Dallas-Fort Worth Real Estate Review - Summer 2018 by DALLAS NEXT

DFWREALESTATEREVIEW.COM

HUB OF ACTIVITY YEARS IN THE MAKING, THE

I N T E R N AT I O N A L I N L A N D P O R T O F D A L L A S THRIVES AS ITS PROFILE RISES

ALSO INSIDE:

DALLAS-FORT WORTHâ&#x20AC;&#x2122;S GREEN FUTURE MULTIFAMILY ROUNDTABLE SUMMER 2018

INNOVATION: DATA CENTERS

DESIGN WITH COMMUNITY IN MIND Supporting our communities from local offices in Dallas, Fort Worth and Plano.

BOKAPowell

Lamar Union Austin, Texas

DALLAS | AUSTIN | FORT WORTH

TEXAS SOCIETY OF ARCHITECTS 2018 DESIGN AWARD AIA AUSTIN 2018 DESIGN AWARD ULI AUSTIN IMPACT AWARDS 2017 INNOVATION AWARD

ON THE COVER Union Pacific’s Dallas Intermodal Terminal is the heart of the International Inland Port of Dallas. Photo by Michael Samples

SUMMER 2018

CONTENTS

21 THE CRANE REPORT

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

FOUNDATIONS DFW Market Statistics, Economic Indicators, and Commercial Real Estate News. . . . . . . . . 12

PLACEMAKERS Todd Interests . . . . . . . . . . . . . . . . . . . . . . . . . 14

BUILDING TOMORROW TOGETHER

32 ROUNDTABLE

‘Since Our Last Meeting’. . . . . . . . . . . . . . . 18

THE CRANE REPORT Who’s Building What, Where . . . . . . . . . 21

SCORECARD DFW’s Top Office, Industrial, and Retail Leases . . . . . . . . . . . . . . . . . . . . . . 28

ROUNDTABLE Industry Experts Take On the DallasFort Worth Multifamily Market . . . . . . . 32

SUMMER 2018

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

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

DFWREALESTATEREVIEW.COM

46 FEATURE The Green Future of Dallas-Fort Worth Area Developers, designers, and cities are pushing sustainability forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

D MAGAZINE PARTNERS BUSINESS GROUP PUBLISHER Josh Schimmels

PUBLISHER Quincy Curé Preston 214-523-5215 quincy.preston@dmagazine.com MANAGING EDITOR Lance Murray ASSOCIATE EDITOR Alex Edwards CREATIVE DIRECTOR Michael Samples

52 ANATOMY OF A DEAL

CONTRIBUTING EDITOR Julia Bunch

Hub of Activity

Years in the making, the International Inland Port of Dallas thrives as its profile rises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

CONTRIBUTING WRITERS Kerry Curry David Kirkpatrick Nicholas Sakelaris ACCOUNT EXECUTIVES

INNOVATION

Samantha Ragsdale

Data Centers in North Texas Creating a Class of Their Own DFW is a Top 5 Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

214-523-0384 samantha.ragsdale@dmagazine.com Carson Rice 214-523-5259 carson.rice@dmagazine.com

SPECIAL ADVERTISING SECTION

BUSINESS DEVELOPMENT MANAGER

Economic Development Directory Profiles of cities around the region . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Stephanie Mojonnet 214-523-0311 stephanie@dmagazine.com MEDIA DEVELOPMENT MANAGER Vanessa Santillan

COMMUNITY The Real Estate Council, Impact Investors . . . . . . . . . . . . . . . . 85 Dallas Regional Chamber, Top-Level Members . . . . . . . . . . . . . 86 Dallas Regional Chamber, Leadership Dallas . . . . . . . . . . . . . . . 88 Calendar of Events . . . . . . . . . . . . . . 89

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INTERNS

Photos: TREC’s Young Guns Forum . . . . . . . . . . . . . 90 The Real Estate Council, TREC Leadership . . . . . . . . . . . . . . . 91 View From the Top: Wan Kim, CEO & Owner, Smoothie King . . . . . . . . . . . . . . . . . . 92

Yvena Chowdhury Chrisa Head Rachel Linch Meredith McGrath

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 this publication may be reproduced or reprinted without written permission. Neither the Dallas Regional Chamber nor The Real Estate Council nor D Magazine Partners is a sponsor of, or committed to, the views expressed in these articles. The publisher is not responsible for unsolicited contributions.

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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

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DALLAS • FORT WORTH • AUSTIN • CHICAGO gatewayplanning.com | 214.529.7430 | 817.348.9500

WELCOME

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

REACHING NEW HEIGHTS IN HIGHER EDUCATION

PRESIDENT & CEO Dale Petroskey

Higher Education in the Dallas region looks a lot like the business community in the region

— innovative and growing rapidly. Higher Education plays a critical role in our economy, and we are fortunate to live in a region where it not only thrives, but is recognized as a critical element to our region’s economic success and growth. When it was announced in late July that the University of Texas at Dallas had qualified for the National Research University Fund — one of only three schools in the state to do so — it was just the most recent recognition of the Dallas Region’s ascendance in the higher education space. Over the past two years, our regional universities are being increasingly recognized for outstanding research and academics. For example, the University of Texas at Arlington became the first North Texas institution to receive funding from the Texas Governor’s University Research Initiative. And, the Dallas Region is now home to three of the seven “emerging research institutions” in Texas, all having been named “Research-1” or “highest-research” institutions nationally by the Carnegie Classification of Institutions of Higher Education, the definitive list for the top doctoral research universities in the United States. We also lead the nation in creating innovative ways to connect students to the workforce. Paul Quinn College in southern Dallas became the first urban and historically black college to be named a “Work College” by the U.S. Department of Education. This designation requires students to work 10 to 20 hours per week, gain workforce skills, earn an income, and save over $10,000 in tuition. This program has elevated Paul Quinn College students, many of whom are first-generation, to learn and grow alongside some of the biggest names in Dallas business. Just up the road, UNT Dallas has led in supporting primarily minority and low-socioeconomic students, in career-focused education. The university asks industry partners to design curriculum with faculty to ensure that students graduate with the skills needed to contribute to our growing industries

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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

and make a living wage. Our region’s institutions are also growing at a record pace in enrollment, research, and academic prestige — each with individual strengths in their offerings. While many other regions have one institution as a focal point of academic resources, our region is unique by offering a robust ecosystem of dozens of opportunities for post-secondary education at institutions with a wide-range of expertise. With a combined enrollment of more than 250,000 students, we produce more than 45,000 graduates every year — 64% of whom decide to stay right here and join the Dallas Region’s workforce: This signals how important that university pipeline is to the health of our business community. Since 2010, more than 120 companies have relocated to the Dallas Region, hundreds more existing companies have expanded operations, and more than 800,000 new jobs have been created. This would have not been possible if business executives had doubted the ability of the Dallas Region to produce and replenish a pipeline of talent through our regional higher education system. Business leaders understand that higher education is a key component of our economy and our future. The interests of students and the business community are directly aligned: improving educational opportunities and outcomes for local students creates better career options for them — and a sustainable, highly-trained workforce for Dallas-area businesses, now and in the future. With our increasingly excellent higher education institutions in the Dallas Region, our future workforce and research capacities are sure to reach new heights, and our economy will continue to soar.

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

SUMMER 2018

DESTINATION: FITNESS.

EXPANDED 9,000 SF ATHLETIC CLUB COMING THIS YEAR. #DestinationTCC

FOR MORE INFORMATION, CONTACT: Ramsey March, Sara Terry, or Scott Sowanick at 214.267.0400 TRAMMELLCROWCENTER.COM

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

A letter from the Publisher

Dallas-Fort Worth has continued to see growth in new projects in the first half of 2018 encompassing all real estate sectors—gleaming office buildings, massive industrial and manufacturing facilities, and amenity-laden multifamily developments— that will help form the face of North Texas for years to come. We Texans love to think big, and our cover story this edition highlights one of the biggest industrial and logistics developments in North Texas, the International Inland Port of Dallas. It’s a 7,500-acre project that contains a Union Pacific intermodal facility and is flanked by three major interstate highways. Beginning on Page 52, writer Kerry Curry tells how the massive development rose from an idea by Fort Worth developer Mike Rader to become the busy hub of freight, transportation, and warehousing that it is today. Dallas-Fort Worth continues to get denser and more urban, and in our roundtable discussion starting on Page 32, an A-list panel of experts engages in a lively discussion about the region’s multifamily residental market. We’re growing by 150,000 people a year, and the region has roughly 50,000 units set to be completed by 2019. That growth is making multifamily a sector that is becoming more interesting than ever. Beginning on Page 46, writer Julia Bunch takes a look at green construction. North Texas has been recognized by Site Selection magazine as one of the nation’s top regions for sustainable building practices. It’s all about creating an energy-saving,

RESPONSIVE | RESOURCEFUL | RELIABLE

wellness-promoting environment in which we can live and work. Our Innovation feature by writer David Kirkpatrick, beginning on Page 60, examines the booming data center market in Dallas-Fort Worth and how these unique structures are becoming a class unto themselves in the real estate industry. DFW is one of five Tier 1 data center markets in the U.S., and we give you a glimpse inside two major data centers — the massive 2.46 millionsquare-foot Facebook facility in Fort Worth and RagingWire’s 1.5 million-square-foot campus in Garland. Our Placemakers feature beginning on Page 14, showcases Todd Interests and its East Quarter development in downtown Dallas. It’s the first project in which Shawn Todd has teamed with his sons, Patrick and Philip. As always, you’ll find the biggest lease transactions in office, retail, and industrial in Scorecard beginning on Page 28, and the latest in North Texas construction projects in the Crane Report beginning on Page 21. You can find extended content on our website, www.dfwrealestate.com, and in our Facebook feed. Stay in touch, we want to hear from you.

Quincy Curé Preston Publisher

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SUMMER 2018

TEXAS DESTINATION FOR

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

Celebrating r 2 Year in the C mercial Real Estate C munity and r new h e at The Berkshire.

TRUTH · CUSTOMER SERVICE · EXPERTISE · GROWTH · LEARN · PERFORMANCE · FUN · GOLDEN RULE www.holtlunsford.com

THE VIEW MAY CHANGE, BUT OUR VALUES REMAIN THE SAME.

HLC Corporate Headquarters 5950 Berkshire Lane Suite 900 Dallas, Texas 75225

Fort Worth Oﬃce 300 Throckmorton Street, Suite 550 Fort Worth, Texas 76102 Houston Oﬃce 11757 Katy Freeway, Suite 250 Houston, Texas 77079

FOUNDATIONS

A baseline for the region’s future

INDUSTRIAL

INDUSTRIAL TENANTS CONTINUE TO FLOCK TO NORTH TEXAS COPELAND COMMERCIAL’S I-20 COMMERCE CENTER IN LANCASTER

with activity focused on the DFW Airport (5.4 million square feet) and South Dallas and Alliance submarkets (4.7 million square feet each). So far this year, 10.8 million square feet of new industrial space has been delivered to the market. Notable leases signed during the second quarter include VM Innovations in South Dallas (416,891 square feet), Rent the Runway in Great Southwest (319,200 square feet), and XPO Logistics at Alliance (318,768 square feet).

10.8 MILLION SF

INDUSTRIAL SPACE UNDER CONSTRUCTION IN DALLAS-FORT WORTH

NEW INDUSTRIAL SPACE DELIVERED TO THE DFW INDUSTRIAL MARKET SO FAR IN 2018

725.2 MILLION SF

TOTAL INDUSTRIAL INVENTORY IN DALLAS-FORT WORTH

ENERGY

DEMAND IN 2043: LOOKING AHEAD Walter Bialas, vice president and director of research at JLL in Dallas, has taken a look at how population growth in Dallas-Fort Worth will influence how the region looks in 25 years. A new report estimates how many homes, office buildings, and industrial facilities will be needed, as well as multifamily housing. Based on a standard 65/35 split between singlefamily and multifamily, he says the region will need to build 900,000 new homes

22.6 MILLION SF

and 640,000 apartments. Population growth of roughly 4 million new residents will spur development of another 325 million square feet of industrial, warehouse, and manufacturing space, Bialas says. The amount of office space will need to grow, too. Assuming higher utilization rates of perhaps 150 square feet per office employee, DFW’s existing inventory of 225 million square feet would need to grow by 125 million square feet to accommodate new businesses that could emerge in the future, he says.

