 13 * 14 ■ CANADA
2018 RANK 1 2 6 4* 3* 7 5 13 * 3* 9* 4* 13 * 11 * 9* 8 11 12 * 10 * 10 * 11 * 13 * 10 * 9* ■ LATIN AMERICA
* Indicates tie
Expectation of better capital value growth than other assets
Asset class diversification
16%
20%
Yield relative to cost of debt (positive leverage advantage)
4%
Hedge against inflation
1%
Other
7%
FACTORS MOTIVATING INVESTORS
What is your company’s main reason for investing in real estate? Stability of income stream
32%
Yield relative to other assets (e.g. spread over risk free)
20%
SOURCE: CBRE Research, Americas Investor Intentions Survey, 2018 and 2019
A recent survey by CBRE ranks Dallas-Fort Worth as one of the top investment targets among all metro areas in the United States, putting DFW as the second most-desirable investment market for the third straight year. According to the 2019 Americas Investor Intentions Survey, Dallas-Fort Worth comes in behind only Los Angeles. The survey looked at how investors view each of the diff erent asset types: > Industrial & logistics remains the preferred property type, cited by 39 percent of investors as the most attractive for investment in 2019. > Multifamily was close behind, with 37 percent of investors naming it as the next most attractive property type—up from 20 percent in 2018. > 10 percent of investors cited office as the most attractive for purchase in 2019. > Retail’s share of investors—9 percent—has held steady over the past three years, despite competition from e-commerce. “We are seeing unprecedented investor interest for industrial and logistics properties in DallasFort Worth coming not only from U.S. investors, but also global capital from Asia— primarily Singapore, Europe and the Middle East,” Randy Baird, executive vice president, Industrial & Logistics at CBRE, said in a statement. “DFW is capturing the interest of all forms of capital because we are at a central point in the U.S. supply chain, we have a pro-business environment with a low cost of doing business, and we have nation-leading population growth,” Baird said. “Investors are attracted not only by the
TOP-RANKED METROS FOR INVESTMENT
SPRING 2019
F FOUNDATIONS INDUSTRIAL
DATA CENTERS
E-COMMERCE AND LOGISTICS COMPANIES MAKE UP MAJORITY OF INDUSTRIAL LEASES TOP WAREHOUSE DEALS By market, 2018 PA I-78/81 CORRIDOR 11,821,966 MSF 11 Deals INLAND EMPIRE 18,989,996 MSF 20 Deals
CHICAGO 4,422,828 MSF 5 Deals DALLAS-FORT WORTH 11,112,658 MSF 10 Deals
ATLANTA 8,810,140 MSF 9 Deals
● MARKETS WITH TOP
100 TRANSACTIONS IN 2018
Of those 13 leases, six were for e-commerce and logistics companies, CBRE says. “In 2018, DFW’s industrial real estate market saw unprecedented demand for a multitude of reasons,” says Ryan Keiser, executive vice president with CBRE’s Industrial & Logistics practice in Dallas, in the report. “The growth of e-commerce— specifically the ever-increasing e-commerce service levels such as two-day, same-day and white glove delivery options—was a huge factor. We also are seeing demand for distribution centers due to the Metroplex’s location and transportation infrastructure, and we see strong local demand due to the area’s population growth.” Keiser says he anticipates comparable demand for industrial and logistics real estate in the region in 2019.
SOURCE:CBRE Research, Q4 2018
As proof of the growing influence of e-commerce and logistics companies on warehouse construction nationwide and in Dallas-Fort Worth, those businesses took a larger share of the 100 largest industrial-andlogistics leases signed last year than they did in 2017, according to a new research report by CBRE. The firm analyzed 2018’s industrial-leasing activity in the U.S., and found that 61 of the largest 100 leases were signed by e-commerce companies and logistics firms for a total of 61.5 million square feet of space in 2018. In 2017, those sectors claimed 52 of the largest leases for a cumulative 43.2 million square feet, CBRE says. In 2018, CBRE notes, the Dallas-Fort Worth market had 10 of the largest warehouse leases in the nation for a total of 11.1 million square feet. That trails on Southern California’s Inland Empire—which had 20 deals totaling nearly 19 million square feet—and the PA I-78/81 Corridor in Eastern Pennsylvania, which had 11 deals for 11.8 million square feet. Six of the 10 top leases in DFW were for e-commerce and logistics companies, CBRE said, which put the region on par with the national trend. But DFW’s total for 2018 was down slightly from 2017, when 13 warehouse leases were signed in Dallas-Fort Worth for a total of 11 million square feet.
“DFW’s real estate and labor markets continue to represent an ‘easy button’ for corporate users needing to expand their supply chains due to DFW’s availability of cost-effective industrial real estate and quality labor,” said Keiser. CBRE says the logistics and e-commerce industries are related in that many logistics companies— specifically third-party logistics companies—handle e-commerce distribution for clients. “These figures illustrate that there still is a lot of momentum behind e-commerce uses in US warehouse leasing, despite concerns that the sector’s expansion may be reaching its later stages,” said David Egan, CBRE’s Global Head of Industrial & Logistics Research. “We expect this type of leasing momentum to continue in 2019.”
NET GAINS
U-HAUL: TEXAS RANKED AS NO. 1 IN GROWTH For the third year in a row, Texas is ranked as the No. 1 growth state by U-Haul, based on U.S. migraton trends for 2018. McKinney, Kaufman, Irving, and Arlington are among notable cities in Texas showing net gains, U-Haul said. It calculates the net gain of one-way U-Haul trucks entering a state versus leaving that state during a calendar year. The jump back to No. 1 for three years is a major rebound for Texas from the No. 39 spot it held in 2015, the company said. Florida, South Carolina, Utah, and Idaho round out the top fi ve states for growth in 2018.
SPRING 2019
U-Haul says migration trends data is compiled from more than 2 million one-way U-Haul truck sharing transactions each year. Texas arrivals of one-way U-Haul trucks were up 5 percent, the company says, while departures were up 6 percent compared to the state’s 2017 numbers.
DATA CENTER MARKET SHOWS ROBUST SUPPLY IN DALLASFORT WORTH Dallas-Fort Worth is showcasing a robust supply of data center inventory in 2019, with providers posting themselves for possible hyperscale activity, according to a new report from JLL. The report notes that Dallas-based CyrusOne, Digital Realty, Infomart (Equinix), and QTS are delivering new data centers in the market. Equinix, Skybox, Stream, and Edgecore are in design phases for land they own. JLL said data center demand remains primarily composed of enterprise transactions that average 250KW to 2.5MW each. The report notes some enterprises are moving their workload from on-campus owned-and-operated facilities to multitenant data centers. Adding to the absorption in the DFW marketplace is a big uptick in organic growth from existing customer expansions and contract restructures, JLL said. As far as the outlook for the region, users should benefit from aggressive rental rates caused by stong supply; take advantage of the revenue and geographic portability available from providers; and the receptibility of providers to restructuring contracts, JLL says. Providers are dedicated to more service offerings to tenants to help win business, JLL says. Also, providers should stay in frequent contact with their existing customers to stay ahead of possible expansion opportunities. JLL notes that connectivity to Infomart (Equinix) and/or on-campus options to access cloud exchanges has become increasingly valuable. DATA CENTER SUPPLY/DEMAND
Despite a larger year-overyear increase in departures, U-Haul says arrivals still accounted for 50.2 percent of all one-way U-Haul traffic in Texas. Which state tops the nation for the number of out-bound trucks? That would be Illinois, coming in at No. 50, followed by No. 48, California, and No. 49, Michigan. Migration trends don’t correlate directly to population or economic growth, but U-Haul says its growth data is an eff ective gauge of how well states and cities are attracting and maintaining residents.
SUPPLY
SF
TOTAL INVENTORY
3,639,751
516.6
TOTAL VACANT
562 ,516
79.2
UNDER CONSTRUCTION
190,595
34.7
1,104,601
187.8
PLANNED
DEMAND
MW
MW
NET ABSORPTION
40.2
RENTAL RATES <250kW >250 kW
$190-$300/kW (all in) $100-$120/kW (+E)
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P PLACEMAKERS
PERSEVERANCE PAYS OFF
From Bishop Arts to Cedar Hill to Waxahachie, Amanda Moreno-Lake’s vision and self-professed stubbornness has led her to success in building communities. BY LANCE MURRAY
PHOTO: REBECA POSADAS-NAVA
When Amanda Moreno-Lake started her entrepreneurial life at age 11, selling paletas—a popsicle-like frozen treat—for 25 cents to her schoolmates, little did she know that her drive and self-professed stubbornness would lead her to become one of North Texas’ busiest redevelopers. You’ll find her touch in Dallas’ Bishop Arts District and in downtown Waxahachie. She has projects underway in Ennis and Cedar Hill with her husband, Jim Lake Jr., and other municipalities have contacted the pair about undertaking projects in their towns, too. Among their newer projects in Dallas, the Lakes bought the historic 113-year-old Ambassador Hotel in downtown’s Cedars neighborhood and are planning to redevelop it into micro-lofts with amenities including a coworking space on the first floor. Moreno-Lake is a busy woman, and she has many titles. She’s vice president for operations and a partner in Jim Lake Companies with her husband. She’s the owner of Lake-Moreno LLC, which oversaw the renovation of the historic Rogers Hotel and the redevelopment of roughly 200,000 square feet of mixed-use retail, commercial, office, and residential property in Waxahachie. She’s the CEO and owner of VA Capital, a commercial investment company. And there’s more. Moreno-Lake is a consulting property manager for Victor Ballas Investments and the owner of C&K Capital and 2 Esquinas at Bishop Arts. Add to that the consulting work she’s done in the past and her role on the board of Dallas Area Rapid Transit and other community organizations, and it’s hard to imagine Moreno-Lake has any free time. The mother of three sons, Moreno-Lake says her most important title, however, is “grandmother.” Her career in real estate investing and development started in 1992, when she bought a building that housed a typewriting business in Bishop Arts. In 1996, she opened Jaripeo Mexicano, a Western-wear store in Oak Cliff. The following year, she opened a successful beauty salon called Amanda’s Salon & Boutique in the building. Other businesses and real estate investments soon followed—the second building she bought is now the home of Lockhart Smokehouse—and she’s spent several decades working to boost and revive the Bishop Arts District.
SEEDS OF SUCCESS Moreno-Lake is the sixth of seven children born to Mexican immigrants who lived in an 800-square-foot home in West Dallas. The house wasn’t well insulated; in the winter, Moreno-Lake says she slept with her coat on and would use socks as gloves.
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P PLACEMAKERS
I’VE NEVER LEARNED HOW TO QUIT AT ANYTHING—I’M VERY STUBBORN. A ‘NO’ ALWAYS MEANT ‘MAYBE’ TO ME. —AMANDA MORENO-LAKE
She learned how to cook from her mother, and today preparing food in her large kitchen is one of her passions. She says she didn’t always get along with her father, who worked in the concrete business, but it was he who pushed her to understand entrepreneurship. He even gave her some seed money, which she invested in Bishop Arts. Moreno-Lake says she saw how hard her mother and father worked, and she attributes her drive to succeed to her upbringing in that cold, small house in West Dallas. “I knew there’s more to life than this,” she says of her childhood. “I made up my mind that I was going to work very hard.” Admitting to a streak of stubbornness, the developer says it helped form her dogged nature as an adult. “I’ve never learned how to quit at anything—I’m very stubborn,” she says. “A ‘no’ always meant ‘maybe’ to me.” In her view, for every problem, there’s a solution: “You just have to find it.” Moreno-Lake says the most important part of her success was deciphering the ins and outs of city codes and learning to work hand-in-hand with city officials to get her projects done. Also crucial was learning how to work with contractors. Her rule now is to identify companies that meet her standards, get three different bids, and build trust. “You build relationships,” she says. “It’s never been about the money; it’s always been about building relationships. Loyalty is very important to me.” To the lifelong entrepreneur, a placemaker is “somebody who’s really making a difference in a community.” In Bishop Arts and Waxahachie, she’s proven to be a classic placemaker—and she intends to keep that role. She’s even left a literal impression on Bishop Arts—her son’s small handprint is still visible in the concrete outside one of her buildings. In Waxahachie, Moreno-Lake and her husband own buildings comprising more than 200,000 square feet of space. Her husband became a partner with her there before they were married. Moreno-Lake has owned a 120-acre ranch outside Waxahachie for years, and she says taking a drive to see the city’s downtown sparked her idea for redevelopment
SPRING 2019
AMBASSADOR HOTEL, THE CEDARS
in the Ellis County community of roughly 35,000 people. “To my biggest surprise, there were all these beautiful buildings, but they were vacant,” she says. “It was like a sleeping beauty.” She immediately called Jim Lake Jr., she says, telling him she’d found something she wanted to partner on. So it began, and in 2014, the Lakes completed the purchase of many buildings on the city’s historic downtown square. Notable among them is The Rogers Hotel, a historic, 106-year-old structure that now houses retail, restaurant, office, and loft tenants. The second floor has an events venue. In the building at the corner of Main and Monroe Streets, a motorcycle shop and children’s boutique sit below 12 lofts, which feature fireplaces, polished concrete, and wood floors made from reclaimed basketball court flooring. There’s also the former County Bank Building and Ellis County records building, which have been redeveloped into retail spaces with second-floor lofts above, as well as the recently purchased Texas Theatre. The Waxahachie development, she says, has “now become very vibrant, with new businesses coming in.” Three to four years ago, the Lakes acquired buildings in Ennis and have been working with the city to create a mixed-use development with 11 buildings. David Farrell is the architect on the project. Her project in Cedar Hill will include a mix of retail, office, and residential space. Its $10M first phase will take a 40,000-square-foot lumberyard built in the 1960s and turn it into retail, restaurant, and event space. The first phase is on roughly 5 acres of land near the intersection of West Belt Line Road and Broad Street. Completion is expected in 2021. While Moreno-Lake’s past has influenced her life in many ways, it’s the future that keeps the developer eyeing new challenges. “I don’t think I’ll ever retire,” she says.
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PHOTO: MICHAEL SAMPLES
DOWNTOWN WAXAHACHIE
PHOTO: REBECA POSADAS-NAVA
RENDERING: JIM LAKE INC
THE MAYOR’S HOUSE, BISHOP ARTS DISTRICT
B BUILDING TOMORROW TOGETHER
ILLUSTRATION: Z_WEI VIA iSTOCK
SITE SELECTION IN A BOX BY MIKE ROSA SENIOR VICE PRESIDENT, ECONOMIC DEVELOPMENT, DALLAS REGIONAL CHAMBER
In late March, I attended a Site Selectors Guild annual forum in Salt Lake City. The Guild consists of about 50 of the top site selectors in the U.S. and world. Many have successfully located projects in DFW with our help and the support of our economic development colleagues representing regional cities. We attend Site Selectors Guild forums to further those critical, project-yielding relationships. We’ll host this year’s fall forum in Plano in early September, and for the past several years, we’ve hosted consultants here individually and in small groups. At the forum, site selectors populated a panel on the topic of “site selection in a box.”
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The availability of big data, coupled with user-friendly analytical and visualization tools, has transformed the way consultants examine states, regions, and cities before advising companies where to move or grow. It also has right-shifted the point of entry for state, regional, or community economic development teams into location projects led by consultants. Just after attending the Guild, a site selector with a major real estate firm called to let me know that a client corporation was considering the Dallas region for a large corporate office, thousands of jobs, and hundreds of thousands of square feet, and would soon visit here with
SPRING 2019
B BUILDING TOMORROW TOGETHER the client to share the project in detail and dig into important issues. There’s not much unusual about that call or request; the Dallas Regional Chamber has built relationships with this and other site selection firms over the years that bear this sort of fruit, and this year we’ve averaged more than one visit per week. What was unusual about this project is that prior to that call, which was the DRC’s first touch, the consultant had already advised the search down to just two regions in the U.S., and within those regions had narrowed to a specific area, with the availability and cost of talent driving the analysis. Narrowing to two final locations often indicates a project has actually narrowed it all the way, with a second option to keep the top choice enthusiastic in pursuit. I can’t recall a site selection process for a project of this magnitude already so close to the goal line before state, regional, and local economic developers were engaged. It brought to mind the session at Site Selectors Guild and a trend we’ve seen coming for a while: There’s an app for everything, even site selection. All the big data and analytical tools have not decreased or diminished in importance the work that happens between site selectors and economic development organizations like ours. It’s just different than before. The timelines are more compressed, energetic, and nearer the company’s decision point. Field visits to DFW seem to have actually increased in importance; trust big data, but verify. When we host a field visit by a consultant and company, they’re here to step
ALL THE BIG DATA AND ANALYTICAL TOOLS HAVE NOT DECREASED OR DIMINISHED IN IMPORTANCE THE WORK THAT HAPPENS BETWEEN SITE SELECTORS AND ECONOMIC DEVELOPMENT ORGANIZATIONS LIKE OURS; IT’S JUST DIFFERENT THAN BEFORE. out of the box that brings them to us in the first place. They use us, and others we arrange for them to meet while here, to check their work. We and our allies have the local knowledge to fine tune, offer insight, tell a story, and relate the data. Over the years, the work of the DRC’s outstanding research team has become known and trusted among site selectors; they value the added depth of analysis we provide. Many times, when meeting with a consultant and client company together in our office, I’ve had the chance to present the region and tell the company executive that their consultant evaluated a particular topic exactly right, or tell a story illustrating our position to be even stronger than thought. That’s a subtle but important thing, as it builds confidence in the client company that their adviser has gotten it right; proving DFW’s inclusion as a finalist location or the ultimate selection is the smart move. We have big data, too. A great example of that is our ability to develop a compound 360-degree diagram for any location in DFW that shows the direction and daily flow of inbound labor to that exact spot. The data is out there for anyone to find and use. It’s the storytelling aspect and relating the data to what’s on the ground here that is our value-add to the consultant and company and an important way we work hard to win projects for DFW.
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.
SPRING 2019
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 1 5
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JEFFERSON TEXAS PLAZA RENDERING: JPI
THE CRANE REPORT
Spring 2019
Dallas-Fort Worth is a region that always meets challenges head-on and wins, says Brad Blankenship of Cushman & Wakefield. The region is a competitive, hot market in the office, industrial, and multifamily sectors as Dallas-Fort Worth continues to experience a population boom. State and local governments are marketing North Texas communities aggressively as great places to live and do business. BY LANCE MURRAY
ON-TH E-G RO U N D I N SI G H TS
OFFICE
BRET HEFTON JLL Senior Vice President
“Tenants are attracted to new, high-quality offices, floor-to-ceiling windows, and nearby amenities to recruit and retain a strong, educated, young workforce. Developers want to capitalize on that demand by delivering quality office product. Additionally, historically iconic buildings are being infused with significant capital to keep pace with the new construction.”
1
SPRING 2019
INDUSTRIAL
MULTIFAMILY
BRAD BLANKENSHIP
CHRIS TEESDALE
“Competition is driving everything. Labor competition is forcing companies to look for better properties to attract and retain talent. Labor shortage and competition is also driving up construction costs. Market geographic competition is in play for corporations seeking lower taxes, a lower cost of living, and an educated workforce.”
“Industrial developments in North Texas continue to meet the ever-evolving demands users require to achieve optimum efficiency in their buildings. Speculative projects are offering clear heights reaching 40 feet, truck court depths beyond 225 feet, and staging bays of 70 feet. Whether it’s multilevel e-commerce or an automated storage need, developers are providing the innovation.”
