ROSS AVE. ALSO INSIDE:
ANATOMY OF A DEAL: DICKIES ARENA CONSTRUCTION & DESIGN ROUNDTABLE THE CRANE REPORT
We take a unique approach to every design Supporting our communities from local offices in Dallas, Forth Worth, and Plano.
Design with community in mind stantec.com
TEXAS DESTINATION FOR
Keri Samford, Executive Director of Development 972.624.3127 • email@example.com • www.TheColonyEDC.org
ON THE COVER Ross Avenue in downtown Dallas, looking southwest from Leonard Street. Photo by Michael Samples
15 THE CRANE REPORT
Welcome Letter . . . . . . . . . . . . . . . . . . . . . . . . . 6 Publisher’s Note . . . . . . . . . . . . . . . . . . . . . . . . .8
FOUNDATIONS DFW Market Statistics, Economic Indicators, and Commercial Real Estate News. . . . . . . . . 10
BUILDING TOMORROW TOGETHER Learning from the Amazon Bid . . . . . . . 13
THE CRANE REPORT
Who’s Building What, Where . . . . . . . . . 15
SCORECARD DFW’s Top Office, Industrial, and Retail Leases . . . . . . . . . . . . . . . . . . . . . . 23
PLACEMAKERS Good Space’s David Spence . . . . . . . . . . . 30
ROUNDTABLE Construction and Design: Building a Better Dallas-Fort Worth . . 30
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
46 FEATURE Reinventing Ross Ave. Renovations and new construction are transforming Ross Avenue’s place as a hub for offices, retail, and residential . . . . . . . . . . . . . . . . . 46
D MAGAZINE PARTNERS BUSINESS GROUP PUBLISHER Josh Schimmels
PUBLISHER Quincy Curé Preston 214-523-5215 firstname.lastname@example.org
MANAGING EDITOR Lance Murray
CREATIVE DIRECTOR Michael Samples CONTRIBUTING EDITOR Julia Bunch
56 ANATOMY OF A DEAL
The Rise of Dickies Arena
Set to open in 2019, Fort Worth’s new facility will be the home of the Stock Show & Rodeo, as well as other major events . . . . . . . . . 56
David Kirkpatrick Dave Moore Heather Noel Nicholas Sakelaris
Amy Wolff Sorter
The Food Industry
DIRECTOR OF SALES
North Texas is ranked as No. 1 most competitive in food and beverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SPECIAL ADVERTISING SECTION
Kyle Moss 214-523-5247 email@example.com
BUSINESS DEVELOPMENT MANAGER
Economic Development Directory Profiles of cities around the region . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Stephanie Mojonnet 214-523-0311 firstname.lastname@example.org
MEDIA DEVELOPMENT MANAGER
COMMUNITY Event Recap: Market Matters . . . . . . . . . . . . . . . . . 12 The Real Estate Council, Impact Investors . . . . . . . . . . . . . . . . 72 Dallas Regional Chamber, Top-Level Members . . . . . . . . . . . . . 70 Dallas Regional Chamber, Leadership Dallas . . . . . . . . . . . . . . . 73 4 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
Calendar of Events . . . . . . . . . . . . . . 73 Photos: TREC’s Young Guns 2018 Casino Night . . 74 The Real Estate Council, TREC Leadership . . . . . . . . . . . . . . . 75 View From the Top: Stan Deal, President and CEO, Boeing Global Services. . . . . . . . . . . 76
INTERNS Merissa De Falcis Katie Kelton Taylor Lowder Carley Williams
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. ©2018 All rights reserved. No part of ths publication may be reproduced or reprinted without written permission. Neither the Dallas Regional Chamber nor The Real Estate Council nor D Magazine Partners is a sponsor of, or committed to, the views expressed in these articles. The publisher is not responsible for unsolicited contributions.
Allen’s Montgomery Ridge
Blackard Global Craig International CWA Management Dreien Opportunity Partners Embrey Partners KDC Malcolm Bryant Co. Montgomery Family Newell Companies Options Real Estate Parliament Group Rex Real Estate Rosewood Property Co. Suburban Land Reserve Standridge Companies Thompson Realty Trike Investors Westcott Woodhouse Allen Argyle Burleson Celina Dallas DART Duncanville Fate Flower Mound Fort Worth Frisco Garland Grapevine Irving Mansfield McKinney Melissa NCTCOG North Richland Hills Roanoke Richardson Plano
honored to serve the best
We Plan and Design. It’s Developed.
Sachse Southlake Terrell Trinity Metro Trophy Club TxDOT
DALLAS • FORT WORTH • AUSTIN • CHICAGO gatewayplanning.com | 214.529.7430 | 817.348.9500
A letter from the Dallas Regional Chamber and The Real Estate Council 2018 CHAIRMAN OF THE BOARD John Stephens Senior Executive Vice President & Chief Financial Officer AT&T
KEEPING UP WITH DFW’S GROWTH
PRESIDENT & CEO Dale Petroskey
By the time you finish this article (in roughly three minutes), a new person will be added to the Dallas Region’s population. Some are born here. Others have moved here to look for opportunities. Still others have found jobs and have relocated to begin new chapters in their professional lives. Regardless of the reason, the Dallas Region added roughly 146,000 people between 2016 and 2017, according to the U.S. Census Bureau. While our birthrate is healthy (roughly 14 per 1,000, compared to the national average of 12), much of this growth can be attributed to relocations: We continue to attract large populations from Los Angeles, New York, Minneapolis, and Chicago, according to census data. This growth has fueled Dallas’ real estate and development communities, which are busy building commercial developments and housing units across the region. The continued swell of population also supports the area’s retailers, which continue to sign leases at a healthy clip. More importantly, this population expansion reflects continued job growth: Between 2010 and 2018, the Dallas Region added more than 750,000 new jobs. Some of the job growth can be attributed to the migration of companies. More than 106 companies have moved to the Dallas Region since 2010, according to the Dallas Regional Chamber. These companies clearly are taking advantage of the area’s vast and growing labor pool, available real estate, a great and improving quality of life— and favorable tax and regulatory conditions. All these advantages mean that the Dallas Region has found itself in a pleasant, upward spiral: Skilled, diverse, motivated, and dynamic people are moving here because of jobs, and companies are relocating and expanding here to harness their energy. And, educational institutions—K-12, community colleges, and other institutions of higher education—are working together to prepare students for the region’s booming job market. Thanks to the work, planning, and leadership of many people already here, transportation hasn’t become a major headache. Roads in the
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
CHIEF OPERATING OFFICER & CHIEF FINANCIAL OFFICER DALE PETROSKEY President and Chief Executive Officer Dallas Regional Chamber
LINDA McMAHON President and Chief Executive Officer The Real Estate Council
Angela Farley COMMUNICATIONS & MARKETING, SENIOR VICE PRESIDENT
Dallas Region are the least congested among global metro markets with 5 million or more people, according to the TomTom Traffic Index. Another key to keeping the population moving has been the region’s $15 billion investment into public transit and highways over the past 10 years. The influx of people has been met by a boom in housing construction and rehabilitation. In 2017, the region saw more construction starts than any other U.S. market except for New York City, according to a report by CBRE, Weitzman, and RealPage. The Dallas Region isn’t hemmed in by an ocean or mountains, so few natural barriers hinder our development. As a result, housing has remained more affordable than most other major metro areas, according to the Cost of Living Index, which is published by the Council for Community and Economic Research. To further assure that middle-class and lower-income people can continue to afford to live in Dallas, city leaders have launched a market value analysis (MVA), a tool to help residents and policy-makers understand the elements of their local residential real estate markets. This objective, data-driven approach will be used to more precisely target investment strategies with the goal of adding thousands of rental and for-purchase housing units into neighborhoods where they’re needed. There’s such a thing as loving a place too much. Some communities are literally crushed or changed beyond recognition by a deluge of newcomers. The Dallas Region’s political and business leaders are working and planning steadily and effectively to manage the growth to assure that the area’s quality of life will steadily improve as it continues to attract people seeking brighter futures.
Darren Grubb RESEARCH AND INNOVATION, SENIOR VICE PRESIDENT Duane Dankesreiter RESEARCH AND INNOVATION, MANAGING DIRECTOR Eric Griffin
2018 CHAIRMAN Ran Holman Cushman & Wakefield CHAIRMAN-ELECT Jim Knight Stantec PRESIDENT & CEO Linda McMahon VICE PRESIDENT, LEADERSHIP & CULTURE Holland Morris CFO Carla Brandt
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 CURÉ PRESTON Publisher Dallas-Fort Worth Real Estate Review
A letter from the Publisher
As the calendar turned to 2018, new challenges and opportunities have arisen for the real estate industry in Dallas-Fort Worth. Ever resilient, the area continues to forge ahead with new construction and a steady demand for office, industrial, retail, and multifamily properties. North Texas’ cities continue to evolve and flourish as job growth continues to draw new residents to the area. Our cover story examines the changing face of Ross Avenue—the major east-west thoroughfare that transects the northern edge of downtown Dallas and is home to some of the region’s most iconic office towers. It is seeing major renovations, new construction, and a re-imagining as a pedestrianfriendly center for office workers and apartment dwellers alike. You’ll find Kerry Curry’s report beginning on Page 46. Fort Worth’s Dickies Arena is rising into the sky near the Will Rogers Memorial Center west of downtown. Writer Nicholas Sakelaris explains how this 14,000-seat multipurpose arena is coming to life thanks to innovative public-private financing involving the city, the state, the county, and the support of private investment led by billionaire Fort Worth investor Ed Bass. It will become the home of the Fort Worth Livestock Show and Rodeo, and will host major sporting events that come to Cowtown. The Anatomy of a Deal begins on Page 56. Our Roundtable discussion, starting on Page 30, features six of the best minds in design and construction. Together, they help us understand how new technology, innovation, and top talent help their companies overcome labor shortages, material costs, and ever-present budget constraints to bring some of the most important projects to fruition in North Texas. Our new Innovation feature, beginning on Page 62, examines the food industry in North Texas and highlights three companies — La Moderna, Farmer Brothers, and PilotWorks. In Placemakers, beginning on Page 28, we highlight David Spence and how his Good Space company is helping revitalize the Bishop Arts District. Boeing Global Services is one of the newer businesses that call North Texas home. CEO Stan Deal talks about why the company chose Plano for its headquarters and how North Texas fits its needs. You’ll find the View from the Top feature on Page 76. And, as always, you’ll find the biggest lease transactions in Office, Industrial, and Retail in the Scorecard section beginning on Page 23. The Crane Report details the biggest construction projects — both underway and announced — in Office, Industrial, and Multifamily. Crane Report begins on Page 15. You can find extended content on our website, www.dfwrealestatereview. com, and in our Facebook feed. We want to hear from you, so stay in touch.
Quincy Curé Preston Publisher
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
Welcome to the family. Allen is home to many businesses, and weâ€™re proud of every single one. From our diverse, well-educated population to our business-friendly economic development corporation, we give the companies that call us home the tools they need to succeed. To find out if this is the family for you, visit AllenEDC.com.
The Place to Raise Your Business
A baseline for the region’s future
LEASING ACTIVITY IN THE DALLAS CBD A burst of development and redevelopment projects have heightened the diff erences of various micro-markets in downtown Dallas. Starting with the first quarter of 2018, Cushman & Wakefield began separately tracking activity in the Arts District, West End, and CBD Core. The Arts District lifted activity in the overall CBD market, with net absorption of 245,581 square feet, off setting losses in the other micro-markets to create an overall gain of 189,050 square feet. MARKET
Q1 NET ABSORPTION
AVERAGE LEASE RATE
SOURCE: Cushman & Wakefield, Q1 2018
SUBMARKET TO WATCH: LOWER TOLLWAY The Dallas-Fort Worth office market continues to percolate. During the first three months of the year, the market gained 500,400 square feet in net absorption, according to new statistics from Cushman & Wakefield. But there was a notable jump in the overall vacancy rate, which climbed from 16.5 percent to 17.7 percent, year over year. This can largely be attributed to multiple major move-outs during the quarter, particularly in the lower tollway area of the Far North Dallas submarket, near the LBJ Freeway and Dallas North Tollway interchange. Fannie Mae vacated two buildings totaling 560,000 square feet and moved to its new campus in Plano’s Granite Park. JPMorgan
Chase vacated 351,000 square feet and relocated to its new owner-occupied tower in Legacy West. The move-outs leave an availability of 757,000 square feet at International Plaza I&II, which were just acquired by Taconic Capital Advisors of New York. The lower tollway is seeing renewed interest from tenants due to the development of multiple new amenities in the Galleria area, enhancements to LBJ Freeway, and the differential in lease rates. Average rents for Class A space in Far North Dallas stand at $28.95 per square foot. This compares to $47.24 per square foot in Uptown, $42.42 per square foot in Preston Center, and $36.76 per square foot in Legacy/Frisco.
PHOTO: IRVING-LAS COLINAS CHAMBER OF COMMERCE
LAS COLINAS TOPS LIST OF MOST-ACTIVE SUBMARKETS While the total number of office sales transactions in the past 12 months was not extremely high, the sector maintained some momentum, according to a report on Commercial Property Executive. Total sales volume surpassed $1.5 billion as several Dallas area submarkets recorded nine-figure deals, according to Commerical Property Executive. Here’s their list of the top 10 most-transacted submarkets by sales volume in the DFW metro area between February 2017 and February 2018, based on data from Yardi Matrix. 1. LAS COLINAS 2. EAST DALLAS 3. PLATINUM CORRIDOR NORTH 4. UPTOWN/OAK LAWN 5. CENTRAL EXPRESSWAY 6. NORTH DALLAS 7. WEST DALLAS 8. PLANO 9. TELECOM CORRIDOR 10. PLATINUM CORRIDOR SOUTH
$603.7 million $290 million $287.3 million $158.8 million $140.9 million $122.1 million $111.2 million $86.8 million $72 million $71.2 million
SOURCE: Commercial Property Executive
INDUSTRIAL SECTOR IN NORTH TEXAS IS FUNDAMENTALLY STRONG The fundamentals of industrial in DallasFort Worth are strong, according to CBRE Research, which says the first quarter of 2018 continued a lengthy trend of positive absorption. Vacancy fell to a paper-thin 5.8 percent, CBRE said, despite 2.3 million square feet of deliveries in Q1 — building, literally, on top of 2017’s record deliveries with 19.3 million square feet in tracked projects under construction in the Q1 pipeline. That number, while flat, is still a solid number. CBRE said part of the vacancy drop 1 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
is attributable to the removal of Vought Airplane Factory — roughly 3 million square feet of functionally obsolete industrial space — from the region’s inventory. The report said that the remainder of the drop was caused by the 3.9 million square feet of absorption in the quarter. According to the report, 45 percent of the new construction is precommitted, due in large part to large build-to-suits in South Dallas. That figure is well above historical levels, CBRE said.
19.3 MILLION SF 45% 5.8%
INDUSTRIAL PROJECTS UNDER CONSTRUCTION
OF NEW CONSTRUCTION IS PRECOMMITTED
F FOUNDATIONS RETAIL
RETAIL OUTLOOK LOOKS POSITIVE FOR 2018 The retail sector in Dallas-Fort Worth will continue to be strong in 2018, supported by growth in population, jobs, and single- and multifamily housing, according to the 2018 Shopping Center Review & Forecast from Weitzman. Weitzman expects new retail spaces to come online in phases, but that should ensure strong occupancy and keep overbuilding in
check, the company said. At the end of 2017, the retail market ended with 92.5 occupancy, which Weitzman called “an extremely healthy rate.” It was the second-highest occupancy in more than three decades. Weitzman surveys 1,417 centers in 42 submarkets. Of those, 30 submarkets are in the Dallas area, and 12 submarkets are in the Fort Worth area.
197.9 MILLION SF OCCUPANCY
4.2 MILLION SF
MULTIFAMILY IN NORTH TEXAS WILL CONTINUE TO EXPAND What’s in store for the Dallas-Fort Worth multifamily sector in 2018? According to Fannie Mae, it will continue to expand. In its Multifamily Metro Outlook: Dallas Winter 2018 report, Fannie Mae says that expansion will be driven by healthy fundamentals, strong in-migration, a diversified economy, and strong job growth. As of September 2017, the DFW metro area added more than 67,100 jobs year over year and expanded by 2.7 percent. That almost doubled
the national rate of 1.4 percent, Fannie Mae said. The lender said there are almost 29,000 units in the planning stages, with an additional 24,000 units underway in DFW. According to CoStar data cited by Fannie Mae, the prime renter group of people ages 20-34 should expand by 9 percent through 2022, and with the area’s young demographic, a healthy economy, and strong job growth, the region should continue to keep demand.
UNITS IN PLANNING STAGES
MULTIFAMILY VACANCY RATE 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 2006 Q1
Q3 2017: 5.75% 2007 Q3
SOURCE: Fannie Mae Multifamily and Economics Research
ASKING RENT GROWTH 3% DALLAS NATIONAL
2% 1% 0% -1%
Q3 2017: +0.75% ASKING RENT: $1,120
-2% -3% 2006 Q1
SOURCE: Fannie Mae Multifamily and Economics Research
DFW RANKS THIRD NATIONALLY IN APARTMENT CONSTRUCTION We see them in all areas of DallasFort Worth — new apartment communities going vertical in the North Texas sky. According to a new report by Apartment List, Dallas-Fort Worth ranks third in the nation for the value of apartment building, with developers spending $27.6 billion on new apartment construction in the area between 2000 and 2016. Which communities saw more? That would be New York City at $64.9 billion in projects and Los Angeles with $28.4 billion. “The share of new residential spending going to multifamily construction has increased in all of the 25 largest metros, in some cases drastically,” Apartment List’s Chris Salviati said in the report. “Between 2005 and 2016,
91 percent of all newly formed households were renters, and renters currently occupy 87 percent of the units in multifamily properties.” Salviati said that as more of the country’s top jobs cluster in what he called “superstar cities,” there becomes an increasing need for dense, transit-oriented development to keep those areas “affordable and inclusive.” Apartment List said that between 2000 and 2016 the share of residential construction spending for apartments in DFW grew from 8 percent to 26 percent. Richardson-based RealPage reported that in 2017, DFW was the top market for new apartments in the nation, as developers finished 28,996 new apartment units.
REAL SPENDING ON NEW MULTIFAMILY CONSTRUCTION: 2000-2016 New York, NY Los Angeles, CA Dallas, TX Houston, TX Miami, FL Atlanta, GA Chicago, IL Seattle, WA Washington, DC Phoenix, AZ Denver, CO San Francisco, CA Boston, MA Tampa, FL Charlotte, NC San Diego, CA Minneapolis, MN Philadelphia, PA Portland, OR San Antonio, TX Riverside, CA Baltimore, MD St. Louis, MO Detroit, MI Pittsburgh, PA $0
$64.9 $28.4 $27.6 $25.4 $23.1 $20.2 $19.8 $17.9 $17.2 $13.1 $12.0 $11.3 $11.2 $10.1 $9.5 $9.5 $8.6 $8.3 $8.2 $6.7 $6.5 $4.8 $3.8 $3.5 $2.0 $10B
SOURCE: Census, BLS, Apartment List
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 1 1
M MARKET MATTERS THEN AND NOW:
FEHMI KARAHAN AND THE LEGACY DEVELOPMENTS BY AMY WOLFF SORTER
When Dallas-area developer Fehmi Karahan first shopped around the subject of a mixed-use component in West Plano’s Legacy area, he was greeted with skeptics. Critics dissed his idea of an open-air retail center within striking distance of the Shops at Willow Bend (Plano) and Stonebriar Mall (Frisco), both of which were being planned. Additionally, “When I first started in 1998, my lender didn’t want to underwrite the office component,” said Karahan, who is president and CEO of Karahan Cos. Some 20 years later, things are much different. Karahan’s mixed-use Legacy West has been an undeniable success. And the open-air center — Shops at Legacy — has silenced critics; it’s been a good amenity draw for companies such as Toyota and FedEx, to name a few. Karahan shared his story and experiences with participants at The Real Estate Council’s “Market Matters: Mixed-Use Summit,” which took place in February. In an interview with Greg Kraus, Invesco Real Estate Acquisitions Group Managing Director, Karahan discussed his upbringing in Istanbul, Turkey, and how it formulated the open-air marketplace idea that would eventually be the hallmarks of both the Shops at Legacy and Legacy West. “When you live in Istanbul, you see pedestrian-friendly environments everywhere,” he told Kraus. “I thought I could create a place to help people do both—shop and eat—and put in a pedestrian-friendly, inviting environment.” People like watching people, Karahan went on to say; they don’t, for example, like to eat in empty restaurants. “Growing up in Istanbul, I thought about all of this,” he said. “I wanted to bring an alternative to the closed-in mall, with beautiful landscaped trees and outdoor cafes.” These days, there is talk about amenities when it comes to attracting and retailing talent. “Companies are attracted to Legacy because it’s an urban core,” Karahan said. “Corporations want to give their employees the best amenities.” Shops at Legacy and Legacy West have become successful case studies, but there was still a learning curve. “One big complaint was not having sufficient parking in the early going,” Karahan said. “So, in the following phases, we included much more parking.” That Legacy West is a success there is no doubt. Karahan was quick to praise capital partners (such as Invesco), corporations who took space there, and partner developers Jackson Shaw and KDC. “Legacy is one of a kind,” he said. “Not because of me, but because of the vision of the Perot family.”