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STABLITY, SOME EXPANSION RETURN TO ENERGY INDUSTRY Dallas-Fort Worth is an internationally recognized hub for energy companies that maintain their international, national, or regional headquarters in North Texas: Think Exxon Mobil, Pioneer Resources, and ConocoPhillips. Companies that serve the oil and gas industry such as Flowserve, Fluor, and Holly Frontier also call it home. After a tumultuous few years for the energy sector, stability has returned and these companies are looking for growth opportunities. And, with growth, comes additonal real estate needs. According to a new report from JLL, this stability is leading to some expansion by companies that “right-sized” in recent years. Efficiency and cost-control likely will remain, even as the sector continues to stabilize.

In North Texas, for example, Pioneer is constructing its new 1-million-squarefoot headquarters in Las Colinas. That new HQ will result in 650,000 square feet of office space returning to the market when Pioneer vacates Williams Square. What are the challenges? Remaining conservative on expansion, for one. Also leasing to startups, spin-off s, and recently recapitalized companies carries a higher risk, despite new capital investments, JLL said in the report. There are opportunities, too: As equity investment funds continue to support new companies in North Texas, new office demand could be generated. And, this new stability positions energy tenants to negotiate longer-term lease deals, albeit for smaller space requirements.

SUMMER 2018

KASAHASA/ISTOCKPHOTO

MARKET OUTLOOK

SOURCE: CBRE Cushman & Wakefield

Dallas-Fort Worth’s industrial sector continues to see fervent interest from tenants, developers, and investors. According to research from Cushman & Wakefield, net absorption for the second quarter came in at a whopping 8.5 million square feet, nearly double the 4.7 million square feet absorbed in the second quarter of 2017. The activity propelled midyear absorption to 11.7 million square feet, and puts the market on track to again eclipse 20 million square feet in net absorption for the year. Major move-ins during the second quarter include Kohler in South Dallas (1.3 million square feet), Tellworks in Arlington (722,733 square feet), and GE Appliance (702,000 square feet). Overall vacancy now stands at 6.4 percent, down a bit from the yearago figure of 6.6 percent. Leasing activity continues to keep pace with new development. The market currently has 22.6 million square feet of industrial space under construction, Cushman & Wakefield reports,

F FOUNDATIONS RETAIL

OFFICE

DFW POSTS NEAR-RECORD OCCUPANCY THE RETAIL SECTOR IS SHOWING STRENGTH MOVING INTO THE SECOND HALF OF THE YEAR IN BOTH OCCUPANCY AND NEW SPACE, WITH DALLAS-FORT WORTH LIKELY TO HIT 200 MILLION SQUARE FEET OF RETAIL SPACE FOR THE FIRST TIME IN ITS HISTORY BY YEAR’S END. That’s according to a recent report from the Weitzman Group that paints an optimistic picture of DFW’s retail real estate sector moving forward. The outlook for the North Texas retail market moving into 2019 remains “strongly positive, as retail is supported by growth in the key areas of population, job gains, and single- and multifamily-housing deliveries,” Weitzman says. The mid-year occupancy rate in 2018 was 92.5 percent, up slightly from the 2017 year-end total of 92.4 percent. This year’s occupancy rate is one of the market’s highest in more than three decades, second only to the 92.7 percent occupancy rate reported in DFW at year’s end in 2016, Weitzman says. Weitzman bases its mid-year 2018 occupancy rate on a review of a total DFW retail market inventory of 198.1 million square

feet of space in projects with 25,000 square feet or more, which Weitzman says is the largest retail inventory for any Texas metro area. Despite some major store closings — think Sears and Toys “R” Us — the DFW market has maintained steady occupancy because those closures are largely being off set by preleased new construction and the backfilling of large retail vacancies, Weitzman said in the mid-year report. The Sears and Toys “R” Us closures are resulting in more than 1 million square feet of vacancy, Weitzman says, and involve three Sears mall anchor stores and several locations of the toy retailer totaling 600,000 square feet. Weitzman doesn’t expect those buildings to remain vacant, though, as there has been interest from concepts ranging

DALLAS-FORT WORTH RETAIL MARKET

100% 100%

[MILLIONS OF SF] INVENTORY INVENTORY [MILLIONS OF SF]

200

from fitness uses to multitenant redevelopment. Of the vacancies, Weitzman expects the best locations to be redeveloped within the next 18 months. Combined, those closed stores represent just about one-half of one-percent of area vacancy, based on DFW’s retail inventory, Weitzman said. Leasing in existing centers this year is bolstering occupancies by eliminating vacancies of all sizes, and many projects involve renovations and redevelopments. Weitzman said that, in terms of new space, North Texas is experiencing significant development activity. By year’s end, the space expected to open is on track to approach the 4.1 million square feet that came online last year. The North Texas market is on track to add roughly 3.5 million square feet of retail space during this calendar year.

EXPANDING RETAIL CONCEPTS INCLUDE:

200

% OCCUPANCY % OCCUPANCY

92.5% 92.5%

90%

150

90%

2003

SOURCE: Weitzman

2008

INVENTORY INVENTORY

2013

198.1 M 198.1 M

2008

188.0 M 188.0 M

100

2003

170.1 M 170.1 M

100

147.9 M 147.9 M

150

2018

Based on second quarter year-to-date 2018 net leasing

80%

OCCUPANCY OCCUPANCY

SUMMER 2018

residents by January 2020. Under the ordinance, complexes with eight or more units must provide a capacity for 11 gallons of recyling a week for each unit. Landlords can use dumpsters, carts, bins, and compactors to achieve that mandate. Roughly half of Dallas’

Even as relocations and expansions continue across North Texas, the region’s office leasing is behind last year’s robust figures led by a surge in 2017 of big companies moving to new buildings. According to the latest estimates from commercial property firm Cushman & Wakefield, through the first half of 2018, businesses have net leased roughly 965,000 square feet of office space in Dallas-Fort Worth. That’s roughly a third of the net office leasing in the first half of 2017 — one of the strongest leasing periods in more than a decade — the firm said. “Overall deal activity remains strong,” Cushman & Wakefield Executive Director Johnny Johnson told The Dallas Morning News. “We are tracking more than 5.5 million square feet of active prospects in the market. “We are maintaining a healthy balance of supply and demand.” Cushman & Wakefield said that some of the largest office tenant moves in the second quarter were made by NTT Data in Plano, Steward Healthcare in Richardson, and Ethos Group in Las Colinas. In the second quarter, roughly 632,000-square-feet of net office leasing was counted, according to Cushman & Wakefield. Most of that leasing was in Richardson’s Telecom Corridor and the Legacy-Frisco area along the Dallas North Tollway, the report said. And, pending office leases by Samsung, 7-Eleven, Genpact, and Darling Ingredients should add to the demand totals in the second half of 2018 and into next year, Cushman & Wakefield said.

Top DFW Office Leasing Markets

80%

CITY OF DALLAS MANDATES THAT APARTMENTS MUST PROVIDE RECYCLING In a move aimed at helping Dallas reach its goal of becoming a zero waste city, the Dallas City Council has mandated that Dallas apartment communities and other multifamily dwellings must provide recycling for their

2018 LEASING ACTIVITY DOWN FROM 2017

residents live in multifamily buildings, but roughly a quarter of them offered recyling under the previous voluntary program. “The city and various groups have been working toward our zero waste goals for years now and this action is going to move the needle considerably,” Dallas City Council member Sandy Greyson said.

Telecom Corridor Legacy Frisco Downtown Dallas Las Colinas Downtown Fort Worth DFW Total

520,294 sq.ft. 352,653 sq .ft. 317,827 sq.ft. 245,095 sq.ft. 173,172 sq.ft. 935,657 sq.ft.

New Construction Las Colinas Uptown Dallas Legacy-Frisco North Fort Worth DFW Total

1,985,900 sq.ft. 654,375 sq.ft. 390,000 sq.ft. 328,354 sq.ft. 4,382,768 sq.ft.

SOURCE: Cushman & Wakefield

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P PLACEMAKERS

For Todd Interests, revitalizing a downtown Dallas neighborhood is a family affair When the East Quarter development on the eastern edge of downtown Dallas is completed later this year, it will mark two milestones — the reimagining of a long-overlooked neighborhood and the first project by Todd Interests founder Shawn Todd in collaboration with his sons, Patrick and Philip. East Quarter encompasses an area north of the Farmers Market and just west of Deep Ellum along streets that mostly converge around 2200 Main St. where the former nightclub Purgatory once operated. Todd Interests will transform the area into a mix of restaurants, creative office space, and residences, all connected by wider sidewalks and narrower roadways. It’s the latest in a long line of impressive real estate investments and developments for Todd Interests that include 400 N. Ervay and One Dallas Center in downtown Dallas. Shawn Todd, 55, founded the company in 1990 with the goal of acquiring and developing profitable and successful properties across the United States. Todd is a 1985 graduate of Baylor’s Hankamer School of Business with a BBA in entrepreneurship, real estate, and finance. It was there he met his wife, Cheryl. Patrick, 28, came to work with his father three years ago, and previously worked as a debt and equity analyst for Holliday Fenoglio Fowler LP. Before that, he managed 3 million square feet of office and industrial space along the East Coast for the Allegiancy real estate firm in Richmond, Virginia. “I didn’t even want to do real estate,” Patrick says. But, he thought, “maybe I’ll enjoy it.” Patrick’s previous experience provided a strong background. “I learned a ton about real estate, debt, and equity,” Patrick says. Then, he says, he was told by someone, “You’d be foolish not to join your father’s team.” Philip, 25, joined Todd Interests in 2017 after

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PHOTO: LANCE MURRAY

BY LANCE MURRAY SHAWN TODD (CENTER) CREDITS SONS PATRICK (LEFT) AND PHILIP AS LEADING THE WAY ON THE EAST QUARTER DEVELOPMENT AND OTHER PROJECTS.

working as an associate at the $70 billion private equity firm Lone Star Funds. There he worked for its credit lending platform LStar Capital. He also worked as an analyst at the Bank of the Ozarks, where he originated real estate deals in aggregate of $1.2 billion across all property classes. “I come from a lending background,” Philip says of his financial expertise. Todd’s daughter, Caroline, 23, works in the real estate industry as a financial analyst for StreetLights Residential. Shawn Todd is rightfully proud of his children. “They bring their own unique skill sets to the table,” Shawn Todd says, also citing what appears to be a family trait — a great work ethic. The East Quarter project was born when Patrick Todd was returning to the office from a meeting in Deep Ellum. He says he was sitting at the intersection when he noticed all the vacant buildings in the area. “I was driving from a meeting in downtown ... and had a chance to stop and look around at the Commerce intersection,” Patrick says. “I saw all the buildings were vacant. I thought, these are some of the finest, most beautiful, architecturally significant buildings in our city.” At first, Patrick judged the area by its exterior, but the more he looked into it, he soon realized the buildings were treasures. “I didn’t understand how well the buildings were done in the interiors,” Patrick says. Patrick says he reviewed tax records to see who owned the buildings — there were six different sellers — and the team went to work on making East Quarter a reality. “I think I was too young not to know better than to dig into it,” Patrick says. Todd Interests uses everyone’s “natural giftings” to make a project work, with each member of the team taking on a valuable role. To accomplish their vision for East Quarter, the Todds tore down the windowless 1980s-era one-story building fronting Main Street and Cesar Chavez Boulevard. Behind that building is the former home of dance club Purgatory — a five-story building that will be transformed into a Class A office building. In all, East Quarter will have roughly 200,000 square feet of creative office space. No vertical construction will be involved in creating East Quarter: It will involve the demolition and renovations within several of the firm’s 18 buildings in the area. The company will spend $2 million to improve the streets surrounding East

SUMMER 2018

P PLACEMAKERS

RENDERING: TODD INTERESTS

SUMMER 2018

EAST QUARTER CONTINUES TODD INTERESTS’ TRACK RECORD OF INVESTING IN PROPERTIES AND TURNING THEM INTO UNIQUE LANDMARKS IN THE CITY.

400 N. ERVAY IS HOME TO TODD INTERESTS’ OFFICES, AND, HE SAYS, IT’S HIS MOST SATISFYING PROJECT TO DATE.

capital, secured long-term office leases, and closed on the building — all in less than 90 days. In addition to office spaces on the lower 14 floors that now include the headquarters of Greyhound Lines Inc. and architectural firm HKS Inc., the upper 16 floors were converted to high-end residential. Todd Interests sold the 275 for-lease residences in the upper floor in June 2015 to an institutional investor and marked the completion of the renovation project in December 2015 when Woods Capital bought the office component and the parking garage. With projects underway across the country, the Todds stay busy. “We have great teammates here,” Shawn Todd says, a team that is built on “great communication.” Philip likened the firm’s teamwork to football, a sport in which players must work together for success. “We all block and tackle,” he says. Shawn Todd has had great success by investing in and bringing new life to notable buildings and properties. But he says he doesn’t find his greatest satisfaction just in bricks and mortar, shimmering office towers, or redeveloping a forgotten shopping mall. “It’s the people that you meet” along the way that you remember most, he says.