Executive Managing Director, Project and Development Services, Cushman & Wakefield
Executive Vice President, Colliers Dallas
DONALD R. POWELL Principal, BOKA Architects
“Multifamily properties are experiencing several major shifts in design thinking. There is a growing preference for onebedroom units, efficiencies, and even ‘micro-units’ that encompass just a few hundred square feet. These shrinking footprints have proportionally smaller rents that allow early-career professionals to live near their urban workplaces.”
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
THE CRANE REPORT:
OFFICE
RAYZOR RANCH MEDICAL PARK
OFFICES AT RAYZOR RANCH DUCHESS OFFICE PARK FOURCORNERSTONES OFFICE BUILDING FORT WORTH DR PROFESSIONAL OFFICE PARK
ANNOUNCED + UNDER CONSTRUCTION
ANNOUNCED DEVELOPMENTS
RIVER WALK MEDICAL PARK IV LAKESIDE CROSSING
6
STONEGLEN OFFICE BUILDING
3
CHARLES SCHWAB CORPORATE CAMPUS
CHAPEL PHASE 1 CROSSING KRIYA OFFICE BUIDLING CARILLON COURT SOUTHLAKE MEDICAL OFFICES
THE TRAD HEADQUA FREEPOR COMMON
THE BRAUN ON BELT LINE
HERITAGE GLEN MEDICAL CENTER
LAS COLINAS CORPORATE CENTER III
VILLAGE CREEK
USCIS BUILDING AMERICAN AIRLINES CORPORATE CAMPUS VIRIDIAN TOWN CENTER BUILDING I
1
FRISCO OFFICE BUILDING AT THE STAR
THE OFFICES AT HAMPDEN WOODS
SIZE: 300,000 square feet LOCATION: Frisco DEVELOPER: Blue Star Land DETAILS: The new building at the Dallas Cowboys’ Star development will overlook the Cowboys’ practice field. Blue Star plans to begin construction on the project—reportedly for a big-name corporate tenant—no later than August, with completion in 2021.
2
FAIRWAY CENTRE
LOCKE TRIANGLE
WATERSIDE OVERTON CENTRE TOWER III
CHISHOLM TRAIL PROFESSIONAL PLAZA
CHISHOLM TRAIL PROFESSIONAL CENTER
ROUGHRIDER PLAZA
SIZE: 350,000 square feet LOCATION: Frisco DEVELOPER: Tom Gaglardi DETAILS: The mixed-use development on the Dallas North Tollway just south of Frisco’s Dr Pepper Ballpark will have 350,000 square feet of office space across three buildings ranging from four to eight stories. The project will have a 311-room, 7-story hotel, and four retail buildings. Also, several parking garages are planned.
1 8 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
BROOKHOLLOW COMMONS II
MUSEUM PLACE III
BARDIN ROAD CENTER PHASE II
WADDELL EXCAVATING
MANSFIELD WEBB AND LAFRONTERA TRAIL
BROAD STREET PLAZA
MANSFIELD MEDICAL OFFICE
3
LAKESIDE CENTER
SIZE: 138,500 square feet LOCATION: Flower Mound DEVELOPER: Realty Capital Management DETAILS: There will be twoand four-story office buildings in this 10-acre project in the Lakeside business district. Staubach Capital is the equity partner and First United Bank is the construction lender. The buildings were designed by BOKA Powell.
SPRING 2019
PLAYFUL CORP HEADQUARTERS COBB FARM WEST OFFICE PARK FRISCO MEDICAL ELDORADO PAVILION STONEBRIDGE OFFICE CONDOS MEDICAL CONDOS FAIRVIEW LEGACY MCKINNEY RANCH EXECUTIVE VILLAGE PROFESSIONAL CENTER PARK STONEBROOK MONARCH STEWART CREEK CITY OFFICE OFFICE CENTER V INDEPENDENCE PKWY ALLEN MEDICAL OFFICE BUILDING WADE PARK ANGEL & OFFICE/RETAIL ALLEN PLACE NATIONAL EXCHANGE THE MEDICAL CENTER STAR MUSTANG ALLEN DUKE BRIDGES V WATTERS SQUARE & MAIN CREEK STONEBRIAR NORTH COMMONS LEGACY 1000 CENTRAL AT PRESTON PARC II WATTERS CREEK CENTRE PLAZA AT THE COLONY LEGACY BUSINESS PARK THE REALM AT LEGACY PARK C CASTLE HILLS LEGACY WINDHAVEN TWO LEGACY CENTRAL 5 PLACE ONE WEST THE OFFICES AT WILLOW BEND CROWN INTERNATIONAL PROFESSIONAL/ CENTRE BUSINESS PARK HERITAGE MEDICAL OFFICES CREEKSIDE TOWERS
4
2
1
5
OAKBEND CENTRE
NORTH DALLAS MEDICAL CENTER PHASE II
THE RIDGE AT 121 TRINITY MILLS BENT TREE URBAN VILLAGE AT THE DE GROUP PARKWAY ARTERS RT NS POINT THE INWOOD FOUR WEST II LINCOLN AT ALPHA WEST CENTRE
HIDDEN RIDGE
WEST LOVE BAYLOR SCOTT & WHITE MEDICAL CENTER MOB III
N PLANO RD & ARAPAHOE
VILLAGE ON THE PARKWAY
INFINITE PROSPECTS MIDTOWN MEDICAL TOWER OFFICE TOWER IN THE GLEN AT PRESTON HOLLOW HILLTOP PLAZA
THREE HICKORY CENTRE PIONEER NATURAL RESOURCES
7 CITYLINE
THE POINTS THE GRID AT WATERVIEW
PHASE ONE OFFICE CONVERSION MEADOW GREEN MEDICAL CENTER
OGH MEDICAL CENTRE ROWLETT
BAYSIDE OFFICE TOWER
SWC SH 205 & FM 549
BOOKMARK CENTER
WEIR’S PLAZA
THE DESIGN DISTRICT TOWER PARKLAND KNIGHT
THE FAIRMOUNT BUILDING
GATEWAY OFFICE TOWER THE UNION
BAYLOR, SCOTT & WHITE HEALTH THE EPIC DEEP ELLUM THE DREVER
PHYSICIANS SPECIALTY CENTER SUNNYVALE MEDICAL CENTER
SOLA ON LAMAR DAVIS STREET MARKET OFFICE PARK
REDBIRD OFFICE
● ANNOUNCED ● UNDER CONSTRUCTION MAP COURTESY OF TRANSWESTERN
4
SRS DISTRIBUTION INC.
SIZE: 100,000 square feet LOCATION: McKinney DEVELOPER: KDC DETAILS: The building products firm announced that it will build a four-story, 100,000-square-foot corporate headquarters in the Hub 121 mixed-used development at State Highway 121 and Alma Road. Dallas’ KDC will build the Genslerdesigned building that will sit on four acres. Work starts this spring.
SPRING 2019
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:
INDUSTRIAL
US 380 BUSINESS PARK BLDGS 3-5 TYSON FOODS
ANNOUNCED + UNDER CONSTRUCTION
GATEWAY BUSINESS PARK AIP EAGLE COURT
ANNOUNCED PROJECTS
SPEEDWAY LOGISTICS CROSSING ALLIANCE NORTHPORT
1
ALLIANCE CENTER NORTH 3
STANLEY BLACK & DECKER
SIZE: 1.2 million square feet LOCATION: Northlake DEVELOPER: Hillwood Properties DETAILS: The new facility will serve as a regional distribution hub for the tool manufacturer and will bring 300 new jobs to North Fort Worth in the AllianceTexas development owned by Ross Perot Jr.’s Hillwood. The building is near Fort Worth Alliance Airport, the BNSF Railway Alliance Intermodal Facility, FedEx Express Southwest Regional Hub, and the UPS and FedEx ground shipping centers.
WESTPORT 11 WESTPORT LOGISTICS
DFW NORTH IV
NORTH PORT 4
LAKESIDE RANCH 1001
3
1
MUSTANG PARK
LOG CE
FOSSIL CREEK BLVD PHASE II INTERNATIONAL AVIATION COMPOSITES
PAK QUALITY FOODS
OAKDALE LOGISTICS CENT
MARK IV COMMERCE PARK
H
GENERAL MOTORS ASSEMBLY PLANT EXPANSION
MARKUM BUSINESS PARK
2
GSW 77
HO
360 COMMERCE PARK
CHAMPIONS BUSINESS PARK
PARK TWENTY THREE-SIXTY FIRST ARLINGTON COMMERCE CENTER III
2
● ANNOUNCED ● UNDER CONSTRUCTION
SOUTH FORT WORTH
SIZE: 1 million+ square feet LOCATION: South Fort Worth DEVELOPER: Crow Holdings Capital Real Estate and Rob Riner Cos. DETAILS: The project will be at Joel East and Oak Grove Road. The companies are building a 394,000 square-foot, a 294,000-square-foot, and two 187,000-square-foot buildings on the site. Construction was expected to begin in the first quarter of 2019.
MAP COURTESY OF TRANSWESTERN
UNDER CONSTRUCTION 3
KLEIN TOOLS EXPANSION
#12 LONG HORN
MIDLOTHIAN BUSINESS PARK 1
NORTHWEST COMMERCE PARK
SIZE: 1.1 million square feet LOCATION: Fort Worth DEVELOPER: Stream Realty Partners DETAILS: Stream Realty Partners is breaking ground on the industrial park that will be capitalized via a joint venture with a global institutional investor. It’s on 66 acres and will have as much as 1.1 million square feet of space in three buildings.
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
PASSP
PEDREGAL
PARC NORTH
SPRING 2019
FIRS DIS
MCKINNEY INDUSTRIAL CENTER
CYRUSONE PHASE II & III
FIRST PARK 121
DFW VII DATA CENTER PHASE I
DIGITAL REALTY
VALWOOD CROSSROADS
NUTRIBIOTECH
GISTICS ENTER
CORE LOGISTICS CENTER HORIZON BUSINESS CENTER BUILD TO SUIT
PORT PARK SOHCO LAKESIDE VILLAGE III
TER
GRAND LAKES COMMERCE CENTER EXETER BUCKNER
WILDLIFE BLDGS 7-11
GOODYEAR DISTRIBUTION CENTER
HOME DEPOT
OME DEPOT 2 LIBERTY PARK MOUNTAIN CREEK
POINTSOUTH SOUTHFIELD PARK 35
ST MOUNTAIN CREEK STRIBUTION CENTER
STONERIDGE
FIRST 20/35 LOGISTICS CENTER
SOUTHLINK II
4
MELTON TRUCK LINES
VISTAPRINT
SUNRIDGE BUSINESS DUKE INTERMODAL III PARK TEXPORT LOGISTICS CENTER DALPORT TRADE CENTER CORE5 LOGISTICS CENTER AT BONNIE VIEW OLLIE'S
MIDPOINT LOGISTICS CENTER
DFW INLAND PORT I & II
DATA SOURCE: REAL ESTATE REVIEW RESEARCH/ DALLAS REGIONAL CHAMBER / VARIOUS REAL ESTATE FIRMS
4
OLLIE’S BARGAIN OUTLET
SIZE: 615,060 square feet LOCATION: Lancaster DEVELOPER: Jones Development Co. DETAILS: The closeout and excess merchandiser’s build-to-suit distribution center will be at the southwest corner of West Wintergreen Road and North Lancaster-Hutchins Road within the Wintergreen Exchange development, a 71acre, master-planned Class A industrial park in southern Dallas County. It is expected to be completed in the fourth quarter of 2019. The development team includes Bob Moore Construction, engineering firm Pacheco Koch, and Alliance Architects.
SPRING 2019
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
THE CRANE REPORT:
PALLADIUM DENTON
MULTIFAMILY
DISCOVERY PARK
THE MAJESTIC ON M
LIVE OAK 13 UNDERWOOD
ANNOUNCED + UNDER CONSTRUCTION
MILLENN OXFORD AT LAKE VIEW
ANNOUNCED DEVELOPMENTS 1
ALTA CHAMPIONS CIRCLE
● ANNOUNCED ● UNDER CONSTRUCTION
LAKEYARD DISTRICT
THE BYRON
SIZE: 364 units LOCATION: Lewisville DEVELOPER: Leon Capital Group DETAILS: The community will be on a 15.2-acre site at 1000 Lake Ridge Road, about a mile from the Sam Rayburn Tollway. Eight three-story buildings will comprise the development. LG Wade is the general contractor, and the architect is BGO Architects. Delivery of the first units is expected in November.
TH JEFFERSON SILVERLAKE ENCLAVE AT THE PARK TACARA VILLAGE THE PRESERVE AT ELAN THE LANDING AT CROSS CREEK
CORTLAND RIVERSIDE
GRAND ON BEACH
THE MILLENNIUM AT HOMETOWN
TRINITY UNION
PROVISION AT NORTH VALENTINE
THE VIEW OF FORT WORTH I THE UNION AT RIVER EAST I
THE PRESIDIO AT RIVER EAST JEFFERSON RIVER EAST ENCORE PANTHER ISLAND 311 NICHOLS STREET MAGNOLIA
THE PALMER
SIENNA HILLS PALLADIUM
ELAN CROCKETT ROW ALEXAN SUMMIT ROSEDALE
RIVERSIDE PLACE
MAGNOLIA AT UNIVERSITY HEIGHTS ALTA WATERSIDE
THE TERRACE
THE QUADRANGLES ON TWENTY
AVILLA HERITAG
TAVOLO PARK
2
THE DYLAN
LEGACY LAKESHORE
SIZE: 293 units LOCATION: Irving DEVELOPER: Legacy Partners and HGC Investment Management DETAILS: The property will be on nearly 3.5 acres on Lake Carolyn in the Las Colinas Urban Center. The project is designed by REES Associates, and it is expected to open in 2020.
AURA 3FIFTY-ONE
MAP COURTESY OF REALPAGE
3
JEFFERSON TEXAS PLAZA
THE TRAILS AT SUMMER CREEK
AUBERGE OF BURLESON
SIZE: 282 units LOCATION: Irving DEVELOPER: JPI DETAILS: It’s a 9-acre development near the Irving Convention Center and the Toyota Music Factory. A pedestrian trail will connect the apartments to the University of Dallas.
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
MANSIONS LAKE RIDG
M
SPRING 2019
PROVISIONS AT MELISSA
McKINNEY, TX
MCKINNEY THE CLIFFS AT RIDGE CREEK
NEWMAN VILLAGE EDISON ADLEY AT AT FRISCO THE CRAIG RANCH FOUNDRY
CANTERRA
NIUM PLACE
THE KILBY THE ATHERTON 7005 SOUTH DOMAIN AT CUSTER ROAD THE GATE
JEFFERSON AT THE GATE
MONTGOMERY RIDGE I
ALTA 289
LIVE GRANDSCAPE LAKEYARD DISTRICT
LVL29
1
ALEXAN LEGACY CENTRAL I
THOUSAND OAKS AT STAG'S LEAP
1980 LENOX EAST TX-121 CASTLE BUSINESS HILLS
MORADA PLANO CITYLINE PARK
SOCIETY 190
HEBRON 121 STATION V
FRANKFORD STATION LOFTS
HE ASHER
ELAN AMLI ADDISON ADDISON GROVE
HARPERS BAY AT THE SOUND
MODERA DALLAS MIDTOWN ELAN THE DOMINION AT MERCER CROSSING INWOOD
2
3
THE CAROLYN
WATERWALK NORTHSIDE AT THE WOODLANDS
4
OLYMPUS ON MAIN MUSTANG STATION II
JEFFERSON PROMENADE JEFFERSON EASTSHORE
SEVENTY8 AND WESTGATE
JEFFERSON VANTAGE
SWITCHYARD
THE LUXE AT MERCER CROSSING
Situated for business.
CITRON ALLEN STATION 729 JUNCTION DRIVE
CIRCA FRISCO
STAR HOUSE TOWER BAY LOFTS
AURA BLUFFVIEW
THE JEFFERSON WEST LOVE II HUDSON
AMLI FOUNTAIN PLACE ALTA TRINITY GREEN MAGNOLIA OFF SYLVAN
ONE90 FIREWHEEL
HARMONY HILL II THE MANSIONS AT BAYSIDE
EMBRY URBAN LOFTS
SHOREVIEW
MAIN STREET VILLAGE
JEFFERSON TEXAS PLAZA
THE FLORENCE AT THE HARBOR THE TOWERS AT BAYSIDE
THE CROSSING BROADSTONE COLE AVENUE FITZHUGH URBAN FLATS ENCORE SWISS AVENUE NOVEL DEEP ELLUM AMELIA AT FARMERS MARKET
SKYLINE TRINITY 727 ZANG LOFTS
THE CROSBY
BISHOP NORTH
A GE
PRAIRIE GATE CLARK RIDGE CANYON
S AT GE
THE MARK AT MIDLOTHIAN I
THE KINSTEAD
ASPIRE AT PRESTON TRAIL
THE PARC AT WINDMILL FARMS
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UNDER CONSTRUCTION PALLADIUM GLENN HEIGHTS
4
JEFFERSON EAST BRANCH
MARK ON 287 SIZE:THE 390 units LOCATON: Farmers Branch PARK PLACE DEVELOPER: JPI DETAILS: Ground has been broken on the new project on the Dallas North Tollway in Farmers Branch. It’s on the west side of the Tollway, north of the Dallas Galleria.
SPRING 2019
McKINNEY ECONOMIC DEVELOPMENT C O R P O R AT I O N McKINNEYEDC.COM INFO@McKINNEYEDC.COM 972-547-7651 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
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S SCORECARD
AN UNDISCLOSED TENANT HAS SIGNED A LEASE FOR MORE THAN ONE MILLION SQUARE FEET AT SOUTHPORT LOGISTICS PARK.
SCORECARD
Spring 2019
Owners and landlords across North Texas are working hard to stay competitive in attracting tenants for their office and industrial properties. Lease rates are being driven upward by low vacancy in some submarkets, high construction costs, and rising interest rates, says Kim Brooks, principal at Transwestern. Overall, Dallas-Fort Worth remains a highoctane market with demand continuing to soar. Maps were provided by CBRE. BY LANCE MURRAY
ON-T H E-G RO U N D I N SI G H TS
OFFICE
KIM BROOKS Principal, Transwestern “Low vacancy in most submarkets, high construction costs, and rising interest rates are the driving factors in increasing lease rates in Dallas-Fort Worth currently. Landlords are spending more capital in their buildings in order to stay competitive in attracting today’s tenants who desire more of a hospitality, amenity-rich environment.”
SPRING 2019
INDUSTRIAL
GREG GRAINGER
CORBIN BLOUNT Director, Lee & Associates
Vice President, JLL
“Not every tenant can pay $40 to $50 a foot, so you get pushed out and pushed over to Central—or pushed up Central. So, we’ve seen pricing and occupancy increase from lower Central all the way up, and I think you’ll continue to see that.”
“Paved trailer parking (which can be converted to outside storage as well) has become a decision influencer for national distributors, who often lease or own their own fleet of tractor trailers, as they search for new industrial warehouse space in Dallas-Fort Worth. For those who do not park their trailers on site, paved outside storage is a precious commodity.“
“DFW is one of the hottest industrial markets in the U.S. Our population boom, as well as great state and local governments that are aggressively attracting business to Texas— developers can’t keep up with demand. Vacancy rates have reached historic lows over the past several years, fueling positive rent growth for landlords.”