1 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
A CANDID LOOK AT THE METROPLEX’S MIXED USE Mixed-use seems to be the byword in development these days, and The Real Estate Council’s “Market Matters: Mixed Use Summit” on Feb. 14 delved into issues concerning this product type. A panel of mixed-use developers, moderated by David Evemy, Senior Vice President of Strategic Planning and Research for Sarofim Realty Advisors, focused on trends, technology, and challenges inherent with such developments. MIKE ABLON, PARTNER, PEGASUS ABLON ON TECHNOLOGY IN MIXED-USE: Ten years ago, in the Design District, we used social media to blog, and 50 percent of our leasing was conducted online; tenants could pay their rent in the middle of the night. Today, we look at that and go, “duh.” Ten years ago, that was pushing the limit. We’re evolving so that every light switch has a chip in it, and you can talk to the refrigerator. We continue to see the shift toward integration of technology. Not just hardware, but how it affects everything we do with multifamily. JONATHAN BRINSDEN, CEO, MIDWAY ON “THE NEW EXPERIENCE:” The new experience is insanely local; developers aren’t cranking out the same apartment building and dropping it in different cities. It takes a level of understanding and patience to execute that experience well. One of the things we’re looking at is that real estate is starting to look like hospitality. People want user-friendly hospitality, and we’re asking how we can drive hospitality through all real estate types. KRISTIAN TELEKI, SENIOR VICE PRESIDENT, MATTHEWS SOUTHWEST ON CHALLENGES IN REPURPOSING OLDER BUILDINGS INTO MIXED USE: There is no magic to the process. It all matters how good your due diligence is when you’re buying the asset, and ideally surrounding yourself with great partners. It’s as much of an art as it is a science: It involves managing expectations with your team, corralling risk, and understanding capital partners. Involve the city with the process and have as many good team members as you can on many fronts. MARK COVER, SENIOR MANAGING DIRECTOR AND CEO FOR SOUTHWEST USA AND MEXICO, HINES INTERESTS LP ON CHALLENGES IN DEVELOPING MIXED USE: Mixed use is fantastic for the second owner. It’s tough on the developer unless they have the staying power to stick with it for a long time. There’s no getting around that ... it’s not about the cheapest bottom line for the company. Everything needs to serve the occupant. I challenge our people to, say, pick a 42-year-old divorce attorney with two little kids, and ask, ‘How can I simplify his life with real estate?’ If we can figure that out, we end up with a great piece of real estate. JOHN ZOGG, MANAGING DIRECTOR OF LEASING FOR CRESCENT REAL ESTATE EQUITIES LLC ON THE CYCLE: This market feels a little different. We have to watch jobs, but capital is disciplined. For the first time, there really is disciplined capital, and developers aren’t going crazy. Toyota came to Legacy, and their advertisers and suppliers came to the Crescent. Those are big deals. That engine is still rolling well. As long as we continue, Dallas will be in really good shape.
B BUILDING TOMORROW TOGETHER
L ICHAE ION: M STRAT O ILLU
LEARNING FROM THE AMAZON BID
BY MIKE ROSA SENIOR VICE PRESIDENT, ECONOMIC DEVELOPMENT, DALLAS REGIONAL CHAMBER
I’ve learned a lot about DFW, like anyone with my job would, in my many years of responding to corporate recruitment opportunities, compiling site and community information to satisfy presentations or proposals, and hosting and touring with corporate visitors. Just being out and about all over DFW in the company of expert community economic developers has been a tremendous education. It’s easy, sometimes, for me to fall into the trap of feeling I know just about everything there is to know about the region, thinking I’m ready for any question. That’s not true, of course. One of the things I enjoyed most about building the DFW Amazon response was the rediscovery of the things that
make our region a great place for companies and talent. Only one of the seven Harry Potter books has more pages than the 654 pages of text, charts, maps, tables, images, and exhibits we prepared for Amazon. I’m reading back through it all with our team, so we’re tuned better than ever to present this region and to respond to corporate recruitment opportunities, particularly on location issues. Location is not only important to Amazon, but it also is trending critical today for all corporate moves, like mobility, talent attraction, diversity, and sustainability. I could list a hundred things I learned or was reminded about while preparing the Amazon bid. I’ve listed just a few of my
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 3
B BUILDING TOMORROW TOGETHER favorites that found a home somewhere in all those pages of data, messages, and proof points. They are in categories that will be increasingly important to our future efforts to recruit companies, jobs, and talent here: ■ Dallas Fort Worth International Airport is the first in North America to achieve carbon neutral status; ■ TEXRail, the new 27-mile commuter rail line from downtown Fort Worth to Dallas Fort Worth International Airport, will open late this year with four stops in Fort Worth, two in North Richland Hills, and one in Grapevine and Terminal B at the airport. That terminal is a short walk from the existing DART station at Terminal A; ■ Facebook’s Fort Worth mega-campus is completely powered by wind energy generated by a wind farm about 100 miles away; ■ The University of North Texas is home to the Discovery Park Zero Energy Lab Building, which combines wind, geothermal, solar, and radiant heat energy, and allows research on efficient building materials; ■ There are 61 coworking spaces, 36 accelerators and incubators, and over 20 corporate innovation centers in our region; ■ Arlington is home to EasyMile, one of the nation’s first autonomous municipal public shuttles, which connect Six Flags Over Texas, AT&T Stadium, and Globe Life Park; ■ More than 107,000 K-12 students in Dallas-Fort Worth are enrolled in computer science programs; ■ 55 high schools from 23 school
districts represent our region on U.S. News & World Report’s “America’s Best High Schools” list; ■ Plano West has 77 of the region’s 592 SAT National Merit semifinalists in 2018; ■ Girls Who Code is an initiative for girls ages 13-17 that offers specific learning opportunities for girls to develop computer skills, have role models and peers, and pursue careers in computer science; ■ About 5,500 kids and family members are served each year by the Momentous Institute, founded and supported — as most of us know — by the Salesmanship Club of Dallas, and all the great people wearing the red pants at the AT&T Byron Nelson golf tournament; ■ Last year, the $39 million given by DFW residents on North Texas Giving Day exceeded the total given in any other state in the U.S.; ■ Both Dallas and Fort Worth achieve a perfect score of 100 on the Human Rights Campaign Municipal Equality Index, which is frequently cited as one measure of a city’s inclusion of LGBTQ residents; ■ The largest fundraising dinner for the LGBTQ community in the U.S., the Black Tie Dinner, is here. Over its history, the Black Tie Dinner has raised and distributed over $21 million to 20 organizations in the region, like churches, clinics, small businesses, and other nonprofits; and ■ Café Momentum, in downtown Dallas, employs and provides restaurant management and hospitality training for young people leaving juvenile detention. Since opening in 2015, Café Momentum has helped almost 400 at-risk youth. We can’t compile an effective regional bid for Amazon — or for other major opportunities that have landed here, or that will consider the Dallas Region in the future — without great partners. Our team of all-stars includes the Fort Worth Chamber of Commerce, The State of Texas, the economic development leaders and elected officials representing our regional cities, the real estate and development community, our school districts, colleges and universities, and all the public and private-sector CEOs from organizations and companies here. It’s a team sport, and we’ve got the best.
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 | email@example.com
BUILDING TOMORROW TOGETHER The Dallas Regional Chamber’s economic development program, Building Tomorrow Together, provides organizations in Dallas-Fort Worth with an accelerated investment opportunity that helps advance our region’s success. This additional investment made by more than 130 organizations, in addition to annual chamber membership dues, allows organizations to increase their support of our efforts to further economic prosperity throughout the region. This initiative funds efforts related to direct contact with corporations and location consultants examining the DFW region.
1 4 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
TROPHY CLUB TOWN CENTER
THE CRANE REPORT
The demand for office space in Dallas-Fort Worth continues to be strong with many firms looking for a “work, live, play” environment. Lenders have tightened requirements for speculative development, and that could have an impact on preleasing for many of the new developments. In each issue of the Dallas-Fort Worth Real Estate Review, we showcase projects that are underway or planned in the Crane Report. BY LANCE MURRAY
ON-THE-GRO U N D I N S I G H TS
Vice President, JLL Project and Development Services
“Though construction costs are high, they haven’t negatively impacted development. As the cost of materials increases, it may become more of a factor. Companies will weigh increases versus competition for top talent— a price they’re willing to pay now, but for how long?”
President, Gateway Planning
“We are working in the real estate industry to dispel myths about multifamily as NIMBY opposition strengthens. For example, integrated multifamily in mixed use helps with traffic as some people can walk to work. And so, office wants to be in walkable neighborhoods with well-connected multifamily.”
Executive Managing Director, Cushman & Wakefield
Senior Vice President and Development Partner, JPI
“It all comes down to the basics: supply and demand. The lack of welllocated, development-ready land, along with rising construction costs and land prices, is increasing the rates needed to justify new developments. On the other side, with the record number of people moving to North Texas, the demand for industrial product continues to be near all-time highs.”
“Last year, more than 146,000 people moved to Dallas-Fort Worth making it one of the fastest-growing metropolitan areas in the country. Additionally, we foresee job growth continuing to be a driving force behind multifamily construction for years to come as corporations continue to identify DFW as a place they want to do business.”
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
THE CRANE REPORT:
● ANNOUNCED ● UNDER CONSTRUCTION
CYPRESS OFFICE 1403 E MCKINNEY ST
OAKMONT OFFICE CONDOS
ANNOUNCED + UNDER CONSTRUCTION
OLD TOWN BLVD NORTH
4961 LONG PRAIRIE RD
SIZE: 374,000 square feet DEVELOPER: Hillwood Urban DETAILS: Plans have been filed with the city for a 15-story office and retail high-rise that would be built adjacent to DART’s Victory Park rail station in Dallas. The project would have 374,000 square feet of office space and 13,000 square feet of retail.
404 KELLER PKWY
801 ENTERPRISE DR MAIN STREET CO
BEAR CREEK OFFICE PARK
SOUTHLAKE COMMONS 1750 KELLER PKWY
SOUTHLAKE TECH CENTER THE PONDS
HERITAGE OFFICE PARK
54 FOSSIL CREEK STATION
7105 GOLF CLUB DR PAD SITE
5851 NORTH FWY
7114 MID CITIES BLVD
4301 FOSSIL CREEK BLVD
ADVENT PARC 6513 PRECINCT LINE RD
AIRPOR HQ CE
2803 GREEN OAKS BLVD
THE OFFICES @ HAMPDEN WOODS
FAIRWAY 9701-9703 CENTRE WHITE SETTLEMENT RD OFFICE
464 BAILEY AVE
3736 CAMP BOWIE BLVD
FROST TOWER FORT WORTH OVERTON TOWER III
2201 AVENUE J
1200 6TH AVE CLEARFORK RIVER CAMPUS 4015 W I-20
WATERSIDE BLDG L 111 LARSON LN
THE GARDENS AT TOWN CENTER
MATLOCK PROFESSIONAL OFFICE PARK
SUMMER CREEK STATION GARDEN HULEN VILLAGE OFFICE
CANNON PROFESSIONAL PLAZA THE ATRIUM
8010 PARK LANE
1 6 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
THE AP LAS COLINAS CROS
360 SE JOHN JONES DR
SIZE: 340,000 square feet DEVELOPER: Northwood Investors DETAILS: The 11-story office tower in Dallas will sit on the north side of The Shops at Park Lane and will include groundfloor retail space that opens to a community park. Gensler is the project’s architect, and a general contractor has yet to be named. Construction is expected to begin after a specified amount of space is leased.
PINNACLE POINT GRAPEVINE STATION
CARILLON COURT OFFICE
DATA SOURCE: REAL ESTATE REVIEW RESEARCH/ DALLAS REGIONAL CHAMBER / VARIOUS REAL ESTATE FIRMS
PRAIRIE COMMONS 870 LONG PRAIRIE RD LAKESIDE CROSSING
TROPHY CLUB TOWN CENTER
SIZE: 200,000 square feet DEVELOPERS: Cawley Partners LOCATION: Plano DETAILS: The planned five-story office project will be on Headquarters Drive east of the Dallas North Tollway in the booming Legacy business park. The building is scheduled to open in early 2020, and is designed by architect BOKA Powell. It will include a fitness center, cafe, conference facilities, and an outdoor lounge area.
MERCEDES-BENZ FINANCIAL SERVICES USA
SIZE: 200,000 square feet DEVELOPER: Hillwood DETAILS: Dallas-based BOKA Powell is the architect for this new home for the financial services center for the German automaker that will keep the company in Fort Worth’s AllianceTexas master-planned, mixed use development.
VICTORY AT FRONTIER BLDG 4 WHISPERING FARMS PROSPER OFFICE PARK
GARDENIA VILLAGE OFFICE PARK
NORTH RICHLAND HILLS
SUMMIT PARK II
1402 CUSTER #501
LAKE FOREST PLAZA TOWER AT FRISCO SQUARE
FRISCO SQUARE STONEBROOK BUSINESS PARK
SOUTHERN HILLS OFFICE PARK
ONE FOUNTAIN COURT
LAKES OF TENNYSON PROFESSIONAL UNIT 5030 WINDHAVEN PLACE ONE
PARKER ROAD THE PROFESSIONAL REALM OFFICES THE OFFICES CROWN CENTRE AT WILLOW BEND 4101 HIGHWAY 121 BYPASS BLVD INTERNATIONAL HERITAGE BUSINESS PARK VISTA RIDGE CREEKSIDE ROCKBROOK OFFICE NORTH DALLAS MEDICAL CENTER II THE GRID
HALL PARK 17 LEGACY DISTRICT
ECONOMIC DEVELOPMENT DEPARTMENT
5001 COLLIN MCKINNEY PKWY
THE FORUM AT WADE PARK
WATTERS JUNCTION ONE BETHANY AT WATTERS CREEK WATTERS CREEK OFFICE PARK III WATTERS CREEK AT MONTGOMERY FARM LEGACY CENTRAL 5
PARK TOWER AT DALLAS MIDTOWN - OFFICE
201 OLYMPUS BLVD THREE HICKORY CENTRE ROYAL TOWER PHASE I
SE OF FM 544 & BRAND RD
MURPHY MEDICAL OFFICES
400 WHITE HALL ST
FORT WORTH ROCKWALL COMMONS PHASE II SPRINGFIELD PROFESSIONAL CONDOS BAYSIDE NWC OF DALROCK RD AND I-30
4401 W LOVERS LN
RIDGEMARK OFFICE BUILDING
8010 PARK LN
BAYSIDE OFFICE TOWER
FOUR ENERGY SQUARE
4437 BUENA VISTA ST
ROLEX TWO VICTORY PARK THE UNION DAVIS STREET MARKET OFFICE
PARK CITIES PLAZA
CAMPBELL CROSSING OFFICE PARK
TOWER AT PRESTON HOLLOW VILLAGE
FOUR GALLERIA TOWER FOUR LINCOLN CENTRE
PEX AT SSING
399 MELROSE DR
9797 ROMBAUER RD
RT 161 ENTER
VICTORY AT CRESCENT STONEBRIDGE PARC 6579 VIRGINIA PKWY
COBB FARM WEST OFFICE PARK ELDORADO OFFICE PARK AVON @ LEGACY COMMERCE PARK
1840 LAKE FOREST BLVD
3001 TURTLE CREEK BLVD TWO ARTS PLAZA 1900 N PEARL ST EPIC
SOLA ON LAMAR
SUNNYVALE PROFESSIONAL PLAZA
324 W JEFFERSON BLVD
INDEPENDENT BANK GROUP
SIZE: 165,000 square feet LOCATION: McKinney DEVELOPER: KDC DETAILS: The new corporate headquarters for Independent Bank Group is at the McKinney Corporate Center Craig Ranch and will encompass six stories of space on a 10.4-acre parcel at State Highway 121 and Grand Ranch Parkway. KDC will seek LEED Silver certification. SmithGroupJJR is the architect, and Rogers-Oâ€™Brien Construction Co. LTD is general contractor.
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
US 380 BUSINESS PARK BLDG 5 OAK HILL BUSINESS PARK
THE CRANE REPORT:
WESTGATE BUSINESS PARK
5075 TIM DONALD RD
ANNOUNCED + UNDER CONSTRUCTION
GATEWAY BUSINESS PARK
LEWI NW OF I-35W AND FM 1171 BLDG 8 SPEEDWAY DISTRIBUTION CENTER BLDG C
ANNOUNCED PROJECTS CARTER INDUSTRIAL PARK
SIZE: 300,000 square feet DEVELOPER: Hunt Southwest Real Estate Development DETAILS: The Dallas-based developer will begin work on this spec 300,000-squarefoot cold storage facility in the Carter Industrial Park at 8200 Will Rogers Blvd., in southern Fort Worth at Interstates 35W and 20.
LIBERTY PARK GSW NORTH
SIZE: 172,120 square feet DEVELOPER: Liberty Property Trust LOCATION: Irving DETAILS: The building on Valley View Lane at Frye Road near Dallas Fort Worth International Airport is the third phase of the company’s business park. The latest spec building likely will open in December.
TRAMMELL CROW @ 35-EAGLE BLDG J
LAKESIDE RANCH BLDG 1
3 12500 WILLOW SPRINGS RD
LOGIS CENTE 1005 CHISOLM TRL
12801 HARMON RD
PHASE I - BLDG I @ COLLEYVILLE BLVD 5761 PARK VISTA CIR
DATA SOURCE: REAL ESTATE REVIEW RESEARCH/ DALLAS REGIONAL CHAMBER / VARIOUS REAL ESTATE FIRMS
● ANNOUNCED ● UNDER CONSTRUCTION
PARK 820 BLDG 2
1815 RELIANCE PKWY
PARC NORTH BLDG 5
PARKER PRODUCTION FACILITY
4000 STATE 157 HWY BLDG 4
1460 AVENUE S
1009 NE 11TH ST
360 GLOBAL LOGISTICS PARK LAND TRACT A
901 S CHERRY LN 2809 SHAMROCK AVE
2317 W ARKANSAS LN
PARK 20/36 BLDG V 1301 MARKUM RANCH RD
SOUTH CENTRAL DISTRIBUTION CENTER II
8600 WILL ROGERS BLVD
KENNEDALE PKWY F
MAJESTIC FORT WORTH SOUTH BLDG 5
1102 ENTERPRISE PL
350 GARDEN ACRES DR BLDG B
619 S WISTERIA ST
SW OF E FM 917 & LONGHORN DR
ALLIANCE NORTHPORT 3
SIZE: 1.03 million square feet DEVELOPER: Hillwood LOCATION: Northlake DETAILS: Hillwood has announced construction of a new 1.03-millionsquare-foot speculative distribution hub at the Alliance Northport development, a 260-acre site in Denton County.
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
PROSPER BUSINESS PARK BLDG 6
2211-2241 REDBUD BLVD BLDG 2 FRISCO PARK 25 BLDG D
COBB BUSINESS PARK
THE TECH CENTER ON GREENVILLE BLDG 3
ISVILLE CORPORATE CENTER BDG B
NW OF HILLSIDE DR & N MILL ST
CREEKVIEW 121 BLDG 4
INTELLIGENT EPITAXY TECHNOLOGY, INC
121 RIVERVIEW CROSSING
PLANO TECH CENTER 8
1401 MACARTHUR DR
2910 GUILDER DR
PROLOGIS PARK 121 BLDG 7 MAIN STREET COPPELL S3
STICS ER VI
PROLOGIS VALWOOD CORPORATE CENTER BLDG 4 COTTON RIDGE BUSINESS PARK
ROYAL TECH 18
3000 FOREST LN 2040 KRISTY LN
PARC 114 BLDG 9
JUPITER MILLER BUSINESS CENTER 2
4.93 ACRES - N STEMMONS FWY
DFW/161 DISTRIBUTION CENTER 300
9749 CLIFFORD VALLEY VIEW DFW AIRPORT
LIBERTY PARK GSW NORTH BLDG 1 PARC SOUTHWEST
FEDEX PROLOGIS/ BUCKNER LAND
2909 W OAKDALE RD
2300 SHORECREST DR
3325 INOVATIVE WAY BLDG 1
GRAND LAKES III DCT MIDPOINT DISTRIBUTION CENTER
PARKWAY LOGISTICS LIBERTY PARK MOUNTAIN CREEK
ASHLEY FURNITURE 5858 W KIEST BLVD
MOUNTAIN CREEK BUSINESS PARK BLDG 8 FIRST MOUNTAIN CREEK DISTRIBUTION CENTER
PARK 20/45 BLDG 1 PLANNED POINTSOUTH LOGISTICS & COMMERCE CENTRE 1 1701 S I-45
STONERIDGE 14 WAYFAIR
SUNRIDGE BUSINESS PARK BLDG 1
DISCOUNT TIRE SUNRIDGE BUSINESS PARK BLDG 2
DUKE INTERMODAL III DALPORT TRADE CENTER 3
DFW INLAND PORT I
NW OF E OVILLA RD & N CENTRAL BLVD
UNDER CONSTRUCTION 4
INTERNATIONAL LOGISTICS CENTER
SIZE: 646,796 square feet DEVELOPER: Cabot Properties Inc. and Stream Realty Partners LOCATION: South side of Dallas Fort Worth International Airport DETAILS: The three-building industrial center is located on 40 acres near the airport and includes structures of 118,634 square feet, 203,476 square feet, and 324,686 square.
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:
WOODLANDS APARTMENTS I 404 INDUSTRIAL STREET
MULTIFAMILY ANNOUNCED + UNDER CONSTRUCTION
HICKORY CREEK RANCH
DISTRICT OF HIGHLAND VILLAGE
ANNOUNCED DEVELOPMENTS 1
HILLSTONE RIVER WALK
● ANNOUNCED ● UNDER CONSTRUCTION
ELAN FLOWER MOUND
SIZE: 585 units DEVELOPERS: Direct Development LOCATION: Flower Mound DETAILS: The 35-acre mixed-use development in the Lakeside Business District will feature 585 multifamily units by Trammell Crow Residential, 215,000 square feet of Class-A office space, and a 100room Tru by Hilton hotel. Groundbreaking is expected in the fall of 2018.