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PHOTO: LANCE MURRAY

Quarter, including widening sidewalks, adding landscaping, and reducing Cesar Chavez Boulevard from five lanes to three. Bike lanes on Jackson Street will connect to Santa Fe Trail and to the West End. Two new restaurant concepts by restaurateur Nick Badovinus will be launched in the Magnolia Oil/KLIF Building — National Anthem will have a rooftop patio, while PMA All Day will offer a breakfast and coffee concept. Current business tenants in the area include the software company Order My Gear and the branding firm Tractorbeam. Office leasing and property management will be handled by Peloton, headed by T.D. Briggs. Shawn Todd credits Patrick and Philip as leading the way on East Quarter and other projects, and he says he’s beginning a transition for the firm as his children gain more experience. “My role was very small now, which was very joyful,” Shawn Todd says. East Quarter continues Todd Interests’ track record of investing in properties and then turning them into unique landmarks in the city. Take 400 N. Ervay, for instance, which Todd Interests acquired in 2007. Originally built in 1929 as the largest federal building in the south, the United States Post Office and Court House is one of the most significant architectural buildings in Texas, Todd says. It is a registered historic national landmark and was home to a federal tax court and to the courtroom of U.S. District Judge Sarah T. Hughes — yes, the same Sarah Hughes who swore in Lyndon B. Johnson as president after the assassination of John F. Kennedy in 1963. Todd Interests maximized the benefits from Historic Tax Credits to turn 400 N. Ervay into a showcase. Now, the building is home to some of the most luxurious forlease residences in Dallas. Some 78 residents live in the building. A functioning U.S. Post Office still operates on the building’s first floor, as does a bustling cafe. Shawn Todd says 400 N. Ervay — home to Todd Interests’ offices — is his most satisfying project to date. “What I learned in this project were life-affirming,” he says. Nearby 400 N. Ervay, One Dallas Center was designed in 1978 by the renowned architect I.M. Pei & Partners and for a time was known as Patriot Tower. The 600,000-square-foot structure encompasses a 30-story tower and parking garage. When Todd Interests acquired the building in 2012, it had an occupancy rate of less than 10 percent. The firm formulated a business plan, found financing and

PA I D A DV E RT I S E M E N T

RENDERING: MERRIMAN ANDERSON ARCHITECTS

Mitsubishi Electric: Bringing Seamless, Safe Elevators and Escalators to Grandscape Grandscape, a 400+ acre communal hub, is soon to become the epicenter of the Dallas/ Fort Worth area. With plans to feature an array of upscale dining options, major retail brands, co-working spaces, unique entertainment venues and luxury housing, the mixed-use project developed by Berkshire Hathaway’s Nebraska Furniture Mart is already bringing in 8 million visitors per year – and is not slowing down anytime soon. Designed by the award-winning team at Merriman Anderson Architects, Dallas, Texas, Grandscape is a sought-after destination for all walks of life. With each successive phase through 2020, the project is expected to attract new opportunity and business to the area. With grand-scale development comes the need for seamless vertical transportation: elevators and escalators. Having earned a global reputation for smooth, quiet and safe transportation due to sophisticated engineering, energy-efficient motors and carefully selected, quality materials, Mitsubishi Electric Elevators & Escalators will be providing the exceptional vertical transportation Grandscape requires to serve its patrons.

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With Mitsubishi Electric ensuring safe and uniform operation, 35 elevators and six escalators will provide universal accessibility for six of Grandscape’s latest projects including Galaxy Theatres, Andretti Indoor Karting & Games as well as Live Grandscape – a 14-story apartment community that will include 345 units overlooking the development. Building on extensive successful retail partnerships, Mitsubishi Electric will apply vertical transportation aimed at adding to the luxurious Grandscape experience, and setting the standard for engineering, comfort, safety and preventative maintenance. Having served the U.S. marketplace since 1985, Mitsubishi Electric’s Elevator & Escalator Division opened a branch office in the Dallas/Fort Worth region in 2017. Mitsubishi Electric is proud to be expanding their offerings in one of the fastest-growing cities in the United States. Committed to the market, trouble-free maintenance and unmatched technology are what patrons and developers can expect from Mitsubishi Electric. Visit mitsubishielevator.com or email EEDSales@meus.mea.com to experience Quality in Motion™.

SUMMER 2018

PHOTO: DENNIS SWANSON, STUDIO 101 WEST

Experience World-Class Quality Elevators and Escalators Soon, Grandscape residents and visitors will experience their own world-class ride on Mitsubishi Electric elevators and escalators. We deliver the worldâ&#x20AC;&#x2122;s highest standards in innovation, efficiency, safety and comfort. Known for our Quality in Motionâ&#x201E;˘, we promise to provide passengers an experience that is unmatched.

To learn more, visit mitsubishielevator.com

B BUILDING TOMORROW TOGETHER

‘SINCE OUR LAST MEETING’ BY MIKE ROSA SENIOR VICE PRESIDENT, ECONOMIC DEVELOPMENT, DALLAS REGIONAL CHAMBER

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In July, we invited executives of a large California-based company we’ve visited multiple times to join us in Oxnard as a VIP guest at Dallas Cowboys training camp. They could not attend camp, but confidentially informed us they plan to make a move to the Dallas region. Hopefully, they’ll make an announcement soon. After learning this great news, my thoughts and conversation with staff turned to “we’ve been working with them for quite a while” as part of our corporate targeting and marketing efforts. I thought it had been two years: We checked, and

it turns out it was twice that. We first requested to visit and met their CFO on a marketing trip in 2014. Long lead times in economic development and real estate are nothing new, and this example is a good reminder for our team that consistent marketing and staying in front of good opportunities pays off. We left the 2014 meeting thinking this company is an excellent prospect. Its situation and characteristics matched well with what the Dallas region offers as a corporate location, and we resolved to keep in touch on subsequent trips—even though

SUMMER 2018

B BUILDING TOMORROW TOGETHER they confessed it would be a while before a move was possible. So, we showed up from time to time at their California home. When making return visits or calls with executives we’ve met once, twice, or more, sharing new information is important, and one of our favorite tactics. We’ve previously shared all the basics: We’ve conveyed and reinforced the primary reasons a particular company fits best in our region, so what’s left to talk about? Plenty. Our last marketing trip was the week of Aug. 12 in California and included companies we’ve met before. Here’s a sampling of our favorite “hot-off-the-press” updates: ■ Dallas-Fort Worth increased the number of technology degree graduates by 81 percent—5,700 annually—in the last five years. It’s the fastest growth of all technology talent markets in the U.S. Our region also has the largest tech labor force in the South—the fifth largest in North America at 160,800—while being the most affordable large market in the nation, all according to a report from CBRE that compares markets on the basis of technology talent. ■ The University of Texas at Dallas announced in July that it has qualified for the State of Texas’ “Tier One” fund, having achieved the critical benchmark criteria required to qualify for funding from the National Research University Fund, an exclusive source of research support available to Texas’ “emerging research universities.” ■ Dallas Fort Worth International Airport has received $180 million in federal funds toward a $278 million taxiway

expansion to help cut down on runway crossings, and get passengers to-andfrom gates faster. The airport plans to build a pair of taxiways to divert planes around, instead of across, runways. ■ It’s been a year since Toyota unveiled its new North American headquarters in Plano—a 100-acre corporate campus. Far above initial estimates, about 70 percent of 4,000 employees formerly in California, Kentucky, and New York decided to make the move here. ■ The Dallas Symphony Orchestra announced that acclaimed Italian conductor Fabio Luisi will be its next music director. Luisi said the quality and spirit of the orchestra are way beyond his expectations. ■ Area public schools are constantly improving. The Dallas Independent School District now outperforms state averages in 11 of 12 academic categories. Twenty-five percent of Dallas public school freshmen and sophomores are enrolled in early college classes. In the last year, 40 schools were upgraded and are no longer on the “improvement required” list. Companies engage the region’s public schools: 30 percent of all P-TECH (Pathways in Technology Early College High School) schools in the U.S. are in the Dallas region. Texas Instruments just awarded the Richardson Independent School District a $4.6 million grant to create a “STEM for All” program impacting 10,000 students. ■ Texas claimed the top spot in CNBC’s 2018 Top States for Business rankings, and added more than 350,000 jobs in one year. Dallas-Fort Worth is fueling this growth in Texas and has added more than 1 million people and more than 120 company headquarters since 2010. There are many more. We’ll only have 30 minutes or, if we’re lucky, an hour to meet with company leaders. Much of that time, we’ll dedicate to receiving an update on the company and its plans, so the balance must be used effectively to advance our cause. If it’s a return visit—though always ready to reprise our overall pitch—we’ve learned that it’s new information, fresh data, and deal points that keeps their focus sharp on our region and makes it worthwhile for them to meet us again. And when they do, they’ll know we’re with them for the long haul.

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

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

BUILDING TOMORROW TOGETHER The Dallas Regional Chamber’s economic development program, Building Tomorrow Together, provides organizations in Dallas-Fort Worth with an accelerated investment opportunity that helps advance our region’s success. This additional investment made by more than 130 organizations, in addition to annual chamber membership dues, allows organizations to increase their support of our efforts to further economic prosperity throughout the region. This initiative funds efforts related to direct contact with corporations and location consultants examining the DFW region.

SUMMER 2018

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JEFFERSON AT THE GATE

THE CRANE REPORT

Summer 2018

The demand for office space in Dallas-Fort Worth continues to be strong with many firms looking for a “work, live, play” environment. In each issue of the Dallas-Fort Worth Real Estate Review, we showcase projects that are underway or planned in the Crane Report. Maps for the office and industrial markets are provided by Transwestern. Data for the multifamily market is provided by Axiometrics, a RealPage company. BY LANCE MURRAY

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

OFFICE

NATHAN DURHAM Principal, Transwestern

“At this point in the game, suburban [office] activity is greater because the talent and labor pool is highly concentrated in Plano, Frisco, Richardson, Allen, McKinney, and other similar communities. When you take the labor stats and combine it with the amenity-laden office campuses in Plano, Las Colinas, Frisco, and Richardson, plus the ample parking, suburban activity is higher.” SUMMER 2018

TRAVIS BOOTHE

Director, Cushman & Wakefield

“Demand continues to be driven by the growing, educated workforce in North Texas and its businessfriendly environment. Last year, DFW saw the largest population growth in the country, with 146,000 new residents. Additionally, the cost of doing business in Dallas is 7 percent lower than the national average. That’s a powerful combination.”

INDUSTRIAL

MULTIFAMILY

SHANNON JOHNSTON

GREG FAULKNER

Senior Associate, Cushman & Wakefield

President, Humphreys & Partners Architects

“Tenants are seeking big-box warehouses with extra truck storage, higher clear heights to support the movement of goods, ample dock doors, and easy ingress/egress, which can help decrease drive times. Labor is critical, too. As companies battle for workers, projects that offer access to a ready supply of labor will have an advantage over the competition.”

“While an individual amenity is the more traditional answer, I believe the No. 1 amenity renters are looking for is connectivity. This encompasses physical items such as [having] a grocery store on the ground floor, but is also starting to include digital capabilities like home automation, community programming, and cloud technology, just to name a few.”

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THE CRANE REPORT:

OFFICE

OFFICES AT RAYZOR RANCH LEASE RAYZOR RANCH MEDICAL PARK BUILDING 4

DUCHESS OFFICE PARK FOURCORNERSTONES OFFICE BUILDING FORT WORTH DR PROFESSIONAL OFFICE PARK

ANNOUNCED + UNDER CONSTRUCTION

RIVER WALK MEDICAL PARK IV

ANNOUNCED DEVELOPMENTS 1

LAKESIDE CROSSING MERCEDES-BENZ FINANCIAL SERVICES

CEDAR MAPLE PLAZA

PAYCOM

CHARLES SCHWAB CORPORATE CAMPUS SOUTHLAKE MEDICAL OFFICES

SIZE: 660,000 square feet LOCATION: Uptown Dallas DEVELOPER: Granite Properties DETAILS: Granite is proposing construction of a 28-story office building and two small restaurant buildings on the west side of Cedar Springs Road at Maple Avenue, across the street from the Crescent complex in Uptown.