President, Principal, and Co-manager, Younger Partners Property Services
CHRIS STOUT
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 2 5
S SCORECARD
OFFICE LEASES
1 5
2 4
3
2018,364 SF 18,36565,000 SF 65,001205,000 SF 205,001535,731 SF 535,732965,813 SF
MAP COURTESY OF CBRE RESEARCH
LARGEST OFFICE LEASES
1
KEURIG DR PEPPER
SIZE: 350,000 square feet LOCATION: The Star TENANT REPS: Jeffrey S. Ellerman, Seth Kelly, John Ellerman, Robert Blount of CBRE LEASING AGENTS: Worthy Wiles and Jake Young of Lincoln Property Co. DETAILS: Recently formed beverage giant Keurig Dr Pepper announced its headquarters hop from Plano to Frisco in February. It’s moving to The Star, marking another Fortune 500 win for Frisco.
2
WEWORK
SIZE: 77,000 square feet LOCATION: Towers at Williams Square in Las Colinas LEASING AGENT: Bill Brokaw of Hillwood DETAILS: Capitalizing on the need for coworking in a burgeoning tech hub, WeWork advanced the tide of coworking washing into the suburbs with a threefloor lease in Las Colinas in early February.
2 6 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
3
KATTEN MUCHIN
SIZE: 56,340 square feet LOCATION: Park District PwC TENANT REPS: Matt Craft of Lincoln Property Co. LEASING AGENTS: Dennis Barnes, Shannon Brown, Clay Gilbert of CBRE DETAILS: Katten Muchin Rosenman’s two-floor lease–inked in the ides of March–brought PwC Tower’s law firm count to four, lending momentum to the trend of legal services located in the urban core.
4
MID-STATES DISTRIBUTING CO.
SIZE: 40,000 square feet LOCATION: Mercantile Center in Fort Worth LEASING AGENT: Colt Power of NAI Robert Lynn DETAILS: Minneapolisbased retailer MidStates Distributing Co. announced it would move its headquarters to Fort Worth in mid-March. Its new headquarters building previously housed the American Paint Horse Association, which moved to the Stockyards recently.
5
FIRST GUARANTY MORTGAGE
SIZE: 27,055 square feet LOCATION: Legacy Place One, 5800 Tennyson Parkway in Plano LEASING AGENTS: Ward Eastman, Trey Smith, and Johnny Johnson of Cushman & Wakefield DETAILS: In early March, First Guaranty Mortgage signed a lease in Legacy Place One and announced it would move its headquarters into the Plano office development.
SPRING 2019
S SCORECARD
INDUSTRIAL LEASES
1
4
5
1,42951,480 SF 51,481137,500 SF
2 3
137,501298,653 SF 298,654629,690 SF 629,6911,500,000 SF
MAP COURTESY OF CBRE RESEARCH
LARGEST INDUSTRIAL LEASES
1
STANLEY BLACK & DECKER
SIZE: 1,279,500 square feet LOCATION: Northport 3 at AllianceTexas in North Fort Worth LEASING AGENT: Tony Creme of Hillwood DETAILS: By far the biggest lease of the first quarter, Stanley Black & Decker brought major absorption to an already booming Alliance submarket. The new distribution center will bring 300 more jobs to Hillwood’s newest Alliance development, Northport.
2
UNDISCLOSED TENANT
SIZE: 1,079,395 square feet LOCATION: Southport Logistics Park, 1200 Fulghum Road in Wilmer LEASING AGENTS: Kacy Jones and John Hendricks of CBRE DETAILS: Though the tenant is undisclosed, it is newsworthy that Southport got another tenant to the tune of 1 million square feet in Q1. This South Dallas logistics hub just across from the UP Terminal is burning up with big wins like Amazon and this 1-million-square-foot mystery tenant.
SPRING 2019
3
GEORGIA-PACIFIC
SIZE: 1,004,674 square feet LOCATION: Interchange 20/45 in Hutchins LEASING AGENTS: Stever Berger and Kacy Jones of CBRE DETAILS: Another win for the South Dallas industrial market, Georgia-Pacific, took a large stake in Hutchins industrial square-footage with this lease, setting up shop in the 14.29acre industrial development at Interchange 20/45, three miles from the Union Pacific Intermodal.
5
4
CTDI
SIZE: 705,955 square feet LOCATION: Elizabeth Creek Gateway in North Fort Worth LEASING AGENTS: Nathan Lawrence and Krista Raymond of CBRE DETAILS: CTDI inked its fullbuilding lease at Transwestern’s newly acquired building in the booming North Fort Worth Alliance submarket, which is known for its pro-business tax rates and access to the BNSF Intermodal.
HOLLINGSWORTH LOGISTICS
SIZE: 494,990 square feet LOCATION: 14900 Frye Road in Fort Worth TENANT REPS: Noel Hutcheson of Colliers International LEASING AGENTS: Kurt Griffin and Nathan Orbin of Cushman & Wakefield
DETAILS: Dearborn, Michiganbased supply chain solutions company Hollingsworth Logistics is partnering with the U.S. Postal Service to participate in its Mail Transport Equipment Service Center program and will dedicate 350,000 square feet of this lease to that end.
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AFTER THE PITCH INSIDERS DISCUSS DALLAS-FORT WORTH’S AMAZON HQ2 BID AND WHAT’S NEXT FOR THE REGION EDITED BY QUINCY PRESTON
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MEET THE EXPERTS MODERATOR
CHRISTINE PEREZ Editor, D CEO Magazine
THE PANEL
MIKE ROSA Senior Vice President of Economic Development, Dallas Regional Chamber
LINDA MCMAHON President and CEO, The Real Estate Council
TODD WATSON Senior Vice President, Hunt Realty Investments
P PANEL DISCUSSION It was the decision that had city leaders across the nation on the edges of their seats for most of 2018—who would win Amazon’s HQ2? The unified front presented in the region’s overall response to the largest RFP in Dallas-Fort Worth history was noticed by Amazon, which made two official visits to DFW. Dallas “checked all the boxes” for what Amazon was looking for and was a finalist in the search. While in the end, Amazon chose Crystal City, Virginia — after an initial announcement in November 2018 to split its second headquarters between Crystal City and Long Island, New York — what we gained was a road map for how to develop downtown Dallas’ urban center. And we’re ready for other interested companies with many other sites around the region, according to the Dallas Regional Chamber, who led the coordinated efforts. It’s really a two-part story: The initial regional response, a massive effort coordinating 55 sites across 22 communities, and the second stage, a detailed City of Dallas bid once Amazon made its decision to focus on the Dallas core. Earlier this year, the Urban Land Institute North Texas hosted a panel discussion featuring prominent Dallas leaders who talked about their roles in the rollercoaster race for HQ2—Mike Rosa, senior vice president at the Dallas Regional Chamber, Linda McMahon, president and CEO of The Real Estate Council, and Todd Watson, senior vice president at Hunt Realty. It’s a group looking to the future of what that means for DallasFort Worth. And, as Rosa says, “We never hung up the phone with Amazon.” CHRISTINE PEREZ: We’re here to talk about the remarkable battle for the Amazon HQ2. What were your initial reactions when you heard the news and your thoughts about Dallas-Fort Worth’s chances?
MIKE ROSA: On the morning of Sept. 7, I was speaking on a panel in Irving with Brandom Gengelbach from the Fort Worth Chamber when both of our phones started blowing up around 7:30 a.m. We looked at each other: It was hard to concentrate on panel remarks after that, I’ll guarantee you. Briefly, after the breakfast, we talked about it, and I went back to the office to respond to Amazon’s invitation that essentially said, “If you’re interested, email this address.” I immediately got a confirmation that said, “Great, we got you on record, you’re going to respond. And, you will coordinate the response.” It was quite clear, from the very beginning, Amazon wanted one response—a single response from any interested metro area in North America of more than a million people. The RFP questions were very, very simple. It was a
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one-page request for information, and there were nine questions. There were really seven different topics, with a couple of the questions around incentives. Because of the way we’re built as a region with a major city to the west, as well as major suburban cities, the Dallas Regional Chamber (DRC) has established an architecture to respond to these [kinds of] requests over the years. Amazon ended up getting 238 bids—three times more than they really asked for, based on its initial ask of one response per metro that qualified on populations. There are only 75 [of those qualifying metros] in North America. For this region to come together with one bid was remarkable, and it made a great impression on them. LINDA MCMAHON: When I heard the news, I said, “This is a no brainer. I thought Dallas-Fort Worth was the obvious choice. We’re the best place to be in the country. We have the most available opportunities for an organization like Amazon to relocate to.” And, coincidentally, about four months before that announcement, I’d gone to Seattle for a long weekend. I walked all around their campus on South Union and soaked in what the feel was in
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the neighborhoods that Amazon had chosen to be in. It’s not a typical corporate campus. When I got a phone call from the mayor’s office asking The Real Estate Council to be involved, I was super excited. My role was to represent the City of Dallas in the regional bid. TODD WATSON: Hunt Realty had two sites that we submitted on the initial RFP: 11 acres in Uptown between the Perot Museum and the American Airlines Center that was part of a Victory/Uptown aggregated submission. We also submitted our Reunion site, along with a city of Dallas land parcel, and the former Belo headquarters. Obviously, we thought Dallas was going to show well, and we had some good sites and prospects.
We’ve heard a lot about the team effort and how everyone mobilized to help give Dallas its best shot at winning the big prize. It seems like this was a game changer in how massive relocations are typically pursued. How did it all come together and what were your individual roles in the process?
ROSA: After Amazon’s announcement on Sept. 7, there was a lot of excitement and buzz around that. But we had a race with time: The responses were due in early-to-mid October. With only about six weeks to put the bids together, we had to build a timeline quickly. That might be simple for one city to do, but for the region—with all of the powerful communities, the great leaders, the great sites that we have, and all the things that needed to go into it—we had to split that timeline. It was for the customer—for Amazon—and it had to make sense. It wasn’t a matter of taking each community’s package, punching three holes, and putting them all together in a giant binder to send off to the company. That wouldn’t help Amazon understand our region. In the back half of the six-week timeframe, we— the DRC, along with Boston Consulting Group, Linda, and others—had to synthesize it all to make it digestible for Amazon in our unified response to the RFP. We
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worked backwards from the time it was due and put a tremendously compressed deadline on the communities that were participating. We also routed the various real estate interests through the host cities. That was an important part of the initial strategy. The host cities needed to make decisions within their communities as to which sites they wanted to submit. It wasn’t going to work well if all the real estate interests bypassed the host cities to come directly to the Dallas Regional Chamber. In the end, we had a linear process that worked pretty well—despite the headaches, the crunches, the late nights, and the weekends. And it was all required: We had to make sure that Amazon could understand this region. We had different sites and different communities offering different things. We built a regional response that helped Amazon digest it all. We used websites, spreadsheets, and other things that would make it very, very easy for them to understand all the communities and sites that were in place. The DRC made a promise to all the communities. And it’s because of that promise we made that the public hasn’t seen the regional bid released. While the
TIMELINE: AMAZON’S HQ2 SEARCH SPRING 2019
RENDERING: HKS
PROPOSED AS THE NEW GATEWAY TO THE CENTRAL BUSINESS DISTRICT, AMAZON HQ2 AT REUNION WOULD HAVE BECOME THE PRIMARY IMPRESSION ON THE SKYLINE OF SOUTHWEST DOWNTOWN.
AMAZON ENDED UP GETTING 238 BIDS—THREE TIMES MORE THAN THEY REALLY ASKED FOR, BASED ON ITS INITIAL ASK OF ONE RESPONSE PER METRO THAT QUALIFIED ON POPULATIONS. THERE ARE ONLY 75 [OF THOSE QUALIFYING METROS] IN NORTH AMERICA. FOR THIS REGION TO COME TOGETHER WITH ONE BID WAS REMARKABLE, AND IT MADE A GREAT IMPRESSION ON THEM. — MIKE ROSA DALLAS REGIONAL CHAMBER
communities could talk about their individual bids, the DRC promised that, in working through us, we would not reveal the information—even if they did. Certainly, we would not reveal the sites that were submitted or disclose the incentives that were offered. That promise was important to the communities. Compliments really go to all the communities that submitted. They were compiling all the real estate interests under tremendous pressure, because we had have the information back in enough time to package it in one unified regional bid for Amazon. MCMAHON: My role in the process was to be on the team that the Dallas Regional Chamber put
SEPT. 7, 2017 Amazon announces its plan for a second headquarters. Dallas Regional Chamber notifies Amazon that it will enter the race.
SEPT. 22, 2017 North Texas cities submit sites to the chamber. Mayors have a conference call to discuss details of a consolidated bid.
SEPT. 12, 2017 DRC tells Dallas-Fort Worth cities to send it sites that meet Amazon’s criteria. The next day, chamber staff and Dallas Mayor Mike Rawlings visit Seattle.
OCT. 11, 2017 Mayors preview the DRC’s bid concept, including a secure website containing data requested by Amazon.
OCT. 17, 2017 Secure website and copies of a 253page book containing proposed sites and information about the region sent by chamber to Amazon, which confirms receipt the next day. The company also receives 237 other proposals. OCT. 19, 2017 Dallas-Fort Worth leaders release a video promoting their bid.
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P PANEL DISCUSSION together, which was a combination of consulting groups and other representatives. The Fort Worth Chamber of Commerce economic development EVP was at the table along with Dallas Regional Chamber. The team became all about Amazon. We absorbed everything about Amazon. We read everything we could read. We asked, “What does ‘Day One’ look like?” All of us talked to sources who worked with, or at, Amazon. We discussed what it was like when they built out their campus in Seattle, asking, “What were they looking for? What do you think that they want to hear about when they come to Dallas?” It was enlightening. We had several different people who had worked either at Amazon or with Amazon at a very high level. We wanted to kind of get into the heads of what it was that Jeff Bezos would want. We all talked about his six page memo a lot. It was an interesting process for all of us because it made us realize how differently they operate, and how they think versus the way a lot of other corporations do. While Dallas is famous for having great competition in the real estate industry—and we do have some of the greatest companies in the country and in the real estate development world here—everyone worked together ... But our real estate development companies all had one mission: How are we going to get this business? It was an interesting process to work with all the various companies and all the various interests, but all with one goal in mind. WATSON: I’ll echo that. We reached out to all of our counterparts in downtown Dallas. We were talking to them as part of our submission. We worked with Hillwood and the Victory submission package. From our perspective, we had participated in contests like this before, but not of this magnitude. We needed to elevate our game to a tremendously different level. We enlisted HKS’ Brian Trubey for the first-round submission, which was a high-level real estate overview, [rather than an] in-depth analysis of
TIMELINE: AMAZON’S HQ2 SEARCH
specific sites. We had about three weeks, max, on our side to submit. The DRC would then have additional time for compiling the information. MCMAHON: I honestly think Amazon would not have picked the City of Dallas without the presentation HKS put together. The first call I made when the Mayor contacted me was to Mark Buskuhl at HKS—they were essential in the project, working pretty much as a pro bono effort for the City of Dallas. We had a “war room” where all of the City of Dallas bid planning took place at HKS. We worked side by side with the graphics team and their designers lead by Craig Kolstad and Brian Trubey, who is a great visionary. HKS went to great lengths to ensure that the City of Dallas bid was the best.
There were two visits by Amazon. What was on the itineraries? What were the hot buttons for Amazon and what were their reactions?
ROSA: Amazon announced 20 finalists in January 2018. A couple of days after the announcement, I got on the phone with them and learned what they wanted to see. We got word at the end of January that they were coming here Feb. 11-13. They wanted to see certain sites, which meant visiting with certain communities. That part of it was sort of “preset” by them. We would have two days [with Amazon]. With all the data we had shared with them, they already knew that we have outstanding air service. They knew that we have two great airports and flights to everywhere. We check the box—over and over again—on air service. We gave Amazon credit for knowing what our strengths were. Let’s not forget that they’re already here in the region. They’ve got thousands of employees here. They’ve got an engineering center near the Galleria with 500 engineers. And they’ve got fulfillment centers and distribution center operations. They know how much we make, they know what we buy, and they know where we live. So, they already had a lot of information about this region, and we didn’t need to [repeat] the basics in those two days. We focused on the things we wanted them to know. We wanted to focus on the variables where Amazon might not fully understand the region and on what some of the misperceptions might be. And we considered the speculation in the articles we were reading in the media—Amazon this and Amazon that. We noted all the opinions they were getting— things like, “Don’t go to Texas because the LGTBQ community protections aren’t maximized.” We wanted to focus on diversity, education, transit, transportation, and ground transportation. We looked at the stories in the Wall Street Journal, USA Today, and others on where Amazon might go and where they were likely to pick. So, in addition to visiting the sites and the communities representing those sites [with Amazon], we focused on those softer issues. We wanted to bolster Amazon’s knowledge of the region—not wanting them to leave here with any doubts that we’re strong—and as we said at the very beginning, that we check all the boxes. Amazon visited all 20 of the finalist locations, so they did a lot of work, too. I can’t imagine making 20 trips within the span of three months. MCMAHON: To Mike’s point about the softer things: Amazon is a dog-friendly
(CONTINUED FROM P. 31)
JAN. 18, 2018 Amazon announces 20 finalist cities, including Dallas and Austin.
MARCH 5, 2018 Chamber submits additional data requested by Amazon.
JAN. 22, 2018 Chamber has a call with Amazon to discuss next steps.
APRIL 19, 2018 Amazon founder and CEO Jeff Bezos visits Dallas to speak at George W. Bush Presidential Center’s Forum on Leadership. He drops no hints about where HQ2 will end up.
FEB. 12-13, 2018 Amazon team makes first visit to DFW.
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AUG. 9, 2018 Amazon’s real estate team returns to Dallas for a second visit, zeroing in on southern downtown sites, including the former Dallas Morning News headquarters at Young and Houston streets. SEPT. 7, 2018 On the one-year mark, Amazon says the decision is still coming in 2018.
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PHOTO: MICHAEL SAMPLES
A MODEL OF THE PROPSED DOWNTOWN DALLAS HQ2 SITE REMAINS ON DISPLAY IN THE DOWNTOWN DALLAS OFFICE OF HKS.
company. So we had a lot of emphasis on how many dogs are in our community. We drove by dog parks. We wanted to make sure that they understood we love dogs as much as they love dogs. So, yes, it was all of those softer things. But, we also wanted to emphasize that, particularly with the coming of highspeed rail, we will be at the center of the largest economy in the world connecting Houston and Dallas. That’s something that we can’t underestimate the power of. We’re also on the edge of emerging technology. We’re one of the only places in the U.S. for Uber Elevate. The region is just now starting to get recognition for these kinds of things on an international basis, so it was something we had to present to them. We’re a forward-looking community, we’re a forward-looking region, and we’re there for the future. We’re not an old economy: We’re a new economy. That’s something we wanted to help them understand. We’re a fairly new city [relative] to the other cities that they were looking at. We’re forward looking, and we’re not caught up in our ways. We have the ability to [welcome] them and have them not be, “This is Amazon town.” That’s their problem in Seattle. Dallas has such a diverse economy that we could easily integrate them into the fabric of the city if Amazon came here with 50,000 employees, in addition to the inmigration of 50,000 people every single year—so we couldn’t become “Amazon town.” They did not want that. WATSON: On that first tour, how many sites did they see? ROSA: On the first follow-up phone call, they shared six sites that they were most interested in. Before they came, they eliminated one that they shared with us. When they visited the first cities and regions of the 20, we were maybe third or fourth on the list. They realized that urban was probably what they were looking for. You may recall that the original RFP invited suburban greenfield sites. Our communities
SEPT. 13, 2018
BEZOS
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Jeff Bezos gives highly anticipated speech to Economic Club of Washington, but offers no hints on the company’s decision-making process.