1 5 AURA FOUR44
JUNCTION CROSSING SAGEWOOD VILLAGE
THE STANDARD AT BOSWELL MARKETPLACE
DOLCE LIVING HOME TOWN II
HILLSTO CENTREP THE VIEW OF FORT WORTH I ELAN AT RIVER DISTRICT
THE RIVER EAST I
ELAN AT CROCKETT ROW
JEFFERSON ALPHA WEST
SIZE: 409 units DEVELOPER: JPI LOCATION: Irving DETAILS: The four-story luxury apartment community will add 409 homes to a larger mixed-use development at Alpha and Inwood that also will feature a 155-room Aloft Hotel, 296,000 square feet of high-rise office space, and 22,000 square feet of retail space.
MAG & MAY
DATA SOURCE: REALPAGE
ARLINGTON COMMONS PH I (THE ROOSEVELT)
MAIN STREET LOFTS I
AUBERGE OF BURLESON
SIZE: 390 units DEVELOPER: Lang Partners LOCATION: Fort Worth DETAILS: The new apartment complex will be on the Near Southside of Fort Worth in the hospital district, encompassing 241,000 square feet of space. Construction of the $30 million project is set to begin this spring at 1001 West Rosedale St.
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
TROPHY CLUB TOWN CENTER
SIZE: 250 units DEVELOPER: Beck Ventures LOCATION: Trophy Club DETAILS: The 250 luxury apartments will be on the north end of the Trophy Club Town Center development that will have 39 town homes, a 137-room Aloft Hotel, and 50,000 square feet of retail and restaurant space. The development is just north of State Highway 114 and east of Trophy Club Drive.
MANSFIELD THE GREEN
SOVEREIGN PRESTON RD ASCEND AT WESTRIDGE
DAVIS AT THE SQUARE
WESTRIDGE VILLAS THE VILLAGE AT LAKEFRONT I
PARKVIEW APARTMENTS ARTISTRY AT PCR
ARCOS CRAIG RANCH DOMAIN AT THE GATE VERUS I VERA WATTERS CREEK THE HUNTINGTON
LVL29 RAVELLO STONEBRIAR
Situated for business.
LUXE ALLEN DOLCE LIVING TWIN CREEKS PH I MONTGOMERY RIDGE
THE RESIDENCES AT LEGACY
HEBRON 121 STATION IV
JEFFERSON WOODS I
TRINITY MILLS PLACE
JEFFERSON GALATYN PARK
BRICKYARD AT MERCER PARK II
ALTA LUNA I
WATERWALK LAS COLINAS
THE DOMAIN AT FIREWHEEL
2 THE BRISCOE
TERRA LAGO VILLAGE OF ROWLETT
THE NASH LOOKOUT AT LAKE HIGHLANDS TOWN CENTER
JEFFERSON LAS CO
ONE AT PORT
TOWERS AT SPRING CREEK
THE PARC AT WYLIE
ALEXAN MAPLE ALTA STRAND THE KATY
THE ASH AT THE BRANCH THE KATY MAGNOLIA ON MOSER
MODERA HALL STREET
EPIC TAYLOR LOFTS MAGNOLIA ON ZANG BISHOP HIGHLINE
THE ENCLAVE AT MIRA LAGOS II
Try our location on for size. Thirty minutes north of Dallas and conveniently located at the crossroads of three major highways, McKinney is ready for business. Direct access to domestic and world markets, the newly widened U.S. 75 corridor, McKinney National Airport and a nationally acclaimed quality of life are just a few reasons why companies ямБnd success in McKinney. Discover how McKinney can be the gateway to your business future.
D ON N II
UNDER CONSTRUCTION 5
Start Your Property & Land Search
SIZE: 371 units DEVELOPER: JPI LOCATION: Grapevine DETAILS: Ground has been broken on the luxury multifamily development that will have 371 units at State Highway 26 and Bass Pro Drive in Grapevine.
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 1
OFFICE SPACE AVAILABLE RANGING FROM 1,800 RSF TO 240,000 RSF. #DestinationTCC
FOR MORE INFORMATION, CONTACT: Ramsey March, Sara Terry, or Scott Sowanick at 214.267.0400 TRAMMELLCROWCENTER.COM
THE LOBBY OF SAINT ANN COURT, WHERE BOSTON CONSULTING GROUP HAS JUST RENEWED ITS NEARLY 70,000 SF LEASE.
The year got off to a strong start with not only many new leases from first-to-market tenants, but renewals and expansions that prove Dallas-Fort Worth is still a place where office, industrial, and retail tenants want to stay. Here are the top five largest leases—new or renewal—so far in 2018. Data was provided by individual firms. BY JULIA BUNCH
ON-THE-GRO U N D I N S I G H TS
“Office rents are at historic highs in select submarkets— Uptown, Legacy/Frisco, and Preston Center—for diff erent reasons. All three off er highly sought-after walkability. Uptown provides access to the all-important millennial workforce, rooftops in Legacy are more aff ordable, and Preston Center is near decision-maker homes.”
“[Tenants are looking for] a work environment that looks, feels and reflects ‘success’ and will enhance the brand—also marrying with a long list of walkable amenities. Ten years from now, all tenants want to pass the ‘W.I’. test: ‘What Idiot approved this?’”
“There are two factors front of mind for all industrial tenants — access to labor and transportation. Tenants want to be where they can attract and retain talent, and with transportation costs increasing 10-15 percent, companies want to be close as possible to their customer base.”
“[Good retail design] magnifies the appeal, notoriety, and interaction with its user. It regulates the desirability, adaptability, and efficiency for converting a space. It’s not just the aesthetic allure of look and feel. It’s the invisible design — the function that reinforces how everything works and operates.”
Senior Director Cushman & Wakefield
Associate, Tenant Advisory Services, Transwestern
Senior Vice President, JLL Industrial
Co-Founder + Design Principal Made Design
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
OFFICE LEASES 5
2 4 0 - 5,760 SF 5,761 18,804 SF 18,805 54,646 SF 54,647 152,086 SF C
152,087 327,183 SF
DATA SOURCE: REAL ESTATE REVIEW RESEARCH/ DALLAS REGIONAL CHAMBER / VARIOUS REAL ESTATE FIRMS
LARGEST OFFICE LEASES
NEW YORK LIFE INSURANCE
LOCATION: 4849 Greenville Ave. in Dallas SIZE: 107,267 square feet LEASING AGENT: Jeff Eckert with JLL
DETAILS: New York Life renewed its lease in the three-building Energy Square near Central Expressway amidst a major repositioning of the office campus that will bring more outdoor amenities.
GUIDESTONE FINANCIAL RESOURCES
SOURCECORP BPS INC.
LOCATION: 3750 W. Royal Lane in Irving SIZE: 99,451 square feet TENANT REP: Dan Woldert with Swearingen Realty Group
2 4 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
LEASING AGENTS: Blake Kendrick and Sarah Ozanne with Stream Realty Partners DETAILS: Sourcecorp will move into Parc Royalâ€™s Building 5, which is owned by Jackson Shaw.
BOSTON CONSULTING GROUP
LOCATION: 2501 N. Harwood St. in Dallas SIZE: 69,624 square feet TENANT REPS: Phil Puckett, Harlan Davis, and Neal Puckett with CBRE LEASING AGENTS: Kelly Whaley and Hannah Waidmann with Harwood International DETAILS: BCG will stay at Saint Ann Court after renewing its 2008 lease in March. Its long-term lease spans three floors.
LOCATION: 615 Westport Pky. in Grapevine SIZE: 66,052 square foot lease TENANT REP: Ryan Boozer with Stream Realty Partners LEASING AGENT: Steve Koldyke with CBRE DETAILS: Hanes renewed its lease at International Airport Center, which is owned by a company by the same name.
IMAGES COURTESY OF THE COMPANIES.
LOCATION: 5005 LBJ Fwy. in Dallas SIZE: 113,585 square feet TENANT REPS: JLL LEASING AGENTS: J.J. Leonard, Sara Terry, and Chase Lopez with Stream Realty Partners DETAILS: GuideStone will relocate to Pinnacle Tower in late summer after signing its lease in the early days of 2018.
121 24,581 SF 24,582 86,845 SF
86,846 204,556 SF 204,557 492,322 SF 492,323 1,041,600 SF
DATA SOURCE: REAL ESTATE REVIEW RESEARCH/ DALLAS REGIONAL CHAMBER / VARIOUS REAL ESTATE FIRMS
LARGEST INDUSTRIAL LEASES
1 TELLWORKS COMMUNICATIONS
IMAGES COURTESY OF THE COMPANIES.
C&S WHOLESALE GROCERS
LOCATION: 777 Freeport Pwy. in Coppell SIZE: 445,695 square feet TENANT REP: Bob Gibson with CBRE LEASING AGENTS: Ken Wesson and Mark Graybill with Lee & Associates Dallas-Fort Worth
LOCATION: 4101 Research Blvd. in Arlington SIZE: 722,733 square feet TENANT REP: Ryan Keiser with CBRE LEASING AGENTS: John Brewer and Joe Rudd with Transwestern DETAILS: Tellworks will fully occupy Building 1 at Park 20/360 in Arlington, which is owned by Ridge Development and Invesco Real Estate.
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
DETAILS: The largest wholesale grocery supply company in the U.S. signed an expansion and extension with landlord GLP in the early days of 2018.
5 TONY CREME
LOCATION: 2112 Eagle Pkwy. in Fort Worth SIZE: 443,945 square feet TENANT REP: Cushman & Wakefield DETAILS: Rolls-Royce will operate a jet engine testbed at the former Texas Aero Engine Services facility owned by the city of Fort Worth.
LOCATION: 13601 Independence Pkwy. in Fort Worth SIZE: 409,914 square feet TENANT REPS: Dave Anderson and Krista Raymond with CBRE LEASING AGENT: Tony Creme at Hillwood DETAILS: The logistics provider will continue to be neighbors with FedEx, Walmart, and Nestle in the Alliance submarket with its first quarter renewal.
PROFESSIONAL PACKAGING SERVICES LOCATION: 1400 N. Hwy. 360 in Grand Prairie SIZE: 349,421 square feet TENANT REP: Stream Realty Partners LEASING AGENT: CBRE DETAILS: Grand Prairiebased Pro Pac, which specializes in designing and installing integrated packaging lines, will open its second area location about 5 miles from its headquarters.
S SCORECARD 1
2 4 3
04,587 SF 4,588 14,022 SF 14,023 32,637 SF 32,638 76,429 SF 76,430 152,946 SF
DATA SOURCE: REAL ESTATE REVIEW RESEARCH/ DALLAS REGIONAL CHAMBER / VARIOUS REAL ESTATE FIRMS
IMAGES COURTESY OF THE COMPANIES.
LARGEST RETAIL LEASES
LOCATION: 4268 Legacy Drive in Frisco SIZE: 62,000 square feet LEASING AGENT: Frederick Kippes at Regency Centers DETAILS: The grocery chain opened its second Frisco location near Lebanon Road and Legacy Drive in January.
GLOWZONE FAMILY CHALLENGE ARENA
LOCATION: 2416 S. Stemmons Fwy. in Lewisville SIZE: 46,039 square feet TENANT REP: Colliers International
LEASING AGENT: Weitzman DETAILS: In its first North Texas location, GlowZone will join Academy, At Home, Conn’s, and Spec’s at Lakepointe Crossing.
LOCATION: 8380 Davis Blvd. in North Richland Hills SIZE: 42,000 square feet DETAILS: The dine-in movie theater will have eight screens, more than 925 reclining chairs, and a fullservice restaurant.
LOCATION: 110 W. Campbell Road in Richardson SIZE: 30,000 square feet LEASING AGENTS: Jared Aubrey and Michael Austry with CBRE DETAILS: The Texas-based furniture store has been opening new locations all over the region, including in North Richland Hills and Arlington.
LOCATION: Glade Parks Town Center SIZE: 25,000 square feet LEASING AGENTS: Steve Ewing and Josh Flores with EDGE Realty Partners DETAILS: After Euless voters approved liquor sales in November, Total Wine opened its first store in the city at Glade Parks Town Center.
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 2 7
Good Space’s David Spence builds Bishop Arts’ future by preserving its past BY LANCE MURRAY
2 8 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
PHOTO: LANCE MURRAY
THE BISHOP ARTS BUILDING IS HOME TO THE GOOD SPACE OFFICE, AS WELL AS APARTMENTS, AND RETAIL.
In the heart of North Oak Cliff, the Bishop Arts District is a unique mix of the old made new again, and the new taking on the feel of a nostalgic small town. It’s a community filled with renovated buildings serving as homes to a new generation—a place where entrepreneurs operate restaurants, shops, and specialty stores. There are more than 60 independently owned ventures including theaters, a record shop, antique stores, coffee shops, clothing boutiques, a wedding venue, and art galleries, to name a few. The home of Dallas’ busiest trolley stop in the 1930s, Bishop Arts is returning to the vibrant nature it had in bygone times. It’s a transformation that has been led by visionary developers and community advocates — people like David Spence of Good Space. In 1995, Spence brought his company Good Space to Bishop Arts, and he has helped lead the neighborhood’s resurgence with thoughtful development that pays homage to the community’s history, independence, and potential. “It’s a wonderful neighborhood,” Spence says. Spence, a Waco native, married his wife, Cindy, right out of college, and they made their way to Dallas after serving as Peace Corps volunteers in Guatemala and a return stateside to the University of North Carolina. There, Cindy studied public health, and Spence pursued his Master’s of business administration and a law degree. “We had notions of getting a master’s and going back overseas in development,” Spence says. “Cindy and I then decided, ‘let’s save the world stateside,’ and I got a job in Durham, North Carolina at a place called the Center for Community Self Help [now called Self-Help], which was a very innovative nonprofit.” There, he was mentored by community development strategist Martin Eakes, who later won a MacArthur Genius Award. “I was using all of my MBA tools for the Lord’s work, and I thought, ‘cool,’” Spence says. Eakes urged him to combine his MBA with his law degree. Spence then worked for an affordable housing
PHOTO: LANCE MURRAY
nonprofit in Raleigh, North Carolina, but in his last year of graduate school, he became homesick for Texas and asked Cindy if they could move back to the Lone Star State. “She grew up in Houston, and, of course, she said ‘anyplace but Dallas,’” Spence says. But the only job offer was in Dallas at the Southern Dallas Development Corp. Spence assured the nonprofit’s management that the couple would live in southern Dallas — and that’s when he discovered Oak Cliff. That job didn’t work out, Spence says. Neither did another nonprofit job. Spence decided he needed to be his own boss, and he put together a business plan that would have made Good Space a nonprofit. He talked with the late Bennett Miller, the first person to develop in The Cedars and a pioneer in Dallas loft living. Miller advised him to make Good Space a for-profit firm that would bring new
life to distressed buildings, telling Spence, “If you think these buildings are worth saving, then put your own money in it.” About that time, Spence says his grandmother died. “My share of the proceeds from the family farm was $85,000,” Spence says. It was the stake he needed to found Good Space. Following Miller’s advice — a for-profit company based on a nonprofit model — has served Spence well. “In that respect, Good Space has been a success,” Spence said. First, he restored three 1920s-era apartment buildings, and in 2000, Spence opened his first commercial space at the Bishop Arts Building at 408 W. Eighth St., the largest renovation yet in the neighborhood and the home of the Good Space offices. Besides his offices, the building includes apartments upstairs, as well as Lucia restaurant and Dude Sweet Chocolate on the ground floor. “I kind of like retail, office, and apartment all in one building,” Spence said. Next, Good Space turned its attention to industrial and automotive buildings on West Davis Street, the onetime brick-paved section of an early 20th-century transcontinental highway — U.S. 80, which connected downtown Dallas to downtown Fort Worth as part of a 2,900-mile roadway commissioned in 1926 that once stretched from the Atlantic Ocean to the Pacific. In 2003, Route 80 Studios and the Bishop Arts Co-op opened as flexible office space for newcomer design firms, as well as affordable studio space for artists. Good Space rehabilitated a 1926 residential hotel in 2004, to serve as Bishop Gate Apartments, and in 2006 and 2007, Spence bought Settles Garage and Kemp Garage from their longtime owners. Now, those re-envisioned venues are home to Bolsa’s restaurant, grocery, and catering operations. Spence’s latest project in Bishop Arts is The Cliff House, a restored historic church that was built by its members in 1936 at 610 N. Tyler St. The venue is available for weddings, receptions, performances, and other types of events. He kept much of the church’s original look and honored its legacy. To Spence, Bishop Arts isn’t just a place, and his properties aren’t just buildings. “Bishop Arts is a state of mind,” Spence says. “It’s been a lesson in how things evolve.”
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 2 9
BUILDING A BETTER DALLAS-FORT WORTH
DESPITE LABOR SHORTAGES, MATERIAL COSTS, AND EVER-IMPORTANT BUDGETS AND SCHEDULES, NORTH TEXAS’ CONSTRUCTION AND DESIGN SECTORS CONTINUE ADVANCING THANKS TO TECHNOLOGY, INNOVATION, AND TOP-NOTCH TALENT. BY J U L I A B U N C H | P H OTO G R A P H Y BY M I C H A E L S A M P L E S 3 0 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
R ROUNDTABLE The most successful real estate projects, our experts agree, are the ones where developers, designers, general contractors, and subcontractors all come together with shared goals and a lot of trust to make an outstanding development. Thus, to give us the lay of the land in Dallas-Fort Worth’s construction and design landscape, we thought there would be no better way than to ask heavy hitters in every field spanning development, construction, architecture, and design. Here’s what David Cunningham, Jeff Forbes, Toby Grove, Eric Krueger, Tom Reisenbichler, and Lindsay Wilson had to say.
Let’s talk about the relationship between developers, design firms, and construction companies. How has that evolved over the last few years?
DAVID CUNNINGHAM: It’s something that’s been very important for Granite and myself throughout my career. We’ve formed a company based on intense partnering. Every member of our team—architects, engineers, designers, geotechnical people, contractors—are our partners, and they are treated that way. We depend on them. If we don’t have good partners, we can’t do what we do. We treat everybody very evenhandedly, and that has always paid a dividend for us. I like to say we start as friends, and we end as friends. LINDSAY WILSON: The only thing I would add is that the speed we’re all asked to move at now necessitates strong partnerships early in the process to meet the expectations that a lot of clients come to the project with. Toby can probably speak to that in even more detail. TOBY GROVE: You know, I think it’s incredibly healthy right now. There are so many great architectural firms, and there are so many great contractors here. It’s a competitive, but collaborative, environment in DFW, and I don’t think it’s been in a better state my whole career. ERIC KRUEGER: And, the challenges we face with labor and materials necessitate us to come together early to plan, get the materials earlier, get the right subcontractors on board, and appropriate the labor so we can achieve these schedules. JEFF FORBES: Collaboration is really key, like you said, Toby. What we’re finding is that because of time, some of the design is not fully vetted. That collaboration is very critical, so you can go ahead and guarantee a number to an owner at a very early stage based on drawings. You can only do that with trust and collaboration. TOM REISENBICHLER: Trust is the biggest part. You have to get the opportunity to build the trust. Once you do, those partnerships continue and roll forward.
That is the most valuable part of the team—how they can depend on each other.
How do you connect players from all your different industries to create an ecosystem that’s beneficial to the project and to all of you?
KRUEGER: Our projects may not be design-build by contract, but they are design-build in spirit. So much of that helps get you out of that silo, along with the trust Tom mentioned. Any time someone’s withholding information, or you feel like they are, that tends to isolate them. But if you come in with transparency, you build trust. REISENBICHLER: I think everybody here probably realizes that each team needs to be set up for success, and that doesn’t always mean that our firm is going to be the right firm on a project or another firm is going to be the right firm. It’s making sure that we have the right sub-consultants, and we have the right team to meet the goals of a project. It doesn’t have to be where you try to use one group for everything. CUNNINGHAM: Buildings are getting more and more complicated. More technology is involved now with all buildings. It’s impossible for any one trade or any one company to know enough about all of the aspects of the building. By bringing everybody in early—whether it’s subcontractors or sub subcontractors, suppliers of equipment and materials, the design team, the owner, the general contractor—you’re able to put together a better project because you have more information early. WILSON: Taking a minute at the beginning
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 3 1
R ROUNDTABLE of a project to make sure everybody understands the shared expectations is important. Sometimes there’s such a rush — everybody just wants to put pen on paper before expectations are aligned. When you have so many players, if everybody is not aligned, you’ll definitely find a divergent path at some point. KRUEGER: We call it ‘smart start.’ WILSON: So Eric’s got a name for it. KRUEGER: Exactly what you said, Lindsay. You set out and say: ‘What are the expectations? What’s the governance? What meetings do certain people have to be in, versus others?’ In these projects there are so many meetings. There are times you’re saying, ‘Why wasn’t I included in that?’ — and other times you’re saying, ‘Why am I in this meeting?’ It’s establishing those types of things up front that really helps set the pace. CUNNINGHAM: Teaming with people answers a lot of those questions. The more trust you have in various members of the team, the more that you feel like—at least speaking as an owner— you don’t have to be in every one of those meetings. You can trust those partners to do what they’re supposed to do. GROVE: From our perspective as a build-to-suit company, it really starts with our client. Every
architectural firm in the city—and obviously you all here—are qualified, and general contractors as well. It comes down to personalities and the people that can meet the expectations of our clients, as well as budgets and schedules.
What makes for a successful project?