TRAD 5 THE HEADQUA

CHAPEL CROSSING

FREEPOR COMMON

HERITAGE GLEN MEDICAL CENTER

LAS COLIN CORPORA CENTER VILLAGE CREEK

AMERICAN AIRLINE CORPORATE CAMP

VIRIDIAN DEVELOPMENT

VIRIDIAN TOWN CENTER BUILDING I

THE OFFICES AT HAMPDEN WOODS

FAIRWAY CENTRE

BROOKHOLLOW COMMONS II

BALLPARK PLAZA II MUSEUM PLACE III

WATERSIDE

BUILD TO SUIT

KNOX STREET

SIZE: 250,000 square feet LOCATION: Dallas DEVELOPERS: Weir’s Furniture and Four Rivers Capital DETAILS: Weir’s and Four Rivers will build a new retail and office tower on the furniture store’s Knox Street site. The 297,000-square-foot high-rise will have 250,000 square feet of office space, a new Weir’s store, and additional retail.

OVERTON CENTRE TOWER III

CHISHOLM TRAIL PROFESSIONAL PLAZA

BARDIN ROAD CENTER PHASE II

WADDELL EXCAVATING

CHISHOLM TRAIL PROFESSIONAL CENTER

BROAD STREET PLAZA MANSFIELD MEDICAL OFFICE

DATA SOURCE: REAL ESTATE REVIEW RESEARCH/ DALLAS REGIONAL CHAMBER / VARIOUS REAL ESTATE FIRMS

MONARCH CITY

SIZE: 4.5 milion square feet LOCATION: Allen DEVELOPER: Howard Hughes Corp. DETAILS: Howard Hughes Corp. is partnering with the city of Allen on this mixed-use development that will feature 4.5 million square feet of office space, 4,000 square feet of multifamily residential units, 300,000 square feet of retail space, two hotels, restaurants, and entertainment space in a “live,work, play” model.

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SUMMER 2018

C THE CRANE REPORT COBB FARM WEST OFFICE PARK FRISCO MEDICAL PAVILION ELDORADO COMMONS RAILHEAD TOWER

MCKINNEY RANCH

STEWART CREEK OFFICE CENTER V WADE PARK OFFICE/RETAIL

PLAYFUL CORP HEADQUARTERS

STONEBRIDGE MEDICAL CONDOS

MONARCH CITY OFFICE FAIRVIEW EXECUTIVE PARK

ANGEL & ALLEN NATIONAL EXCHANGE & MAIN MEDICAL CENTER MUSTANG ALLEN PLACE III ONE BETHANY EAST SQUARE AT WATTERS CREEK CENTRAL GRANITE PARK 6 PLAZA AT LEGACY II 1000 CENTRAL AT WATTERS CREEK LEGACY BUSINESS PARK LEGACY LEGACY PARK C CENTRAL 5 WINDHAVEN PLACE ONE THE OFFICES AT WILLOW BEND PROFESSIONAL/ HERITAGE MEDICAL OFFICES CREEKSIDE TOWERS

THE REALM AT CASTLE HILLS

CROWN CENTRE OAKBEND CENTRE

THE GRID

MARSH LANE MEDICAL / OFFICE CONDOS

DE GROUP ARTERS RT NS BRINKER INTERNATIONAL

FOURTEEN555 THREE HICKORY CENTRE

NAS ATE R III HIDDEN RIDGE

ES PUS

THE POINTS AT WATERVIEW

7 CITYLINE

NORTH GARLAND MEDICAL CENTER

VILLAGE ON THE PARKWAY THE INWOOD AT ALPHA WEST DALLAS MIDTOWN - OFFICE

OFFICE/MEDICAL CONDOS

INFINITE PROSPECTS MIDTOWN MEDICAL TOWER

PROJECT BLUE STAR

OFFICE TOWER IN THE GLEN AT PRESTON HOLLOW

PIONEER NATURAL RESOURCES

PARK PLAZA

BAYLOR SCOTT & WHITE MEDICAL CENTER MOB III

PARKLAND KNIGHT

HARWOOD NO.10

THE DESIGN DISTRICT TOWER VICTORY CENTER GATEWAY OFFICE TOWER

OGH MEDICAL CENTER ROWLETT MEADOW GREEN MEDICAL CENTER BOOKMARK CENTER

THE TRADE GROUP

STACY GREEN

HEADQUARTERS II

SIZE: 200,000 square feet LOCATION: Grapevine DETAILS: The marketing and design firm The Trade Group is moving its corporate headquarters to a new building under construction in Grapevine. The two-story, 200,000-square-foot facility is north of Dallas Fort Worth International Airport near State Highway 121.

BAYSIDE OFFICE TOWER

FOUR ENERGY SQUARE/ ENERGY SQUARE 4

SIZE: 125,000 square feet LOCATION: Allen DEVELOPERS: Provident Realty Advisors and Glaser Retail Parnter DETAILS: This 72-acre mixed-use development in Allen will feature 125,000 square feet of office space, 365 multifamily units, 80-100 townhomes, and restaurant spaces. It is at the southwest corner of Stacy Road and U.S. Highway 75 in Allen. GFF Architects and Winkelmann Associates are contributors on the project.

CEDAR MAPLE PLAZA TWENTY SIX TWENTY THE SPIRE THE EPIC DEEP ELLUM THE LUMINARY

PHYSICIANS SPECIALTY CENTER SUNNYVALE MEDICAL CENTER

SOLA ON LAMAR DAVIS STREET MARKET OFFICE PARK

REDBIRD OFFICE DUNCANVILLE MEDICAL COMPLEX

● ANNOUNCED ● UNDER CONSTRUCTION MAP COURTESY OF TRANSWESTERN

UNDER CONSTRUCTION 4

THE HERITAGE AT SPRING CREEK OFFICE CENTER

SIZE: 440,000 square feet LOCATION: Plano’s Legacy district DEVELOPER: Heady Investments DETAILS: The project will feature two 14-story office towers, parking garages, and a high-rise hotel. The 440,000 square feet of office space will come in two phases. The project is at Dallas North Tollway and Headquarters Drive and should take roughly 19 months to complete.

SIZE: 210,000 square feet LOCATION: Plano DEVELOPER: Heady Investments DETAILS: This seven-story Class AA office space is on the northwest corner of the North Dallas Tollway and Spring Creek Parkway in Plano. It’s completion date is scheduled for February 2019.

SUMMER 2018

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US 380 BUSINESS PARK

THE CRANE REPORT:

INDUSTRIAL

GATEWAY BUSINESS PARK

ALLIANCE NORTHPORT

PARK 820 ANDREWS DISTRIBUTING

FIRST FOSSIL CREEK COMMERCE CENTER

INTERNATIONAL AVIATION COMPOSITES

360 CO

MAJESTIC FORT WORTH SOUTH

● ANNOUNCED ● UNDER CONSTRUCTION MAP COURTESY OF TRANSWESTERN

GOLDEN STATE FOODS

OAKDALE LOGISTICS CENTER

SIZE: 401,577 square feet LOCATION: Grand Prairie DEVELOPERS: CT Realty and Port Logistics Realty DETAILS: Ground has been broken for this 401,577-square-foot industrial building, which will feature 75 docks and 185 truck courts. Construction is expected to be complete on the single-tenant facility in the first quarter of 2019.

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MCLANE CLASSIC FOODS

PARC SOUTHWEST

SIZE: 292,700 square feet LOCATION: Irving DEVELOPERS: Jackson-Shaw and Stream Realty Partners DETAILS: The 292,700-square-foot, twobuilding development is on 28 acres south of Dallas Fort Worth International Airport in the Great Southwest. It includes two properties of 112,200 and 180,500 square feet respectively.

SUMMER 2018

MCKINNEY FIVE INDUSTRIAL PARK MCKINNEY FULFILLMENT CENTER

THE ROCK AT FRISCO PARK 25 PARK 25 CORPORATE CENTER

MCKINNEY INDUSTRIAL CENTER

CYRUSONE

FIRST PARK 121

PPG INDUSTRIES DISTRIBUTION

FW NORTH IV

DFW VII DATA CENTER DIGITAL REALTY INDUSTRIAL CONTEMPORARY VALWOOD CROSSROADS

LOGISTICS CENTER 7

NUTRIBIOTECH 1&2

DFW COMMERCE CENTER

BUILD TO SUIT

CENTREPORT 4

LOLLICUP

HORIZON BUSINESS CENTER BUILD TO SUIT

PARC GSW BTS BUILDING C

LIBERTY PARK GSW BUILDING 1

3 OAKDALE LOGISTICS CENTER WILDLIFE 7-10

GENERAL MOTORS ASSEMBLY PLANT EXPANSION

OMMERCE PARK

ASHLEY FURNITURE

LIBERTY PARK MOUNTAIN CREEK

PARK TWENTY THREE-SIXTY FIRST ARLINGTON COMMERCE CENTER III

POINTSOUTH FIRST MOUNTAIN CREEK DISTRIBUTION CENTER

FIRST 20/35 RIDGE LOGISTICS SOUTHFIELD LOGISTICS CENTER PARK BUILD TO SUIT CENTER

MELTON TRUCK LINES SOUTHLINK

STONERIDGE I-35 LOGISTICS CROSSING B

KATOEN NATIE PHASE I

SUNRIDGE BUSINESS PARK II DUKE INTERMODAL III DALPORT TRADE CENTER

DFW INLAND PORT

MIDLOTHIAN BUSINESS PARK 1

PARKWAY LOGISTICS CENTER

SIZE: 271,794 square feet LOCATION: Grand Prairie DEVELOPERS: Stream Realty Partners and LaSalle Investment Management DETAILS: Groundbreaking has occurred on the 271,794-square-foot speculative industrial development at 2911 S. Great Southwest Parkway on a 14.34-acre site in the Great Southwest submarket across from the Grand Prairie Municipal Airport. The Class A-rated facility is expected to deliver later this year.

SUMMER 2018

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DISCOVERY PARK THE VILLAGE AT RAYZOR RANCH I

THE CRANE REPORT:

MULTIFAMILY

THE MAJESTIC ON MCKINNEY

13 UNDERWOOD

MILLE PLAC OXF LAK

TOWER

DISTRICT OF HIGHLAND VILLAGE

HILLSTONE RIVER WALK

● ANNOUNCED ● UNDER CONSTRUCTION

TOWER BAY LOFTS

ELAN FLOWER MOUND

SIZE: 308 units DEVELOPERS: Transcontinental Realty Investors Inc. and Abode Properties LOCATION: Lewisville DETAILS: The four-story midrise apartment development will include such amenities as resort-style pools, a parking garage with a deck overlooking Lewisville Lake, a fitness center, onsite dog park, bocce ball court, storage units, and bike rentals.

JEFFERSON SILVER JUNCTION CROSSING

AURA FOUR44

ARCOS AT PRESIDIO

WATERW TACARA VILLAGE THE LANDING AT CROSS CREEK

TRINITY UNION DOLCE LIVING HOME TOWN III

THE FLA AT 901

GRAND ON BEACH RIVERSIDE VILLAS

THE PALMER

THE REALM AT CASTLE HILLS

SIZE: 265 units LOCATION: Lewisville DEVELOPER: Bright Realty DETAILS: Phase II of the The Realm will include a 260-unit multifamily complex and 35,000 square feet of boutique-style retail space. This phase is expected to be completed in mid- to late-2020. The development is on the former family ranch of the late Texas businessman and Dallas Cowboys owner H.R. “Bum” Bright.

DATA SOURCE: AXIOMETRICS, A REALPAGE COMPANY

SIENNA HILLS PALLADIUM

ALTA WATERSIDE

RIVERSIDE PLACE

THE UNION AT RIVER EAST I PARK 7I

ELAN CROCKETT ROW ALEXAN SUMMIT

THE KELLEY AT SAMUELS AVENUE 311 NICHOLS STREET MAGNOLIA

THE MONARCH

AV HER

MAGNOLIA ON STANLEY THE QUADRANGLES ON TWENTY

AURA 3SIXTY

MANSFIELD THE GREEN

MAP COURTESY OF REALPAGE

6 AUBERGE OF BURLESON

LAKESIDE LOFTS

SIZE: 498 units LOCATION: Farmers Branch DEVELOPERS: Transcontinental Realty Investors and Adobe Properties DETAILS: Ground has been broken on the project situated within Mercer Crossing. Located at 11500 Lago Vista E, the development is on the shore of the Elm Fork of the Trinity River and is a 498-unit luxury multifamily development.