OCT. 29, 2018 Dallas Morning News’ parent company announces pending $33 million sale of former newspaper headquarters to developers KDC and Mike Hoque. Contract includes additional compensation if the developers sell the building to Amazon. NOV. 4, 2018 Wall Street Journal reports that Amazon is in late-stage talks with Dallas, New York City, and Washington, D.C., for HQ2.
WE WERE GOING TO KEEP THINGS QUIET, ALTHOUGH WE WISHED WE COULD TELL THE WORLD: ‘SO DID WE.’ NOW WE CAN SAY, ‘YES, THEY CAME BACK.’ — MIKE ROSA DALLAS REGIONAL CHAMBER responded to that by offering exactly what they said they were interested in, but we knew that they were leaning toward urban by the time they got here. They ended up with five sites in three communities when they came in on that first visit on Feb. 13, 2018. You all know what it’s like to coordinate, drive around, and visit multiple sites—we didn’t have much time to waste. We had to work in all the meetings around those site visits. WATSON: Hunt Realty was one of the five sites— the Reunion site. I think Chris Kleinert had 20 minutes with Amazon. Fortunately, we had a nice vantage point—Reunion Tower—to overlook our property and the city’s property. But again, we had 20 minutes to show our wares. I think we all walked away from the presentation—or Chris did that day, along with Mike and Linda—saying, “Hey, Dallas showed well.” Right after that tour, we got a request for information, and that’s when we dug into details. The RFI was probably 10 to 20 pages of information that they were requesting, including property level surveys, property level diligence, infrastructure, fiber, transit, and more for specific sites. We took our planning to the next level with
NOV. 5, 2018 New York Times reports Amazon will split HQ2’s 50,000 workers evenly between Queens, N.Y., and Crystal City, Va., by building two new headquarters locations. NOV. 13, 2018 Amazon officially selects the East Coast cities. It also announces a new operations hub in Nashville. SOURCE: Dallas Regional Chamber
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LAY OF THE LAND: A COLLECTIVE VISION
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OFFICE RESIDENTIAL HOTEL TRANSPORTATION GREEN SPACE
RENDERING: HKS
HKS and engaged for another six to eight weeks of detailed planning that yielded results for us when they came back around for their second tour last August. MCMAHON: One thing that made the City of Dallas bid very unique was the concept that we presented to them—a place-based vision. It wasn’t just a real estate site. We combined all of the different sites into a sense of place. So, ultimately, they wanted to look at Reunion Place. We were trying to give them the sense of community. We may have had four or five different real estate sites with four or five different real estate developer owners. But we had a sense of place. Robin Bentley, [assistant director of the Office of Economic Development for the City of Dallas], and Raquel Favela, [former chief of Economic Development & Neighborhood Services for the City of Dallas], are really responsible for coming up with that concept. Ed. note: Favela is currently director of the National Development Council. ROSA: After the last meeting on Feb. 13, we took them back to the airport in a bus. It was a chance to lean over the seat and talk directly with Holly Sullivan, Amazon’s lead project coordinator. We didn’t ask her, but she talked about the quality of the people that they met.
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She complimented us on the organization of the trip. We got a lot done in a short period of time. Amazon left that first tour with a very, very positive impression. We could tell from the depth of the questioning, the time they invested here, and the interactions that they had. If it wasn’t real, they should all get the Academy Award for Best Actor and Actress. And that impression carried through when they came back in August 2018. That second visit—the super-secret visit—was Aug. 9, 2018. It was preceded by a very, very detailed RFP: one that hasn’t been talked about much compared to the initial RFP. That initial one page RFP with nine questions was nothing compared to the detailed RFP of about 250 questions. That second RFP was more like a traditional RFP we might receive from a corporate location opportunity that we typically work on in secret. That RFP led to a great visit that August.
How were you able to keep things under wraps?
ROSA: In the summer of 2018, when it started getting out that a couple of locations had a second visit, Amazon asked us to keep everything tight. They wanted to make another visit here, and maybe a couple of other places. But they couldn’t let that get out. We did our part, and there was not a peep. Nobody knew that Amazon had been to Dallas again when word got out that Amazon had been to Chicago a second time. There may have been one other location that let it be known that they got a second visit: They just couldn’t help themselves. We were going to keep things quiet, although we wished we could tell the world: “So did we.” Now we can say, “Yes, they came back.”
Let’s talk about the second visit.
ROSA: The visit on Aug. 9 was very, very, very specific. Amazon didn’t come in to
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P PANEL DISCUSSION WAR ROOM: MAYOR MIKE RAWLINGS, LINDA MCMAHON, AND A TEAM OF DEVELOPERS MET AT TREC ON SATURDAYS TO HAMMER OUT THE VISION THEY WANTED TO CREATE FOR THE CITY OF DALLAS DURING THE SECOND PHASE OF THE BID PROCESS.
PHOTO: THE REAL ESTATE COUNCIL
assess labor force, quality of life, or check out our diversity a bit more. It was two things: They came to check out the sites and the place—Downtown Dallas. And the other half of the visit was about, “If we land here, how can we best come in as good neighbors? What do you need from us?” Amazon made the determination that the focus of the visit would be a site in the city of Dallas, and that’s where the action was going to be. It was a citylead visit—and the City of Dallas did a fantastic job. Linda (McMahon) was part of that. Ed. note: The 230-acre site in downtown Dallas combined three sites, including Hunt Realty’s Reunion area, the former Dallas Morning News building, and the DART train station; a 20-acre area between Dallas City Hall and I-30 proposed by Hoque Global and KDC; and a Cedars neighborhood site proposed by Jack Matthews. MCMAHON: The combined site represented a massive ability that we could deliver: One that could include not just Amazon, but all the other companies coming to Dallas to follow them on. WATSON: Hunt Realty received notice on July 27, 2018, that we would present on Aug. 9. ... When we had a first meeting with Mayor Rawlings and Linda (McMahon) there was no internal competition amongst the developers and groups. Everyone viewed it as one collective opportunity and one collective site. HKS’s Brian Trubey stepped up with the I-30 Deck Park vision, which came together in less than a week. Really, it was the Deck Park that the three places wrapped around, and I think that really made a special impression on the Amazon folks. They wanted the details at that meeting on Aug. 9 and waded into specific stats. They were certainly very engaged and well-versed on matters, in lots of different aspects. ROSA: Amazon again brought in Holly Sullivan, who was leading the project, and a few different people for the second visit—the types of people that you’re not going to waste their time with a visit unless Dallas is being genuinely considered, like certain kinds of legal experts and human resource folks. It reinforced that this was a legitimate, serious process. We drove around in the efrogs, and they walked the sites. They spent time talking with city of Dallas. MCMAHON: We also showed them what it looks like from up high in Reunion Tower, looking down on the trolley coming up from North Oak Cliff to downtown. That perspective is amazing, and they saw where the buildings could be built. And when we were back at ground level in the Cedars, looking towards downtown, it was a magical moment. Amazon could visualize the connection with high-speed rail, the connection with the Reunion Tower site, and City Hall. Of course, we had to make sure they had some good barbecue. We had Pecan
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Lodge catered into a small business in Deep Ellum: Unruh Furniture, a for-profit furniture-building business with a nonprofit heart. Kourtny Garrett did a phenomenal job making a presentation about downtown Dallas. Amazon was impressed with the Downtown 360 study and wanted copies of those studies that we’ve been engaged in executing. Amazon wanted to talk about our challenges in Dallas. They didn’t want us to talk just about our big, beautiful, glossy city: They wanted to know where they could dig in. It was an opportunity for us to be able to tell the story of the challenges the city of Dallas has and how we’re tackling them. And how the business community is very, very involved in that. Dallas is a great place to do business. And, like any city, we have our challenges. We said, “There’s a place here to be able to help us,” and that was a part of the discussion. It was very important for them. I wasn’t a part of the end-of-day discussion, but Mayor Rawlings and the city manager met with Amazon on the nitty gritty of the issues. I think after that, they said, “We appreciate you being honest with us.” ROSA: Quite frankly, it was one of the best site visits I’ve ever observed and been a part of. It felt genuine. With all the questions and considerations, we had the impression that we were a serious contender for HQ2. WATSON: One other interesting thing we learned that morning: Amazon had stipulated in their RFP their development timeline. In that meeting, they shared with us that they were compressing their timeframe by a third, maybe more. ROSA: Dramatically compressing. We had all read 15 to 17 years to get to the 50,000 tech jobs [in the RFP]. In August 2018, we learned Amazon’s own expectations for growth and needs advanced. We are able to easily pull talent from Texas and all the universities in South Central U.S. In Dallas-Fort Worth, we believe, absolutely, that we can satisfy 50,000 tech jobs—assuming they were all tech jobs. And they weren’t going to be all tech jobs, but we can satisfy that; we can build around that. When that timeline gets changed to 50,000 in five years or seven years, it puts stress on every region in the country. I think Amazon realized they were learning this whole time. In September 2017, they didn’t have all variables. They didn’t have everything nailed down. They were learning as they were going along, visiting all the places, and impacting the vision of what they could do.
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P PANEL DISCUSSION Ultimately, Amazon decided it was a talent issue, which we share publicly, and they shared that privately with me in a follow up phone call when we learned we weren’t going to get HQ2. It’s hard to argue the Washington, D.C., to Boston corridor, as the place that they can get the most talent, the fastest. In that corridor they were able to cast the widest talent net. [But] they’re paying more: I noticed a $150,000 average salary, when the original RFP suggested about $100,000 for a job. So they do realize there’s a price to be paid for that talent, but it superseded all other considerations. When Amazon compressed the time schedule, it was the driving force to the ultimate outcome.
Let’s talk about that outcome.
ROSA: I talked to Holly (Sullivan) afterwards. She said we were a proven market. They loved everything about it. But talent drove them to make that decision. It was a short and sweet phone call: talent, talent, talent. Of course, I was able to understand that. They did compress that timeline. But, we did check all the boxes. DallasFort Worth is the largest metropolitan area in the country that’s business friendly. By the way, New York, Chicago, and LA are larger population numbers—larger in demographic numbers and talent numbers. But they come wrapped in a less business friendly environment. Texas is different, and Dallas-Fort Worth is different. So as we said, we knew we checked all the boxes. I’m terrifically proud of the effort. I don’t know if I would have gone back on anything. If there are golfers in the room, it’s like we went out and shot a 64 on Sunday. And we, that’s everybody: The Mayor, these individuals, everybody who worked on that 64 on Sunday. But in the end, talent was the overarching issue and Amazon’s belief that they had to find it now.
Let’s talk about the biggest lessons we’ve learned from this process and the takeaways for Dallas, going forward.
ROSA: I think it certainly raised our profile. And I think there were some companies that were waiting to see what Amazon had in mind—although those companies might not come right out and say it. Some of them probably weren’t waiting on it, but timing just happened to make it appear that way. You’ve noticed that after Amazon made its announcement, Apple announced its expansions
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to its existing locations—Austin being one of those. Early in the Amazon window, in early 2018, Apple’s CEO Tim Cook said, ‘Apple’s going to grow, and grow in a couple of ways: We’re going to expand our existing locations, and we’re going to find a third place to go that’s not Texas, and not California, to build a new place [to] attract talent.’ And they came out with their Austin expansion announcement. Google did the same. But, the largest Fortune company in 2018 to make a headquarters announcement wasn’t Amazon. It was the one that came here, to Irving. McKesson is the sixth largest company in the country. This region now has three of the Fortune 10 headquartered here. No other place in the country has more than one. New York, LA, and Chicago don’t have any. We’ve got AT&T, McKesson, and Exxon. I’ve had a chance to see our regional cooperation in practice while working on Toyota and some of the other deals. I knew that the region would pull together and work together. That might be a surprise to some who aren’t part of this process on a regular basis. What I really learned about were the fantastic sites and the land. That bodes well for future pursuits, in not only Dallas and downtown Dallas, but all the cities in the region. MCMAHON: It’s amazing what we have to offer any company in the world. The information that was pulled together by the DRC in the pitch—all the data points, all the information about access, accessibility, infrastructure—all that information was put together in one place. I know it’s not public, but the book of information that was provided is really a phenomenal sales tool that we can use over and over again. The spirit of cooperation between Dallas and Fort Worth, Dallas and the region, and within the development community was epic. It was incredible to see how everyone didn’t care which site was chosen—because we all win. WATSON: I’ll echo the sentiment. The Dallas real estate communities are intensely competitive, but it was intensely collaborative on this effort. And that was a lot
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of fun. What was new for me was working closely with Mike Rawlings. In the last 10 days, he was ‘directing traffic’ on Saturday mornings for three groups and a handful of consultants. That was pretty fun to be a part of. He was a cheerleader for everybody around the table, and did a magnanimous job.
Where do we go from here, in terms of the impact you think that it has had—and will have—on the region? Also, what’s the relocation pipeline looking like?
ROSA: The pipeline is strong. We’ve taken the point about the great data and information that was constructed. We’ve taken that many times and broken it down, and reassembled it to meet the needs of other clients and prospects who are interested in the market. Just last night we had a dinner with a corporate headquarters opportunity for the region. We are as busy as we’ve been. Every day that goes by, every month that goes by, more companies that we work with as a regional chamber are really keying in on where young people like to live: “Where’s the action? Where’s the fun? Where can we find the talent that we need?” The core of the region—the downtown Dallas core—just continues to elevate. We’ve got a thriving urban core—the largest urban core in the region. It’s doing very, very well and always on the rise. There’s a desire of companies to check it out to see if that might be the place for them. And we have tremendous suburban locations and tremendous cities throughout the region—large and small. It’s a neat balance to have. The companies that are coming in and looking, the companies making a location decision—they’re looking to the future. We know it’s a huge decision for them to make. It’s hard enough for me to think about moving my household, much less an executive moving an entire corporation and all the people they are responsible for. It’s a big disruptive thing to do. They’ve got to be sure, and they want to be in a place that they see is rising. For example, I remember working with Hilti’s North
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THE BIO CUBE: AT THE CENTER OF THE PROPOSED CAMPUS WAS A BIO-CENTRIC HUB TO BE USED AS GATHERING AND EVENT SPACE FOR OCCUPANTS AND VISITORS.
America President and CEO Cary Evert. Hilti made a decision a couple of years ago to relocate from Tulsa: They’re in Plano now. Ed note: Hilti North America President and CEO Cary Evert retired in 2017, and Hilti Canada General Manager, Avi Kahn was named President and CEO. The folks in Europe and the home office considered Chicago and DFW. They were more familiar with Chicago, and Dallas-Fort Worth was more of a mystery to them. They said, in the end, [they could have] made a go of it just fine in Chicago, but DFW was a place that was moving—on the rise. They’re a company that was doing that, too. It felt like a nice match for them. We do very, very well when we’re talking with companies that have the same kind of vision that we see here: Moving forward and continuous improvement. We will be busy. MCMAHON: Adjacency is so important. That’s the other part of the equation: Big companies come here, and they bring a lot of their suppliers and vendors with them. That’s an important part of the process. It’s exciting to see what our future is here, particularly as we can grow not only the larger corporate locations, but also the small business and middle market companies coming here as well. That’s some of the strongest space we can build for our economy and for our city. ROSA: In terms of corporate recruitment and economic development, we will be successful. We will look back 20 years from now, 30 years from now, and we will have been successful if we are a place people want to be. And it’s not so much people like me. I’m in my late 50s, and it’s not so much what my taste and my preferences are. It’s more about my kids and my grandkids. If Dallas-Fort Worth is the kind of place they want it to be, then companies will follow that. We’ll look back and say, “Oh, it was really that simple: Are we a place that people want to be?” Years and years ago, economic development was pretty simple: ‘There’s a river, there’s a mountain with some iron ore in it. I guess we better put a plant right there.’ These days, with technology, there’s a lot of location freedom for companies and for individuals—especially for those that have talent. They carry that talent with them and live where they want and ply their trade where they want. More than ever before it’s about, ‘Do I want to be there?’ The answer for this city and this region has to be, ‘Yes, it’s the place that people want to be.’ It’s that simple when you boil it down.
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PHOTO: MICHAEL SAMPLES
HISTORIC REDEVELOPMENT BRINGINGNEWLIFETOAGINGBUILDINGSISANEXPENSIVE, COMPLICATEDUNDERTAKING.THOSEWHOSUCCEEDREAPREWARDS FORTHEMSELVESANDFORLOCALCITIES. BY JEREMIAH JENSEN 3 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
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CAMBRIA HOTEL, DOWNTOWN DALLAS
There’s something tantalizing about unveiling hidden gems in the built environment, walking on floorboards older than anyone alive today, and writing the next chapter in a building’s life. That’s why developers across North Texas are pumping new life into old buildings with projects some might call complex, risky, even gnarly. But chances are, they also call them invigorating, rewarding, and game changing. For those who complete the herculean task of resuscitating aged structures, the rewards can be exponential, both for the developer and the city. Just ask officials in Dallas, Fort Worth, Arlington, Grapevine, Waxahachie, Plano, and McKinney. They’re among the slew of cities that have seen the benefits of the adaptive redevelopment projects that bring new people and businesses to their communities. These buildings often draw first blood in the fight against urban atrophy and are the harbingers and symbols of rebirth in re-emerging areas. In recent years, North Texas real estate developers who have taken on many of these beautifully complicated building projects have been met with great success, bringing new life across the region. The historic downtown areas of Dallas and Fort Worth, for example, have benefitted from extensive preservation and adaptive reuse efforts. Dallas architect Norman Alston, who has led planning and restoration on more than 100 historic projects, says the organic appeal of existing neighborhoods can be difficult to recreate from scratch. “As North Texas has grown, and as density has become a consideration alongside
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expansion, those at the forefront of urban development have begun to look at the existing and historic building stock from a different perspective,” Alston says. Alston, whose projects include the U.S. Post Office and Courthouse redevelopment at 400 N. Ervay, South Side on Lamar, and the Lakewood Theater, says that’s understandable because buildings are very expensive undertakings. Alston says he thinks the industry is “just beginning to appreciate” the inherent value of the area’s existing stock of buildings. “I don’t think any industry has adopted the concepts of sustainability as enthusiastically as the architecture profession, and with that comes the appreciation of the inherent sustainability of existing buildings and the embodied energy they possess,” Alston says. “There is evidence that developers have begun to take advantage of the fact that these buildings can be environmentally responsible, culturally invigorating and economically advantageous,” he says. Adaptive reuse projects have become a valid tool for creating value in the metro, thanks to
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development tools such as TIFs and historical preservation tax credits, the efforts of forward-thinking organizations, public-private partnerships, and the pioneering spirit of the Dallas-Fort Worth commercial real estate community.
PRESENTING PRESERVATION
SUNDANCE SQUARE Fort Worth’s landmark Sundance Square— named for Butch Cassidy’s famed outlaw partner, the Sundance Kid—dates back to 1979 when Bass Brother Enterprises began buying buildings and land in the downtown area of the city. Urban decay had set in, but the brothers transformed the old buildings through adaptive rehabitation and built new ones. Residential, retail, restaurants, and nightclubs came. Open areas blossomed into gathering points for city residents. The district became an example of how private citizens, businesspeople, and the city could work together to improve their hometown—so much so that it now is recognized as one of the nation’s top downtown areas.