WILSON: When I look back on projects that were really successful, it doesn’t matter how big or small the budget was: The most successful ones are where there was a trusting relationship between the whole team. You can see it in the finished project. KRUEGER: It matters that everyone feels it was successful and not just one party had success at the expense of another. CUNNINGHAM: Continued improvement is really important. Like Eric said, we start every project with a plan and goals. And we finish every project with an ‘asbuilt’ meeting. We talk about what we did right, what we did wrong, and what are we going to do next time to correct those mistakes. It’s a learning process, not just a ‘getting through’ process. FORBES: Once you have trust, you’re able to go ahead and deal with conflict, because conflict will happen. If you have developed trust, it’s so much easier to deal with conflict and then move on to team alignment.
Is design-build the new normal? Why and why not?
WILSON: Not necessarily. Interiors and corporate work is what I focus on, and we still see a lot of traditional design-bid-build. As Eric said earlier, often the contractor is an early team member. In contract, there’s still a bid happening, and that’s on our side. We are seeing more integrated product delivery in other sectors we practice in, like health care and education, but not as much in corporate. CUNNINGHAM: I think the term design-build is misapplied. It’s not design-build because we are not hiring one firm to design and build the project. We are hiring multiple firms to cooperate and design-build the project.
MEET THE EXPERTS
David Cunningham is Senior Director of Development and Construction at Granite Properties, where he has been responsible for construction management for shell projects and interior construction. Prior to joining Granite in 2000, Cunningham ran development at his company called CrossTimbers Capital.
Jeff Forbes leads construction and architectural operations at The Beck Group’s Dallas office. In his more than 30 years at Beck, Forbes has worked his way up from a field engineer to become Regional Director of Beck’s Dallas office. He is also the past board chair for TEXO construction association.
As President of KDC, Toby Grove is responsible for corporate development, acquisition, and financing activities. Under his leadership, KDC has developed CityLine in Richardson, the office portion of Legacy West, and is under construction on The Epic in Deep Ellum.
3 2 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
THE SUPPLY OF HIGHLY SKILLED WORKERS— LIKE ELECTRICAL, MECHANICAL, ELEVATORS, AND THE CURTAIN WALL PEOPLE—THAT’S WHERE YOU REALLY SEE THE SERIOUS IMPACT. YOU CAN’T PUT THAT PERSON ON —DAVID CUNNINGHAM THE JOB WITHOUT SKILL. GROVE: I think that’s a big differentiator. When I think of design-build, I think of a developer that has a captive general contracting firm and perhaps a captive architectural firm. That is something we do not endorse. We think there are a lot conflicts. In order to get the best delivery for our clients, that’s something we’ve never, ever pursued. KRUEGER: In the public arena there is a pretty good use of design-build. The federal government uses it quite often. We just finished about a $550 million hospital that was design-build. You’ll see some of that even in higher-end institutions and municipalities. But for the majority of this group, it’s more in the spirit than the physical contract. FORBES: I would like to take the opposing view. We firmly believe in the process, and we’ve been doing this process for over 20 years. And Peter Beck said he’s not happy with some of the discontinuities that develop. And now we do architecture. We have 85 architects in Dallas and 150 across the nation in addition to what we do construction related. We take it very personally, and we sell it.
You can see it in the eyes of the students from the colleges, whether it’s in architectural or in construction. [Some colleges house] construction in the school of architecture. Students want to make a difference. Where we see a lot of design-build opportunities, we call it integrated, because it’s all under one roof. We all share the same bottom line, which is totally different than your typical design-build. With integrated, you see it with high-end, high-design projects like Old Parkland, the Nasher sculpture garden, Shake Shack. And you really see it with some scrappy, smaller developers — not so much with the KDCs, although we’d love to have an opportunity, Toby. BUNCH: Why do you think that is? FORBES: Just like Peter 20 years ago, they see a lot of this and sometimes that’s good. With Beck, we call it creative tension, and there’s a push for high design against what we can afford. GROVE: But you’re also doing general contracting work. We’ve just completed a very successful project where HKS was the architect and Beck was the contractor. It was a great delivery and a great project. No complaints at all from our side. That’s the adaptability you have to have if you’re going to be in that arena. FORBES: That’s a good point because 50 percent is
Eric Krueger is Executive Vice President, Texas Division at Balfour Beatty Construction. In his more than 20 years at Balfour, Krueger has become responsible for business acquisition, marketing and communications, and future business planning across Texas.
Tom Reisenbichler is the Southwest Region Director at Perkins+Will. With more than 25 years of experience, Reisenbichler oversees the firm’s regional business strategy and performance in all market sectors. He also leads the firm’s healthcare planning.
As President at Corgan, Lindsay Wilson leads the firm’s interiors sector. With 20 years of experience, Wilson specializes in developing the program and vision for projects and evaluating real estate opportunities from a design perspective.
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 3 3
R ROUNDTABLE [the] level that we’re looking for, with 50 percent being integrated and 50 percent being third party. REISENBICHLER: Every few years you see a new kind of methodology out there. People want to find a new way to do design and construction. I think design-build has been around the longest and is the most consistent through that process. But whether it’s IPD [Integrated Project Delivery] or other types of partnerships that are put together, there’s always [a] new approach that’s emerging every several years. It goes through a cycle, and it seems like it always comes back to more standard design-bid-build or design-build. GROVE: We would never hire a general contractor that was owned by a development company. We’re never going to pay a contractor that’s going to feed a competitor of ours. Just a personal belief, and David, I’m guessing you’re the same way. CUNNINGHAM: That’s 100 percent correct. ... And to take the beast out of Jeff ’s argument, I wonder if the reason why smaller or less experienced development firms go that way [is] they don’t know how to manage the process, so they look at [it] as risk mitigation to hire one firm. Yet, I don’t know that a more experienced or a bigger developer would see that as a benefit, because you are going to lose the benefit of bringing in talent from various different firms. That’s where the creativity comes from. I think you lose something with that, and that’s why we don’t do it. KRUEGER: That extends further down into construction as to whether you want to self-perform work or not self-perform work. Take concrete, for example. If you’re going to self-perform, then you’ve got that workforce you’ve got to keep busy. You have the ebbs and flows of your labor out there, versus if you are out getting competitive bids from a subcontractor that does nothing but concrete placement — now you can have the advantage of getting the best talent out there.
What asset classes are offering the most opportunity right now?
REISENBICHLER: Commercial properties. A lot of it is corporate build-to-suit — some of it is housing. We’ve got projects right now in Mexico City and Monterey where they are developing more housing projects. We’re seeing housing being developed in the U.S. and Latin America quite a bit. WILSON: In this market, we’re seeing the effect of all the new development, especially up in the Plano Legacy corridor. That’s caused a lot of renovations. People are renovating earlier than you would have normally seen. Tenants may be re-upping early to get some TI [tenant
3 4 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
improvement] dollars. [Maybe] you can look out your window and see Toyota and JPMorgan Chase, and [think] your office isn’t keeping up: We’re seeing a lot of renovations up there to keep up with employee experience, health and wellness, and natural light. Nationwide, we’re seeing incredible growth continue in data center development. Those are consistently our hardest architects to hire, and we always have open positions. Any architect who wants to pursue data center design as an architect—there is a home for them. KRUEGER: In addition to the markets that Lindsay mentions, it’s been surprising how long the hospitality market has stayed strong. From my understanding, it’s driven around energy prices. The other one we’re seeing a lot, and I know Corgan is too, is school work. All these people that move here, all these businesses, now [we] have to build schools, roads, fire stations, and municipal projects. If you look at just the bond issues that have passed through K-12 in North Texas, Houston, and Austin, they are all record-setting. Quite frankly, there is more need for schools than there is the capacity to design and build them, currently. That market will continue to be strong for the foreseeable future. CUNNINGHAM: It seems like there’s more need for everything that we can build and design these days. It’s a busy marketplace. FORBES: I don’t want to echo what you said, but with mission critical and data centers — with the advent of autonomous cars, Uber, Lyft and some of these other things — it’s all going to be about data. I see that as a big push — mission critical — and then also life science. You look at the news — [stories on] genome and what is being done with the different life sciences, it’s a big player.
What projects are you all excited about here in our region?
KRUEGER: There have been a couple: David has done one in the West End, and we’ve had the pleasure of working with Tom on historic renovations. Those [were] fun projects. Granite did an awesome job on Factory Six03. We got to do Dallas High School. We all have war stories we could tell about historic renovations. When you open up an old building, you find things that you didn’t know were going to be in there. And if they are historic, you’ve got to go through the National Park Service, which is a lot of red tape. Sometimes those things don’t make sense, but you’ve got to do them anyway. CUNNINGHAM: We’re glad we did Factory Six03. We learned a lot. It was our first historic renovation project, and it didn’t come without bumps and bruises. When you do a project like that, it’s mostly unknown unknowns. We typically work in
ONCE YOU HAVE TRUST, YOU’RE ABLE TO GO AHEAD AND DEAL WITH CONFLICT, BECAUSE CONFLICT WILL HAPPEN. IF YOU HAVE DEVELOPED TRUST, IT’S SO MUCH EASIER TO DEAL WITH CONFLICT AND THEN MOVE ON TO TEAM ALIGNMENT. —JEFF FORBES an environment where we have known unknowns that we’re able to manage. That was a very difficult project to manage because it had a lot of unknown unknowns. We dealt with it, and we delivered a great project, but we certainly will be better armed the next time. REISENBICHLER: We certainly have some great, great projects we’re happy to be involved in, but the most exciting thing to me is the energy about downtown development, whether it’s the Statler or the Dallas High School or other new projects that are coming out. Uptown has been kind of the hot place for a while, and it’s really almost saturated up there. There’s not much [space] to build, but that’s pushing back into downtown. WILSON: For us, the renovation and expansion of Corgan’s building and the re-branding of it as the Luminary is really exciting. The reason we wanted to stay in the West End is because of what’s going on. We sat next to what is now [Granite’s] Factory Six03 for 10 years while it was empty. When [we] started to see all this energy in the West End, we were like, ‘There’s no way we’re leaving now that there’s so much going on.’ We’re thrilled to be staying in the West End and expanding. I’m also excited about Balfour Beatty’s office. I couldn’t sit here next to Eric and not say that was an exciting project. CUNNINGHAM: We’ve got stuff going all over the country right now. We’ve got a really cool project we’re working on in Cambridge, Massachusetts. It’s hard to get things done there. You have to be dedicated to it. We’ve been working on it for five years, but we’ll start that project soon. We’re going to redevelop our Cedar Maple property, which may be one of the best sites in Uptown. It’s an underdeveloped piece of property. We’re going to convert that very small property into a meaningful property. ... The project will start in about three years and develop out through the next cycle. And, we’re working on our seventh building at Granite Park. It’s about a half-a-million square feet. GROVE: We’ve always followed our clients wherever they want to go. It’s interesting that in 30 years, we pulled our second permit in the city of Dallas last year. The first was 1920 McKinney, and now we’re doing The Epic in Deep Ellum. We’re really bullish on downtown and the city of Dallas. There’s a lot of interest from all of our clients, and I think you’re going to see a lot happen — that’s where we’re spending a lot of focus right now. KRUEGER: Tom’s firm and ours are very fortunate to be working with KDC on The Epic. To see things pushing towards Baylor, that’s pretty exciting. I go down there on a Saturday during the day and [it’s as if] the State Fair is going on — there are
people moving everywhere. FORBES: Beck is finishing up an exciting project with KDC and moving them into their new home. [And then], the whole corridor with Texas Scottish Rite — what they are doing for kids up in the north part of the community, and Crayola, which is really a unique project. Toby, you forgot to mention maybe the third permit you pulled with the 24 Hour Club. GROVE: That’s true. FORBES: I thought that was an exciting project in that, Austin [Construction], Balfour, Beck, and about 80 other subcontractor and consultants ended up helping. GROVE: It was an amazing project. We had some friends who approached us and asked for guidance and help to look at plans for the 24 Hour Club, which is a homeless and drug and alcohol recovery center. We went to a bunch of our general contractors and architectural firms and asked for help and support. Through their contributions, we were able to get the project built for 24 Hour Club at essentially no cost to them. It was a tremendous project, and we had great partners.
What are the unique challenges of renovations and historic redevelopments?
KRUEGER: ‘Unknown unknowns,’ that’s the new term. WILSON: It’s a great term. CUNNINGHAM: The thing we learned is most critical about these projects is we didn’t factor in the proper amount of time. Most projects are foreseeable. You start the foundations, and you go to the first floor, or you go to the 10th floor, and it’s just repetitive. You can manage
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 3 5
R ROUNDTABLE that process. Everybody who’s been involved in that type of construction knows it’s a 12-month project or a 14-month project, and you can deliver in that window. With a historic project, you uncover, design something, price that, learn that price is too much, redesign something, price something else. It’s a repetitive cycle of uncovering things, and then having to design something for that, because you didn’t know about it. That really [dragged] out our delivery schedule. It cost us about six months. And dealing with the federal government on the national historic credits was a whole new fun thing. We sent plans for them to approve, and they didn’t get back to us for three months. We finally pried it out of them that they lost the plans. So we sent another set of plans up to them to approve. After 30 days, we called them, and they had lost the plans. The third time we sent the plans, we sent them with our consultant to hand deliver them and walk them through the plans. When we did that, we got approval within about three weeks. But we lost four months because they couldn’t find the plans. It was really, really frustrating. These are the nuances of doing the historic renovation and dealing with lots of people you don’t have control of. On a city level, you have relationships you can deal with. When you get on the federal government level, there’s no control of anything. REISENBICHLER: 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. In the end, it should be worth it because of the tax credits. GROVE: In hindsight, David, would you have been better off from a monetary standpoint just to blow through and ignore the tax credits? CUNNINGHAM: No, the historic tax credits will reduce the base of the project so significantly that it wouldn’t have been otherwise successful to do it. So you just live with the pain. That project would have not have been possible without the tax credits. REISENBICHLER: And the richness of what was built 80 to 100 years ago is hard to duplicate today. Often, you get a unique sense of place or quality from those historic preservations that you can’t duplicate with today’s economy. So it’s good stuff. BUNCH: That’s why they are worth saving, right? KRUEGER: I’m going to end up leading you to your next question [on labor]. We just don’t have the skilled labor — the carpenters and things today that you did 15, 20 years ago to be
3 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
I DON’T CARE IF YOU’RE CORGAN OR TOYOTA, YOU ARE TRYING TO FIGURE OUT HOW THESE PEOPLE CAN HAVE A CAREER PATH AS OPPOSED TO A JOB. — TOBY GROVE
able to do that type of work. We just don’t have the skilled labor, carpenters, and things today that we did 15, 20 years ago to do that type of work. REISENBICHLER: When’s the last time you heard of a stone mason that would actually carve? KRUEGER: Right.
How does the labor shortage affect the cost of building your projects? How do you deal with retaining that skilled labor?
KRUEGER: It’s been extremely difficult. David and I had lunch three or four months ago, and he was like, ‘Give me a realistic schedule. Don’t just give me the schedule that you historically do things, because we’re not doing them historically.’ It’s very difficult to get and retain the labor on your projects. I personally think it’s going to ease up. I don’t see ’18 and ’19 like ’16 and ’17. And then, there’s different labor for different types of projects. The subs that work on apartment projects don’t necessarily work on commercial office, for example. I’m starting to see some commercial office subcontractors saying they need work. Meanwhile, some of the high-rise apartment subcontractors are still totally covered up. It’s been a real challenge the last couple years. I wish more parents would push their kids to go to a trade school and learn a skill versus just going on to the university to get a business degree. We’ve been guilty as parents to push our kids to go to college, not to a trade school. But from a compensation point of view, the superintendents and folks out working in the field — their income is generally better than the guys or gals working in the office. FORBES: I think you’re right. I’m the past chair for TEXO, a construction association in North Texas, and one of the key things that we’re looking at is workforce development. We’ve been looking at it for the past 20 years, but it’s really come to roost right now. We’re involved in high schools through the Dallas County Community College district in Northlake. We’re setting up high school programs at Wilmer-Hutchins High School. We put out a call for the program, and it immediately filled up—118
There is something wonderful that There is something happens when smart wonderful that and talented people happens smart unite when around the and talentedofpeople purpose making unite around the their city better. purpose of making That is TREC. their city better. That is TREC.
Ran Holman TREC CHAIRMAN
CUSHMAN & WAKEFIELD TREC CHAIRMAN CUSHMAN & WAKEFIELD
Imagine. Imagine. Empower. Empower. Impact. Impact.
JoinTREC TREC now now & imagined. Join & build buildthe thecity cityyou’ve you’ve imagined. RECOUNCIL.COM RECOUNCIL.COM
214 692 692 3600 McKinnon Street NO. 1150, Dallas, Texas 75201 214 3600PHONE PHONE 3100 3100 McKinnon Street NO. 1150, Dallas, Texas 75201
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 spots—boom, done. The first two years, freshmen and sophomores will be meeting at Wilmer-Hutchins. Junior and senior years, they’ll be meeting at the community college. Now, Richardson and Irving’s MacArthur high school will be joining. Exactly what Eric said: There has to be an opportunity beyond going to college. It’s a good paying career and profession. WILSON: We’ve seen an increase in career and technical high schools in the [region]. They’re fantastic facilities, not just covering construction, but a lot of other career paths. CUNNINGHAM: As an owner-developer, I ask a lot of questions. Why is this happening? Why is that happening? What can we do the next time so that that doesn’t happen? I’ve had key partners be apologetic lately of the problems [we’re] having because they want to correct them—they would love to correct them—but they can’t. The supply of highly skilled workers—like electrical, mechanical, elevators, and the curtain wall people—that’s where you really see the serious impact. You can’t put that person on the job without skill. And, there’s a generational aspect here. A vast majority of the supervisors and skilled labor and foremen are ageing out. A significant component of leadership on job sites will be going away with retirement. The following group is smaller and not as skilled. We live with a unique flavor of it here in Dallas-Fort Worth because of the vast volume of work here. GROVE: I agree with David. We were fortunate to have 7 million feet underway at one
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
time. Each of those projects had between 1,500 and 3,000 people on the site every day. That’s just unfathomable. I’ll never forget when we finished Blue Cross Blue Shield in Richardson, and somebody said, ‘Well, that was a once-in-a-lifetime project.’ We’ve been fortunate to do a couple of 2-million-square-foot projects since. The amount of resources it takes to get these things developed from the GC side is just incomprehensible. CUNNINGHAM: It’s leading to more prefabrication. It’s really important to try to get much of the work done offsite so you’re not overburdening the construction site with too many people. You’re able to control your deliveries a little bit better. Our electrical contractors are prefabbing 65 to 70 percent of installations—bringing them to the job site and putting them in place. Mechanical contractors are doing the same. All of those kinds of things are helping projects be built at better quality and reasonably good speeds, while taking the pressure off of the men and women in the field. KRUEGER: We’ve got a goal to reduce the onsite workforce as a global goal by 25 percent by the year 2025. At Parkland [Hospital], we [prefabricated] all the bathroom pods offsite and literally slid them into place. CUNNINGHAM: We’re making hiring decisions based on who can prefabricate. We’re an actively involved owner who not only hires our traditional partners, but we’re actively involved in hiring the subcontractors that work with us as well. One reason to do that is we want to know what they are going to do from a pre-manufactured or prefab standpoint. If a subcontractor doesn’t have a prefab operation, we simply don’t go there. We know it’s not going to benefit us. We’re not a merchant builder. We are a portfolio builder. We build with our own money—we own, manage, and lease. It’s different than what Toby does, for the most part. We’ve done a couple of build-to-suits, but not like what KDC does. We’re really interested in making sure our quality is top-notch because we have to live with it. WILSON: With architecture and design firm talent, the key is keeping employees in our firm. Once teams work together, they become incredibly more efficient and collaborative. That brings value to our clients. We’ve been continually evolving and looking at how we create value for our employees at Corgan with our culture. We changed to an ESOP [employee stock ownership plan] last year so that every single employee became an owner of the firm. With the younger generations, they want to feel like they’re working for a company that cares about them and their career development. That will continue to be a tremendous focus for us. KRUEGER: I’ve always said the No. 1 thing you have to have is a very strong culture.
AS A MEMBER OF THE DALLAS DESIGN COMMUNITY, WHEN ARCHITECTS ARE BROUGHT IN FROM OUT OF TOWN TO DESIGN SIGNATURE PROJECTS, IT HURTS MY FEELINGS A LITTLE BIT BECAUSE THERE’S A RICH WEALTH OF TALENT HERE. — LINDSAY WILSON LINDSAY WILSON
R ROUNDTABLE You’ve got to create a wonderful environment for your employees to be able to be productive. REISENBICHLER: I think a lot of the shortage of the architectural and the interior design talent came from the recession in 2009, ’10. A lot of people left the profession and started doing other things. That created gaps. Recently, we opened an office in Fort Worth as a way to reach out to get more talent in the Metroplex. People don’t want to commute an hour each way. So this is an opportunity to tap into some more talent. It’s tough right now because we don’t want to just steal from each other—Corgan, Perkins+Will, HKS, and all those firms—because it creates a round robin, and you never get anywhere. We’re trying to look for talent from out of town to bring it in. GROVE: The whole drive for culture is what’s driving our business. Corporate America is trying to figure out how to attract and retain the best employees. I don’t care if you’re Corgan or Toyota, you’re trying to figure out how these people can have a career path as opposed to a job. They want to be able to stay in a facility and not get moved around the county. Some of these bigger facilities are bringing multiple functions together that
Bank of Texas
Save the date for TREC’s next Speaker Series event on the future of transportation in our region! We’ll be talking about drone use, hyperloop and driverless cars with Leander Johns of Uber, Steven Duong of AECOM, and Rod Schebeth of Stantec, so mark your calendars now! Don’t miss out!