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SUMMER 2018

JULIAN AT SOUTH POIN

THE LANDING AT LITTLE ELM

WESTRIDGE VILLAS

SATORI FRISCO I EDISON AT FRISCO

SPRINGS AT MCKINNEY

FOUNDRY

ENNIUM CE FORD AT KE VIEW

THE MAXWELL

ARTISTRY AT PCR

ALAQUA STAR HOUSE LVL29

BAY LOFTS

C THE CRANE REPORT

DAVIS AT THE SQUARE

PARKSIDE AT CRAIG RANCH IV STATION HOUSE VERUS II

METRO WEST

ARCOS CRAIG RANCH VERA WATTERS CREEK

LUXE ALLEN

THE REFLEXTION AT MONTGOMERY RIDGE

BREEZEWAY FARMS I

HEBRON 121 STATION V

MORADA PLANO

SLOANE STREET

ATELIER

PIONEER PLACE

SIZE: 364 units LOCATION: Dallas Arts District DEVELOPER: Zom Living DETAILS: The project between the Nasher Scupture Center and the Morton H. Meyerson Symphony Center will have more than 26,000 square feet of amenity space and 15,000 square feet of retail in the 41-story high-rise tower. It also will be the home of Flora Lofts, 52 affordable artist lofts developed by Dallas architect Graham Greene.

THE KINSTEAD

THE LYLA THE ASHER

RLAKE

IMT PRESTONWOOD

TRINITY MILLS PLACE

HARPERS THE BAY AT SWITCHYARD THE SOUND

UNION AT CARROLLTON SQUARE III

BRICKYARD AT MERCER PARK II

VITRUVIAN WEST

THE DOMAIN AT FIREWHEEL

GABLES WATER STREET THE CAROLYN

ATS

HARMONY HILL II

TERRA LAGO THE TOWERS AT BAYSIDE

JEFFERSON MERCER CROSSING I

AURA BLUFFVIEW JEFFERSON WEST LOVE

MODERA TURTLE CREEK ALEXAN KATY TRAIL

HEIGHTS AT CAMPFIRE CROSSING

THE BRISCOE

WALK LAS COLINAS

MODERA DALLAS MIDTOWN

THE LOFTS AT ALTA PALISADES NORTHSIDE AT THE WOODLANDS

THE NASH THE ROYAL SHOREVIEW MAIN STREET THE VILLAGE LAUREL THE ASH AT THE BRANCH THE HUDSON THE MCKENZIE ALEXAN LOWER GREENVILLE

HARBOR URBAN CENTER

THE MANSIONS AT BAYSIDE

ARDAN 4600 ROSS AVENUE ENCORE SWISS AVENUE 2000 ROSS AVENUE

THE TAYLOR CROSBY LOFTS NOVEL BISHOP ARTS VICTOR PROSPER BISHOP NORTH

AMLI FOUNTAIN PLACE

THE SPRINGS

VILLA RITAGE PRAIRIE GATE

CLARK RIDGE CANYON

THE ENCLAVE AT MIRA LAGOS II

EMLI AT LIBERTY CROSSING

D ON N II

NTE I PALLADIUM GLENN HEIGHTS

SIZE: 135 units LOCATION: Mansfield DEVELOPER: Historic West Mansfield Texas Community Development Corp. DETAILS: Treymore Construction is the prime subcontractor on the project that will offer affordable housing for seniors, ages 55 and up. The entire project is scheduled to open in summer 2019.

JEFFERSON AT THE GATE

SIZE: 425 units LOCATION: Frisco DEVELOPER: JPI DETAILS: The $700 million Gate project is a mixed-use development that will include 425 rental units from JPI along with office, hotel, and retail housing. The project is owned by Dubai-based Investment Group Overseas. First occupancy is scheduled in the first quarter of 2020.

SUMMER 2018

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S SCORECARD

THE BECK GROUP WILL MOVE INTO THANKSGIVING TOWER IN 2019.

SCORECARD

PHOTO: DROR BALDINGER, AIA

Summer 2018

Not only did large leases prove a strong second quarter for Dallas-Fort Worth, but the various submarkets reaping the benefits of new tenants was scattered throughout the region for office, industrial, and retail sectors. From Samsung’s Legacy Central consolidation to Rent the Runway’s Great Southwest debut, the entire region is welcoming newcomers. Data was provided by individual firms. Maps were provided by CBRE. BY JULIA BUNCH

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

OFFICE

JO STAFFELBACH HEINZ Principal, Studio Leader, DLR Group, Staffelbach

“Each tenant’s needs are unique, but almost all focus in some way on creating a technologically-forward environment. Tenants want to connect anywhere/anytime, and must have robust and reliable high-speed technology that allows them to be productive no matter where they are in the building.”

INDUSTRIAL

RETAIL

BROOKE ARMSTRONG

GEORGE TANGHONGS

DANIEL TAYLOR

“Organic growth is impacting office demand. Tenants want to increase their footprint, regardless of lease expiration. Rights of first refusal on vacant space has become vital. As some tenants search for alternatives, existing tenants are exercising their expansion rights since many of these buildings are as much as 90 percent+ leased.”

“When a tenant ‘company’ is looking for a new place to run their operations ... the first feature they look for is how the space is configured. Among the first features considered are the size and ratio of office to production to warehouse area. Then other features like dock doors and air conditioning come into play. The lease rate is an important but final consideration. If the space doesn’t work, the rate won’t matter.”

“[Retail tenancy is] a supply and demand equation. We don’t have enough new suburban construction coming online to meet the demand of the expanding tenants who are attracted to the growing population base in DFW. As DFW continues to grow, we should see continued tenant demand in the market.”

Executive Vice President, JLL

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

Principal, Lee & Associates DFW

Retail Managing Director, CBRE

SUMMER 2018

S SCORECARD

OFFICE LEASES

1 2

4 3 5

0 - 20,200 SF 20,200 69,624 SF 69,624 165,300 SF 165,300 427,224 SF 427,224 965,813 SF

MAP COURTESY OF CBRE RESEACH

IMAGES COURTESY OF THE COMPANIES.

LARGEST OFFICE LEASES

SAMSUNG ELECTRONICS AMERICA INC.

LOCATION: 6550 Chase Oaks Boulevard in Plano SIZE: 216,000 square feet TENANT REPS: Kimarie Ankenbrand, Matt Astrachan, Simon Landmann, and Steve Thelen with JLL LEASING AGENT: Nathan Durham and Duane Henley with Transwestern DETAILS: More than 1,000 Plano and Richardson employees will be centralized in Samsungâ&#x20AC;&#x2122;s Legacy Central 1 office starting in early 2019.

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STEWARD HEALTH CARE

LOCATION: 2375 North Glenville Drive in Richardson SIZE: 165,107 square feet LEASING AGENT: Chris Taylor with Cushman & Wakefield and Russ Johnson with Peloton Commercial Real Estate DETAILS: Though this deal was rumored last quarter, the Boston health care company closed a deal to lease space in Galatyn Commons during the second quarter.

GAINSCO INSURANCE

LOCATION: 3333 Lee Parkway SIZE: 107,934 square feet TENANT REPS: Chelby Sanders and Josh White with CBRE LEASING AGENT: Robert Jimenez and Burson Holman with Granite Properties DETAILS: The Dallasbased insurance company simultaneously expanded by 21,418 square feet and renewed its existing space of 86,516 square feet.

DARLING INGREDIENTS

LOCATION: 5601 North MacArthur Boulevard in Irving SIZE: 95,322 square feet TENANT REPS: Bill McClung and Robbie Baty with Cushman & Wakefield LEASING AGENT: Matt Hurlbut and Nathan Durham with Transwestern DETAILS: In a deal that will grow Darling by nearly half, the food company will lease the entire building at MacArthur Center 1.

THE BECK GROUP

LOCATION: 1601 Elm Street in Dallas SIZE: 81,698 square feet DETAILS: More than 200 employees of the Dallasbased general contractor will move into Thanksgiving Tower in 2019. Neither party used a broker.

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S SCORECARD

INDUSTRIAL LEASES

1,63152,000 SF 52,000 135,579 SF 135,579 282,825 SF

282,825 555,321 SF

555,321874,566 SF

MAP COURTESY OF CBRE RESEACH

LARGEST INDUSTRIAL LEASES

ELEMENTS INTERNATIONAL GROUP DETAILS: The Rockwall-based furniture wholesaler leased nearly 500,000 square feet in Mesquite’s Skyline Trade Center, joining neighbors such as Midwest Air

Technologies and Four Seasons Buildings Products.

IMAGES COURTESY OF THE COMPANIES.

LOCATION: 2250 Skyline Road in Mesquite SIZE: 487,200 square feet TENANT REPS: Nathan Lawrence with CBRE

PPG

LOCATION: 1001 Lakeside Parkway in Flower Mound SIZE: 450,000 square feet TENANT REPS: Thomas McCarthy, Craig Jones, and Trevor Ragsdale with JLL LEASING AGENT: Randy Wood with Duke Realty DETAILS: Architectural paint company PPG preleased more than 70 percent of Duke Realty’s new facility which will be completed in May 2019.

VMINNOVATIONS

LOCATION: 1200 West Wintergreen Road in Hutchins SIZE: 416,891 square feet TENANT REPS: Mark Collins and Adam Campbell with Cushman & Wakefield LEASING AGENT: Matt Elliot with NAI Robert Lynn DETAILS: The online retailer will open its shipping and fulfillment center in Core5 Logistics Center that will be used for a new shipping hub. VMInnovations sells products for home and garden, sports and outdoors, and electronics.

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RENT THE RUNWAY

LOCATION: 1111 Bardin Road in Arlington SIZE: 319,200 square feet LEASING AGENT: Brian Gilchrist with CBRE DETAILS: The fashion rental company will move into its new facility in 2019 with 600 full-time employees.

XPO LOGISTICS

LOCATION: 3300 Eagle Pky. in Fort Worth SIZE: 318,768 square feet LEASING AGENT: Hillwood Properties DETAILS: The publicly traded global logistics company will move into more than half of the space at Alliance Center North 15.

SUMMER 2018

TEXAS

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

R ROUNDTABLE

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R ROUNDTABLE Dallas-Fort Worth continues to get denser and more urban, even in unlikely places like the suburbs. With that comes challenges such as gaining community support, betting on the right innovations, and—the topic on everyone’s minds—housing affordability. North Texas has 50,000 units of multifamily, give or take, set to be completed by the end of 2019. And we’re growing by about 150,000 people annually. Such intense growth is making the region’s multifamily housing market more interesting than ever as technology disrupters, an ageold amenities arms race, and affordability challenges shake out. Here to explain it all are Sue Ansel, Tom Bakewell, Evan Beattie, Rob Bennett, Sumner Billingsley, and Paul Geyer. The panel is moderated by Julia Bunch.

Where are we in this balancing act of supply and demand of multifamily projects throughout North Texas?