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PHOTO: VISIT FORT WORTH
SUNDANCE SQUARE, FORT WORTH
One of the most complete examples of the benefits of adaptive reuse and historic preservation in the region is Downtown Dallas’ rebirth. It’s taken more than a decade, but a commitment to quality adaptive reuse projects in downtown has created the groundswell necessary to bring new residents and reinvestment to the historical center of the city. The preservation and reinvigoration of the central business district’s intricate Art Deco and Classical Revival facades root the blooming city in its rich history while propelling it higher. Rents in the Central Business District have been steadily climbing and show no signs of a meaningful slowdown in the foreseeable future. According to CBRE research, office rents in the CBD have climbed from $21.42 per square foot in 2014 to $25.83 in 2018. Downtown Dallas Inc. data shows that since 2008, the resident population of downtown Dallas has nearly doubled, rising from 6,689 residents in 2008 to 11,517 in 2017. Many of the early redevelopment projects in downtown were residential projects and have had a pronounced effect on the vitality of the city center. The Mayflower Building, The Mosaic, The Interurban, The Dallas Power and Light Building, and other residential redevelopment projects have enabled people to live in the heart of the city without cutting out its roots. Because of projects like these, and the influx of residents, downtown’s retail scene is blossoming. And, as of April, the area has gained a full-size grocery store—a massive vote of confidence and evidence that downtown has reached critical mass. In 2018 alone, more than 50 retail options opened within a 2.5-mile radius of downtown. The richness of what was built 80 to 100 years ago is hard to duplicate today, says Tom Reisenbichler, Southwest Region Director at Perkins+Will. “Often, you get a unique sense of place or quality from those historic preservations that you can’t duplicate with today’s economy,” he noted in a Real Estate Review design panel discussion last year. Perkins+Will itself relocated in 2017 to the historic Dallas High School building. Built in 1907, the three-and-one-half story classical revival structure was renovated for commercial use after sitting vacant for 22 years. Matthews Southwest refurbished the 111-year-old city-designated landmark into approximately 105,000 square feet of office and retail space. Honored by Preservation Dallas in 2018 with a special tribute award, Matthews Southwest has restored many other iconic Dallas structures including the Sears building (Southside on Lamar) and the Dallas Coffin Company building (Nylo Hotel, now the Canvas) in the Cedars neighborhood of downtown Dallas. David Pickus, director of Business Development-Market Research at PWI Construction Inc., says hotel renovations like the Cabana Motor Hotel, and The Joule and The Statler are part of a nationwide trend of restoring historic hotels. “The history of the hotel (The Statler), along with the new design, make it an attractive option for someone coming to Dallas either as a hotel guest or looking for a residential component,” Pickus says. “People can feel a connection to the grand hotel of the past and still get the contemporary conveniences of today.” In more recent news, adaptive reuse veteran Todd Interests is about to take on “one of the largest historic renovations in the history of the United States,” according to a D CEO report at press time. The 1.5-million-square-foot First National Bank Towner, a project formerly known as The Drever, which occupies the largest vacant block in the core of downtown Dallas, is getting a $450 million redo. The black-and-white skyscraper was the original Dallas home of First National Bank. When it opened in 1965, it was the tallest tower west of the Mississippi River, Philip Todd, project lead and partner at Todd Interests, told D CEO.
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In downtown Dallas, Todd Interests is also undertaking the East Quarter development, including the 80-year-old Masonic Lodge that is being renovated into an office building called Block House. Merriman Anderson Architects, involved in both the First National Bank Tower and the Dallas High School projects, has been an integral part of many historic redevelopment projects in downtown Dallas, taking on 22 such projects in the urban core alone and winning Preservation Dallas awards for 16 of them. Since 2002, Jerry Merriman has worked in offices in the heart of downtown, on Field Street near Akard Station. With each redevelopment project, he’s slowly seen the city center come to life around him, one building at a time. The data backs Merriman up. In Dallas and Fort Worth, The Preservation Green Lab study found that blocks of older, smaller, mixed-aged buildings generated 10,119 jobs and 5,479 jobs, respectively. And in Dallas across 23 historic tax credit qualifying projects, the area received nearly $370 million of private investment. “Repurposed older buildings offer growing opportunities across the market spectrum. Housing and hotel conversions abound in American downtowns, bringing new life to once-vacant office buildings, department stores, and warehouses,” reads a study by the Preservation Green Lab titled “Untapped Potential: Strategies for Revitalization and Reuse.” “Many tech and startup companies gravitate to flexible, open-plan workspaces in older buildings with distinctive features, layers of history, and a built-in marketing story.” But as any professional who has attempted an adaptive reuse project knows, they are gargantuan undertakings that are far from cut and dried. None know this better than the folks who recently completed a restoration—or who are working through that process now.
THE WESTERN FRONT
As downtown continues its evolution, the preservation efforts reach to the outer edges of downtown like the East Quarter, Deep Ellum, and the West End. The West End, thanks to the Dallas Innovation Alliance, serves as a testing ground for Smart City technologies. The nonprofit and a group of corporate entities have dubbed the area Dallas’ Innovation District and are testing technologies and practices that improve efficiency, economic inclusivity, and quality of life. The technologies here focus largely on optimization of the urban environment through real-time data gathering—smart water metering, pedestrian sensors, smart parking, and other tech tools that curtail waste and redirect resources. Owners and developers in the West End are embracing the neighborhood’s new identity and leaning into efforts that make the built environment worthy of
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PHOTO: MICHAEL SAMPLES
THE MAYFLOWER, DOWNTOWN DALLAS
PHOTO: REBECA POSADAS-NAVA
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ROGERS HOTEL, WAXAHACHIE
DOWNTOWN WAXAHACHIE To understand how downtown Waxahachie is flourishing, you only need to look at the numbers. The number of restaurants has doubled since 2015 from 12 to 24. The number of residential units has increased from 20 to 40, according to The Waxahachie Sun. Starting in 2014, developers like Amanda Moreno-Lake and her husband, Jim Lake Jr., have bought buildings in the downtown area, renovated them, and set the city in Ellis County on a path to renewed prosperity.
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Few North Texas cities embraced their history as early as the Tarrant County community of Grapevine, where its historic downtown district feels like a walk through time. The city has nurtured a walkable, historyladen district filled with retail, restaurants, and residential in a mix of old, redeveloped structures and newly constructed buildings. There are art galleries, live entertainment venues, and wine-tasting rooms. The city is also home to the Gaylord Texan Resort and the Great Wolf Lodge, which draw in thousands of visitors a year.
50 BUILDINGS IN THE DOWNTOWN AREA OF GRAPEVINE HAVE HISTORICAL SIGNIFICANCE TIMELINE:
1844 Grapevine established, making it the oldest community in Tarrant County 1888 The Cotton Belt rail line arrives in Grapevine, opening it up as an agricultural trade center 1974 Dallas Fort Worth International Airport opens nearby, spurring population growth for the city 4 2 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
PHOTO: MICHAEL SAMPLES
GRAPEVINE
PHOTO: GRAPEVINE CVB
DOWNTOWN GRAPEVINE
the kind of energy that can change a city from the inside out. Tanya Ragan is no stranger to revitalization projects. She was one of the driving forces behind the revitalization of the Dallas Farmers Market, one of the first projects to begin changing the “downtown Dallas is unlivable” narrative. Now, she’s placed herself squarely on the frontlines of the revitalization of the West End. She’s wrapping up the renovation of the Purse Building, the former home of Purse & Co. Wholesale Furniture. Like the rest of the West End, the Purse Building is steeped in a rich—and sometimes painful—history. THE MOSAIC, DOWNTOWN DALLAS On the day John F. Kennedy was assassinated, the building was seized as the FBI’s war room seconds after the shots rang out. The building is well over 100 years old and has stories upon stories layered into its red brick walls. Committed to preserving those stories and the vitality of the original building, Ragan has carefully uncovered and preserved the original pine floors, the vault from the 1990s banking occupant, and the old tin ceiling on the top floor, while simultaneously fulfilling expensive regulatory obligations to the city in her efforts to transform the building into a hip 70,000-square-foot office building. The whole process has taken a long time and a lot of money, and Ragan says projects such as hers and the others around it in the West End have an uphill regulatory battle to fight in addition to the market challenges. “Now [the city] says you have to have the same regulations as Bank of America. It’s extreme. Those are the type of things that just because you’re in a historic building, you don’t get a free pass on,” Ragan says. It’s faster and cheaper, Ragan says, to just tear a building down and build a new one in its place. “Fortunately, we’ve got a lot of local people who believe in preservation. We’ve got people who are going into these communities and reviving these communities and repurposing some of these buildings,” Ragan says. “They make our downtown special. We need more support to make [them] more economically viable.” Ragan is working to counter out-of-date narratives, address systemic issues in the area, and sell the West End neighborhood as one on the rise. Factory Six03 is another West End redevelopment, the next life of a former cracker factory on Munger Street. Granite Properties took on the 212,226-squarefoot project in 2015 with architects GFF and Architexas and contractor DPR. As the team members peeled back layer after layer of slabs and got into the nitty-gritty of the mechanical and plumbing elements in the building, they realized the finish line was much farther away than they had anticipated. “Until you get to really peeling back the layers of finishes that have been implemented over the years, you’re never going to really fully understand the scope,” Granite Properties’ Aaron Bidne says. “You try your best to anticipate based on old drawings. Based on what you can observe, you try to understand what the scope is. But until you start peeling back the layers, you’re guaranteed surprises.” And surprises there were. After digging through multiple layers of slab, the Granite team discovered a well at the bottom of the factory that had to be sealed and disposed of with the oversight of the City of Dallas. In another life, the building was a 10-theater cinema whose builders removed pillars from the old factory and created numerous structural issues that Granite had to correct. That’s what David Cunningham, senior director of development and
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PHOTO: MICHAEL SAMPLES
PHOTO: REBECA POSADAS-NAVA
THE PURSE BUILDING IN DOWNTOWN DALLAS’ WEST END
construction at Granite Properties, calls “unknown unknowns.” It’s important to factor in the proper amount of time with these types of projects, he notes. After all was said and done, anticipated and unanticipated costs totaled up. Bidne says the Factory Six03 redevelopment came in 20 percent over what Granite expected, and were it not for the tax credits it received for making the project an adaptive reuse project, it could not have been done.
CITY INFLUENCE
Architect Alston says he believes working with existing and historic buildings isn’t more difficult, it’s just different. “They require different skillsets for different needs,” Alston told The Real Estate Review. “Our entire design and construction industry is heavily focused on new construction and spends a great deal of time trying to streamline the process of bringing new developments from concept to reality.” Cities also can affect projects through their building codes, and Alston says those codes have made progress recently in addressing the different needs of a renovation project. “However, we have a long way to go, so the perception of difficulty persists,” he says. Alston says he often hears the old adage, “You don’t know what you’re getting into with an old building until you go in and open things up.” He says he doesn’t find that to be true. “For those of us who do it all the time, few surprises await,” Alston says. “Previous generations had their own processes, materials, and techniques, and those are just as predictable as modern construction, if you are familiar with them.”
FINANCIAL TOOLS OF REBIRTH
Though each adaptive reuse project is unique, they are almost all similar in one way: They are expensive. In most cases, the entire interior and all of the buildings innerworkings need to be redone or repaired. “You need to plan at least 50 percent longer project development time for a historic project just because of the governmental hoops you’ve got to go through,” Tom Reisenbichler says. “In the end, it should be worth it because of the tax credits.” James Adams, senior associate on Corgan’s commercial team, says that a redeveloped project must remain competitive. “The single greatest challenge in repositioning older buildings is having the vision for a value proposition that effectively leverages the intrinsic merits of an existing facility, in structure, aesthetic, and meaning to create a financially sound project that competes with contemporary new construction,” Adams says.
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URBAN UNION What do you do with a bunch of former industrial buildings languishing near the heart of your city? In Arlington, you create Urban Union, a walkable, mixed-use district along Front Street, south of Arlington’s Entertainment District. Since the start of construction in 2014, Arlington-based Dodson Cos. has transformed a hodgepodge of old, rundown industrial buildings spread across several blocks by renovating the aging structures and luring such companies as Legal Draft Beer Co., Sugar Bee Sweets Bakery, Cartel Taco Bar, and The Tipsy Oak Ice House, to name a few. “We certainly took inspiration from places I like to hang out,” Dodson Cos. President and Managing Partner Ryan Dodson told KXAS-TV earlier this year. “I love Bishop Arts. I love West 7th. I love Trinity Groves. So, in going to these spaces and hanging out there on the weekends and the evenings, why not Arlington? Why can’t this area be something extremely cool and fun? And I think we’ve proven, to a certain extent, that it is and has that capacity.” The company has plans to expand the project, with Phase Two scheduled for completion in 2020.
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TODD INTERESTS IS REDEVELOPING THE FORMER FIRST NATIONAL BANK BUILDING.
PHOTO: MICHAEL SAMPLES
Financial tools like the state and federal Historic Preservation Tax Credits and local TIFs are the linchpins of the adaptive reuse capital stack and take the edge off of the costs associated with rehabilitating historical buildings, bringing life to the fight for revitalization. Using the Texas Historical Preservation Tax Credit, companies working on adaptive reuse projects can write off 25 percent of the value of their Qualified Restoration Expenses, which include things such as basic HVAC and electrical services, project management, and insurance. The Federal Historical Preservation Tax Credit allows companies to write off 20 percent of the cost of QRE, for items such as architectural fees, engineering fees, ADA compliance, HVAC and electrical upgrades, and other major rehab costs. If a project qualifies for both, the sum of the write offs can be significant and bring adaptive reuse from pipe dream to reality. Once attained, these credits can be traded in a marketplace, much like stocks or bonds, and are used as part of the capital stack for the project.
RISING TIDE OF REDEMPTION
Viability, expertise, and faith in adaptive reuse projects are on the rise. This has led to widespread implementation throughout the metro. Downtown Fort Worth’s Sundance Square and the Stockyards are a prime example of this. So are the recent projects in the historic downtowns of Grapevine and Waxahachie, which garner tourism and activity for their cities. In Fort Worth, at the historic Fort Worth Stockyards, the Horse and Mules Barns will be redeveloped to include an Autograph Collection boutique hotel, event barn, and “rustic resort” at the end of Mule Alley’s street of shops, eateries, offices, and live-entertainment venues. And the historic office building at 714 Main St. recently was approved for redevelopment as a hotel. The 97-year-old property will become a 232-room Kimpton hotel. The potential to preserve and profit is capturing the imaginations of communities, financiers, and developers alike. There are a host of newly completed and underway adaptive reuse projects in the region. Success stories abound both at home and abroad. It’s no longer a question of possibility. It’s a question of priority.
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A ANATOMY OF A DEAL
THEEPITOMEOFMIXEDUSE:
The high-profile development on the western edge of Deep Ellum blends the old with the new
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A ANATOMY OF A DEAL BY PAY TON POT TER
The late urbanist and activist Jane Jacobs believed four core qualities were necessary to create a sustainable urban community: population density, mixed uses, mixed-age buildings, and short blocks that promote walkability. Today, Deep Ellum is thriving. Until recently, Deep Ellum served primarily as a nightlife district, as Kourtny Garrett, president of Downtown Dallas Inc., points out. As is often the case with districts serving mainly evening crowds, Deep Ellum has experienced rises and falls. But, like any urban environment, the historic neighborhood needs the qualities Jacobs lauded to stay on its current trajectory. Enter The Epic.
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Called “the epitome of mixed use,” The Epic is a three-building mixed-use development now under construction at the intersection of Elm Street and Good-Latimer Expressway on the western end of Deep Ellum. The area has sat mostly vacant in recent memory. But by 2020, that’s going to change with The Epic’s 310 units of multifamily residential housing, 251,351 square feet of commercial space, 42,000 square feet of retail (18,357 square feet of it on the ground floor), and a 164-key boutique hotel. And the development will preserve a significant and often forgotten piece of Dallas’ history: On the easternmost corner of the lot housing The Epic sits a five-story brick structure once known as the Knights of Pythias Temple and, later, the Union Bankers building. Built in 1916, the Temple was designed by Texas’ first practicing African American architect, William Sidney Pittman, son-in-law to Booker T. Washington. The hall was the first structure in Dallas funded entirely by African Americans. The building served as the state headquarters for the Knights and home to black doctors, dentists, and lawyers. It also served as a cultural center for the African American community.
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In its new life, once the new development is complete, the building’s banquet hall, which takes up the top floor and can be seen behind soaring, arched windows, will again be used for its original purpose—this time under the direction of Kimpton Hotels & Restaurants, the group that’s bringing The Pittman Hotel to The Epic. Garrett says the development of The Epic comes on the tail end of an urban resurgence that’s been spurred both by millennials’ desire to live in an urban core and by what she called the “lock-and-go” empty nesters: an active, older demographic of residents who are selling their estates and opting for apartments so they can travel without the burden of leaving behind a house. “Within this development, when you have the combination of office, residential, hotel, and retail, and you layer on top of that the element of historic preservation, it really is the ultimate definition of what a mixed-use project can bring,” Garrett says.
MEET DEEP ELLUM
Established in 1873 as a Freedman’s Town near the Houston and Texas Central railways, Deep Ellum was settled by European
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immigrants and African Americans. Later, industrial manufacturing—including one of Henry Ford’s Model T plants—entered the neighborhood, creating more employment opportunities for the area. The Adam Hats building served as a Model T manufacturing plant, as did the entertainment venue now called The Bomb Factory. Both remain standing in Deep Ellum. Alongside the rise of manufacturing grew a burgeoning music scene, which persists in the area today. The Temple of the Knights of Pythias building at 2551 Elm St. was sold to Union Bankers in 1959, says David Preziosi, executive director of Preservation Dallas. In the mid-1990s, it was sold to its current owner, Westdale Real Estate Investment and Management, the developer behind The Epic, but not before being named a City of Dallas landmark. In April 1989, the building became the subject of a Historic Overlay District ordinance that dictated, “A person shall not alter the property, or any portion of the exterior of a structure on the property, or place, construct, maintain, expand, demolish, or remove any structure on the property.” The ordinance, which remains in effect, requires that construction meet a number of specific restrictions intended to preserve the historical facade of the building, including limitations to nearby construction and fence height, as well as a requirement that the developer must “employ brick that is similar to the existing in color, module size, and texture.” Because the building had been painted white, the developers of The Pittman Hotel were required in the ordinance to restore the building to its original, unpainted appearance. A consultant was hired during restoration to help ensure the building matched its original appearance, says Ron Stelmarski, design director at Perkins+Will, the architecture firm behind the hotel and the office tower at The Epic.
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A ANATOMY OF A DEAL
“
THE EPIC KEY PLAYERS
WHEN WE DROPPED THIS MUCH SQUARE FOOTAGE INTO A NEIGHBORHOOD OF THIS SCALE, WE THOUGHT IT WAS REALLY IMPORTANT THAT WE TIE IT AND WEAVE IT BACK INTO THE FABRIC THE BEST WE CAN.
Preziosi says the building won’t be used for its original purpose, but will instead be adapted to meet the needs of hotel customers and Deep Ellum’s patrons: “Buildings change and evolve over time.” When The Epic comes online, its residential tower—The Hamilton—will bring the region’s population up to an estimated 2,500 people. The area’s growing population is thanks, in part, to The Case Building, another residential tower developed by StreetLights Residential that opened in early 2018. The Case Building added 337 units to the area, and The Epic is slated to add another 310.