Wednesday, September 19, 2018
LOCATION Belo Mansion
FOR MORE INFORMATION R ECOU NCIL .COM
214 692 3600 PHONE
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 3 9
I’VE ALWAYS SAID THE NO. 1 THING YOU HAVE TO HAVE IS A VERY STRONG CULTURE. YOU’VE GOT TO CREATE A WONDERFUL ENVIRONMENT FOR YOUR EMPLOYEES TO BE ABLE TO BE PRODUCTIVE. —ERIC KRUEGER never would have been together in the past. From call centers to very senior executives in the same facilities, they want to demonstrate that all these people have a path. You’re going to continue to see it, and I think it’s really healthy for what we all do. REISENBICHLER: That leads to one of the things dear to Lindsay’s heart, and to mine, too. We just had a pursuit up in Columbus, Ohio, and it’s a technology company. We pursued the job, but the purpose they wanted to create was to have a remarkable environment for their employees because, as a technology company, they’re competing with the east and west coasts for talent and trying to bring that talent to Ohio. The workplace environment has become more and more critical to the success of the end user than it used to be. There’s a lot more emphasis placed on the design of a workplace and the culture that it helps create than there used to be. It’s really nice to see that value being recognized and brought forward. CUNNINGHAM: It’s helped us to do better projects because the emphasis is not so much on cost all the time anymore. It’s more about atmosphere, amenities, and keeping employees engaged and happy. In the not-too-distant past, it was more like, ‘Whoever gives me the cheapest rent is the one that gets the deal.’ That’s become less of the situation now. There will always be that tenant looking for the least costly thing, but the preponderance—especially the bigger, wiser corporations—are looking at better product because it’s what they need for their environment. That’s to our benefit because we’ve always tried to build that, and it’s been a struggle sometimes to compete against less costly
4 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
projects. We have HR directors sitting in planning sessions and being involved in space planning and decision making. GROVE: For most of these facilities we’ve developed, payroll is somewhere between 15 and 20 times the cost of rent. So if you’re able to maintain your employees—it’s helped us all build much better facilities. WILSON: And it helps with decision-making during a project. A client says, ‘We want to create an environment where our employees innovate faster, collaborate more, and are more transparent with their leadership.’ Then you bring some decisions that have costs associated with them. Then I can say, this cost answers to all of those things you want to accomplish. Then they can make a much more informed and confident decision about where to spend their dollars. The focus on the employee experience—storytelling about brand mission and culture—all of those things have been great for all of us and DFW. Each project builds on the next one. Everybody tours every facility, which is great because they come back and see things that might work for them. Authenticity in all of this is incredibly important. Whenever any client starts a sentence with ‘We want our office to look like…’ Google, Facebook, whatever—I kind of cringe. The most effective workplaces look like that organization and celebrate their culture.
What are the biggest challenges impacting construction, development, and design right now?
KRUEGER: We’re still assessing material costs and what effect the new tariffs might have. That’s a big challenge. I feel like we’re going to kill the goose that’s laying the golden egg with all of these increases in material prices. It’s [impacting] aluminum a little bit more than steel, maybe. We just got a notice this week that the rebar prices are going up — it’s going to be up above $1,100 a ton again. I don’t doubt some of that increase is because they are truly passing along costs that they are getting. But it feels like, for some of this, they’re taking an opportunity to raise prices. I’m concerned that folks like David and Toby are going to say, ‘This doesn’t pencil anymore,’ and then the party is over. CUNNINGHAM: That time is coming. From a cost standpoint, some of the reactionary things we’re seeing from cities is just insane. The City of Denver just had a vote that requires everybody that’s going to build a new building in Denver to have a green roof—a living green roof. The ordinance goes as far as to say [that] when you replace your roof on an existing building, you have to replace it with a living green roof. Those buildings weren’t built for those loads. The cost impacts of a silly ordinance that’s passed without any logic or reasoning—it’s just murder. We have a
big office in Houston. We’ve done a lot of development there. Because of the recent hurricane, which is like a one in 10,000-year event, they’re passing a law that says if you develop—even in a 500-year flood plain—you can’t fill anything at all. Everything you build has to be 2 feet above the 500-year flood plain. The cost impacts that are going to hit development are immense. You’ll get to the point where some of the ordinances cities are passing will stifle development significantly. It will get to the point where people just won’t pay.
Are you seeing any of that here in North Texas?
CUNNINGHAM: Yes, similar things. Before we got done with [Granite Park VII] in Plano, the firemen were walking the project and [asked], ‘Where’s your firemen’s air?’ We’re like, ‘What firemen’s air?’ It seemed like the ordinance was passed in the midnight hours, and it wasn’t even made known to the city staff that it was going to be a requirement. But it became a requirement of ours to put it in as we were getting a final inspection, and it cost a dollar a square foot to build it—so 300,000 square feet. We’re the proud owner of the only firemen’s air system [Firefighter Air Replenishment System] in North Texas that I’m aware of. If those kind of things keep getting layered on, it just adds to the cost increases that we see because of iron and steel and aluminum. It concerns me a lot.
How do you mitigate that?
CUNNINGHAM: Lobbying your government entities — hopefully getting them to slow down and factor in the realties in some of the decisions they make: It may sound good. It may sound interesting, but it’s not very practical. Why would you do that and stifle your development environment? If that happens, you can potentially stifle the growth of your city. Getting those folks to listen is not easy. Our industry has to do a better job of getting in front of those things and educating government entities to the point that maybe they will at least pause, and not pass laws we can’t afford to do if we want to do more development in their cities.
What tactics are you all using in your respective fields to increase efficiency?
WILSON: Putting teams together early is one of the most common tactics, at least in North Texas, of getting everybody around the table early on instead of getting really far with design or development before everybody’s had a meeting of the minds. GROVE: I’ve said it before: transparency and expectation. Everybody needs to understand going in what our budgets are and how we are going to achieve that. KRUEGER: If you’re a developer, you don’t want to buy some property, hire an architect, and get all the way up to design development documents only to find out the construction costs are such that the project doesn’t pencil. WILSON: And you have to have difficult discussions sometimes: speed or cost. What is the fixed item? You can go faster, but it will cost more. If cost is the fixed item, then we may have to go through a few more alternatives. There must be an understanding with the client early on about which one of those things is going to rule when the rubber meets the road. It’s the only way we got Toyota done. Toyota is an example where the date was not flexible. There were times where they made decisions to perhaps spend a little bit more because we could not miss that move-in date. CUNNINGHAM: There’s cost, there’s quality, and there’s service. Pick two, because trying to deliver all three is not practical. WILSON: That’s a unicorn. FORBES: What you’re all saying is so imperative. We must figure out, is this a go or no-go decision before spending the money on the architecture. Sometimes [the client] says, ‘My gosh, we can’t afford it.’ And there are tools out there to go ahead and help with that process. REISENBICHLER: I think from the design standpoint, there’s a lot of technology out there with augmented reality and virtual reality that helps the client visualize what they’re going to get. But it doesn’t speed up the process. It adds a lot of quality to our customers’ experience, but it also takes time to use the technology as properly as we should. Prefabrication helps on schedule, but it doesn’t save any money. CUNNINGHAM: It doesn’t really save any money, but it does help on schedule and it
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 4 1
does, I think, help on quality. GROVE: And safety.
How are you using technology to innovate within your industries?
CUNNINGHAM: In the early days of my career, I was on the construction side, and I remember my first project. We had an IBM Selectric typewriter, and I don’t know how we would have ever done that job without that. The next job we had a fax machine, and that was great. Those are almost caveman days. It amazes me now when I go on our construction sites and I see superintendents and foremen and subcontractors with iPads and all of the drawings — all of the information flow is right there at their fingertips. There’s no running back to the office to read the plans or carrying around a set of plans that may be out of date. That helps on quality, eliminating mistakes, speed, and cost. But it’s not just technology: It’s training people to use that technology. I’m really encouraged with the next generation bringing that knowhow with them. REISENBICHLER: There’s a real benefit to technology, but there’s also a danger in how fast responses are expected. I read a story about the construction of the World’s Fair in Chicago. They needed a landscape architect out of New York to come to see the job, and it took him two weeks on a train to get there. Now, of course, somebody takes a picture and gets an answer in 10 minutes. The danger in that technology is that people are expected to give quick response and sometimes, if they’re not careful,
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
they won’t thoroughly vet the response. So there’s a tendency to try to be overly responsive based on technology. What we’re trying to get our younger people, in particular, to do is to stop and think about their response. It’s too easy to say, ‘Yes, do that,’ and that was the wrong answer. KRUEGER: I agree. We try to make sure we are using tools and not toys, especially when we are talking to our clients. Two or three years ago, nobody had drones. Now people have them, and you can use that for surveying large sites that would take four or five days. We can now survey a site in a day using drones. We’re using VR goggles, as Tom mentioned, to eliminate some mock ups. We can make changes, which saves money and time later on. And things like laser scanning, whether you’re in some of the historic buildings or new, you can go in and laser scan in one day and be accurate versus sending in a survey crew. Ultimately those things will help reduce some of the workforce out on the project. WILSON: There’s no doubt all of the technology is helping. Everything is helping with decision-making for clients. You can get a better picture of what you’re deciding on. Creativity is the basis of design, and you can’t compress the time to actually think and work together and come up with creative solutions and solve problems—which is really what we are all doing. That can only get compressed so much. Sometimes we are pleading with our clients that we have got to go back and think on a problem and work on [it] a little bit. ... We still need the people. Thank goodness we’re all still needed in this process, because the innovation is really the human element. That’s my plea for low tech, as the junior member of the group. KRUEGER: What Tom was saying earlier about rapid decision-making—yes. There are times where you need to just sit and think, or collaborate with others, and say, ‘Is this really the direction we want to go?’ Especially around design—once you get going, it’s pretty hard to erase that. WILSON: With our young people, sometimes it’s like, ‘Step away from the computer, get the paper out, let your brain come up with new solutions.’ That’s what everybody gets excited about, as long as they are buildable and executable. REISENBICHLER: There’s no substitution for creativity, and that takes time. That’s what nurtures the culture that we’re seeing in corporate offices. They’re really seeking culture and employee experience and workplace strategies. To really have that be effective, it takes time. It takes creativity to be successful. FORBES: Technology is so critical. [Eric] mentioned drones and surveying. You
Onward and Upward
2601 Victory Avenue Dallas, Texas
R ROUNDTABLE can take a look at the energy efficiency of every single building. Think about a building and how hard it would be to know if you have a leak or energy. You can fly that drone around and figure out if you have an issue based on heat. You could [determine] if you have a pipe in the wrong spot. You can take care of it before it becomes an issue. You can go into a building, laser scan it, drop those points into a model, figure out the design, get it done, and then drop that back into Trimble [construction software] so that our field engineers have the right information to lay out that building. We’ve been playing around with an alternative for Multivista. Multivista used to sell KDC and others what’s going behind the walls. Now, we have GoPros on helmets. You can walk into the site, and it’s a 360 [degree] view to know exactly what’s in there. Technology has moved us forward, [but] I just want to be a downer for a second. It took 13 months to build the Empire State Building, a 100-story building. There’s no way in Dallas you can do even half that size in 13 months. It’s still pretty incredible what technology can’t do. GROVE: One of the biggest challenges for us right now, from a corporate perspective, is that we’re looking at more urban projects. They are denser, but [tenants] don’t want to give up their parking ratio. We’re looking at trying to park these buildings at four or five [cars] per thousand [square feet] in an urban setting. Parking is completely driving the design of those projects. And we’re building thousands of car stalls at $15,000, $20,000, $40,000 per space that may be obsolete in five years. KRUEGER: I bet if you flew in a helicopter over North Texas. ... WILSON: ... No cars on the roof. KRUEGER: [Right,] no cars on any top deck of any building. GROVE: The real challenge is what do you do with these spaces. We’re all looking at alternative uses. How do you go flat floors with no internal ramping and [where] you can reallocate the space? There are costs to that. CUNNINGHAM: Parking is absolutely my pet peeve. It’s the thing that drives cost on projects. It’s the least efficient use of capital. We just did a complete survey of our five buildings at Granite Park that are multitenant buildings. We grossed up the peak hour of the peak day and then extended that out to a 100 percent leased building, and we parked at two per thousand. We are building at 3.25 to four per thousand. Yet, any given day at Granite Park,
4 4 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
we have 2,000 parking spots unused. That’s literally 22 million dollars in capital unused. It’s crazy, and we cannot get the broker community to listen. They just keep saying we want four per thousand, six per thousand. They are not using the spaces. GROVE: That’s also going to drive urbanization. Big corporate users have wanted to have these parking ratios. They have shunned downtown where the ratios are much lower. If we had an alternative, whether it’s autonomous vehicles or ride share, it’s going to open up the urban opportunities again. That’s one of the things we are most excited about with our deal with Mike Hoque in the Dallas Smart District. There are all kinds of opportunities, and I think they are going to be very successful. WILSON: We went out to our employees because we knew we were going to be constrained on parking during the construction and expansion of our new building. We offered to pay for a DART pass for a year. We had a model built out of how many people we thought would take us up on it. Twice as many took the offer—30 percent of our population jumped on it immediately. We have a corporate Uber account, and we have a few cars that are available. Most of the time—because I park next to one of them—the car that people can take places sits there all day long. We hope to increase the amount of people using other types of transportation in our building. We were totally comfortable with that because we believed the data. CUNNINGHAM: If we could get people to believe the data, we would quit wasting the money. We just ran a model on our Cedar Maple property that we’re redeveloping. The cost of reusing the flat slab in the future [for a non-parking use] is so significantly higher that it prevents you from building the project in the first place. We’re not going to need as many cars in the future, and we would love to be able to repurpose parking space, but we can’t build it in the first place because it’s too expensive. WILSON: It’s really interesting. We still see 15-year leases. So the spaces in the buildings that we’re designing now are for second graders who may or may not ever have a car. It’s really interesting when you think about how fast technology is changing, yet we are designing and building all these buildings right now. CUNNINGHAM: And the demands are based on some corporations. They think, ‘We’ve got 2,000 people and we need a spot for everybody’s car.’ That’s what you are going to build for that build-to-suit client without factoring in work from home, vacations, sickness, and when no one is ever at 100 percent employment. That’s the reason we use two per 1,000 usage. All of those things pile up, and it equates to a 30 or 35 percent vacancy rate all the time. We need the real estate community, the brokerage community to help us get there. That will help drive the cost of projects down, which in turn will help deliver better product at lesser cost.
How does Dallas rank in architecture, design, construction, and development compared to elsewhere?
REISENBICHLER: We have close to 26 offices all over. The largest office is in Dallas, and that’s largely due to the successful economy we have. This office has one of the most diversified practices. [Dallas] is a hub for the leading firms in the country. You have all the big names here. When I talk to my peers at other offices at Perkins+Will, they say, ‘I can’t believe that you have all of those firms in Dallas that you compete against.’ But it’s actually a collegial competitiveness. We all get along. We share information, and it’s actually a really nice environment architecturally. The quality of architecture has really improved over the last 10 to 15 years in Dallas. I think the Arts District was a big step. The bridges are really making the city. Over the last 10 to 15 years, it’s changed quite a bit to be more designed focused — more of a place where architects want to come work.
WILSON: I certainly agree. I think we could still do better. As a member of the Dallas design community, when architects are brought in from out of town to design signature projects, it hurts my feelings a little bit because there’s a rich wealth of talent here. I would much rather see Perkins+Will Dallas team designing a building than somebody brought in from out of town. There’s a lot of pride around this community because we have such a robust design community. Sometimes you can tell when it was a designer who didn’t spend as much time here and know the site or the community as well. We could step up our game a little bit more so that all of our premier projects were designed by Dallas firm. CUNNINGHAM: As an owner who is employing architects, I very much agree with that. There’s so much talent here. If we would just let our design teams run— sometime creativity is squelched because we have reins on them, and it’s, ‘You must do this, or it’s going to cost too much.’ We really need to do a better job as clients to let design teams run and show us better ways to get out of our paradigm of what we think is the correct way of doing things. We may not go the whole way. We may say, ‘Whoa, that was too far.’ But if we let the design teams with all that talent run, we will get better architecture, and we won’t have to go overseas to get it. WILSON: If you want to see an architect work fast, tell them to bring a bunch of different ideas to pursue, and they’ll just crank them out. FORBES: Cost is maybe too big an issue here in the states and specifically in DFW. I look at what we’ve done in Korea, and it blows my mind. Some of the stainless steel skin with multiple perforations and LEDs behind. Why can’t we do that in Dallas? KRUEGER: Beauty is in the eye of the beholder, and I have been very impressed, especially in the commercial offices, here in North Texas. Some of the hospitality, hospitals, healthcare—same. We love being able to build them but, recently some
of the high-rise apartments, I don’t think they are that attractive. I wonder if in five or 10 years, folks are going to say we should have done something a little bit different there. WILSON: True sustainability is to build something of a high quality that you intend to last a really long time. A lot of the multifamily developments—they are not intending for them to last a really long time. KRUEGER: Just by the nature of the materials they’re using. WILSON: Right. KRUEGER: Dallas and North Texas are blessed with great developers, great architects, and great contractors. It makes it a very, very competitive environment versus the rest of our offices nationally, or even internationally. It’s good for our clients. But the fees we see here, typically, are some of the lowest from our other offices, and that’s just due to having great competitors and a great environment here. So that’s good for businesses wanting to move here. And even though we talked about how tough labor is, the available labor workforce here is still better than in most other places. WILSON: I was on the phone with a building owner in California and their question was, ‘Will the city tell us we can’t do this?’ We’re like, ‘No, that doesn’t happen here.’ They may just tell us all the things that we need to do to make this work, but they are not going to say no. GROVE: The architecture and general contracting community in Dallas is very collaborative and probably more open and customer service-oriented than much of the country. We do stuff all over. We’ve got architects in various markets telling us how they’re going to design our project regardless of budget, schedules, and everything else. Here, the architecture and the general-contracting community has a sense of humility and understanding. We appreciate the collaboration and the willingness to put the ego aside, whether you’re a contractor or an architect. That doesn’t happen everywhere. WILSON: Firms that have tried to come here and been unsuccessful, it’s consistently been a lack of understanding of the level of service that’s required to do business here and being able to embrace that, because it’s a very, very high level. CUNNINGHAM: In my role at Granite, I’ve been able to travel and work in Atlanta, Denver, Houston, Boston, and these other locations. It’s fun and you learn a lot. But I love coming home. There’s nothing like Dallas-Fort Worth. This is a great place to build a career.
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 4 5
2000 ROSS AVE
RENDERING: TRAMMELL CROW
AMLI FOUNTAIN PLACE
RENDERING: CUSHMAN & WAKEFIELD
TWO ARTS PLAZA
RENDERING: BILLINGSLEY COMPANY
4 6 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
ROSS AVE. THE THOROUGHFARE TRANSECTS THE NORTHERn EDGE OF DOWNTOWN, AND RENOVATIONS AND NEW CONSTRUCTION ARE TRANSFORMING ROSS AVENUE’S PLACE AS A HUB FOR OFFICES, RETAIL, AND RESIDENTIAL BY KERRY CURRY
PHOTO: MICHAEL SAMPLES
In the 1980s, nine skyscrapers were added to Dallas’s skyline and the city’s “Main Street” for commercial activity shifted to Ross Avenue as Trammell Crow and others developed a succession of commercial buildings closer to and ultimately on Ross Avenue. By the late ’80s, Ross Avenue was home to some of the Dallas’ most iconic and highly sought-after commercial space, but retail, restaurants, and residential never followed, resulting in a street with magnificent office towers — and a hodgepodge collection of surface parking lots. “One of the reasons I love to walk in Manhattan is it’s interesting to look in the windows and see the activity,” says longtime Dallas resident Jim Wilson, principal and regional partner of Atlanta-based Goddard Investment Group, which spent $70 million
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 4 7
moved to or renewed their lease in Downtown Dallas in 2017
HERE COMES THE NEIGHBORHOOD Recent, active or planned construction ON ROSS AVENUE
RENDERING: TRAMMELL CROW COMPANY
TRAMMELL CROW CENTER, 2000 Ross Ave.: JP Morgan Asset Management, under the direction of master developer Stream Realty Partners, is building a second phase across the street from the original tower where it is developing retail, a 200-room hotel,–– and a parking garage. Completion is set for the end of this year. A residential site at Ross and Olive will be sold to another developer.
RENDERING: TRAMMELL CROW CENTER (FLORA ST. NEAR PEARL ST.)
to renovate the iconic Fountain Place tower in one of the most ambitious rehabilitations undertaken along Ross Avenue. A 45-story residential apartment tower, AMLI Fountain Place, will be built next door. Today, the influential corridor is becoming a more fully urban district that combines a live-work-play component to the historically important corporate office address via a new wave of owners that seek to activate ground-floor retail and pedestrian traffic.
KPMG PLAZA AT HALL ARTS, 2323 Ross Ave.: The 18-story 515,000-square-foot tower opened in 2015 as the first phase of Hall Arts. It includes 15,000 square feet of restaurant space.
RENDERING: HALL GROUP
HALL ARTS II, Flora Street and Ross Avenue: The $250 million mixed-use 28-story tower, phase two of Hall Arts broke ground in April 2017. It will feature luxury condos with 44 condo units with prices starting at $2 million. The hotel will front Ross Avenue. Completion is expected in the spring of 2019.