AS THE DALLAS-FORT WORTH MULTIFAMILY MARKET CONTINUES TO THRIVE, INDUSTRY EXPERTS TAKE ON THE TOPICS THAT ARE CHANGING THE GAME BY JULIA BUNCH

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PHOTOGR APHY BY MICHAEL SAMPLES

SUE ANSEL: The strength of the market is really the job growth that is coming to Dallas-Fort Worth. There’s a lot of supply that’s being constructed and has been delivered, but the biggest driver of demand on family units is job growth. It’s hard to generalize because it’s very submarket specific. We’re seeing a lot of the deliveries in the Uptown market now, so that’s a little softer than some of the suburban markets where there hasn’t been as much supply delivered. EVAN BEATTIE: On the design side, we saw a real peak in 2015 in projects in Uptown and the urban areas of Dallas. People really hit the brakes in 2016 and 2017 on new project starts and the design phases. The affordable housing initiatives that are pending right now [with the city of Dallas] cause people to get pretty nervous about zoning changes, not knowing where policies are going to end up. That slows things down, but now we’re seeing affordable housing rules starting to settle down. There’s kind of a new wave starting: I think there’s going to be a bit of a gap in deliveries when you look at 2019 and 2020, but it will start picking up again after that. SUMNER BILLINGSLEY: I agree. Supply and demand always fluctuates, and a few years ago there was a little bit more of a demand. Now there may be a bit more supply coming on than we need at the moment. But the equilibrium is headed up in the long term. I think it’s a safe bet because Dallas is going to continue to be more and more attractive. We’re located in the middle of the country: Companies are going to keep relocating here. We’ve got great schools and great weather. You can work on both coasts. We have great quality

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R ROUNDTABLE of life and good bang for the buck. That’s going to continue to attract talent. [Once] there was a gold rush, but this is the job rush: We’ve never seen anything like it. The U.S. is the most important country in the world, Texas is the most important state in that country, and Dallas is the most important city in that state, at the moment. We’re really well positioned. The talent is going to drive more innovation, which will keep this momentum going for a lot of years to come. TOM BAKEWELL: The market is very resilient— surprisingly so. The jobs were slow to come at first, and now they’ve come quicker in Texas than anywhere else. I get nervous about the supply sometimes. Six months ago, we had four projects, now five projects, in lease up in Dallas. We saw some softness and said, OK, the slowdown is coming. Let’s prepare for it. And then in the last 45 to 60 days, it’s picked back up like it used to be. The latest job numbers are still strong, so we’re encouraged. PAUL GEYER: I moved to Dallas from Chicago about 20 years ago. The biggest job growth in Dallas was coming, but everybody was criticizing it, and said that it was [due to] low-paying jobs. I

think what we’ve really seen is a movement in Dallas to attract much higher-paying job—engineering, design, and architecture. It’s really fueled the overall growth in the city. Dallas has become a much more cosmopolitan area. People want to shorten their commutes, and that’s created a much more vibrant demand for Uptown, downtown, and anywhere in the outlying suburbs where there’s a good quality of life and good schools. The job growth has been driven in different pockets, but I think what we’re seeing is pretty sustainable: It seems to be fueling itself. ROB BENNETT: We’re also bullish on DFW: We think the job growth will continue for as far as we can see. We see pockets of concentrated development [such as] the Frisco or Plano markets. The development has really front-run a lot of the jobs. While there’s some talk about softness in the market, we haven’t seen a majority of those jobs actually arrive yet. I think there’s going to be demand to fill those up. In general, pockets like Frisco or Uptown certainly have the availability, but [there’s] continued opportunity to be just off of center at a lower price point. One thing I’ll add: Construction costs are a factor that’s going to keep development in check to some extent.

In what sectors are we seeing the most opportunity? BEATTIE: The way people are wanting to live is changing. People want to live in walkable, urban areas. So if you can deliver an affordable product in a walkable market where out your front door you have options to go to restaurants and shopping that’s where people want to be — where you can park your car on Friday and not get in it again until Monday. Across the price spectrum, whether at Cypress Waters, where there are efforts to create a walkable environment or in a low-rise, mid-rise, or highrise product, people want to be within a walkable distance. ANSEL: Some of us are more niche players. We focus our strategy primarily on

MEET THE EXPERTS

SUE ANSEL

TOM BAKEWELL

EVAN BEATTIE

As CEO of Gables Residential, Sue Ansel has been with the 36-year-old company for more than 25 years. Gables owns, develops, and manages multifamily and mixed-use projects throughout major U.S. markets, accounting for 30,000 units. Locally, Gables is nearing completion of Gables Water Street in Las Colinas.

Tom Bakewell co-founded StreetLights Residential in 2011 with its CEO Doug Chesnut and now serves as its President of Development. The 7-year-old company focuses on urban infill multifamily developments and has 15 projects under construction. StreetLights is nearing completion on two Dallas projects, The Christopher at The Union and The McKenzie.

Evan Beattie is President and Senior Principal at GFF Architects. In his more than 15 years of experience, Beattie is focused on managing complex residential projects through design and construction phases. GFF is focused on urban infill mixed-use projects that often include zoning changes.

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R ROUNDTABLE

THE U.S. IS THE MOST IMPORTANT COUNTRY IN THE WORLD, TEXAS IS THE MOST IMPORTANT STATE IN THAT COUNTRY, AND DALLAS IS THE MOST IMPORTANT CITY IN THAT STATE, AT THE MOMENT. —SUMNER BILLINGSLEY

live-work-play areas. What’s different in the market today is that those areas used to be pretty well defined for us. Now companies like Billingsley and others are creating that environment in areas that are outside of the urban core. Clearly there’s a shift in demographics. People are walking and voting with their feet. [Ours] is primarily a luxury portfolio. We’re clearly looking in the live-work-play areas around town— wherever those might be. BILLINGSLEY: The areas we’ve seen that look the most attractive are in North Dallas and Northwest Dallas. That’s because it’s where we’re able to get companies to relocate. That’s where they can build campuses. People want to have close proximity to

work. So if that’s where the young talent is going to be working, then we need to build communities around those offices. GEYER: We’re probably a little more agnostic on the type of property we’re lending on. If you look at the ’70s and ’80s product, it was cheaper construction at the time and is very affordable today. But it’s 30 to 40 years old, and it needs a lot of capital and repositioning. Investors are going in and saying, “OK, we can put a lot of capital into these properties and still make the rent very affordable compared to the luxury market today.” There’s a lot of demand for that space. Those properties are [typically] in locations are that very infill and dense, but the land values haven’t caught up enough to go to higher floors or to knock it down and build a new property. The market is still trying to catch up to that from an valuation standpoint, but the rents are there and the people are there: They need a quality place to live, and they are willing to pay for it. BENNETT: We’re doing new development. And in the value-add space, where we come in and do value-add renovation for older product, we’ve had a lot of focus on that product as well. You

ROB BENNETT

SUMNER BILLINGSLEY

PAUL GEYER

Dallas-based Thackeray Partners invests in and acquires multifamily and industrial projects throughout the nation. As a partner, Rob Bennett has more than 15 years of experience, including more than 10 years at Thackeray, where he focuses on its multifamily platform.

Sumner Billingsley is Vice President of Multifamily and Retail Development at Billingsley Co., the family-based development company behind projects such as International Business Park and One Arts Plaza. Sumner is primarily focused on multifamily projects at Austin Ranch and Cypress Waters.

Paul Geyer is Managing Director at PGIM Real Estate Finance, a division of PGIM Inc. and the principal asset management business of Prudential Financial. Since his tenure began in 2002, PGIM Real Estate Finance has become one of the largest commercial and multifamily lenders in the U.S. with more than $90 billion of mortgages under management and administration.

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R ROUNDTABLE can increase your rents 15, 20, or 40 percent, but that’s still a discount compared to the new product. We’ve seen great rent growth there. It targets the majority of the income bell curve in DFW. We call it “obtainable price product”—intentionally not “affordable” in that connotation. It targets the rent-to-income ratio that is obtainable: It’s affordable to average wage earners. BAKEWELL: Rob, is there a secondary thought there, that we would rather be doing value-add instead of new development and getting caught with that longer investment process? BENNETT: Yes, that, and also knowing your investment fund. We’re looking at three- to seven-year increments on an investment. We like cash flow. Those properties have nice yield, but we also think they have the potential to ride a little better if there’s a bump. We see it as having better sustained rent growth than some of the higher end stuff, currently. While both are positive, it’s a bit better in that value-add aspect. BEATTIE: Tom, you talked about being late in the cycle. Something we’ve seen on the design side is that if we’re working on a preliminary design for a project that’s in a location where somebody can build the exact same thing next door —or on two out of three corners in the neighborhood—that project tends to have a difficult time moving forward. People looking at those deals say, “It’s a commodity. There’s no supply constraint. We’re not interested.” The locations where the entitlements are tough to get—and it’s a great location—those projects seem to have no problem moving forward. ANSEL: Is that more driven by land availability or entitlement process through the city? BEATTIE: It’s a bit of both. To go through a zoning change process in Dallas right now, you’ve got to be willing to risk some capital and be patient— and not be trying to time the market. It can take anywhere from six months to two years. It takes a good partner that’s willing to work the process. You have to be collaborative and compromise along the way to get a deal done. ANSEL: Our new developments are on the luxury end, but one of the things that we’re finding is opportunity within our own portfolio. The average age of our portfolio is 10-11 years old, [but] there are products within the portfolio that are older. We’re finding the opportunity to do some of the value-add within our own portfolio to create a differentiated product in the rents. We’re finding it harder too: We haven’t gone down the path of making a value-add acquisition because pricing has gotten so— BENNETT: It’s competitive. ANSEL: Yes, competitive is a good word.

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BAKEWELL: There are many value-add buyers out there that are one- or two-person shops. There are so many different groups, and they’re all chasing the same equity. On the development side, there are so many more responsibilities. Even though it’s competitive, it’s not quite as competitive as the value-add sector.

DEMOGRAPHICS What type of demographics are you seeing in your communities and hearing about from colleagues? Are baby boomers still chasing the lockand-leave lifestyle? ANSEL: A good example of that is in this room. As of Monday, Paul moved into a lockand-leave lifestyle. I’ll let him talk about his experience, but from our standpoint, it’s happening. We’re building several products that are designed specifically toward the Baby Boomer generation. The demographics of our portfolio are probably a bit older than most. The average age of our residence is 36 years young, but we’re building two or three projects that have a larger footprint and a better design for the baby boomer. Last year in Dallas, [we saw] a 340 basis-point increase in the percent of residents who are over 36 years old. BEATTIE: In Texas, we’ve seen limited condo construction in the last cycle because there are state laws that made class-action lawsuits pretty easy to file against the team behind a condo project. I think that’s incentivized developers like StreetLights to deliver high-rise product that targets baby boomers. For the top of the market where the competition normally would be other high-rise condo projects—although there have been none coming out of the ground right now—you can offer a lifestyle that’s equivalent to the condo experience without HOA dues, without a long-term commitment to a unit, and without having to compete with 100 other sellers in your building. BAKEWELL: A lot of it is a shift in thinking about it. For a long time, the older demographic, especially, wanted to own their own home. They thought, “renting is not for somebody of my stature or level.” That thinking isn’t really out there anymore. Now they think, “hey, it’s convenient.” There are great new places, great locations, and lots of amenities. ... A lot of those people are selling a house.Maybe they have a lake house or a house in Santa Fe. Or they’ve got grandkids somewhere else, and they want to spend more time with them. It’s a good alternative for them.

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R ROUNDTABLE EVAN BEATTIE

BEATTIE: Some of the tax law changes that have happened have also disincentivized homeownership. BAKEWELL: I think it’s more the change in the thought process, because I saw the shift happening before the tax came into play. ANSEL: It’s the single biggest change in the multifamily industry since I’ve been in it, and I’ve been in it longer than most of you. We’ve gone from apartments being not a choice — an optimal choice—to today, when multifamily is seen as a lifestyle choice people want to make. And we’ve changed the product that we delivered. When I got out of school, apartments were very different. GEYER: As a tenant I would say — ANSEL: Resident. Resident, Paul. GEYER: I stand corrected, and thank you for that, because my esteem just went up. For [our personal experience], it was more that we were in a school district with a nice home that our kids loved, but now our kids are out of the house. So they call us “empty nesters,” but the kids come back. You still like the house, and you’re still very attached to it, but for us, we looked at how many weekends we’re out of town visiting kids, moving a kid, picking them up from college ... then we looked at the upkeep of the house: There was something very attractive about just writing a check every month and not having to worry about it. When you look at a condo, you have assessments. And, if you have an elevator and a doorman you’re looking at thousands more dollars. That’s not as appealing when you start thinking about it. For us, it was an easy way to have a landlord in charge of the building and be able to live. You’re not worried about the property tax, the swimming pool, the yard, when the sink’s clogged—you’ve got somebody there who’s just going to show up to help out. BAKEWELL: When you look at how high our real estate taxes are in Texas, most people that we’re trying to target for The McKenzie, for instance, can sell their home and live there for equal to or less than what they paid in property taxes. That’s not even taking into account all the upkeep on a house or your mortgage. BENNETT: A lot of this discussion has been about renters by choice, which we’ve definitely seen. That’s clearly a shift in the market, but there also are renters by necessity or the people who have delayed moving out of a rental. There’s a huge tailwind for the multifamily market, and that will continue for some time. Looking at the millennials and baby boomers, and then Gen Z—the youngest of those groups

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IF WE’RE WORKING ON PRELIMINARY DESIGN FOR A PRODUCT THAT’S IN A LOCATION WHERE SOMEBODY CAN BUILD THE EXACT SAME THING NEXT DOOR OR ON TWO OUT OF THREE CORNERS IN THE NEIGHBORHOOD, THAT PROJECT TENDS TO REALLY HAVE A DIFFICULT TIME MOVING FORWARD. —EVAN BEATTIE are delaying marriage and delaying having kids— if they get married at all. That’s a huge demographic shift that’s going to keep that rental demand in all tiers of the market, not just the rental by choice.