THE CONSTRUCTION
Sharing a block with the Knights of Pythias building was a warehouse owned by Grainger, an industrial supply company. Joe Beard, president and CEO of Westdale, says the warehouse presented an ongoing problem for the developers and architects who were master-planning the site. “For years there was one piece missing out of the middle of this development, and it was the old Grainger warehouse,” Beard says. “It took an acre-plus chunk out of this land. We had always anticipated that we could get Grainger to sell that piece to us. And ultimately they did, but it took 17 or 18 years before they got around to it.” The problem slowed progress for architects at Looney Ricks Kiss (LRK) as well. Craig Henry, a principal with the firm, says they had to redesign StreetLight Residential’s The Hamilton to accommodate the addition of the Grainger warehouse’s lot. In fact, Henry says the firm designed the building twice for this part of The Epic, which was aiming to create a specific appearance to match Deep Ellum. When developers at StreetLights saw the first draft, they felt the appearance was too modern, he says. Though LRK designed another facade for the building to
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CIVIL ENGINEER: KIMLEY-HORN STRUCTURAL ENGINEER: THORNTON TOMASETTI CURTAIN WALL CONTRACTOR: HARMON METH LATH: IWR MEP ENGINEER: SCHMIDT & STACY LANDSCAPE ARCHITECT: TALLEY ASSOCIATES REDNERINGS COURTESY OF KDC
”
— RON STELMARSKI, DESIGN DIRECTOR AT PERKINS + WILL
OWNER: WESTDALE REAL ESTATE AND ASSET MANAGEMENT
GENERAL CONTRACTOR: BALFOUR BEATTY OWNER’S REPRESENTATIVE: KDC REAL ESTATE DEVELOPMENT & INVESTMENT RESIDENTIAL DEVELOPER: STREETLIGHTS RESIDENTIAL HOTEL DEVELOPER: VINETOWER DEVELOPMENT ARCHITECT FOR COMMERCIAL TOWER & HOTEL: PERKINS+WILL ARCHITECT FOR RESIDENTIAL TOWER: LOONEY RICKS KISS INTERIOR DESIGNER FOR THE HAMILTON: INK & ORO
better meet the vision of StreetLights, they had to again redesign the building after Westdale bought the Grainger property. Henry says the process leading up to the construction of The Hamilton began in February 2015, and the work will likely continue for another year or more. The Epic’s commercial tower, a 10-story structure perched atop six above-ground levels of parking, is slated to open this year. Stelmarski, of Perkins+Will, says the building is designed to bridge the gap between Deep Ellum’s industrial, pedestrian-friendly feel and the downtown Central Business District,
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LAY OF THE LAND
An iconic piece of Dallas public art has been sitting at the corner of Pacific and GoodLatimer, now part of The Epic, since the Deep Ellum light rail station opened in 2009. The Traveling Man - Waiting on a Train is part of a sculpture series commissioned by DART and designed by Brad Oldham. The sculpture stayed in place during the construction of The Epic, and will now be the first thing to greet commuters as they walk from the rail station to The Epic.
THE EPIC
OFFICE TOWER
The Epic includes 1,406 curtain wall units, each with an average weight of 900 lbs.
marked by high-rise buildings. He describes the commercial tower for The Epic as a tower of blocks inspired by the various buildings found across Deep Ellum. “What we didn’t want to do is overwhelm the neighborhood,” Stelmarski says. “So, we took all the different sizes of existing buildings, and we shifted our building tower as a set of blocks. It looks like there’s an accumulation of two-story, three-story, and five-story blocks on top of
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The Epic will incorporate the historically significant Knights of Pythias Temple, (more recently known as the Union Bankers Building) into the Pittman Hotel. THE PITTMAN HOTEL THE HAMILTON
BY KIMPTON
RESIDENTIAL TOWER
each other. So it looks like you’ve taken pieces of the Deep Ellum fabric and just stacked them on top of each other.” The offset style of the building not only makes the structure stand out as the most visible landmark east of downtown, but also helps save on energy costs, Stelmarski says. “Each level has a terrace. By overhanging these pieces of building, you shade a portion of building below,” he says. “And we found that with these offsets we’ve saved about 5 percent of the overall building energy costs by creating self-shading architecture.” Placemaking is about more than creating a healthy building with LEED, WELL,
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REDNERINGS COURTESY OF KDC
and Fitwel certifications—all of which the developer expects to achieve with The Epic’s commercial tower. It’s also about creating a place where people simply enjoy being. “Architecture is more than just the building,” Stelmarski says. “Architecture is the experience, and it’s how culturally relevant the building is to its context. The true litmus test of success is: ‘Do people like the building?’” The idea of placemaking extends to the residential tower as well. StreetLights Residential’s president of development, Tom Bakewell, says the look, feel, and history of Deep Ellum were all taken into consideration during site planning. He believes The Hamilton pays homage to the neighborhood’s history with an industrial feeling that gives the impression The Hamilton could once have been a tall warehouse. “It’s all new construction, but when you look at it, it has the feel of something that was there originally and had been added to over time,” he says. When it comes to developing in a historic neighborhood, Bakewell has a simple philosophy: “We’re not the first ones here, and we’re not going to be the last ones here. Let’s respect what’s already here today and make sure that we become an asset to the neighborhood versus trying to act like there’s nobody else around us.”
LOOKING FORWARD
Entertainment districts tend to be cyclical in nature, says Kourtny Garrett, of Downtown Dallas Inc., and Deep Ellum has experienced oscillations over the decades. “You see this in any city ... You really find that almost in any case where you have the proliferation of just one use,” Garrett says. “This particular ‘rise’ of Deep Ellum”—meaning its recent shift toward multiple uses—“is one that’s going to be much more sustainable.” The Epic aims to piggyback on the success of other developments in Deep Ellum to shake up the cycle. Stelmarski says urbanism in Dallas is a particular challenge because of the city’s history of development. But thriving, sustainable urban spaces offer a number of things Deep Ellum lacked until relatively recently—including adequate space for pedestrians, green surfaces, a thriving community of residents, and access to transportation, retail shopping, and food/grocery options. Stelmarski’s overall vision for The Epic is to bring a broadly useful space to the district. “We wanted to create meaningful spaces,” Stelmarski says. “Design is only part of the equation. You want people to feel good about where they are, but the more layers of meaning you can add to it, it just allows people to look through different lenses and have a better grounding.” Those lenses, he says, are not of gentrification but of sustainability. A vibrant, pedestrian-driven urban community rooted in diverse multifamily housing requires a density of about 20,000 people per square mile. “When we dropped this much square footage into a neighborhood of this scale, we thought it was really important that we tie and weave it back into the fabric the best we can,” Stelmarski explains. In order to fit into the neighborhood known for its nontraditional
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THE EPIC BY THE NUMBERS LINEAR FEET OF PT CABLE: 571,705 CUBIC YARDS OF CONCRETE: 31,755 TONS OF REINFORCING: 4,175 TOTAL MAN HOURS TO DATE: 589,774 AVERAGE MAN COUNT: 140/DAY GROSS SQUARE FOOTAGE (OFFICE): 290,490 SF SQUARE FOOTAGE OF CURTAINWALL: 109,765 SF NUMBER OF CURTAINWALL UNITS: 1,406
clientele—musicians, artists, muralists, and others—the developers and architects who master planned The Epic had to consider a number of factors, among them: how to construct a highrise commercial building in an area dominated by low-rise commercial and industrial facilities. And while the commercial tower will total 16 stories, The Hamilton will be even taller at 26 stories. It, too, aims to match the neighborhood’s fabric. Its red-brick facade will mimic the old brick warehouse grids that can be seen
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throughout Deep Ellum, though the cast stone detailing is cleaner and more modern. “I’m hoping our base is a dark red brick, and then the tower [appears] as a little more orange and red, so it kind of plays off that Union Bankers Building,” says LRK’s Henry. Henry backs Bakewell’s approach, saying he feels as if a traditional high-rise doesn’t belong in Deep Ellum and would disrupt the flow and feel of the area. So they set to work finding a compromise. “We set the tower back on terraces,” he says. “We didn’t want the tower out on the street. We’re opening up the view to downtown, but we’re pulling it off of Elm Street. We did not want that hard edge.” Similarly, the hotel was designed with context and historical reference in mind. Guests visiting The Pittman Hotel will enter through the restored Knights of Pythias hall before taking a short walk through a connecting hallway into the hotel itself. Because of its significance as a historical site in Deep Ellum, great strides were taken to preserve the history of the building. “You’ve got this texture and adjacent relevance of what will be a Class A Kimpton hotel that also has some soul. It’s just not shiny and new,” says Bill Guthrey, senior vice president of land development at KDC Real Estate Development and Investments, Westdale’s strategic development partner on The Epic. “Yes, the office building is new, and components of the neighborhood are new, but you’re still getting some of the flavor of what Deep Ellum is.”
The Epic, too, is a walkable development, boasting a pedestrian thoroughfare that connects the Deep Ellum Green Line DART station to the three streets that make up Deep Ellum. Stelmarski says Perkins+Will abides by rules of design that best serve pedestrians in placemaking urban developments. Those rules include short, foot-traffic-friendly blocks—often between 250 and 400 feet in length—that do not overwhelm pedestrians. “We want to make sure that as we’re organizing, we’re using the distances and the width of Deep Ellum, and that we’re also using the measurement of distance between blocks that would enhance the best experience,” he says. Commuters coming off the DART train will enter Deep Ellum through The Epic’s breezeway. Stelmarski says site planning took public transit into consideration and, rather than creating a private space for workers and residents at The Epic, funnels pedestrians from the train station into Deep Ellum via Elm Street. “When you get off the DART line, you should look right and see the Traveling Man,” Stelmarski says. “You’re getting this quick connection and gateway experience into Deep Ellum. Ultimately it’s about the pedestrian and how they interact with the outdoor spaces.” The Epic serves not only as a connection between the DART station and Deep Ellum, but also between Deep Ellum and the downtown Central Business District. That’s where public transit comes in. While a DART rail station and various bus stops currently provide commuter
CONNECTION OVER COMMUTES
Though Dallas as a city has struggled with walkability, Deep Ellum has long been a walkable neighborhood, often requiring no more than a brisk stroll to get to dining or nightlife options. That’s now truer than ever, thanks to a recent redevelopment of Elm Street that widened sidewalks and narrowed roadways.
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RENDERINGS COURTESY OF KDC
access to the area, Garrett says Downtown Dallas Inc. is exploring other on-demand options that could improve the travel experience to, from, and through Deep Ellum. “Whether it’s Efrogs or another company that does something like that, we’re looking at smaller vehicles that can operate with an on-demand model… We know our high-traffic areas are high-demand areas,” she says. Such options could cut down on drunk driving and provide easier access from Deep Ellum into the Central Business District, the Farmers Market, and Uptown.
THE INS AND OUTS OF PLACEMAKING
The Hamilton will offer residents a number of ways to engage with Deep Ellum from the comfort of their own homes, including Ink+Oro’s interior design, which features local art, graffiti pieces, and touches that pay homage to Deep Ellum’s music scene. In addition to unique art splashed through the building’s common areas, the parking garage will also bear a mural designed to honor the history of the site. Ink+Oro managing partner Geoffrey Woodrum designed the mural, which he says displays the faces of area historical figures connected to Deep Ellum including William Sidney Pittman, Henry Ford, and notable jazz singer Bessie Smith. He says he believes preserving the history of the neighborhood can happen alongside progress. “It’s inevitable that this building is going to get built,” he says. “So how do I do RENDERINGS COURTESY OF KDC
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it in a way that’s right for the people who live there? I’m giving them a nod to what Deep Ellum is, but also making a really cool building that attracts the people who are going to want to live here.” Going further, Woodrum says he wants residents in The Hamilton to have an experience that mirrors walking through Deep Ellum. “It’s always drawing you to the next moment, similar to how Deep Ellum is.” Woodrum says. “We have little moments where you pass by the mailroom, and it’s just an entire graffiti and ceiling that’s kind of like walking past an alley.” The art in The Hamilton continues the trend of staying grounded in the neighborhood and its city. From graffiti murals to unique elevators emblazoned with the style of Deep Ellum, all the art found in the building is local. “Why would I bring in some artists from New York or L.A. or wherever, when we’re here in Dallas—in the arts center?” Woodrum asks. Residents will also have access to a feature that’s uncommon in high-rise apartment buildings. A “makerspace” or “makers kitchen” that lets residents do things they like, but might not be able to do in their own homes, from cooking to crafting to experimenting with a 3-D printer. “You can do cooking classes there, you can rent it out and have an event there, you can use it for a party. There are flexible coworking tables that can be moved,” Woodrum says. “You can go in there and work on something, build something, tinker around—stuff you don’t want to do in your apartment.” Although The Epic has a long way to go before it’s fully open and functional, Preziosi of Preservation Dallas says he’s happy to see smart, sustainable progress in the area. “The key is you don’t have to demolish historic buildings to do new development. You can incorporate historic buildings into the development like The Epic has done. I think they’ve been creative in the way they’ve done it to make sure they preserve the history of the Knights of Pythias building.”
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ADVANCED MANUFACTURING: DESIGNERS AND BUILDERS ARE CREATING FUNCTIONAL SPACES THAT ADAPT TO NEW TECHNOLOGIES BY DAVID KIRKPATRICK
North Texas is a hotbed of manufacturing across a wide swath of fields—automotive manufacturing, defense, aviation, biomedicine, food, microprocessors and semiconductors, and telecoms, to name a few. The needs of these kinds of companies mean real estate professionals, designers, and builders must find the perfect locations and create facilities that are flexible enough to work today, but that are adaptable enough to accommodate future technologies.
WHAT IS ADVANCED MANUFACTURING? The term conjures up images of innovative technologies such as artificial intelligence, 3-D printing, automation, and advanced software and machinery, and many new facilities are built to serve companies using those technologies. Seemingly traditional businesses now require these kinds of capabilities when
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they build new spaces, says David Masters, principal and director of architecture with Merriman Anderson Architects in Dallas. Masters points out that projects his company recently completed in the pharmaceutical and technology sectors typically would be considered advanced manufacturing, but most of the firm’s work in advanced manufacturing has been in older industries such as automotive, aeronautics, and raw materials conversion. Dallas-Fort Worth can claim more manufacturing activity than any other metro area in Texas, according to the Dallas Regional Chamber. Across all sectors, it’s a major North Texas real estate driver and employer. As of 2018, advanced manufacturing as a whole employed roughly 133,000 people in North Texas, 4 percent over the national average. It’s a high-paying form of work, with average earnings of $126,057 a year, the Texas Workforce Commission says. The challenge for Masters’ business and others involved in advanced manufacturing real estate is creating spaces that function efficiently but are adaptable to ever-changing technological advances that affect the manufacturing process or the products. “One of the most unique ‘elements’ of the manufacturing facilities we are working on is
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I INNOVATION: MANUFACTURING KEY ADVANCED MANUFACTURING PROJECTS
DYNACRAFT NORTH TEXAS MCKINNEY
“GONE ARE THE DAYS OF SOOT AND STEEL SHARDS CAKING THE FLOORS AND WALLS. WHETHER IT’S ENGINE REBUILDING OR WIRE PRODUCTION, THESE FACILITIES ARE MORE LIKE CLEAN ROOMS THAN INDUSTRIAL PLANTS.” — DAVID MASTERS PRINCIPAL/DIRECTOR OF ARCHITECTURE, MERRIMAN ANDERSON ARCHITECTS
how clean they are,” Masters says. “Gone are the days of soot and steel shards caking the floors and walls. Whether it’s engine rebuilding or wire production, these facilities are more like clean rooms than industrial plants.” From a design perspective, it’s critical to grasp the overall technical requirements of the facility. Understanding the process of a manufacturing plant and anticipating power requirements, both now and in the future, has always been important. What has changed, Masters says, is the increasingly rapid pace of technological advancements. The right tech infrastructure needs to be put in place today while allowing for flexibility and adaptability tomorrow. On the construction side of advanced manufacturing, the projects start with
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PHOTO: MERRIMAN ANDERSON ARCHITECTS
CUMMINS SOUTHERN PLAINS ENGINE REPAIR AND REBUILD FACILITY
Dynacraft is a subsidiary of PACCAR, which is the parent company of Peterbilt and Kenworth, along with numerous other motor-vehicle-related businesses. Dynacraft manufactures and distributes parts to Peterbilt and Kenworth. Because Dynacraft is near the Peterbilt plant in Denton, Peterbilt is its primary, though not exclusive, customer. The Dynacraft facility, which opened in late 2018, includes 34,000 square feet of office space and 150,000 square feet of production and distribution space. Raw materials or small components are delivered and stored in a state-of-the art racking system. From there they move to kitting stations, where they are assembled using a variety of computer-aided machines and robotics. Then they’re packaged up and shipped out.
LOCKHEED MARTIN FORT WORTH Sometimes, adaptability is the essence of being advanced. Since 1942, that’s been the case at Air Force Plant 4, which has been turning out some of the most advanced military aircraft in history. The plant now is the division headquarters for Lockheed Martin Aeronautics, and it became known for building the F-16 Fighting Falcon fighter jet, first built there by General Dynamics. The plant’s current prime product is the F-35 Lightning II Joint Strike Fighter—the most expensive and advanced weapons system (CONTINUED ON P. 57 )
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BELL HELICOPTER REPAIR AND OVERHAUL CENTER
PHOTO: MERRIMAN ANDERSON ARCHITECTS
a deep dive into the client’s process requirements, which include critical infrastructure, precisely controlled environments, complex process equipment, and even process flow analysis, says Jeff Sanders, executive vice president of Hill & Wilkinson General Contractors . The technology requirements drive the entire process. “We have been integrating robotics and 3-D printing for several years now. The manufacturing line, and particularly process equipment, came alive and started generating data several years ago,” Sanders says. “We have been using this data to improve productivity for the past few years. That’s old-school.” “But now the data comes faster, and now it comes from every device and employee on the plant floor,” he says. That requires a different type of modular, highly flexible infrastructure. “The data transfer now continues even once the product leaves the plant and is in the hands of the consumer. This only accelerates the flexibility needed in an advanced manufacturing plant,” Sanders says. The plants Hill & Wilkinson is building now look nothing like the plants from 10 years ago.
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Now, they provide fully-conditioned environments, and they’re ergonomically advanced, colorful, and stacked with every amenity found in a Class A office building. A technicians’ work area will have the same level of finish as the customer showroom, for example. One big reason for this is to serve the dual goals of employee recruitment and retention. Sanders says retaining a highly paid technician after spending money on training is as important as selling the high-dollar item being manufactured. “We are seeing older facilities place substantial capital into locker room renovations, wellness centers, cafeterias, and breakrooms,” Sanders says. “These facilities become recruiting tools, not just process facilities. We build high-end automotive dealerships throughout the Metroplex, and their technician workspaces are as comfortable as the customer showrooms.”