4 8 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
Ownership changes along the corridor began to materialize about a decade ago as surface parking lots in the area began to change hands from parking lot owners/investors to local billionaires with track records for innovative and impactful real estate development: Tim Headington and Ross Perot Jr. among them. Trammell Crow Center’s mixed-use project in the 2000 block of Ross Avenue, more than four years in the making, is one example of a property ownership change and its impact. The initial catalyst for the project was a surface parking lot that became available for purchase, says Ramsey March of Stream Realty Partners, master developer for JP Morgan Asset Management. “It got the whole team thinking about what the future of Trammell Crow Center should look like,” March says. “When you combine Trammell Crow Center with the 2.6-acre tract across the street, you’ve got more than 5 acres of re-development potential in a prime location in downtown Dallas.” What resulted was a plan to sink $140 million into a project that includes extensive renovation of the existing 1984-era tower with new development across the street. “You could easily come into Trammell Crow Center, or an asset like it, and touch up a few things, add a couple of amenities, maybe a tenant lounge and fitness center … and probably attract tenant demand,” March says. But Stream
F FEATURE TWO ARTS PLAZA
RENDERING: BILLINGSLEY COMPANY
TWO ARTS PLAZA: Planned 12-story commercial tower by Billingsley Co. to include office and retail. No construction date is set.
RENDERING: TRAMMELL CROW COMPANY
decided a transformative renovation would drive the most value for the building’s owners. Renovations of the existing tower, along with phase one of 2000 Ross Ave., a 2,000-stall parking garage and 26,000 square feet of ground floor retail, are scheduled for completion in the fourth quarter. More phases will follow, including a luxury residential apartment tower via another developer. Several hotel flags have expressed interest in developing a boutique hotel that will sit on top of the parking/retail development, he says. Ultimately, the development will have about 50,000 square feet of street-level retail — the highest concentration of street-level retail Ross Avenue has seen. Stream’s Sara Terry, senior vice president, and Scott Sowanick, vice president, will lead the leasing efforts at Trammell Crow Center while Thomas Glendenning with Shop Cos. will handle retail leasing.
ADDRESSINGCHALLENGES A lack of parking has been an issue for the Ross Corridor but the greater challenge has been the lack of cohesive urban connections to encourage pedestrian activity. The corridor’s “dead” blocks discourage pedestrians from walking the avenue. The Arts District and Downtown Dallas Inc. are recommending changes to bring a more vibrant streetscape. Since January 2016, the Arts District staff has been in the process of engaging the community, including developers and property owners along Ross Avenue, as it works through an extensive process to update the 35-year-old Dallas Arts District Masterplan. Its work began by seeking input from property owners, developers, city staff, and others, which resulted in a framework plan with five strategies — one being to embrace Ross Avenue’s future as a mixed-use commercial corridor. “We knew Ross Avenue had the potential of being the next important
AMLI FOUNTAIN PLACE, 1800 N. Field St.: AMLI is developing a 45-story luxury apartment high-rise on the Fountain Place site. The $150 million tower, which brings the total value of the Fountain Place redevelopment to $220 million, is the tallest building to be constructed in urban Dallas in more than three decades. The new residential tower is scheduled to open in 2019 THE ACADEMIC, 3700 Ross Ave.: Leon Capital Group bought the former DISD administration building and is building a 365-unit apartment project in its place. It plans to preserve the main entrance façade of the historic building. ALEXAN ROSS: Trammell Crow Residential bought at tract of land on Ross Avenue between Caddo Street and Haskell Avenue and is building nearly 300 apartment units, its second major project along the avenue. Trammell Crow also developed an apartment complex about a block off of Ross on Bennett Avenue. ATELIER | FLORA LOFTS: ZOM Development, LRTX, and Graham Greene are developing affordable lofts for artists plus additional apartments at Pearl and Flora. Construction was expected to start soon with an opening in 2019. The project, which includes a retail component, will be between the Nasher Sculpture Center and the Morton H. Meyerson Symphony Center. MODERA: Mill Creek Residential recently completed apartments at 1800 Hall St., just a block off the Ross corridor. APARTMENTS: Austin-based Cypress Real Estate Advisors is building a 300-unit, four-story rental project on the former site of the Credit Union of Texas at 4600 Ross Ave. Expected completion in 2020. SOURCES: The Dallas Morning News, Dallas Business Journal, company websites
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 4 9
RENOVATIONS CURRENT AND RECENT
135,000 employees Currently work in Downtown Dallas
FOUNTAIN PLACE, 1445 Ross Ave.: Goddard Investment Group invested $70 million to update the 1.2 million-square-foot interior and build a 10-story garage anchored by restaurants and retail at the iconic 60-story office tower, built in 1986. It also renovated the property’s namesake fountains. SAINT PAUL PLACE, 750 N. St. Paul St.: Quadrant Investment Properties acquired the 22-story, 273,217-square-foot office tower at N. St. Paul and Ross Avenue in 2016. Built in 1983, it was 78 percent leased. Renovations: Upgraded lobby, new second-floor tenant lounge with conference center and outdoor terrace that overlooks Ross Avenue and the Dallas Museum of Art. Renovations were completed in 2017. CATHEDRAL GUADALUPE, 2215 Ross Ave.: The cathedral church of the Roman Catholic Diocese of Dallas, which opened in 1902, has been in the process of an extensive renovation since 2017. TRAMMELL CROW CENTER, 2001 Ross Ave.: JP Morgan Asset Management is spending $135 million to add amenities to the 50-story existing tower, built in 1984, including ground-floor retail, a grocery, a restaurant, and an outdoor plaza and to add a second phase. Stream Realty is overseeing the work. DALLAS MUSEUM OF ART, 1717 N. Harwood St.: In 2016, the DMA unveiled the museum’s $4.3 million renovated north entrance, which faces Woodall Rodgers Freeway and Klyde Warren Park. The redo includes new access to the main entrance, an outdoor lawn and dining experience with outdoor exhibit space, walkways for better access from Klyde Warren and interior renovations to the atrium. CHASE TOWER, 2200 Ross Ave: Fortis Property Group, owners of the 55-story Chase Tower, built in 1987, will make the skyscraper interact better with the surrounding street with an updated plaza and entry. ROSS TOWER, 500 N. Akard St. at the corner of Ross: About two blocks from Fountain Place, the 45-story Ross Tower, originally called Lincoln Plaza when it was built in 1982, was renovated with groundlevel retail, pedestrian areas, and new street access, including an outdoor patio and Wi-Fi lounge.
5 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
RENDERING: TRAMMELL CROW COMPANY
boulevard in downtown because it’s a perfect east-west connection; the district that greets you first, when coming from the east, is the Dallas Arts District,” says Lily Weiss, executive director of the Dallas Arts District. For Ross, the Arts District envisions streetscape standards and design guidelines that will support the avenue’s transformation into a safe, multimodal, and mixed-use urban corridor. The Arts District Infrastructure Committee proposals include pedestrian-oriented lighting, trees separating pedestrians from traffic, and building designs that bring structures and entrances to the sidewalk. Sidewalks would accommodate a vibrant street life, including outdoor dining, seating areas, and unobstructed walkability. Medians and other public spaces could include art, a hallmark of the Arts District, creating a sense of place and arrival. “One of the key priorities in thinking about public needs was to focus on infrastructure improvements — looking at what we can do to improve the pedestrian experience and the public realm,” Weiss says. For the Ross Corridor, that includes extending the character of the Dallas Arts District to the south side of Ross. The Infrastructure Committee will propose that the city of Dallas extend Arts District zoning south one block to San Jacinto Street and from U.S. Highway 75 to St. Paul Street. Doing so, will make both sides of Ross a more pedestrian-friendly experience. The Arts District is working on the proposal in partnership with Downtown360. The Arts District is continuing an active dialog with real estate developers and property owners along Ross, many of whom are energized by the avenue’s potential, she says. Kourtny Garrett, president and CEO of Downtown Dallas Inc., says diversification is raising the corridor’s appeal for pedestrians. “Now you are laying in more restaurants, more street life, and the Arts
Building The Future Now
Dallas is the urban center of the countryâ€™s most dynamic and diverse metropolitan economy, perfect for an increasingly connected world. WWW.DALLASECODEV.ORG
ARCHITECTS OF THE ARTS DISTRICT Some of the world’s most renowned architects have designed key buildings in the Arts District and Downtown Dallas. FOUNTAIN PLACE
I.M. PEI I.M. Pei, who turns 101 on April 26, has his modernistic handiwork all over Dallas. The New York-based, Chinese-born architect, who retired when he was 90, designed Dallas City Hall (1977), One Dallas Center (1979), Energy Plaza (1983), Fountain Place (1986), and the Morton H. Meyerson Symphony Center (1989). He is a Pritzker Prize laureate.
RICHARD KEATING Richard Keating of the Chicago-based architecture firm Skidmore, Owings and Merrill designed Trammell Crow Center and the Trammell & Margaret Crow Collection of Asian Art. Skidmore, Owings and Merrill also designed the Moody Performance Hall. RENDERING: TRAMMELL CROW CENTER RENDERING: TRAMMELL CROW COMPANY
District is so important to all of this,” she says. Besides the burgeoning Arts District, Klyde Warren Park has been significant to the rebirth, bringing over 1 million people to the city’s center each year. “It’s created that energy that I believe was one of the catalysts to a lot of the Ross Avenue redevelopment,” Garrett says. Downtown Dallas Inc. has Ross Avenue listed as a “corridor of interest” in its Downtown360 plan. It would like to see streetcar and bicycle lanes, landscaping, pedestrian walkways, and street-facing retail. Craig Hall, chairman and founder of the HALL Group, says he hopes public funding will be committed to complement the private sector’s efforts along Ross. For his part, Hall is working on the $250 million HALL Arts Residences condominium tower and HALL Arts Hotel, the second phase of Hall’s Arts District development. The 25-story building on Flora Street, which broke ground a year ago, will have 44 condo units with prices starting at $2 million. It is scheduled for completion in early 2020. The hotel, on the north side of Ross, is expected to open in the summer of 2019. Both are next door to Hall’s 18-story KPMG Plaza at HALL Arts office tower. “The thing that I think will make the biggest difference in this area and is the game-changer—and I’m not just saying it because we are doing it—is the hotel,” Hall says. “The hotel will bring two full restaurants, a very large bar, and a lot of street life at night because of the people staying there. It will liven up the whole area.” Lucilo Peña, president of development for Billingsley Co., has lived in the Arts District for nearly 11 years as one of the first residents of One Arts Plaza, which opened in 2007 as the first major commercial tower to be built downtown since
RENZO PIANO AND PETER WALKER Italian architect Renzo Piano, a Pritzker winner, designed the Nasher Sculpture Center, and Peter Walker, known for the World Trade Center Memorial at Ground Zero, designed the Nasher’s landscape. NICHOLAS J. CLAYTON Nicholas Clayton, a premier Texas architect of the 19th Century, designed the Cathedral Santuario de Guadalupe. SIR NORMAN FOSTER AND SPENCER DE GREY British architects Sir Norman Foster, a Pritzker laureate, and Spencer de Grey, both of Foster + Partners, designed the Winspear Opera House. REM KOOLHAAS AND JOSHUA PRINCE-RAMUS Rem Koolhaas, a Netherlands-born architect, professor at Harvard and Pritzker laureate, and Joshua Prince-Ramus, of the New York firm REX, designed the Dee and Charles Wyly Theater. EDWARD LARRABEE BARNES Edward Larrabee Barnes of New York designed the Dallas Museum of Art. He died in 2004. MICHEL DESVIGNE Michel Desvigne of Paris, in collaboration with U.S. firm SmithGroupJJR, designed Sammons Park with lawns, gardens and a reflecting pool to connect the Winspear Opera House, Wyly Theatre, Strauss Square and the Moody Performance Hall. THE OFFICE OF JAMES BURNETT OJB Landscape Architecture was awarded the American Institute of Architects’ 2018 Collaborative Achievement Award for Klyde Warren Park. Last year, the American Society of Landscape Architects named OJB as the recipient of the ASLA Design Award of Excellence for its Klyde Warren design.
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 5 3
WOODALL ROGERS FREEWAY
F FEATURE LAY OF THE LAND GR IF
AMLI FOUNTAIN PLACE
ST. PAUL PLACE
2000 ROSS AVE.
KPMG PLAZA AT HALL ARTS FLORA ST. CATHEDRAL WYLY GUADALUPE THEATER
HALL ARTS RESIDENCES
TWO ARTS PLAZA
ONE ARTS PLAZA
MOODY PERFORMANCE HALL
the 1980s. “The area has changed drastically since I first moved in,” Peña says. Around the time One Arts was being built, a renaissance was beginning in the Arts District with the renovation of Booker T. Washington High School for the Performing and Visual Arts (2008), the opening of the Winspear Opera House (2009), the Wyly Theater (2009) and the Moody Performance Hall (2012). Other renovations followed, and now more is on the horizon with plans for Two Arts Plaza. The office tower, to be built at the corner of Routh Street and Woodall Rodgers, will be 12 stories high with a park between the One and Two Arts. Preleasing is underway.
TRAMMELL CROW CENTER
SAN JACINTO ST.
DALLAS MUSEUM OF ART
BOOKER T. WASHINGTON HIGH SCHOOL
WINSPEAR OPERA HOUSE
LESSONSLEARNEDFROMBOEING There wasn’t always this much going on downtown. Dallas chased hard after the Boeing corporate headquarters in 2000, but the company ultimately landed in Chicago. It was a tough and debilitating loss for Big D and part of the reason for it, Johnny Johnson believes, is
5 4 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
AMLI FOUNTAIN PLACE
RENDERING: CUSHMAN & WAKEFIELD
Property owners who have already completed their renovations or new developments on or near Ross Avenue say they are enjoying the benefits of a revitalized corridor. “We have seen a significant increase in rental rates, which mirrors the rest of the Arts District assets,” says Chad Cook, founder of Quadrant Investment Properties, which owns Saint Paul Place. “We have also experienced interest from tenants suffering from sticker shock in Uptown, but that still want the experience of being part of a community in a walkable environment.” Watt expects the current wave of development to spur additional construction and/or repurposing of more vacant office buildings.
that downtown Dallas had not yet evolved into a 24/7 city and because the city lacked depth in the arts. “I think Boeing was definitely a wake-up call for the city,” says Johnson, executive managing director at Cushman & Wakefield, which leases Fountain Place. Much has happened since then. Besides the growth in Uptown and the expansion of the Arts District, Klyde Warren Park, which opened in 2012, provides a focal point that broke down divisions between Uptown and downtown, Johnson says. Dallas was named a finalist for Amazon’s H2, a compliment to the city’s efforts. he says.
MODERA HALL STREET
PLANNED OR UNDER CONSTRUCTION
CYPRESS REAL ESTATE ADVISORS APARTMENTS [ 4600 ROSS AVE. ]
NEW LIFE BEYOND THE CORE Ross Avenue attracting multifamily east of 75
OLYMPUS AT ROSS
PHOTO: OLYMPUS PROPERTY
RENDERING: LEON CAPITAL GROUP
Beyond the Arts District and downtown Dallas, Ross Avenue has also attracted significant interest from multifamily developers in an area between U.S. 75 and Greenville Avenue. Cypress Real Estate Advisors plans to develop nearly 300 apartment units at the site of the former headquarters of the Dallas Teachers Credit Union, 4600 Ross Ave. The property’s close proximity to downtown and Uptown employers was one of the draws, Cypress said. The development is expected to be ready for occupancy in 2020. Leon Capital Group, meanwhile, plans to preserve a portion of the Dallas Independent School District’s former headquarters at 3700 Ross Ave. and convert it along with property behind the existing building into a multifamily development called “The Academic.” The development will include about 365 rental units, a parking garage, and a courtyard with expected completion in January 2020. “We’re excited to be a part of the collaborative effort to protect and renew the fabric of Ross Avenue,” David Cocanougher, managing director of the multifamily division at Leon, says in a release. “This busy street near downtown’s east side is getting a major makeover with new housing and retail.” About a block away from the Leon Capital development, Trammell Crow Residential became one of the first multifamily entrants to this section of Ross Avenue. In September 2016, Trammell Crow closed on property it assembled from multiple owners located several blocks east of downtown between Caddo Street and Haskell Avenue for its 292-unit Alexan Ross luxury complex at 4001 Ross Ave. Units are expected to become available this summer. Trammell Crow Residential also developed a 321-unit rental community on Bennett Avenue, a block off of Ross, and in 2015 sold a complex it developed at 3501 Ross Ave. to Olympus that is now called Olympus at Ross.
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 5 5
A ANATOMY OF A DEAL
THE RISE OF
DICKIES ARENA THE NEW PUBLIC-PRIVATE FACILITY IN FORT WORTH WILL OPEN IN 2019. IT WILL BE THE HOME OF THE STOCK SHOW & RODEO, AND ALREADY HAS LASSOED MAJOR SPORTING AND OTHER EVENTS
5 6 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
BY NICHOL AS SAKEL ARIS
With every piece of steel lifted into the Fort Worth sky, Dickies Arena inches closer to hosting bigname concerts, sporting events, rodeos, and family entertainment. The 14,000-seat, $550 million venue is coming to life thanks to a unique blend of public and private money and the leadership from a member of one of the most prominent families in North Texas. The arena will open in late 2019 at the southeast corner of Montgomery Street and Harley Avenue west of downtown, and the 2020 Fort Worth Stock Show & Rodeo will host its rodeo performances in the arena a few months later. Other events already lined up include the 2020 NCAA Women’s Gymnastics Championships and the American Athletic Conference men’s basketball championship from 2020 to 2022. In 2022, the first and second rounds of the NCAA men’s basketball tournament will bring March Madness to Fort Worth. And that’s just the beginning.
A ANATOMY OF A DEAL “The people of Fort Worth have really been underserved in the sport and entertainment side,” says Mike Homan, president and general manager of Trail Drive Management Corp. “We are booking concerts. We’re on the ground running.” Other than the monthlong Fort Worth Stock Show & Rodeo, Dickies Arena will have advantages over other venues such as the American Airlines Center in Dallas and AT&T Stadium in Arlington, which must schedule around the Dallas Mavericks, Dallas Stars, and Dallas Cowboys. “Our ability to schedule the new arena, at least in the foreseeable future, will be much more flexible,” says Mike Groomer, CEO and President of Event Facilities Fort Worth, a nonprofit organization started by chairman Ed Bass, who is leading the effort to privately fund more than half the cost of the facility by enlisting other wealthy individuals and foundations. “As the beautiful, impressive domed roof of Dickies Arena takes shape with new steel members added every day, I’m thrilled to think of what is to come under that roof,” Bass says. “I truly think whatever people expect, Dickies Arena and the events it hosts will be far more than they ever dreamed of.”
THE PATH NOT TAKEN Talk of a Fort Worth arena goes back about 25 years when North Texas put together a bid for the 2012 Summer Olympics. The building’s main focus, at the time, was to replace the aging Will Rogers Coliseum. “But over time it was recognized that a new state-ofthe-art arena could and should be truly multipurpose — bringing to Fort Worth and Tarrant County a whole new level of experience for not only rodeos, but also for concerts, sports, family shows, graduations, conventions, and community events,” Bass says. The failure of the 2012 Olympic bid stung area leaders in the early 2000s but sometimes it’s the road not taken that makes all the difference. Talk picked back up again in 2008 but the recession hit, slowing momentum yet again. “That vision for a new arena never went away,” Groomer says. “We just made strategic purchases, quietly buying land. We always had in mind that someday they would get an arena.” Patience and persistence paid off, though, as Fort Worth was able to structure the deal its way, rather than rushing to meet an Olympic deadline. Fort Worth established a public-private partnership deal where the public portion will be funded by those who use the facility and stay in the hotels around it. “We didn’t want a property or sales tax increase and we couldn’t afford, nor did we want to have, a serious impact to our general fund,” Mayor Betsy Price says. “The plan, it’s even better now than it would have been then. The beauty of
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 5 7
A ANATOMY OF A DEAL
the arena, also, it’s going to belong to the city but it’s going to be privately managed. And, the upkeep of the arena comes out of profits generated so it’s not going on the books as a liability.” Price explained how it came together, starting with the Texas Legislature in 2013. Rep. Charlie Geren, R-Fort Worth, and Sen. Jane Nelson, R-Flower Mound, sponsored a bill that allows cities to allocate the state’s portion of the hotel taxes within a three-mile radius of a certain facility to pay off debt for capital improvements. Lawmakers approved Senate Bill 748, and it was signed by then-Gov. Rick Perry. Now, hotel occupancy tax funds within a three-mile radius of the Fort Worth Convention Center and the Will Rogers Coliseum that would have gone to the state coffers are redirected to pay off the public portion of the debt for Dickies Arena. Hotel guests don’t notice any difference, the state’s portion is just reallocated. Then, the city asked the voters to approve taxes that will be paid by users and those who visit the new arena. That includes a $5 parking tax, a $20 tax on livestock stalls and pens, and a 10 percent tax on tickets. All three propositions passed by 72 percent or more in November 2014.
5 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
Fort Worth has issued 25- and 30year debt instruments to pay for the public share of the project, which is capped at $225 million. “The public perception has been very, very good,” Price says. “It’s not a draw on city funds. Average Fort Worth citizens won’t be hit with it unless they’re using it. There are very few cities around that get a $550 million arena and the city’s EDWARD BASS paying less than half that.” That’s where the private sector comes in. Event Facilities Fort Worth, a nonprofit led by Bass, will pursue the private individuals and foundations to fund the remaining cost. A separate entity called Trail Dust Management Corp. was created to manage the day-to-day operations of Dickies Arena. The 501(c)(3) has a 70-year lease on the building. Dickies Arena will have a premium sound and lighting system for concerts and other events, as well as new restaurants, Price said. Homan says they’ve even discussed having Mavericks or Stars preseason games at Dickies Arena, which would help the teams reach fans in the 817 area code and build excitement for the regular season. In the future, the arena could attract a minor league team, Homan said. Price says it’s not a priority right now, though. “I think it’s possible, and we’ll look into it,” Price says. “Right now that arena’s going to get so booked, we may not have space for it.”