Are you seeing a larger concentration of the renter-by-choice demographic or married with kids residents? ANSEL: To Rob’s point, a big reason why people move out of apartment homes is because of the age of their children. It’s a little bit rent by necessity, but some of that is also renter by choice. We’re seeing people stay within our communities until their children get to school age. They like the lifestyle. So there may be some increase in that for a period of time. I don’t think demographics have shifted such that young adults will not become their parents and not move out to a home. They’re just delaying it. BENNETT: I saw in a Pew research poll that the millennial generation still desires homeownership at some point—that hasn’t changed. The shift that’s most important for our industry is that they’re comfortable staying in rental. Maybe at some point they will want to own a home and move out, but they’re in no hurry. BAKEWELL: The millennials travel more than we did, and the apartment lifestyle lends itself to that. The baby boomers coming in are doing the same thing—traveling more than the previous generation did. BEATTIE: It’s more about experiences than

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R ROUNDTABLE possessions these days. BILLINGSLEY: There’s also something that’s noncommittal about the millennials: This is very much the “swipe right, swipe left” generation. I have friends who live in Uptown, and they’re moving almost every year when their lease comes up because there’s a new amenity: There’s a new pool, there’s a new clubhouse. There’s this fear of “What if I buy a house and miss out on something else that’s even better?” BENNETT: We do have renters who desire to move out into single-family homes, but we haven’t been building enough. If we talk about development on the multifamily side, maybe we’re peaking here in DFW in deliveries, but we’re behind on delivery of single-family homes. I think less people currently desire it, but there are less options for affordable single-family homes to get you out of a rental. BAKEWELL: Then you add onto that, home prices were up 50 percent in the last seven years in the region. ANSEL: There are data points out there that show homeownership rates going up, but if you dig into it, a lot of the rent-to-buy are renters moving out of single-family rentals as opposed to multifamily rentals. You have to dig into the details to understand some of those stats. GEYER: Some of the infrastructure that we need in order to maintain people staying in an apartment complex would be a school or a daycare. Many cities have been putting in schools for the last 10 years, but Plano, [for example], restricts apartment supply. And [other] suburban locations have a hard time adding more density because it’s going to put a strain on the infrastructure. You don’t really hear about DISD building new schools or looking into Uptown for alternative education locations where they can have more high-rises and have kids actually walk to the school. It’s not there. It creates a situation where folks are going to have to move once a kid gets to a certain age. ANSEL: My hope is, as young parents start getting more involved in schools, they’ll make a difference in the in-town school districts. We’ve got an example within our organization: A young gal who has a child has gotten very involved. She’s going to be president of her parent-teacher organization in DISD, and she’s making a difference. GEYER: If you add 350 people a day for five years— that’s a lot of people. [Of those], how many are kids? How many kids are in a classroom, how many teachers, how many bricks and mortar do you need? It’s quite a bit. BEATTIE: I recently read the fastest-growing age demographic in State Thomas is between the ages

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PAUL GEYER

of 0 and 4. When you drive through or walk around State Thomas, you see more and more people with strollers. Millennials don’t want to move out of that urban lifestyle. How we, as a city, help provide them the education amenities they need is important. They deserve environments that really define the next generation’s success. BILLINGSLEY: At Cypress Waters, much more so than any of our urban properties, we see a lot of kids who are in middle school because it falls into Coppell’s school districts. Families are going to get into those apartments because it’s ranked 6th best in the state. They’re willing to ride it out and stay a lot longer.

AMENITIES + DESIGN

How has the role of design evolved in terms of amenities, and what are renters wanting that’s different than in past years? BENNETT: Looking to student housing spaces as a predictor of what amenities will be in demand helps you know [more about future] residents. But the student market’s changed so much: When I moved out of where I lived in college versus my first apartment, I was just happy it had hot water. Now, student housing property is nicer than any apartment I ever moved in, and the level of amenities that [those students] will expect when they move out and get their first job are dramatically different. BAKEWELL: My son’s in a student housing apartment in Austin, and there are six rooms with a giant living room. They have a theater in their apartment. BILLINGSLEY: It’s not just the amenities that are different. The most important thing is the programming you’re doing to back them up. Anybody can have a living room or a clubhouse. At each of our properties, we do about three events per week on average. Everything from a small book club to wine on Wednesdays to pool parties that can be around 400 people. We’ve brought on a full-time events coordinator. At Cypress Waters The Sound, we’re developing the lake front there, which is the retail and the high-rise multifamily along the water, as well as a couple of office buildings. That’s an entire new chapter for our company. ... We’ve got a sound stage there. We’ve got a smaller stage that we’ve got all the acoustics prewired so that we can have a Tuesday night band come and plug and play — not reinventing the wheel each time. We’ve got Legos for kids to build with. We have extra storage units on site. We’ve got hike and bike trails that will tie into the Campion Trail. We can accommodate rehearsal

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R ROUNDTABLE TOM BAKEWELL

WHEN YOU LOOK AT HOW HIGH OUR REAL ESTATE TAXES ARE IN TEXAS, MOST PEOPLE WE’RE TRYING TO TARGET FOR THE MCKENZIE, FOR INSTANCE, CAN SELL THEIR HOME AND LIVE THERE FOR EQUAL TO, OR LESS THAN, WHAT THEY PAID IN PROPERTY TAXES. —TOM BAKEWELL

dinners. It’s a whole new part of the entire process. If we want companies to relocate to these sites, we have to be able to attract the talent. With regard to the actual design and the spaces, it’s very different. Each of our properties has an different design style right now because that’s what millennials want—it’s experiential. The dog parks and all those other amenities are becoming sort of expected. BEATTIE: We’ve seen a huge increase in the percentage of renters who are dog owners. We’ve spent a lot of time in the design phases talking about how we’re going to accommodate dogs, [considering] the amount of time that dogs are spending inside the unit when somebody is away—sometimes eight or nine hours. Some are having to restrict an elevator that dogs can ride, because there are too many accidents that can happen, ruining the “arriving home” experience. We have one project in the early design phase where the client is trying to figure out how to provide dog daycare for their tenants as a service. It’s a staff thing that’s built in so [a tenant] can drop off their dog or have the dog daycare come [take the dog] for an hour a day. I think that’s an amenity that will cause a lot of tenants to be excited. BEATTIE: You end up planning your day around your dog a lot of the time. BENNETT: The standard question you can ask the investment broker when you walk in the clubhouse is, “Do you have WiFi?” and “Is this available to tenants after hours?” Of course, the answer is “yes” and “yes,” but no one ever used it, right? You had to have it as sort of your “wow factor” when you walk in. We’re seeing those spaces have been activated: They are actually being used. In the middle of the day, you’ll have a few people who have flex schedules or work from home who are officing in the common areas. That’s a change we’ve seen in the last five years. BEATTIE: It’s the rise of shared office spaces. If you can deliver a functional shared office type of environment in your project, it’s meaningful to the people who work from home or stay home one day a week. BAKEWELL: One of the amenities that we’ve added to our properties is a private bar. We started out trying to tailor our properties after a boutique hotel experience. Everybody said the one thing a boutique hotel has that apartments don’t is a bar. It’s a gathering place, a social area. We’re rethinking that a bit: Instead of making it a private bar, we’d make it a more public area so that we have more people in there, and it gets energized. We’re starting to do more community spaces. Some of it needs to be programmed, but some of it doesn’t. If you have more co-working space where

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people are coming and have a purpose to be there, versus kind of hanging out and having fun, that’s a purpose too.

Then you own the bar? Do you need your own TABC license, or do you contract out? BAKEWELL: The bars we’ve done, we’ve owned, and we’ve gone through TABC licenses. Now we’re going to other states doing the same process, and it’s a learning experience. ... We’re realizing that it may be better to sub that out to a different group— one that does it every day versus the amount of hours it takes for us to do it. It’s a lot of work. BILLINGSLEY: These are the sort of things that we’re all stumbling our way through right now, figuring out the right balance. ... At Cypress Waters, we’re putting in a co-working space. We wonder if we’re going to be operating it, or should we bring in a third party? We’re still working that out. We’re also putting in an unmanned minimart—converting a unit on one of the floors. ANSEL: We’ve had amenity races for years, and it’s hard to imagine that one more dog park or dog washing station is going to make a difference in the big picture. I think it’s about services. We’ve talked about the lock-and-leave lifestyle. The most important currency all of us have—at any income bracket—is our time. So to the extent that we can provide something that gives residents more time—gives them services that makes their life easier — I think that’s the differentiator going forward. We’re moving into a period where technology and innovation will dramatically change

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SO TO THE EXTENT THAT WE CAN PROVIDE SOMETHING THAT GIVES RESIDENTS MORE TIME, GIVES THEM SERVICES THAT THEY APPRECIATE MORE, AND MAKES THEIR LIFE EASIER—I THINK IT’S THE DIFFERENTIATOR GOING FORWARD.

SUE ANSEL

—SUE ANSEL

everything that everyone of us does. Rob talked about the Internet: The most important thing you can do now is try to bring in as much Internet capacity as you can to the property and be flexible. Some companies are putting Amazon Alexa in their units. We’ve tried to be agnostic with respect to the ultimate solution so the resident can choose whatever works. BENNETT: I totally agree. [In a recent poll of some] 3,000 residents, the number one thing requested was reliable cell phone coverage. They want to sit on the couch in their apartment and be able to text—that’s an easy fix knowing they want that. ANSEL: Easy or not depending on your building. BENNETT: Reliable cell phone service and reliable WiFi, along with capacity, are huge amenities. Those really impact the resident experience, and it can increase or drive people away. [Another thing] we still haven’t cracked the code on is the package delivery issue. The amount of packages that are delivered to an apartment complex on a daily basis is truly unbelievable. In our experience [it takes] a fulltime person in your office to deal with that on a day-to-day basis. It’s just volume. Where do you physically put them? How do you physically get them to your residents in an efficient way? We have package lockers. That’s happening, but it isn’t a perfect solution. There are services where the concierge will deliver packages to the residents’ doors. There are security issues with that, such as who do you allow in

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your complex and how often? We haven’t quite figured that one out, but on the services side it’s hugely important. BAKEWELL: We’ve started [putting refrigeration storage] along with the package lockers. It’s for everything from the prescriptions that people order that need to be refrigerated to the growing popularity of the Blue Aprons where people have their meals shipped to them. BEATTIE: Amazon’s purchase of Whole Foods is only going to increase the amount of grocery deliveries we see. Having chilled storage, or the ability to convert to chilled storage, is going to become increasingly important.

DISRUPTION Let’s talk about some disruptive trends versus some that are just on the fringe. How is transportation changing your product with regard to ride share and connectivity to public transportation? BEATTIE: Building codes haven’t adjusted to recognize a lot of the changes that are coming — such as how people are now using their cars. On the municipal side, there’s a slowness to recognize that parking requirements are dropping dramatically. That’s preventing a lot of multifamily project developers from being able to reduce the parking for their projects. Right now, we’re overbuilding the size of garages. ... More and more, the parking is getting pushed below ground where it’s going to be difficult to use for anything other than storage when it gets repurposed. BAKEWELL: It’s funny, because through the last development cycle, developers would underbuild parking. ... We don’t want to have a property that’s not successful because it doesn’t have enough parking—that mentality is still with a lot of us. But now we have the opposite problem where we’re building too much parking. We have our internal StreetLights standard of how much parking we want: We do it by unit type and size of the units, etc. It’s typically higher than code. But we’re looking at adjusting that back down because we realized we’re being wasteful with it. We don’t want to cut it back too far, but we know driving continues to be less and less of a necessity. We’re trying to figure out how to build parking that we can utilize as something different later. The above-grade garages are a little easier. We had a zoning case in San Diego where they pushed very hard to get parking below grade. We convinced them that it

SUMMER 2018

R ROUNDTABLE was better to do above grade: We’ll screen the garage today, but in five years, we have the ability to convert it to more apartments. For us, it was a win. BENNETT: With regard to technology in our industry now, we don’t know the winners yet. How do you design and adapt in an environment where you know it will be different tomorrow, but you don’t know how? That provides opportunity. It’s people who’ve figured out how to build in the best adaptability to be winners in the long run. That’s tough. It’s a challenge right now for us. We all need to start thinking about how the coming generation—the millennials and Gen Z people— will use space and use product. For instance, we can’t think about cars as a product anymore. Cars are a service. That’s the thinking that we are in front of right now. ANSEL: A critical mistake on new development for us is not designing for drop off—the amount of space needed for [rideshare], whether that’s Uber or Lyft. To your point, parking is over-parked. So do you design parking spaces differently? Do you build the capacity that costs you more money on the front end, but build it with a bigger ceiling height with the idea that, at some point in time, you’re going to try to do something different with it?