ADVANCED MANUFACTURING IN NORTH TEXAS In any given area, advanced manufacturing will serve both as a draw for talent and as a way to diversify the industrial base. These advantages have been especially beneficial for North Texas, which has proven to be fairly resilient to economic changes that have impacted most of the rest of the U.S. Addison-based Mary Kay Inc. saw the advantages of manufacturing in North Texas. The cosmetics giant opened the Richard R. Rogers Manufacturing/R&D Center last fall in Lewisville. The company was founded in Dallas, and its previous manufacturing center was there, but its distribution is global and the company conceivably could have looked elsewhere. “For the real estate sector, advanced manufacturing requires large tracts of land at reasonable prices, which North Texas has an abundance of,” says Abby
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I INNOVATION: MANUFACTURING Stoddart, the director of global real estate and facilities for Mary Kay Inc., and Tonia Crews, the company’s manager of real estate services. “North Texas residential real estate also offers a selection of housing at accessible pricing for employees. North Texas has wonderful educational infrastructure—universities, technical colleges, and a large junior college system—for a strong pipeline of candidates. The local and state governments are also very supportive of business partnerships, through incentives and partnerships with [school district] internship programs.” North Texas is booming in commercial real estate, and advanced manufacturing facilities are no exception. Masters says numerous corporate relocations mean this trend should stay strong. Evolving companies such as Amazon, L3, Raytheon, Lockheed Martin, American Airlines, General Motors, and Texas Instruments eventually will need new or modernized facilities. “The continued growth of both speculative and build-to-suit industrial buildings throughout North Texas indicates that the demand is there for more space,” he says. “While 500,000- to 1-million-square-foot buildings are going up at Alliance, in south Arlington, McKinney, DeSoto, and everywhere in between, smaller facilities are also in demand. It may be cliché, but our central location in the country as well as the network of highways, including three interstates, make doing business anywhere in the Metroplex feasible,” Master says. Regionally, Masters sees untapped opportunities for traditional and advanced manufacturing. The north and south ends of I-35E and I-35W along with I-20 through Dallas, Grand Prairie, Arlington, and Fort Worth are covered, and now opportunities exist outside the Dallas and Fort Worth city limits on I-20 and I-30. Hill & Wilkinson’s Sanders summed up the advanced manufacturing space: “People tend to think the ‘advanced’ in advanced manufacturing applies to the product. Light sabers and flying cars.” Instead, he says it’s “all about the process. Even the most basic products require highly complex, incredibly clean, and universally flexible manufacturing facilities.”
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KEY ADVANCED MANUFACTURING PROJECTS ever purchased by the U.S. government. While these aircraft are legendary and all quite different from each other, they all have one thing in common—Air Force Plant 4, a building that is nearly a mile long and more than 600 feet wide. Its footprint covers more than 3 million square feet. The facility has been adapted and updated over the years to meet the needs of the planes being built there at the time.
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Speedway are hard to miss as they rumble along the railroad tracks of the world. The facility, one of two facilities in the nation where GE Transportation manufactures modern, efficient locomotives for the railroad industry, is the LEED Certified Core and Shell home to the division of Wabtec. There, a skilled workforce of men and women assemble some of the most powerful and efficient diesel-electric locomotives on the planet. The company’s Evolution Series Locomotive is the most technologically advanced dieselelectric, heavy-haul locomotive in the industry, and is designed to reduce costs, streamline operations, and increase performance.
BELL HELICOPTER REPAIR AND OVERHAUL CENTER FORT WORTH Bell Helicopter Building 27 is an existing production building on the Bell Helicopter campus. It was renovated to provide 170,000 square feet of building space for the Repair and Overhaul Center (ROC) facility that’s part of Bell Helicopter’s manufacturing side. The ROC has many compartmentalized rooms for specific services such as rotor repair, blade repair and balancing, and the repair and installation of other parts. Each room had to meet specific requirements ranging from environmental requirements (humidity and overall air temperature) and the proper storage, use, and disposal of hazardous materials to zero-vibration structural support for equipment.
GE TRANSPORTATION FORT WORTH The products manufactured in a massive building in Fort Worth near Texas Motor
L3 TECHNOLOGIES LINK TRAINING & SIMULATION UNIT ARLINGTON The services provided for L3 included overall strategic planning to make the best use of existing campus assets and allow for future business growth. A key component of the new facility is a 63,000-gross-squarefeet bay structure with a bridge crane to accommodate flight simulators for training and demonstration. The entire project was built using tilt-wall construction. The building is situated in a special overlay zoning district, and it called for special consideration of its form and its exterior material palettes. Built to house high-precision state-ofthe-art flight simulators, the building is one of the first in the United States and is used in the development, training, and sales segments of L3’s business. It’s an extremely complex facility in terms of its overall design and such details as dimensional requirements, HVAC needs, and structural and acoustical tolerances.
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KEEPING PRODUCTION
CLOSE TO
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MARY KAY’S ‘R3 CENTER’ ANCHORS RESEARCH & DEVELOPMENT IN NORTH TEXAS BY DAVID KIRKPATRICK
Last November, cosmetics giant Mary Kay Inc. opened a new advanced manufacturing facility called the Richard R. Rogers Manufacturing/ R&D Center in Lewisville. One thing was a given when planning the new plant: Addison-based Mary Kay was going to keep it in North Texas, with a primary focus on its employees and the impact the new location would have on them and their work lives, say Abby Stoddart, director of global real estate and facilities for Mary Kay, and Tonia Crews, the company’s manager of real estate services. The location search for the plant, also known as R3 or the R3 Center, used employee demographics as an anchor. Other considerations included finding an available property of the right size, good zoning requirements, and choosing a place Mary Kay could call home now and as it expands in the DFW area. “We identified Lewisville as a great central hub for our future growth and a wonderful business partner,” say Stoddart and Crews. The global company had spent almost 50 years in its original manufacturing site on Regal Row in Dallas, and saw the new center as an opportunity not only to update equipment, but also to completely rethink its operations. A major piece of this was consolidating under one roof all the operations that go into making its products—research and development, innovation, supply chain, and manufacturing—as well as all the supporting functions such as human resources, finance, and information technology.
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With that result in mind, the facility was laid out to support how Mary Kay works and delivers its products. Given that the main purposes of the R3 Center are R&D and manufacturing, the real estate plan was a bit different from a standard manufacturing site, say Stoddart and Crews. There had to be a balance between the two uses, which are not always co-located, and the space had to serve as Mary Kay’s home for the next 40 to 50 years. The location also had to retain the existing employee base and be attractive when recruiting higher-skilled and technical talent for R&D and later expansion. “We needed space that supported ‘how’ we work (co-locating groups that interact frequently) and provided easy access to varied collaborative spaces and labs,” say Stoddart and Crews. “We purposely located team, huddle, and phone rooms throughout the space, including a multiroom conference area with a large collaborative innovation room we call ‘The Pink Tank.’ We also ensured the site had numerous incidental spaces with soft seating where impromptu meetings, chats, and collaboration could happen.” A few goals were paramount as the interior space was being designed: The R&D teams needed new, modern labs that supported the ability to set new standards and raise the bar within the industry; And the real estate and facilities team had to work directly with all VPs and key stakeholders to align employees with the people they work with daily. To serve the latter goal, Mary Kay created seating where employees no longer sat next to other employees in their group, a design approach meant to allow for better collaboration among different groups, and the facility included more than 17,000 square feet of collaborative space. To
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COMPANY NAME: Mary Kay Inc. HEADQUARTERS: Addison CEO: David Holl FOUNDER: Mary Kay Ash TYPE OF COMPANY: Cosmetics FOUNDED: 1963 2017 SALES/REVENUE: Private company—not disclosed KEY PLAYERS IN THE PROJECT RE BROKER: CBRE GENERAL CONTRACTOR: Beck Others included Cymcor and FMG/Haworth
PHOTO: MERRIMAN ANDERSON ARCHITECTS
MARY KAY FACTS AND STATS
PETERBILT MOTORS CO. PLANT 1 EXPANSION
> The facility’s foundation is about the size of six football fields.
PETERBILT’S DENTON EXPANSION PROMOTES EFFICIENCY, FUTURE GROWTH
> The 142 walls are all tilt panels.
BY DAVID KIRKPATRICK
PROJECT DETAILS
> The number 13 is regarded as lucky. Its street address—2613 Denton Tap Road—refers to the date the facility broke ground, which was Sept. 13, 2016, and the property speed limit is 13. > Employees work at more than 300 height-adjustable tables, giving them flexibility at their workstations. > The dining room will seat up to 250 guests. > The corridor running through the processing and packing area is called “Mary Kay Way,” and the corridor along the front office and lab areas is called “Richard R. Rogers Avenue.” Mary Kay Way is approximately one football field long, and Richard R. Rogers Ave. is approximately two football fields long. > The facility’s labs are approximately 50 percent larger than in the previous plant.
improve ergonomics, each employee was given a Haworth height-adjustable table. As a result of all the real estate planning that went into the R3 Center, Mary Kay has been able to keep its production in the U.S. and in its hometown. It continues to be a proud and successful company manufacturing in the U.S. with global distribution, say Stoddart and Crews. Mary Kay is in the top 10 in DFW-area manufacturing companies.
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In 2017, Peterbilt Motors Co. opened two advanced manufacturing facilities in Denton. The Plant 1 expansion and the Peterbilt Test Building increased the production square footage of the plant to 600,000 square feet with the Test Building accounting for 102,000 square feet. “The expansion investment is the largest made by Peterbilt since the plant construction,” Leon Handt, assistant general manager of operations at Peterbilt, the Denton-based manufacturing of large commercial trucks, said in a statement. “We’re committed to manufacturing the industry’s highest quality vehicles. Growing the Denton plant’s footprint allows us to increase our manufacturing efficiency and positions us for future growth.” All of Peterbilt’s testing and validation relocated to the new test building for a more efficient process flow. The facility features a dynamometer capable of handling all truck configurations and two new paint booths. The total test capacity increased 75 percent in the new building. On the second level of the test building, an automated storage and retrieval system (ASRS) has capacity for 400 painted hoods, sleepers, and cabs. The computer-controlled ASRS was integrated into the production process, sequentially delivering painted parts directly to the production line. The opening of
the test building and beginning of ASRS operations marked the conclusion of the total three-phase project. The entire design-build for the full expansion project was a 19-month effort from design commencement to project closeout, while not impacting the ongoing activity of the existing plant, says David Masters, principal and director of architecture at Dallas-based Merriman Anderson Architects Inc. The initial phase of the Plant 1 expansion included increasing its shipping and receiving capacity by adding 18 dock doors, a new truck well, and modifications to adapt the existing building to the expansion, Masters says. Phase two expanded the West Dock by around 17,500 square feet with additional dock doors and levelers. Finally, phase three involved installing ASRS and upgrading the existing building to support the new advanced manufacturing system. The entire expansion was accomplished without shutting down the existing plant or production process. “The Peterbilt Test Building was designed to provide the additional area needed by the company to allow for increased productivity, efficiency of production, and modernization of their equipment,” Masters says. “The existing Plant 1 could no longer efficiently accommodate the last few components on the assembly line which prompted the need for this new building.”
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SPECIAL ADVERTISING SECTION
ECONOMIC DEVELOPMENT DIRECTORY Addison is certainly the place where it all comes together, and the Economic Development & Tourism Department can help. The department’s professionals are charged with developing programs and supporting projects that will help promote economic prosperity in the community. For companies that are looking to relocate or expand, the department can provide information about Addison so that key decision makers can get a well-rounded understanding of all that the community has to offer. In addition to this, the department can help identify the right space for businesses, evaluate projects for public support, and open the doors for opportunities that abound in Addison and the North Texas region. With the support of our key stakeholders, the department can also get you connected in local business networks. ADDISON ECONOMIC DEVELOPMENT & TOURISM: 972.450.7076 14681 Midway Road Suite 200 Addison, TX 75001 addisoned.com
Located at the highest elevation in Dallas County and 20 minutes from the city center sits the beautiful, family-friendly City of Cedar Hill, where opportunities grow naturally. This bustling and diverse community of just over 45,000 people combines the best of big-city living with natural beauty and outdoor recreation found nowhere else in the Metroplex. With its low cost of doing business, ample workforce, and attractive quality of life, Cedar Hill is experiencing an influx of both startups and established companies. Growth-minded companies are gaining handsome dividends from opportunities that exist throughout the City. In addition to the growing business climate, Cedar Hill corners the market on natural beauty. The Cedar Hill State Park and Dogwood Canyon Audubon Center allows residents and visitors access to the most uniquely diverse geological area, abundant wildlife, and the most breathtaking views in North Texas. To facilitate and energize relocation and expansion, Cedar Hill offers aggressive economic development incentives. CEDAR HILL ECONOMIC DEVELOPMENT 972.291.5132 285 Uptown Blvd, Bldg 100, Cedar Hill, Texas 75104 cedarhilledc.com
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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 Nebraska Furniture Mart of Texas, anchoring the 400-acre Grandscape development. When complete, Grandscape will feature unique entertainment, dining, and retail venues. KERI SAMFORD, Economic Development Director THE COLONY ECONOMIC DEVELOPMENT CORPORATION 6800 Main St., The Colony, TX 75056-1133 972.624.3127 edc@thecolonytx.org thecolonyedc.org
The McKinney Economic Development Corp. (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 communityoriented businesses can thrive. PETER TOKAR III President and CEO MCKINNEY ECONOMIC DEVELOPMENT CORP. / CITY OF MCKINNEY 5900 S. Lake Forest Drive Suite 110 McKinney, TX 75070 info@mckinneyedc.com 972.547.7651 mckinneyedc.com
Centrally located between Dallas Fort Worth International 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. 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 their corporate headquarters, and the addition of Digital Alchemy, a technology company occupying 24,000 SF of office space. CRAIG HULSE Director of Economic Development 4301 City Point Drive North Richland Hills, TX 76108 817-427-6090 chulse@nrhtx.com www.nrhed.com
SPRING 2019
C COMMUNITY
Jim Knight, Chairman Bill Cawley, Chairman-Elect
CHAMPION’S CIRCLE
Bank of America Merrill Lynch/ Bank of America Charitable Foundation, Inc. Bank of Texas CBRE Compatriot Capital, Inc. Deloitte. Federal Reserve (Community Development Financial Institutions Fund) HFF JLL JP Morgan/JP Morgan Chase Foundation NexBank SSB Stantec
CHAIRMAN’S CIRCLE
Balfour Beatty Construction Billingsley Company Corgan Crow Holdings Capital Partners, L.L.C. Cushman & Wakefield DPR Construction, Inc. Eastdil Secured EY Frost Bank Granite Properties Invesco Real Estate Jackson Walker KPMG LegacyTexas Munsch Hardt Kopf & Harr P.C. Republic Title of Texas, Inc. Stewart Title The Howard Hughes Corporation Wells Fargo Bank/ Wells Fargo Foundation Winstead PC
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
BB&T BBVA Compass/BBVA Compass Foundation Brasfield & Gorrie, LLC Cawley Partners Gables Residential GFF Goldman Sachs Grant Thornton Haynes and Boone, LLP Jackson-Shaw KDC NorthMarq Capital PGIM Real Estate Finance PUREPOINT Financial Simmons First Foundation StreetLights Residential Texas Capital Bank Thackeray Partners The Beck Group TIER REIT, Inc. Todd Interests Trammell Crow Company Transwestern US Bank/ Foundation Westmount Realty Capital, LLC
BENEFACTOR’S CIRCLE 42 Real Estate, LLC Acore Capital AG&E Structural Engenuity Alston Construction American National Bank of Texas Associated Bank Bank of America Plaza Bank of the Ozarks Benchmark Title Berkadia Commercial Mortgage Bradford Companies
CallisonRTKL Capital One Bank Chicago Title, NCS Dallas Citigroup Global Markets, Inc. Colliers International Corinth Properties Deutsche Bank Gensler Greenberg Traurig-Dallas HALL Group Hill & Wilkinson Hillwood Urban Hunt Real Estate Capital JPI Jones Day Kane Russell Coleman Logan PC Kennington Commercial KeyBank Kimley-Horn and Associates, Inc Lincoln Property Company Locke Lord LLP Matthews Southwest Merriman Anderson Architects, Inc. Mill Creek Residential Trust LLC MYCON General Contractors ORIX Real Estate Americas Pacheco Koch Consulting Engineers, Inc. Perkins+Will PlainsCapital Bank Primera Companies, Inc. Regions Bank Sarofim Realty Advisors Spirit Realty Capital Stream Realty Partners t. howard and associates architects, inc. (th+a) The Muse Family Enterprises The Retail Connection
Trammell Crow Residential Turner Construction Company VanTrust Real Estate, LLC VCC Construction Vinson & Elkins L.L.P. Walker & Dunlop Younger Partners, LLC
PATRON’S CIRCLE
AG&E Structural Engenuity Bay Miltenberger Benefit Cosmetics Boutique Preston Cherry Painting Company, Inc. Designer Draperies And Floors DPR Construction, Inc. Eastman Law Fairmont Hotel Fauxcades Gaedeke Group LLC Gemini Stage Lighting & Equipment, Co., Inc. Global Furniture Group HALL Group Hilton Anatole Hotel Imlach & Collins Brothers J&S Audio Visual Joel M. Eastman, PLLC Jones Day Lasco Acoustics and Drywall Legacy Hedgcoxe Office Partners, LP Performance Door and Hardware, Inc Polk Mechanical Co LLC Terracon Consulting Inc. The Demo Company The Ritz-Carlton - Dallas TX Office Installation Services Inc Wccw Western Rim Windsor Court Hotel
WHO WE ARE TREC is where 2,000 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. SPRING 2019
Learn more at recouncil.com or by calling 214-692-3600.
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 6 1
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.
[x]cube LABS
Bell Nunnally
Corgan
Fox Sports Southwest
1820 Productions
BG Staffing, Inc.
Frito-Lay North America
7-Eleven, Inc.
Big 12 Conference
Corrientes 348 Argentinian Steakhouse
A G Hill Partners LLC
Billingsley Company
Corrigan Investments, Inc.
Furniture Marketing Group
Accenture
BKD LLP
Acme Brick Company
bkm Total Office of Texas
Active Network
BLNelson Group LLC
Crowe LLP
AECOM
Blue Cross and Blue Shield of Texas
Cyber Group, Inc. CyrusOne
Boeing
Dallas Baptist University
Alaska Airlines
BOKA Powell
Dallas Business Journal
AlixPartners LLP
Boston Consulting Group
Alkami Technology
Bottle Rocket
Dallas County Community College District
Alston & Bird LLP
Brasfield & Gorrie
Altair Global
Brierley+Partners
Amegy Bank of Texas
Brinker International, Inc.
Amerant Bank, N.A.
BRP
American Airlines, Inc.
Business Jet Center
American Heart Association, Dallas Division
Business Wise, Inc.
Akin Gump Strauss Hauer & Feld LLP
American National Bank of Texas AMN Healthcare
Capital One Bank Carrington, Coleman, Sloman & Blumenthal, L.L.P.
CP&Y, Inc. Crestron Electronics
Dallas Cowboys Football Club Ltd. Dallas Mavericks Dallas Morning News Dallas Stars Hockey Club Dallas Summer Musicals Dallas Wings Dal-Tile Corporation Dannenbaum Engineering Corporation
Frost Bank G6 Hospitality LLC Gaedeke Group Gensler George W Bush Foundation Goldman Sachs & Co, LLC Gordon Highlander Granite Properties Grant Thornton LLP Green Brick Partners Gulfstream Aerospace Corporation Gupta & Associates Inc. Hall Group Harness Dickey & Pierce Hartline Dacus Barger Dreyer LLP Haynes and Boone Hazel’s Hot Shot, Inc. H-E-B/Central Market
DeGolyer and MacNaughton
Heritage Health Solutions Inc.
CBRE Group, Inc.
Deloitte LLP DexYP
Armstrong Relocation
Centurion American Development Group
Hill & Wilkinson General Contractors
DFW International Airport
At Home
CENTURY 21 Judge Fite Company
DHD Films
AT&T
Champion Partners
DLR Group Staffelbach
Atmos Energy Corporation
Chickasaw Nation
Dreien Opportunity Partners LLC
Austin College
E Smith Legacy Holdings
Austin Industries
Children’s Health System of Texas
AustinCSI
Choctaw Nation of Oklahoma
Axxess
CHRISTUS Health
Ebby Halliday Real Estate, Inc.
Bain & Company, Inc.
Cinemark Holdings
Baker & McKenzie, LLP
Citi
Baker Botts L.L.P.
City Electric Supply
Estrada Hinojosa & Company, Inc.