A ANATOMY OF A DEAL
DICKIES ARENA BY THE NUMBERS SEATING CAPACITY . CONCERTS
14,000 BASKETBALL RENDERING: CITY OF FORT WORTH
INSIDE THE CONSTRUCTION SITE Four tower cranes loom over Dickies Arena as workers set up the trusses that will become the roof for the facility. Rising from the floor of the arena are two steel towers that will temporarily hold up the roof. Once the roof becomes self-supporting, the towers will be removed and the floor will be ready for the real action. It could have hardwood floors for basketball, a stage loaded with guitars, drums, and amps for a concert, layers of dirt for a rodeo, a ring for professional wrestling, or an ice skating rink for hockey games. Making sure the arena reaches the finish line on time is Scot Bennett, regional director for The Beck Group. Construction is more than one-third complete, and the scale of it even takes a veteran like Bennett aback. “It’s really a fascinating picture, and it’s a fascinating construction process,” he says. “This is going to be one of the tallest arenas in the nation. It’s able to handle a lot of events that Fort Worth hasn’t been able to hold at this scale.” There are premium rodeo boxes that will put people close to the action. There are also suites and loge boxes, which are mini suites that seat about five to six people. And there are the fullsize suites. The regular seating is specially designed for a more intimate feel so even people in the upper levels will feel part of the action. At each level, spectators will walk down to their seats rather than having to walk up. The Dickies Arena did displace some parking lots so the project also includes a new 2,200-spot parking garage specially designed for larger trucks that will be coming for rodeo-type events. The peak of construction began in February, when an estimated 1,000 workers will be working on the interior finish out of the 560,000-square-foot facility. “We’ve been focused on trying to grow smaller, minority-based contractors and have become an incubator for smaller companies,” Bennett says. “We’re really creating a big impact with a job like this. We broke it down into smaller size pieces and held multiple outreach events and pair these smaller subs up with larger companies so they could play a role in the larger project.”
13,300 FAMILY SHOWS AND HOCKEY
RODEO AND EQUESTRIAN SHOWS
PROJECT SIZE . ARENA:
560,000 SF SUPPORT BUILDING:
150,000 SF OUTDOOR PLAZA:
210,000 SF D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 5 9
A ANATOMY OF A DEAL
LAY OF THE LAND
WHERE DICKIES ARENA FITS INTO THE FORT WORTH CULTURAL DISTRICT LANCASTER AVE.
5 GENDY ST.
11 10 4
PRESERVING HISTORY: WILL ROGERS COLISEUM
WILL ROGERS MEMORIAL CENTER
PARKING: Dickies Arena will be supported by a DMSAS-designed, 2,200-car parking garage.
VIEWING PAVILLION: An 85,000 SF underground, multipurpose event and equine warm-up area will be viewable, but inaccessible from outside the pavillion.
LEGEND 11 DICKIES ARENA 22 VIEWING PAVILLION 33 PARKING GARAGE 44 WILL ROGERS COLISEUM 55 FORT WORTH COMMUNITY ARTS CENTER 66 FORT WORTH MUSEUM OF SCIENCE AND HISTORY
6 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
77 NATIONAL COWGIRL MUSEUM AND HALL OF FAME 88 W.R. WATT ARENA 99 FORT WORTH BOTANIC GARDEN 10 CASA MAÑANA 10 11 FARRINGTON FIELD 11
The aging Will Rogers Coliseum will physically be overshadowed by the new Dickies Arena, but the classic art deco-style building will continue to serve a purpose. That’s especially true as Fort Worth begins renovating the Fort Worth Convention Center in downtown and some events get shifted to Will Rogers Coliseum. “It’s a beautiful and very historic building,” Fort Worth Mayor Betsy Price says. “We don’t want to change the feel and flavor of the arena. It does need updating.” The city will focus on opening Dickies Arena first, then update the Convention Center downtown and, finally, start work on Will Rogers Coliseum, Price says. The work will be mostly cosmetic, putting in new seats, making it wheelchair accessible, and upgrading the electrical system for new sound and light capabilities. “We don’t have a timetable for that,” she says. As it is now, Will Rogers had events every single day in 2017 except Christmas, Price said. The Fort Worth Convention Center only went dark for about five or six days last year. “It’s amazing what’s going on,” Price says. Trail Dust Management, the entity that will operate Dickies Arena, will reinvest profi ts from the new arena into the older facilities.
A ANATOMY OF A DEAL
RENDERING: CITY OF FORT WORTH
A STUDY IN URBAN REVITALIZATION Fort Worth’s Sundance Square has become a shining example for how to revitalize an aging downtown in a major metropolitan city. “At least weekly we get a phone call or a visit from another city or civic group who just wants to explore Sundance Square and wants to hear the planning and development principles behind it,” says Johnny Campbell, president and CEO of Sundance Square. The genesis of the project goes back to the 1970s when the Bass family began acquiring property in hopes of revitalizing downtown. Not surprisingly, the same visionary family that led the charge for private funding for Dickies Arena were ahead of their time in redeveloping downtown. Many of the buildings had become dilapidated as Fort Worth residents migrated to the suburbs to live. Things began to turn around in the 1990s when the first residents moved into downtown, the movie theater opened, and so did Barnes and Noble. The inspiration for Sundance came from the work of urbanists William H. “Holly” Whyte and Jane Jacobs, who pushed for public spaces in urban environments where people could gather. Today, that perfectly describes Sundance Square Plaza, a 55,000-square-foot open-air space where people can meet and mingle while their children play in the fountains or enjoy a Christmas tree lighting. The plaza opened in 2013, but it’s been on the master plan since the 1980s. “It turned Sundance Square into something that truly was a destination all times
of the week for a number of different people,” Campbell says. “Foot traffic really jumped at that time.” That has retail and restaurants thriving on Houston Street and other areas surrounding the plaza. On the upper floors are a mix of offices, condominiums, and apartments to keep the area vibrant all hours of the day. That includes fashion retailer H&M’s four-story location on Commerce Street. “That was urban planning before urban planning was cool,” Campbell says. “Retail sales have all increased. That’s very unusual in today’s retail climate.” A recent economic development study listed Sundance Square as the largest contributor of property tax in the city of Fort Worth. “When you see the value of the property beginning to contribute significantly to the city that’s not only good for the property owners but that’s good for everyone,” Campbell says.
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
MIDDLEBY BAKERY GROUP
THE FOOD INDUSTRY
SITE SELECTION MAG RANKS NORTH TEXAS AS NO. 1 MOST COMPETITIVE IN FOOD & BEVERAGE
BY DAVID KIRKPATRICK
North Texas is no stranger to the food and beverage business sector. It long has been a valued location for everything from corporate headquarters, production and distribution facilities, and retail establishments. The impact of the more than 15,000 food and beverage businesses in North Texas is substantial, accounting for nearly 370,000 local jobs. This impact isn’t escaping notice. Last year, Site Selection magazine named Dallas-Fort WorthArlington the No. 1 “most competitive” North American city in food & beverage. “DFW is a great place for food and beverage companies, both headquarter and manufacturing operations,” says Duane Dankesreiter, senior vice president, research and innovation for the Dallas Regional Chamber. “Those companies come here because of our central location,
MAJOR PLAYERS The list of companies with either headquarters or significant operations in the region is impressive. The following is just a sample:
> BORDEN DAIRY CO. > BRINKER > > > >
INTERNATIONAL INC. DEAN FOODS FRITO-LAY GROUPE LE DUFF 7-ELEVEN
> UNILEVER > WOMEN’S
FOODSERVICE FORUM > YUM! BRANDS [PIZZA HUT AND WINGSTREET ]
6 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
cost of doing business, and access to great talent.” A wide range of food manufacturers are represented in the region including: Coca-Cola, Oak Farms Dairy, MillerCoors, Bimbo Bakeries, Kraft Heinz, and more. Along with corporate facilities and restaurants, a number of industry players have introduced test kitchens to the area such as Jamba Juice, Pei Wei, Which Wich, and Farmer Brothers joining more established food innovation centers from Pizza Hut and Frito-Lay. Part of this growth in test kitchens could be attributed to the region’s population, Dankesreiter says. “Food and beverage companies are choosing DFW because of the growth of our region, giving them access to a large pool of customers and ability to test new products on a diverse population,” he says. “We expect even more companies in the food and beverage industry to choose DFW in the future.” One example proving Dankesreiter’s point is the recent launch of Pilotworks’ culinary incubator in Dallas. The new site joins those in five other U.S. cities, and Pilotworks Dallas General Manager William Judge cites the recent population growth in the DFW area, along with a “lively and emerging” food scene, as the reasons why the Brooklyn, New York-based company chose Dallas for an outpost.
INNOVATION IN ACTION
Last spring, Plano’s Middleby Bakery Group opened its Bakery Innovation Center, a $2.3 million project that includes baking automation machinery as well as a test kitchen for commercial bakers from around the world looking for a place to test products at scale rather than in small batches. One goal of the test kitchen was to serve the industry by giving bakers access to the most up-to-date equipment, Middleby Bakery Group President Mark Salman told The Dallas Morning News, with an additional goal of eventually turning those bakers into buyers for the automated equipment.
For more on innovation in the food and beverage industry, as well as groundbreaking trends across all business sectors in Dallas-Fort Worth, visit DALLASINNOVATES.COM . SPRING 2018
RENDERING OF LINEAGE LOGISTICS’ FACILITY EXPANSION IN SUNNYVALE
I INNOVATION TRENDS TO WATCH
CAROLINA BEVERAGE GROUP
In April, Lineage Logistics, a company specializing in temperature-controlled supply chain and logistics, began an expansion of its Sunnyvale warehousing and distribution facility. The construction is expected to last into 2019. When it opens, it will be Lineage’s first fully automated facility in North America. Once open, it will be one of the world’s most-automated food logistics facilities. “At Lineage, we are committed to disrupting the temperature-controlled supply chain through the use of new technology, applied sciences, and innovative thinking,” President and CEO Greg Lehmkuhl says in a statement. He points to Lineage’s partners at the City of Sunnyvale, including the mayor’s office and the departments of Engineering and Economic Development as instrumental in bringing the new nine-level, 100-foot ceiling facility to Sunnyvale along with around 30 new operations jobs. Middleby Bakery Group and Lineage Logistics are recent examples, but the area has notched a number of notable food and beverage projects over the last several years. Fiesta Restaurant Group relocated its headquarters to Addison from Miami at the end of 2014, the same year in which Zoës Kitchen moved its headquarters from Birmingham, Alabama to Plano. Farmer Brothers coffee relocated its headquarters from California to Northlake. In new construction or expansion, Golden State Foods is planning a $70 million hub in the area, Pegasus Foods is planning a $20 million expansion in Rockwall adding 200 new jobs, Kraft Foods spent $84 million on a Garland expansion, and Carolina Beverage Group turned to Fort Worth for its western expansion in 2014. Jamba Juice chose Frisco for its headquarters relocation from California in 2016. Cushman & Wakefield Senior Director Robbie Baty says a big draw was the number of national restaurant brands based here — along with the typical macro-economic factors. Jamba Juice felt that joining the region would help it recruit from the pool of executive talent with restaurant business experience.
THE ROLE OF RESTAURANTS
In a way, the area’s food and beverage success is a self-perpetuating ecosystem. Baty’s background as a real estate office broker specializing in corporate headquarters included handling the deal for Dallas’ Brinker International, as well as the Jamba Juice relocation. He made the analogy of Brinker creating “offshoots” of national restaurant brands eyeing DFW for their headquarters — such as Jamba Juice — to how TI helped spur the Telecom Corridor. The restaurant business itself is one of the most competitive sectors in the nation, CBRE Senior Vice President Greg Pierce says. The result is that brands must continually reinvent themselves to stay relevant and draw customers. He says
PHOTOS PROVIDED BY THE COMPANIES
GOLDEN STATE FOODS
The food and beverage sector is always evolving to meet the challenge of a changing marketplace, and in its recent Global Food Trends report, real estate professional services firm JLL highlights five trends that landlords and restaurateurs should track this year.
> PEOPLE VALUE EXPERIENCES. The trend is from collecting objects to collecting experiences.
> THE “FARM TO TABLE” SUPPLY CHAIN IS CHANGING. People are more apt to actively consume locally.
> THE RISE IN SOCIALLY CONSCIOUS EATING. Consumers are migrating toward brands with more socially conscious messaging.
> SOCIAL MEDIA IS TURNING EATING OUT INTO PERSONAL BRANDING. Eating has become a major form of selfexpression, rivaling even fashion, according to JLL.
> TECHNOLOGY CONTINUES TO DRIVE CONVENIENCE. Beyond just delivery, the mobile revolution has introduced new ways to order and pay for meals as well. Take a deeper dive into these trends at dallasinnovates.com.
that DFW has organically grown a number of notable brands and remains a center of invention for new restaurant concepts. The strength of the restaurant business is also an offshoot of the truism that real estate development follows population, density, and solid income levels, Pierce says. “When you look at the many food and beverage businesses that have opened in Uptown, downtown, West Plano, and Frisco, it is pretty easy to understand because of all the residential single family, multifamily, and office building development and growth that has occurred in the last eight or so years,” he says.
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 3
DISCOVER WHATâ€™S NEW + NEXT IN NORTH TEXAS INNOVATION WHERE
TECH CREATIVES INNOVATORS INCUBATORS EDUCATORS ENTREPRENEURS INVESTORS ENTERPRISE &
CONNECT, CONVERSE, AND CONVERGE ACROSS INDUSTRY SECTORS
THE DIGITAL MEDIA PLATFORM COVERING DALLAS-FORT WORTH AS A HUB FOR INNOVATION
ACOLLABORATION COLLABORATION OF OF THE THE DALLAS DALLAS REGIONAL A REGIONAL CHAMBER CHAMBERAND ANDDDMAGAZINE MAGAZINEPARTNERS PARTNERS 6 4 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W SPRING 2018
PHOTOS: TAYLOR LOWDER
$50 MILLION TOTAL PROJECT COST
THE COMPANY CELEBRATED THE GRAND OPENING OF ITS $50 MILLION HIGH-TECH U.S. HEADQUARTERS AND PASTA PRODUCTION PLANT IN MARCH KEY PLAYERS
GENERAL CONTRACTOR: Beta Centauri (owned by Interamerican Foods Corp.) ARCHITECT: Jim Kirkpatrick of Kirkpatrick Architecture Studio in Denton, along with Beta Centauri’s inhouse architect ELECTRICAL CONTRACTOR: 4C2 Electrical Associates of Farmers Branch LANDSCAPE ARCHITECT: MJ Thomas Engineering LLC of Fort Worth INTERIOR DESIGN: Beta Centauri REAL ESTATE: La Moderna Foods worked directly with the city of Cleburne to purchase the land.
BY L ANCE MURR AY
Pasta comes in many forms — circles, twists, stars, tubes, and even boringly straight — but no matter the pasta’s shape, the new La Moderna plant and U.S. headquarters in Cleburne is a modern, high-tech center for manufacturing plenty of this staple of many people’s diets. It’s the first La Moderna factory outside Mexico for Interamerican Foods Corp., and the company came to North Texas for a reason. The largest pasta maker in Mexico, La Moderna chose the Cleburne site in Johnson County 50 miles southwest of Dallas because of a large local demand for its products, ease of transportation, and communications. “The other reason is the railroads for our raw materials, this is a good point for the railroads,” says Jose Francisco Monroy, director of commerce for La Moderna and one of the four brothers who own the company. “We’re near our clients here and there’s very good communication.”
The plant features robots and hightech machinery to manufacture and package everything from spaghetti to elbow macaroni. It houses two production lines — one for short and one for long pasta — and it potentially could have two more. Monroy says other new elements for La Moderna are the robotic packaging system and software to manage the warehouse and driverless forklift. The automated forklift, “Naveta,” delivers pallets in five levels. Other notable elements for the facility include voice-directed systems, ergonomic palletizing workstations, and interactive technology with multilingual content. Texas Gov. Greg Abbott attended the facility’s grand opening in March, and said it will blend seamlessly into the Texas economy as a whole. “It’s because of investments like this that the Texas economy continues to be the envy of the nation for economic growth and job creation,” Abbott said at the event.
16.5 ACRES TOTAL LAND SIZE
TOTAL SQUARE FOOTAGE OF FACILITY
NUMBER OF RAILROADS THAT PROVIDE DIRECT ACCESS TO LA MODERNA
NUMBER OF DIRECT JOBS
NUMBER OF NEW INDIRECT JOBS
NUMBER OF ROBOTS PROVIDING WAREHOUSE AUTOMATION
POUNDS OF MONTHLY PASTA PRODUCTION
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 6 5
PHOTOS: MERISSA DE FALCIS
COWORKING AND INCUBATOR SPACE HAS A STARTUP SENSIBILITY WITH FOOD PREP KEY PLAYERS
Pilotworks’ Dallas location previously housed a culinary school. Renovation was completed by its own design and expansion team.
BY DAVID KIRKPATRICK
Pilotworks Dallas brings a startup world sensibility to the food preparation industry with its co-working and incubator space business model. The Brooklyn, New York-based company has six locations across the U.S. including the Dallas space in the former Le Cordon Bleu culinary school on Webb Chapel Road, and is the largest operator of on-demand kitchen space in the U.S., helping burgeoning chefs launch and scale food businesses. Because the Dallas location previously housed a culinary school, much of the infrastructure for Pilotworks’ incubator and coworking space already was in place, but the company brought in its own design and expansion team for renovation to ensure its design and operational standards were met. The build-out includes eight shared kitchen spaces ranging from 1,200 to 1,600 square feet, one demonstration kitchen, a 32,000-square-foot restaurant/special event space that can seat 120 as well as three classrooms holding up to 25 students each, 1,500 square feet of dedicated office space,
6 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
and more than 1,500 square feet of coworking space. The layout includes space for dry, cold and frozen storage, and shared conference rooms. “Pilotworks is a new kind of business on a mission to change the landscape of the food industry, helping aspiring food entrepreneurs launch and succeed,” Pilotworks Dallas General Manager William Judge says. The company hasn’t finished adding to the space. There is a plan to convert around 3,000-plus square feet into light industrial manufacturing to offer food makers with high volume needs the capability to produce their product. Providing a studio and test kitchen for concept creation and food photography is in the works. “Our goal is to be the food hub of DFW by fostering education, innovation, and job growth,” Judge says. This goal includes small business education, workforce training, distributing its companies’ products, food storage, and manufacturing and bottling.
TWO COWORKING SPACES
EACH WITH 2,500 SF OF SPACE WITH 24/7 ACCESS
RESTAURANT SEATING SPACE WITH SEATING FOR 120
OF CURRENT CLASS SPACE
CURRENT FOOD MAKERS
SHARED KITCHEN SPACE
PRODUCT STORAGE WITH EXPANSION IN THE WORKS
READ MORE AT DALLASINNOVATES.COM.
AFTER RELOCATING TO NORTH TEXAS, THE COFFEE ROASTER AND DISTRIBUTOR KEEPS BREWING UP INDUSTRY SUCCESS FROM ITS NEW HOME IN NORTHLAKE KEY PLAYERS
GENERAL CONTRACTOR: EMJ Corp. PROJECT ARCHITECT: RGA Architects of Roanoke HEADQUARTERS INTERIOR DESIGN: Gensler & Associates CONSTRUCTION PROGRAM MANAGEMENT: Faithful + Gould REAL ESTATE: Stream Realty
BY L ANCE MURR AY
If you’ve recently had a cup of coffee at a restaurant, convention center, casino, or other institution, there’s a very good chance it was Farmer Brothers coffee. And, if it was, it came from the company’s headquarters and production facility in Northlake, the Denton County city to which Farmer Brothers relocated last year from its longtime home in Torrance, California. The 535,000-square-foot facility sits along Interstate 35W, directly across from Texas Motor Speedway. It’s a location executives say fits their needs to build the company that was founded in 1912. “It really checked every box,” President and CEO Michael Keown says, of the location that enhanced the
company’s ability to import 24 million to 28 million pounds of coffee beans a year — mostly from Central and South America — roast them, and ship the finished product all across the nation. That happens thanks to a state-ofthe-art 125,000-square-foot roasting plant and a 315,000 distribution warehouse. Inside the headquarters, employees are encouraged to visit the Public Domain for a cup of coffee to drink while they work. The coffee shop-like area features hot- and cold-brew coffees that can be made via multiple types of machines and coffee makers. Environmentally conscious, Farmer Brothers’ headquarters facility was constructed with 10 percent recycled materials, and is expected to receive LEED Silver certification.
TOTAL SIZE OF NORTHLAKE HEADQUARTERS AND DISTRIBUTION FACILITY
125,000 SF TOTAL ROASTING ROOM SPACE
APPROXIMATELY $90 MILLION TOTAL COST OF CONSTRUCTION
AMOUNT OF WIRING USED FOR EQUIPMENT CONTROLS IN THE ROASTING PLANT
16 MILLION POUNDS
GREEN BEAN WAREHOUSE STORAGE CAPACITY
READ MORE AT DALLASINNOVATES.COM.
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 6 7
SPECIAL ADVERTISING SECTION
ECONOMIC DEVELOPMENT DIRECTORY Looking for a new place for your company to call home? Consider this the start to your search. Dallas-Fort Worth is a great place to do business, and its vibrant and thriving communities offer myriad resources to help companies grow. With its high quality of life, strong state and regional economies, low cost of living, skilled labor force, and lack of corporate and personal income taxes, companies in DFW are well positioned to flourish in a market that ranks among the top three U.S. metropolitan areas for business expansions, relocations, and employment growth. The hardest part of your relocation search might just be choosing between DFW’s various communities, as they each provide unique qualities and impressive benefits. This guide to area economic development agencies at some of the best and most rapidly growing cities can help you get started.