Balfour Beatty
Clark Hill Strasburger
Ewing Automotive Group
Bank of America
Cleaver-Brooks Sales and Service
Exxon Mobil Corporation
Bank of Texas
ClubCorp USA, Inc.
Fairmont Dallas
Barnes & Thornburg
Coca-Cola Refreshments
FASTSIGNS - Northeast Dallas
Baylor Scott & White Health
Colliers International
FedEx Office
BB&T
Comerica Bank
Fidelity Investments
BBVA Compass
Commemorative Air Force
Fluor Corporation Headquarters
HUB International Insurance Services
BDO USA LLP
Commerce Bank
Foley Gardere LLP
Hunt Consolidated, Inc.
BE&K Building Group
Copart
Forest City Texas Inc
IBC Bank
Andrews Distributing Company of North Texas Aon
Cawley Partners
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East West Bank Egan Nelson LLP Ernst & Young LLP
Hill+Knowlton Strategies Hillwood Development Company Hilti North America Hilton Anatole HKS Inc. HMS HNTB Corporation Hoar Program Management, LLC HOK HollyFrontier Corporation Holmes Murphy HOLT CAT Hotels.com Howard Hughes Corporation HPI Real Estate Services & Investments/Ross Tower
SPRING 2019
C COMMUNITY IBM Corporation
MidFirst Bank
Sheppard Mullin
The Commit Partnership
Imaginuity Interactive
Mohr Partners, Inc.
Sheraton Dallas
The Crowther Group
Interceramic
Montgomery Coscia Greilich LLP
Showcall
The Freeman Company, LLC
International Leadership of Texas
Munck Wilson Mandala LLP
Sidley Austin LLP
The Kroger Co.
Invesco Real Estate
MV Transportation, Inc.
Silicon Valley Bank
Invitation Homes
NEC Corporation of America
Silverado Interests
The University of Texas at Arlington
Jackson Spalding, Inc.
Networking Results Inc.
Slalom
Jackson Walker LLP
Newmark Knight Frank
Smart City Apartment Locating
Jacobs Engineering Group Inc.
Norton Rose Fulbright
Smith Group Asset Management
Jamba Juice
NTT DATA Inc.
Southeastern Freight Lines
T-Mobile US Inc
JE Dunn Construction
Oklahoma State University
Tolleson Wealth Management
JLL
Omni Dallas Hotel
Southern Glazer’s Wine and Spirits
Tom Thumb Food & Pharmacy
Jones Day
Omnitracs, LLC
Southern Methodist University
Topgolf
JPI
Oncor
Southwest Airlines
Torchmark Corporation
JPMorgan Chase & Co.
Operation Kindness
Southwest Office Systems, Inc.
Town of Addison
KDC Real Estate Development Investments
Options Clearing Corporation
Spectrum Enterprise
Toyota Motor North America
Origin Bank
Spectrum Reach
TracyLocke
Ketchum Public Relations
ORIX USA Corporation
Squire Patton Boggs
Transwestern
Kilpatrick Townsend & Stockton LLP
Pacific Builders Inc.
StackPath
Trinity Groves, LLC
Park Place Dealerships
Stantec
Trinity Industries, Inc.
Parkland Foundation
State Farm Insurance Companies
Turner Construction Company
Parkland Health and Hospital System
Stewart Title
TXU Energy
Paul Quinn College
Stifel
Uber Technologies Inc.
Stinson Leonard Street
UMB Bank N. A.
Stout Risius Ross
UnitedHealthcare
Suffolk Construction
University of Dallas
Sumitomo Mitsui Banking Corporation SMBC
University of North Texas at Dallas
Kimley-Horn and Associates KPMG LLP L.A. Fuess Partners Structural Engineers LegacyTexas Bank Life School Lincoln Property Company Linebarger Goggan Blair & Sampson, LLP Littler Mendelson, P.C. Live Nation Locke Lord LLP Lockheed Martin Lockwood, Andrews & Newnam, Inc. M2 Studio Manpower, a ManpowerGroup Company
Penske Motor Group Perkins+Will Pierpont Communication Pioneer Natural Resources Company PlainsCapital Bank PNC Polsinelli Premier Truck Group Prime 45 Development LLC Promenna PSA Constructors, Inc. PwC
Mary Kay Inc.
RealCom Solutions
Matthews Southwest
Regions Bank
McCarthy Building Companies, Inc.
Reliant, an NRG Company
McGough Construction
Rosewood Property Co.
McGuire, Craddock & Strother, PC
RSM US LLP
McKinsey & Company, Inc.
Salient Global Technologies
McLarty Capital Partners
Santander Consumer USA Inc
McRight-Smith Construction
Sbase Technologies
Medical City Dallas Hospital/ Medical City Children’s Hospital
SCHMIDT & STACY Consulting Engineers, Inc.
Methodist Health System
Scientel Solutions
MHBT, a Marsh & McLennan Agency LLC company
Sendero
MHT Partners LP
Shackelford, Bowen, McKinley & Norton LLP
Microsoft Corporation
SPRING 2019
Rent-A-Center
Sewell Automotive Companies
Thompson & Knight LLP
SunTrust Robinson Humphrey Inc Susan G Komen
Thomson Reuters TIER REIT, Inc.
University of North Texas System University of Texas at Dallas UT Southwestern Medical Center
Target Headquarters
Veritex Community Bank
TD Ameritrade TDIndustries
Verizon Wireless South Central HQ
TDJ Enterprises
Village Green Holdings, LLC
Teladoc
Walgreens
Telnorm
Weaver
Tenet Healthcare
Weil, Gotshal & Manges LLP
Texans Can Academies
Weitzman
Texas A&M University
Wells Fargo
Texas Capital Bank
West Monroe Partners LLC
Texas Central
WFAA-TV
Texas Health Aetna
Whitebox Real Estate
Texas Health Resources Texas Instruments Incorporated
Whiting-Turner Contracting Company
Texas Scottish Rite Hospital for Children
Whitley Penn
Texas Star Alliance Texas Woman’s University
Wilson, Elser, Moskowitz, Edelman & Dicker LLP
Texas Women’s Foundation
Winstead PC
The Asset
Women’s Foodservice Forum
The Beck Group
Zinwave
The Broaddus Companies
Ztar Mobile, Inc.
Willis Towers Watson
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L LEADERSHIP
KEZIA STEGEMOELLER Obama Academy director helps build young male leaders
PHOTO: REBECA POSADAS-NAVA
BY NICHOLAS SAKELARIS
It doesn’t take long for Kezia Stegemoeller’s passion to show through. Just get her talking about the students at the Barack Obama Male Leadership Academy in Dallas—currently numbering 460—and the many successes they’ve had. She calls them “big smile moments.” Stegemoeller is the executive director for the Friends of the Barack Obama Male Leadership Academy, a nonprofit that raises money for the Dallas Independent School District magnet school. Her wide-ranging efforts may entail securing a grant to send students on a college visit, giving them the chance to study abroad, or funding full-time college advisers to help students stay on track for graduation and college. “There are so many parts of my job that I’m incredibly proud of,” she says. “Exposure is so important for any young person, but especially from communities where their parents and family members may not have access or relationships to make that happen.” The school will graduate its fifth class of seniors this year, and so far it has an enviable record—a 100 percent graduation rate and college attendance rate.
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“Without the natural curiosity and interest, my job wouldn’t be possible,” Stegemoeller says. “I bet so much on our young men because I believe in them so much. They work so hard and they try so hard.” No matter what she’s doing, these youngsters are on her mind. In 2018, she participated in the Dallas Regional Chamber’s Leadership Dallas program. This class, and the alumni group she participated in afterward, gave her a direct pipeline to Dallas’ business elite, the perfect role models for the students at the school. “There are so many corporations here. Being part of the Dallas Regional Chamber (DRC) allows me to be a bridge,” Stegemoeller said. “I formed relationships with presidents
SPRING 2019
C COMMUNITY of banks, vice presidents, and architecture firms. More than half of my [leadership] class visited the campus throughout the last year.” She adds that she’s had dinner or breakfast with nearly everyone in her DRC leadership class to talk about what she does. She and the business leaders did some valuable community service during that class. Their project was remodeling a shed at the Promise House, a homeless shelter for youth in Dallas. They made it a functional space for the children and spent time playing games with them. Stegemoeller also works with the Junior League of Dallas, an organization of women committed to promoting voluntarism, which gives her a welcome chance to join in the energy of other women. One of their recent projects was helping Our Friends Place, a Dallas-area organization that, among other things, helps young women who age out of foster care. This falls right in line with her passion to help local underserved youth. She believes the work she does at Friends of the Barack Obama Male Leadership Academy, the DRC, and the Junior League will bring benefits far beyond the people she’s directly helped. “There’s a ripple effect to philanthropy. There’s a ripple effect to love and there’s a ripple effect to care,” she says. “I’m doing my part as best I can to make Dallas better for everyone. I want people to understand that when we strengthen communities that are disenfranchised, we strengthen everyone.” The academy’s first alumni are now graduating from college, and Stegemoeller has an active interest in tracking their progress. “I am eager to find out where our alumni are going and what they’re going to do to change the world,” she says. “I’m happy to have played a very, very small part in changing their trajectory and that of their families.”
“I want people to understand that when we strengthen communities that are disenfranchised, we strengthen everyone.”
SPRING 2019
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.
MAY. MAY 29 Public Policy Roundtable: The Political Anatomy of a Real Estate Deal
PHOTO: REBECA POSADAS-NAVA
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.
CALENDAR OF EVENTS
The Real Estate Council 3100 McKinnon Street Suite 1150 Dallas, TX 75201 11:45 a.m.-1:00 p.m. Join us as we kick off our new Public Policy Roundtable programming. Our first luncheon of the series will cover the anatomy of a real estate deal. During this event, panelists Suzan Kedron (Jackson Walker LLP), Evan Beattie (GFF), and Matt Enzler (Trammell Crow Residential) will share their insights and perspectives and participate in an audience Q&A session. You must be a member of The Real Estate Council to attend. Tickets are $25.75 and available at RECouncil.com.
Multifamily, LLC), Jake McCall (Henry S. Miller), and Courtney Spellicy (Austin Commercial) about their experiences in serving on boards and commissions and find out how you can get involved. Coffee and fruit will be provided.
JUNE 26 AND JULY 17 Explore 214 Intern Mixers Capital Factory, June 26, 5:00-6:30 p.m. Dallas Regional Chamber, July 17, 4:00-6:30 p.m. Provides college interns opportunity to experience the lifestyle and culture of Dallas outside of the office by connecting socially and professionally with peers, young professionals, and community leaders showcasing why the Dallas region is a great place to launch a career.
SEPTEMBER. NINA VACA
JUNE. JUNE 6 Public Policy 101: Boards and Commissions The Real Estate Council 3100 McKinnon Street Suite 1150 Dallas, TX 75201 8:00-9:00 a.m. TREC’s Public Policy Committee invites you to participate in its ongoing Public Policy 101 series for an informative workshop about serving on a City of Dallas board or commission. Hear from TREC members Ryan Garcia (Liberty
SEPTEMBER 11 Leadership Insight Series featuring Nina Vaca Dallas Regional Chamber, 4:30-6:00 p.m. Nina Vaca, Chairman & CEO of the Pinnacle Group, will be the featured speaker. It’s the second installment of a series of candid conversations with top leaders in the Dallas region.
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C COMMUNITY
YOUNG GUNS CASINO NIGHT The Real Estate Council hosted more than 500 young professionals at The Union on March 7 during our annual Young Guns Casino Night. We’re pleased to announce that we’ve met this year’s sponsorship goal in support of the Young Guns Foundation Project to renovate the Martin Luther King Jr. Learning Center, a Dallas Independent School District facility located in the Forest District, as part of the Dallas Catalyst Project. We’d like to thank everyone who attended the event and participated in our raffle, members of our Casino Night Committee, our in-kind donors, and our sponsors. PHOTOS BY JAMES EDWARD
MARTIN LUTHER KING JR. LEARNING CENTER PRINCIPAL ROCKELL STEWART (LEFT) AND ADMINISTRATORS
DONALD WESSON, JANIE SIMMONS, PASTOR CHRIS SIMMONS—ALL FROM CORNERSTONE BAPTIST CHURCH
FOUNDATION PROJECT CO-CHAIR TRAVIS GUNTER, MEMBERSHIP ENGAGEMENT CHAIR RANDY STREIG, FOUNDATION PROJECT CO-CHAIR FERNANDO CEBALLOS, CASINO NIGHT CHAIR ELIZA BACHHUBER
BRANDI WICKS, COBY BULLOCK, EUNCIE MARTINEZ, JEFF PORTER, YOUNG GUNS MEMBERSHIP CHAIR JOHNNY BEGZOS
JUAN NINO (TREC PACKAGE RAFFLE PRIZE WINNER), CASINO NIGHT CHAIR ELIZA BACHHUBER, CASINO NIGHT RAFFLE PRIZE CHAIR ASHLEY CUMMINGS
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SPRING 2019
L LEADERSHIP
GILBERT GERST: A VOICE FOR THE UNDERSERVED IN DALLAS
GILBERT GERST
BY NICHOLAS SAKELARIS
GABI SHAFF
TREC CHAIRMAN JIM KNIGHT
CHRISTINA SHAMS AND JANINE NG
SPRING 2019
From his humble beginnings in rural West Texas, Gilbert Gerst has become a fixture in the North Texas banking community, a voice for the underserved, and a tireless philanthropist. He knows well what a lack of opportunities and services can do to a community and of the doors they open when they’re available. Gerst has made it his mission to help disadvantaged residents of Dallas through his day job at BOK Financial and through nonprofit volunteer organizations. He wants to be part of the solution in everything he does. “[My mother] gave me the passion to want to serve the community,” Gerst says. “We all make time for what’s important to us. These things are important to me.” At BOK Financial, he’s a senior vice president and the manager of the Community Development Group, which means he oversees real estate financing for low-income-housing tax credit projects, nonprofit lending, and tax credit equity. “My goal for the bank is to make sure that the products and services are available to the low- to moderate-income people,” Gerst says. He joined BOK Financial in 2011 after more than 25 years at JPMorgan Chase and its predecessor, where much of his work was in the same vein. Much of his days are spent on construction financing for multi-family projects—many contain affordable housing. One of the biggest challenges low- to moderate-income people face now is affordable housing. For example, in Trinity Groves, new development has pushed up property taxes for longtime residents and, in some cases, priced them out entirely. “Prices are elevating. We’ve got to find a way to balance that out because obtaining housing is a challenge,” Gerst says. “For too many people, housing is 50 percent of their income.” Gerst brings his perspective to The Real Estate Council, where he helped start a community loan fund that offers more flexible
lending criteria for real estate loans. “We can share the challenges we face in our line of business, and interact with other areas, such as retail real estate,” Gerst says. “It also helps me to know what we as a bank need to be doing in that segment of the community.” His community involvement goes beyond banking and real estate. For the last 15 years, Gerst has volunteered for Workforce Solutions Greater Dallas, where he helps workers who are underemployed, unemployed, or don’t have marketable skills. “We get them the skills to be self-sufficient, whether they are a youth or a seasoned employee who got laid off and needs to reinvent themselves,” Gerst says. He’s also a trustee and a deacon at the New Birth Missionary Baptist Church in Oak Cliff, where he has an opportunity to develop some land to give back to the community. Gerst’s knowledge and skills as a real estate banker have been invaluable. Modestly, he turns the credit back toward the church. “Churches are realizing they can have greater impact outside the four walls,” he says. For the last 20 years he’s been on the board for Dallas Black Dance Theatre. He’s been the chairman since 2012. He’s also involved in Dallas Area Habitat for Humanity, the AT&T Performing Arts Center, and the State Fair of Texas. Gerst’s work with so many nonprofits and The Real Estate Council only benefits BOK Financial, he says. “They are very supportive of what I do and the mission that the bank has from a community perspective,” he says. “I’ve never had any pushback on anything that we want to do that benefits the community.”
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VIEW FROM THE TOP
BY LANCE MURRAY
TELL US ABOUT THE OPERATIONS THAT ZINWAVE RELOCATED TO DALLAS. We relocated our headquarters from Cambridge, U.K., to Dallas in March 2017. Since then, we have continued to grow and better serve our North American as well as our global customer base from the new centralized location. At the end of 2018, we also relocated our warehouse operations from San Jose, California, to Dallas. This year, we will also be moving to a new, expanded location within DFW. Since coming to Dallas, we developed our Network Operations Center, which serves as a central hub for providing an additional layer of assistance for businesses across the globe. As part of the relocation, we moved our leadership, operations, and finance teams to the area.
WHAT SETS ZINWAVE APART FROM OTHER COMPANIES IN YOUR INDUSTRY?
SLAVKO DJUKIC Chief Technology Officer, Zinwave Zinwave, which makes in-building cellular and public-safety installations for businesses, relocated its headquarters from Cambridge, England, to Dallas in March 2017. With 18 years of experience in indoor wireless technology development, chief technology officer Slavko Djukic joined Zinwave in 2016 as an expert in distributed antenna systems (DAS) and small-cell systems. Previously, he was Ericsson’s head of strategy and solutions for small cells, DAS, and Wi-Fi. Djukic took time to talk about Zinwave’s relocation and where his company fits in the connectivity and networking sector.
6 8 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
Zinwave deploys in-building cellular and public-safety wireless solutions for a variety of industries. We’ve worked with global Fortune 100 companies, many of which are in the Top 25. Zinwave’s patented distributed antenna system (DAS) solution is unique within the industry due to three main components. • Fiber-based: An all-fiber cabling wireless solution is not only more affordable for building owners and developers, but it’s also easier to install. Other providers may use coaxial cabling, which yields higher costs, disruptive installation, and slower network speeds. • Full-spectrum: Zinwave is the only provider that can support the full spectrum of commercial cellular, public safety, and two-way radio frequencies on a single hardware layer. • Future-ready: The solution is designed with the future in mind. If additional carriers, public safety frequencies, and new technologies are required after the initial installation, your system is ready to support those frequencies once you need them— with no adjustment to the hardware.
Zinwave’s DAS solution is first-to-market with several technologies, such as support for OnGo/CBRS (private LTE), which provides the same reliable coverage and capacity commercial cellular offers to businesses, but in a private environment. Zinwave also offers DAS on a cellular-as-a-service plan (allowing businesses to shift a capital expense to an operational expense), which includes full support from the Network Operations Center.
IN YOUR SITE SELECTION PROCESS, WHAT TIPPED THE SCALE IN FAVOR OF DALLAS?
Dallas is the perfect city for technology, innovation, business, and a millennial workforce, and it’s centrally located with easy access to our domestic and international customers. Additionally, the area hosts many of the nation’s top commercial real estate firms, such as CBRE, JLL, and Cushman & Wakefield, who recognize the need for in-building wireless service as a necessary service for their tenants. The CRE community within Dallas-Fort Worth has continued to grow since our relocation, as organizations like WiredScore have recently expanded operations to the area.
HOW DOES THE NORTH TEXAS AREA FIT THE NEEDS OF YOUR EMPLOYEES?
North Texas’ central location allows Zinwave’s team to better serve our customers, partners, and vendors, as well as reside in an area with many great places to live, work, play, and easily commute. Additionally, with a strong representation of industries, including CRE and Fortune 500 companies in the local area, our team is able to personalize relationships and further identify potential opportunities to solve pain points of the businesses and industries we serve. In doing so, Zinwave is able to approach the market with a keen understanding of what a given business is looking to accomplish—which sets our team up for professional success and growth.
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