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 decisionmakers 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
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
Allen is a vibrant community of creative and talented people driven by achievement. Allen’s success is no accident—it is a testament to the community spirit of amazing people who want a better place for their families. A probusiness environment and a superior quality of life come together to empower Allen’s residents and businesses to achieve higher levels of success. Be Part of Something Bigger: Allen’s community spirit, highperforming schools, family friendly recreation, and vibrant economy continue to attract business and residents to our city. We can rattle off the standard stats and accolades, but we do things differently. And that is what makes us great—we’re a vibrant and active community that connects our businesses, workers, and residents together to open the door for new opportunities.
Opportunities grow naturally in Cedar Hill, with its vibrant businesses, natural beauty, and a familyfriendly quality of life. With a location just 20 minutes from downtown Dallas, 30 minutes from Dallas Fort Worth International Airport, and 40 minutes from downtown Fort Worth, Cedar Hill offers outstanding amenities for business growth and relocation. ALLISON J.H. THOMPSON, Director CEDAR HILL ECONOMIC DEVELOPMENT 285 Uptown Blvd. Bldg. 100 Cedar Hill, TX 75104 972.291.5132 ext. 3 allisonthompson@ cedarhilltx.com cedarhilledc.com
ALLEN ECONOMIC DEVELOPMENT CORPORATION 900 West Bethany Drive Suite 280 Allen, Texas 75013 allenedc.com
SPECIAL ADVERTISING SECTION
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 firstname.lastname@example.org thecolonyedc.org
The City of Dallas Office of Economic Development is a fullservice shop that offers business development and area redevelopment programs, small business assistance, and innovative programs such as the City of Dallas Regional Center and New Market Tax Credits. We can successfully usher a project from beginning to end. The Office of Economic Development offers a range of programs and services to assist developers, investors, businesses looking to expand or relocate, and small businesses looking to grow. With innovative programs, a supportive business climate, and a city full of opportunities, we are ready to make your project a success. CITY OF DALLAS OFFICE OF ECONOMIC DEVELOPMENT 1500 Marilla St. Dallas, TX 75201 214.670.1685 dallas-ecodev.org
Hundreds of people relocate to Frisco each month, so we understand the challenges and opportunities that come with being the “new kid on the block.” With a five-year compound annual growth rate of 4.7 percent, Frisco specializes in turning change and new beginnings into a success story for people and businesses alike. The city’s innovative culture is a magnet for a highly educated and diverse workforce, many of whom are raising the next generation of innovators in one of the safest and most prosperous places in America. True and lasting partnership among the municipal government, public school district, and many community organizations is how a small farming community grew into the city with a $5 Billion Mile. The one-mile stretch along the Dallas North Tollway includes four mixed-use developments, either announced or under construction, worth more than $5 billion in capital investment. There’s room to grow in Frisco, Texas. Bring your dreams! Learn more about building a better business and a better life at FriscoEDC.com/videos and search #5BMILE on Twitter. RON K. PATTERSON, President FRISCO ECONOMIC DEVELOPMENT CORPORATION 6801 Gaylord Parkway Suite 400 Frisco, TX 75034 972.292.5150 friscoedc.com
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. ABBY LIU Interim President MCKINNEY ECONOMIC DEVELOPMENT CORP. / CITY OF MCKINNEY 5900 S. Lake Forest Drive Suite 110 McKinney, TX 75070 email@example.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 transitoriented 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 firstname.lastname@example.org www.nrhed.com
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 6 9
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.
DLR Group Staffelbach
Acme Brick Company
Briggs Freeman Sotheby’s International Realty
Ebby Halliday Real Estate Inc.
Active Network AECOM AECOM Hunt Aerotek Altair Global Amegy Bank of Texas American Airlines Inc. Armstrong Relocation AT&T Atmos Energy Corporation
Business Jet Center Capital One Bank CBRE Group Inc. CENTURY 21 Judge Fite Company Champion Partners Chase Chickasaw Nation Children’s Health System of Texas Choctaw Nation of Oklahoma
Ernst & Young Estrada Hinojosa & Company Inc. Ewing Automotive Group FedEx Office Fidelity Investments Fluor Corporation Foley Gardere LLP Forest City Texas Inc. Frost Bank Furniture Marketing Group
Clark Hill Strasburger
Grant Thornton LLP
Haynes and Boone
Hill & Wilkinson General Contractors
Hillwood Development Company LLC
Hilti North America
Corrigan Investments Inc.
Crowe Horwath LLP
Hines Interests Limited Partnership
Dallas County Community College District
Dallas Stars Hockey Club
bkm Total Office of Texas
Blue Cross and Blue Shield of Texas
DFW International Airport
Austin Industries Axxess Balfour Beatty Bank of America Bank of Texas Barnes & Thornburg Baylor Scott & White Health BB&T BBVA Compass BE&K Building Group
7 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
Hoar Program Management LLC HollyFrontier Corporation Holmes Murphy & Associates HOLT CAT HPI Real Estate Services & Investments/ Ross Tower SPRING 2018
Penske Motor Group
The Freeman Company
HUB International Insurance Services
The Kroger Co.
Hunt Consolidated Inc./Hunt Oil Company
The University of Texas at Arlington
Thompson & Knight LLP
Premier Truck Group
Prime Rail Interests LLC
Toyota Motor North America
Jacobs Engineering Group Inc.
RSM US LLP
Trinity Groves LLC
Santander Consumer USA
Trinity Industries Inc.
KDC Real Estate Development Investments
Turner Construction Company
SCHMIDT & STACY Consulting Engineers Inc.
U.S. Trust-Div of Bank of America
Linebarger Goggan Blair & Sampson LLP
Southern Glazer’s Wine and Spirits
Hunton Andrews Kurth LLP Interceramic Jackson Walker LLP
Littler Mendelson PC Locke Lord LLP Manpower, a ManpowerGroup Company
Southern Methodist University Stantec State Farm Insurance Companies Stewart Title
UMB Bank NA University of North Texas System University of Texas at Dallas UT Southwestern Medical Center Veritex Community Bank
Verizon Wireless Regional Corporate Office
NEC Corporation of America
Tenet Healthcare Corporation
Norton Rose Fulbright
Texas Central Partners
Texas Health Resources
Texas Instruments Incorporated
Women’s Foodservice Forum
Options Clearing Corporation
Texas Woman’s University
Pacific Builders Inc.
The Beck Group
Parkland Health and Hospital System
The Boston Consulting Group
Paul Quinn College
The Crowther Group
Mary Kay Inc. McCarthy Building Companies Inc. Methodist Health System
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 7 1
Ran Holman, Chairman Jim Knight, Chairman-Elect
Bank of America Merrill Lynch/Bank of America Charitable Foundation Inc. Bank of Texas Compatriot Capital Inc. Deloitte Fauxcades Granite Properties HFF Hilton Anatole Hotel JP Morgan/ JP Morgan Chase Foundation NexBank
Balfour Beatty Construction Billingsley Company CBRE Corgan Associates Inc Crow Holdings Capital Partners LLC EY Frost Bank Holt Lunsford Commercial Invesco Real Estate Jackson Walker LLP JLL KDC KPMG LegacyTexas Matthews Southwest Munsch Hardt Kopf & Harr PC Republic Title of Texas Inc. Stantec Stewart Title StreetLights Residential The Howard Hughes Corporation Winstead PC
PRESIDENT’S CIRCLE 42 Real Estate LLC Bank of the Ozarks
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.
BB&T BBVA Compass/ BBVA Compass Foundation Champion Advisory Partners Chief Partners LP Comerica Bank Cushman & Wakefield DPR Construction Inc. Eastdil Secured GFF Goldman Sachs Haynes and Boone LLP Jackson-Shaw Locke Lord LLP NorthMarq Capital ORIX Real Estate Americas/ Orix Foundation Spirit Realty Capital Stream Realty Partners Texas Capital Bank Thackeray Partners Todd Interests Trammell Crow Company US Bank
Adolfson & Peterson Construction AECOM Hunt AG&E Structural Engenuity American National Bank of Texas Arch Con Corporation Bank of America Plaza BBG Beck Group Berkadia Commercial Mortgage Bradford Companies Brasfield & Gorrie LLC Capital One Bank Capright LLC Chicago Title Company/Fidelity National Financial (FNF)
Colliers International Communities Foundation of Texas Corinth Properties Cortland Partners Davidson & Bogel Real Estate EMJ Corporation Gables Residential Gaedeke Group LLC Gardere Wynne Sewell LLP Grant Thornton HALL Group Hillwood Urban Hines Interests LP Hunt Mortgage Group Invitation Homes Jones Day JPI Kane Russell Coleman Logan PC KeyBank Kimley-Horn and Associates Inc. Lincoln Property Company Mill Creek Residential Trust LLC Mohr Partners MUFG Union Bank OMNIPLAN Inc. PegasusAblon Properties Perkins+Will PGIM Real Estate Finance PlainsCapital Bank PM Realty Group PUREPOINT Financial Real Estate Deal Sheet Regions Bank Sarofim Realty Advisors Schwob Building Company th+a Architects Inc. The Retail Connection TIER REIT Inc. Trammell Crow Residential Transwestern Turner Construction Company
Vinson & Elkins LLP Walker & Dunlop Wells Fargo Bank Westmount Realty Capital LLC
Alpine Roofing Construction Already Design Co AOS Engineering LLC Armstrong Flooring Carrco Painting Drywall Interiors LP EHP Consulting & Bellphi Environmental Epic Paver Facility Solution Flooring Effects Fource Co. Gemini Stage Lighting & Equipment Co. Inc. Gentzler Electrical Services Inc. Gordon Highlander H & H Outfitters J&S Audio Visual Kellen Flooring Solutions Kite’s Int. Lang Partners Marek Brothers Systems Inc Mckinney Office Supply Parmenter Realty Partners PDL Polk Mechanical Co. LLC Precision Demolition LLP Precision Specialty Floors Premier West Builders RJS Painting Inc. Rod Stanley Shaw Contract Flooring SWA Group TD Industries WFAA-Channel 8
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. 7 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
Learn more at recouncil.com or by calling 214-692-3600. SPRING 2018
CALENDAR OF EVENTS
Make plans now to attend these upcoming real estate and business events. For information on programs hosted by The Real Estate Council, visit recouncil.com. For details on events presented by the Dallas Regional Chamber, visit dallaschamber.org.
MAY 30 Power Hour: Innovation District Walking Tour See how the Dallas Innovation District is rising! Learn about West End’s plans to build the smartest park in America. Our walking tour will include a look at Factory Six03’s mixed-use space and the ways the West End is becoming the hottest tech spot in Dallas. Please note: This event is for Investor-level members and above. [TREC]
SEPT. 19 Bank of Texas Speaker Series: Transportation Revolution Save the date for TREC’s next Speaker Series event on the future of transportation in our region! We’ll be talking about drone use, hyperloop, and driverless cars with Leander Johns of Uber, Steven Duong of AECOM, and Rod Schebeth of Stantec, so mark your calendars now! Don’t miss out! [TREC]
SEPT. 28 22nd Annual Women’s Business Conference Hyatt Regency Dallas The Dallas Regional Chamber’s 22nd Annual Women’s Business Conference, presented by Jackson Walker. [DRC]
OCT. 18 2018 YP Summit The YP Summit is an all-day conference focused on developing future leaders by providing 300+ young professionals the opportunity to build relationships, engage in transformative learning opportunities, and interact with civic and business leaders in a top-tier conference setting. [DRC]
OCT. 24 Market Matters: Capital Markets Summit The Crescent Gallery Ballroom Join us Oct. 24 at The Crescent Gallery Ballroom to get the latest insights and 2019 projections from HFF’s Mark Gibson and our panel of experts in office, industrial, multifamily, and retail. [TREC]
COMMUNITY DAY 2018 FOCUSES ON SOUTHERN DALLAS COUNTY BY NICHOLAS SAKELARIS
The hard work done by Dallas Regional Chamber’s Leadership Dallas class is well known, like this year’s garden project at the Austin Street Center. The annual class project is just the beginning. For people who take the class and want to continue giving to the community, there’s the Leadership Dallas Alumni Association’s annual Community Day. On Jan. 27, 150 volunteers gathered at Southwest Center Mall to offer assistance to six nonprofits — all based in southern Dallas County. They dispersed to help Mission Cedar Hill, Tri-City Animal Shelter, Harmony CDC, Head Start of Greater Dallas, K.I.P.P Destiny, and Hope Mansion. “It’s an amazing experience to bring all these people who are from all over Dallas, who are graduates of the program who say they want to devote time to service,” Community Day Co-Chair Cynthia Mickens Ross says. In addition to the Leadership Dallas Alumni, the event included their families, members of Leadership Southwest Alumni, and a troop of Girl Scouts. “That was amazing as well because these young girls were there on every single project, so they got experience of how important
it is to volunteer,” Mickens Ross says. For Mickens Ross, this year’s Community Day had a special place in her heart because it focused on the southern half of the county. “We have always done projects that were in West Dallas, East Dallas, or downtown,” Mickens Ross says. “I hadn’t seen them come so far south of the Trinity as we were able to do this year. To really see us have the largest turnout for Community Day and for us to service six nonprofits in one day … it put a big smile on my face.” Community Day used the old Southwest Center Mall as its hub of operations, giving Leadership Dallas Alumni, developer and investor Peter Brodsky a chance to show off what he has planned at the 1970s-era mall. He plans to reinvent the mall, bringing back the more well-known Red Bird Mall moniker and turning it into a mixed-use project. Amenities planned include a theater, economic development and training center, a Starbucks, and a hotel. “It will be a one-stop shop, you’ll be able to go to Red Bird Mall and get anything done that you want,” Mickens Ross says. “I’m so excited about that. We will have the same level of amenities available to us as you find in any other part of the Metroplex.”
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.
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 7 3
THE REAL ESTATE COUNCIL YOUNG GUNS 2018 CASINO NIGHT YOUNG GUNS FOUNDATION CO-CHAIR JESSE MONTGOMERY, YOUNG GUNS FOUNDATION COCHAIR BENTON SMITH, DONALD WESSON CORNERSTONE BAPTIST CHURCH, PASTOR CHRIS SIMMONS OF CORNERSTONE BAPTIST CHURCH, TREC CHAIR RAN HOLMAN, CASINO NIGHT CHAIR RYAN UMBERGER, TREC PRESIDENT AND CEO LINDA MCMAHON, TREC YOUNG GUNS CHAIR DAVID ESEKE
The Real Estate Council hosted more than 500 young professionals at Park District on March 1 for its annual Young Guns Casino Night, which was themed “Under the Sea.” Proceeds from the event, which included casino-style gaming and luxurious raffle prizes, benefited this year’s TREC Young Guns Foundation Project to renovate the Cornerstone Baptist Church Community Laundromat as part of the Dallas Catalyst Project! Thank you to everyone who helped make this year’s Casino Night one of the best yet!
RANDE LECOURS, ADAM LECOURS, KELLIE JASSO, AND BIANCA PORITZ
MEREDITH QUIGLEY AND ANNA PROCTER
ASHLEY CARTER, TODD MARCHESANI, AND SUMNER BILLINGSLEY
JAY DREILING AND ANN MARIE DANIEL
74 / 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
STEPHEN CROSSON: STRADDLING THE ROPES OF TWO WORLDS BY AMY WOLFF SORTER
KARI AND JOSH BEETS
AMY AND ELIAS BAHAR
DAVID AND MORGAN ESEKE
If you Google “Stephen T. Crosson,” what pops up is a lot of commercial real estate-specific information. Crosson’s decades-long career includes his current role as Principal with Capright, and other prominent positions, such as chairman and CEO of Crosson Dannis Inc., and board chair/editor-in-chief of The Appraisal Journal. It says he has served as an expert witness on real estate valuation cases. What is lacking in those results, however, is that for decades, Crosson has been involved with professional boxing. Heavily involved. That’s why it makes sense that another of his roles is co-founder and recurrent Boxing Chairman of The Real Estate Council’s FightNight. The annual event, now in its 30th year, is a popular charitable endeavor. Everyone who is anyone in the Dallas-Fort Worth commercial real estate community attends, with proceeds going toward the TREC Foundation. This year’s event was expected to raise $26 million. “I’ve been doing this as long as I have, because they can’t find anyone else with the strange set of skills I have,” Crosson says, with a laugh. FightNight is a glittering affair which typically attracts around 1,500 people. However, the situation was different in 1989, when the event made its debut. “The Dallas real estate industry was completely in the tank,” Crosson says. “We were in the worst possible recession—some would say depression—in commercial real estate. We thought we might be able to, maybe, get 300 people to attend.” The result? “We ended up with 880 people, and a long waiting list,” Crosson says. Crosson was an industry expert when FightNight debuted. A “fourth generation” Dallas native, Crosson attended the University of North Texas for a BBA in banking and finance, and Southern Methodist University for graduate studies in real estate. He wanted a real estate career but didn’t see brokerage or property management as a good fit. Real estate valuation was the logical choice. As he puts it: “I have pretty good analytical skills.” Much as the first FightNight was little like today’s event, the appraisal industry also
differed from today’s highly regulated sector. “There was really no regulation, per se,” Crosson says. “You didn’t need a license.” That was before passage of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, which mandated specific real estate appraisal regulations. As Crosson became an expert appraiser, he also became an expert boxing referee. Crosson’s father was an amateur boxer and, at one point, a family friend asked Crosson for help with a “little tournament in Irving.” That “little tournament” consisted of 55 fights — with young Crosson the only referee. “That was my indoctrination into the sport,” he says. From that auspicious start, Crosson’s avocation led to roles such as World Boxing Council (WBC) referee, treasurer and spokesman, and World Boxing Council Continental Americas treasurer. He testified before a U.S. House of Representatives Subcommittee often on boxing safety and reform. Although he officially retired as a referee in 1990, Crosson continues to keep his hand in the sport, with the connections he made continuing to populate TREC’s FightNight with many boxing notables. Previous celebrity guests have included George Foreman, Sugar Ray Leonard, and Muhammad Ali. Marvelous Marvin Hagler attended this year’s event. Though connecting the worlds of boxing and property appraisal might be tough, Crosson doesn’t see it that way. “A lot of what I do in valuation is litigation support and as an expert witness,” Crosson explains. “Myself against opposing counsel. He’s trying to beat me, and I’m standing up to him.”
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 7 5
VIEW FROM THE TOP
BY LANCE MURRAY
Services headquarters is centrally located within Boeing’s U.S. footprint and has good proximity to major operations for commercial customers and defense partners. Since our customers are dispersed worldwide, the Dallas hub allows us to reach them quickly and efficiently.
WHAT SETS BOEING GLOBAL SERVICES APART FROM OTHER BUSINESSES IN YOUR INDUSTRY?
STAN DEAL President and CEO, Boeing Global Services Boeing Global Services opened its headquarters in Plano last year with a lot of media attention, and a focus on meeting the needs of government, space, and commercial customers around the globe. President and CEO Stan Deal took time from his busy schedule to answer a few questions about how and why Boeing Global Services chose North Texas for its home. TELL US ABOUT BOEING GLOBAL SERVICES OPERATIONS HERE IN DALLAS-FORT WORTH.
Boeing launched its Global Services business unit in July 2017, operating alongside Commercial Airplanes and Defense, Space and Security. This dedicated services business focuses on sustainment needs of government, space, and commercial customers worldwide. Global Services’ headquarters, located in Plano, is home to approximately 75 employees — and growing — and spans the globe with approximately 20,000 employees. Our business brings innovative services solutions to customers in four key capability areas: Supply Chain, Engineering, Modifications & Maintenance, Digital Aviation & Analytics, and Training & Professional Services. 7 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
HOW DOES THE NORTH TEXAS AREA FIT INTO THE NEEDS OF YOUR EMPLOYEES?
Boeing has been part of a rich pioneering legacy in Texas for more than 70 years. In fact, we have approximately 3,700 employees in multiple locations throughout Texas. We also have more than 600 Boeing suppliers in Texas who support an estimated 39,000 direct and indirect jobs and contribute $1.4 billion in economic impact. And, Boeing employees are active members of the community volunteering thousands of hours in our communities. Expanding to North Texas was a natural fit for us. This location aligns with our mission to provide uncompromising service to our customers worldwide. Our Global
Our dedicated services business sets us apart from the competition. Our customers asked for innovative solutions faster while driving down costs, especially in services since 70 percent of platform lifecycle costs are attributed to services. We listened and responded by launching Global Services. Having a dedicated Services business allows us to cultivate that entrepreneurial spirit and tap into the unlimited innovation within Boeing so we can bring solutions to market within weeks versus years, as we have freed ourselves from the regulated processes necessary for new production. Yet we are The Boeing Company. Our resources and global presence give us the unique ability to positively disrupt the market with unparalleled innovation.
IN YOUR SITE SELECTION PROCESS, WHAT TIPPED THE SCALE IN FAVOR OF THE PLANO LEGACY WEST LOCATION?
We could not be more thrilled with Plano and the Legacy West complex and all of the options for dining, shopping, and lodging within walking distance. It is perfect for our employees, as well as for our business partners and customers that visit us. In fact, we are already expanding our footprint with an additional 35,000 square feet to accommodate growth. This added capacity will allow for more than 200 employees at this location.
THE HEIGHT OF LO C A L E
Ross Towerâ€™s 45 stories of Class A office space provide distinctive accommodations at an iconic, architecturally stunning downtown destination. Conveniently located near Klyde Warren Park and the Arts District, and featuring a selection of on-site dining options and amenities, Ross Tower places you in an unparalleled setting at the heart of the city.
For leasing info contact HUNTER LEE 214.954.3304 email@example.com
R O S S TOW E R .CO M
Ross Avenue, Dickies Arena, Design & Construction Roundtable, The Crane Report