ROB BENNETT

Bank of Texas

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Transportation Innovation

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SUMMER 2018

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BAKEWELL: We have partners who are pushing the number of vehicle charging stations that we’re doing in the garage, and I get it. They’re trying to build for long-term viability, but I think reality is, by the time we get that many electric cars, we’re going to have fewer cars and won’t need spaces. BILLINGSLEY: Because of that question mark floating out there, we’re running the power in parking garages, but not putting it through.

How will air taxi services that could be here as early as 2020 disrupt your industry? ANSEL: Today we’re not thinking about that. I would view that the same way we are looking at Uber and Lyft: make sure you design in the future the ability for that to have a spot to land or deliver, but today we are not designing that into our communities. BEATTIE: It’s hard to get approval for a landing pad on the top of your property.

Are you looking at how you could get your properties near sky ports? GEYER: I think it’s a lot like retail development. Where is next interchange going to be? That’s part of the infrastructure that you have to look at and develop, but without knowing where that’s going to be, it’s hard to predict. BILLINGSLEY: In the meantime, we’re still going for proximity to DFW Airport.

Which trends are non-negotiable or expected, and which ones are you still determining if they’re worth the effort? ANSEL: From our perspective, building a sustainable building is not that much more expensive than what we would do as a base case. Our impression is that Millennials won’t pay more in rent for a sustainable building, but they do expect sustainable features, so it will be a potential differentiator. Where you get paid for sustainability is on the exit. When you’re selling a building, the

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next buyer will ask that question and potentially pay a lower cap rate if you have a sustainable building.

When you say sustainable, do you mean LEED? ANSEL: I don’t necessarily mean LEED, but I do mean a certification of some sort. LEED has improved—LEED was originally designed for office buildings. So what points you got for sustainability in LEED weren’t necessarily more efficient. We try to be thoughtful about delivering things that create energy efficiency and better services for residents. In most markets, there’s a sustainable certification that is more multifamily centric. BENNETT: You saw the proliferation of LEED—the idea got a lot of steam pre-recession—in the mid-2000s. Initially, the technology wasn’t quite “there” to deliver a good experience to residents. [For example], the LED lights in 2004 were horrible— very harsh and bright. Residents weren’t used to having motion-sensing lights in the hallways. People hated it. They didn’t like opening the door and it’s dark before the light comes on. Same with low-flow toilets and faucets. Conceptually, they liked the idea, but not the [actual] experience. BENNETT: But the technology’s changed. People have adapted. It’s OK to have motion-sensing lights. So, I agree. Residents are expecting it now. GEYER: You can drive it, too, with the financing. On the agencies side, Fannie Mae and Freddie Mac have their “share green” program. If you’re doing a renovation, or if you’re improving a property and creating low-flow water and the electricity usage goes down significantly, they will give you a better interest rate on your financing. That drives a lot. The pay back is probably less than a year. When you do the math on that—whether it’s an older property or new property—you’ll get a better cap rate on the end and better financing up front. That’s a huge driver that others will start to peruse—maybe mortgage investors will want to drive that as well.

TECHNOLOGY

How are IoT and other technologies becoming expected in the multifamily world? BENNETT: Smart home technology is allowing single family rentals to become much more efficient. One of the hurdles is having real market rates for a lot of individual owners. With the advent of smart home technology, you could have a centralized office where you can check on a pool of rental homes without having to physically drive there. That could be a driver of increased competition to conventional multifamily homes. ANSEL: Consolidators talk about that, how it’s changed their business. To your point earlier, it’s coming. Who is going to be the winner? Who knows? There will be 100 excellent ideas and 90 of them will fail, not because they are a bad ideas, but just because of whatever reason. We want to be agnostic on the specific provider. We know

SUMMER 2018

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R ROUNDTABLE residents are bringing their own device: BYOD. So how do we facilitate the use of whatever device they want to bring? We were an early adopter of putting in iPhone docking stations [in apartments], and that was really cool for about two years. Now we have these beautiful iPhone docking stations that don’t work. BAKEWELL: One of the issues right now is that regulation and legislation prevents the actual use of some of this technology. The technology exists, and you try to figure out how to do it, but you can’t do it yet but there are fiber optics that can eat up the entire building with WiFi. You don’t have to call the cable guy. It’s already there, but it’s the cable companies, the phone companies that all want their own equipment. They don’t want to use a general highway that everybody shares like utility lines. You pick up any electric provider you want, and they’re all using the same infrastructure. If we get to that on the internet and cell phone coverage, then that’s a different game, but today we are having to do it the way they want to do it, which is pretty archaic. BILLINGSLEY: We all know there is going to be a shift here with changing technologies going forward. We’re all trying to figure out which horse to bet on. The whole point of all of it is to save people time and make their lives easier. One of these is the idea of having controlled access or remote access. If I have a dog walker who’s scheduled to come at 1:00, he’s granted access [through] voice activation or a device. And he is only granted access from 1:00 to 1:30. ... You could have your dry cleaning delivered. But there are so many different companies trying to offer these [kinds of things] right now, and the cost of installing this stuff is astronomical. It just doesn’t pencil. Trying to decipher which ones are going to make it, and how you get those costs down is key. The ideal way would be to do it with maximum flexibility where you’re not having to install these things and yank them out of the wall later on. ... It’s a struggle.

CAPITAL Looking across the region, where is multifamily capital coming from and has that changed recently? BENNETT: We’re seeing institutional equity and forward capital looking at deals that they wouldn’t traditionally seem to look at. What I mean by that is more secondary locations—still primary first-tier markets but more location and more value-add older product. BAKEWELL: There’s been so much wealth creation in the last seven to 10 years. We see a lot of high net worth individuals out there, not only buying properties but putting equity into development deals. Individuals are beating out institutions on properties [that would have been unheard before] — they’re coming in and buying $120 [per square foot] assets because they think it’s a safe investment long-term. GEYER: Debt appears the same. We not only lend money on behalf of the insurance company, but we lend money on behalf of institutional investors with an institutional appetite. They’ve come to us and said, “How do we participate in mortgaging?” “How do we get the private mortgages that Fannie Mae and Freddie Mac can buy on the public market?” But they can’t participate in the private market because they don’t have a distribution system. We’ve actually benefited from not only our asset management capabilities across the world, but in the U.S., especially on the mortgage side. ... Currently, we have close to $4 billion we’re investing in mortgages for those clients. A significant portion of that is foreign capital seeking to invest in commercial and multifamily mortgages in the U.S. The consistent returns and the risk-based returns that we’re seeing are driving demand — and more demand for U.S. mortgages. ANSEL: From an equity standpoint, we see a lot of foreign capital interested in investing in the United States—a lot of Canadian and European capital. [Dallas-Fort Worth] is a great place to invest. It’s seen as a very steady and safe place to invest — with much better returns than a lot of those countries can get locally. My impression is Canadian investors seem to be ahead of the curve, and so I find it a good sign that they tend to be interested in our markets. To your point earlier, Sumner, it’s a really solid economy.

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SUMMER 2018

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F FEATURE

THE GREEN FUTURE OF DALLAS-FORT WORTH AREA DEVELOPERS, DESIGNERS, AND CITIES ARE PUSHING SUSTAINABILITY FORWARD BY JULIA BUNCH

TOYOTA MOTOR CORP.â&#x20AC;&#x2122;S NORTH AMERICAN HEADQUARTERS IN PLANO FEATURES A ROUGHLY 7.75-MEGAWATT SOLAR SYSTEM, THE LARGEST CORPORATE OFFICE ON-SITE SOLAR INSTALLATION AMONG NON-UTILITY COMPANIES IN TEXAS. 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

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PHOTO: MICHAEL SAMPLES

SABRE CORP.’S SOUTHLAKE CAMPUS

A YEAR AGO, DALLAS-FORT WORTH MIGHT NOT HAVE COME TO MIND WHEN RANKING THE MOST SUSTAINABLE REGIONS, BUT PROGRESSIVE CITY CODES, INNOVATIVE DEVELOPERS AND DESIGNERS, AND LARGE CORPORATE COMPANIES ARE CHANGING THAT.

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PHOTO: LEEKRIS VIA iSTOCK

PHOTO: TOYOTA MOTOR NORTH AMERICA

The word “green” as a moniker for sustainability and environmentally conscious real estate typically elicits thoughts of coastal cities such as San Francisco or Boston. But don’t write DFW off just yet. Architects, developers, and thought leaders within the sustainability community say the region is underrated. While the Dallas-Fort Worth region may have room to grow in the rankings of the nation’s greenest cities—those that use the most renewable energy, offer the best public transit, or have environmental impact at the center of many public policies—it’s just getting started. “In some areas, we’re ahead of a lot of the country,” U.S. Green Building Council Texas Chapter Executive Director Jonathan Kraatz says, citing public policies in the region’s largest cities. Dallas was one of the first major cities to champion and pass comprehensive standards for sustainable building practices in 2008. The Fort Worth Better Buildings Challenge, sponsored by the U.S. Department of Energy, aims to decrease energy consumption by one-fifth by 2020. Many other local cities have adopted incentive-based programs to encourage developers to pursue third-party certifications, such as the USGBC’s Leadership in Energy and Environmental Design (LEED) designations. And it’s working. Dallas-Fort Worth has 149,146,781 square feet of LEEDcertified real estate, according to the USGBC, accounting for 682 commercial projects. Site Selection magazine recently named Dallas-Fort Worth-Arlington as No. 8 on its list of the Top 10 Metros in its 2018 Sustainability Rankings. And, a recent Abodo study ranked Dallas-Fort Worth-Arlington as the ninth highest metro area for LEED-certified real estate by square footage. LEED, first launched as a pilot in 1998, is a credit-based certification that has many versions to account for project types (i.e. residential or commercial) and types of certification (i.e. building design and construction or operations and

BUILT IN 1983 BEFORE LEED WAS INVENTED, BURNETT PLAZA IN FORT WORTH ACHIEVED LEED SILVER IN 2012, AS WELL AS THE EPA’S ENERGY STAR RATING .

maintenance). “Our concern is the built environment, and many pieces go into that—energy use, materials, indoor air quality, water use,” Kraatz says. “We’re looking at having a built environment that is better for the planet and the people on it, but it’s also a profitable venture for those operating it. If those things don’t balance out, none will survive.” Approaching the latter—profitability—often resonates more with Dallas-Fort Worth decision makers. “Dallas is a very business-oriented city and … our cities are going to have to become more regenerative to continue to attract and

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PIONEERING PROJECTS

From Sabre’s headquarters — Texas’ first LEED-certified building — to HALL Arts Residences, here are prime examples of sustainable construction in North Texas. OFFICE

SABRE CORP. Texas’ first LEED-certified building landed in Southlake in 2000 when Sabre Corp. enlisted The Beck Group and HKS to build its 475,000-square-foot campus with sustainable construction methods, water efficiencies, waste reduction, and more. Sabre employees still love the building’s sustainability features, HKS’s Teske says, and they’re proud to be one of the country’s first LEED projects.

TOYOTA’S RAINWATER CAPTURE SYSTEM AT THEIR PLANO HEADQUARTERS.

BURNETT PLAZA TEIR REIT’s Burnett Plaza in downtown Fort Worth was built in 1983, long before LEED was invented. Yet the 40-story building (the tallest in Cowtown) designed by Sikes, Jennings, & Kelly Architects and Geren Associates has obtained rigorous benchmarks such as LEED Silver for existing buildings’ operations and maintenance standards and the EPA’s Energy Star rating.

MCKESSON CORP. When pharma-distributor giant McKesson Corp. bought the former NEC Corp. of America in Las Colinas, it brought along a culture of supporting human health. So unsurprisingly, the San Francisco-based company pursued both LEED Gold and WELL Building Silver certifications—one of the first buildings in the state to do so.

STRYKER COMMUNICATIONS Stryker Communications’ regional HQ in Flower Mound is pursuing both LEED Gold and WELL Building Standard certifications for its 209,000-squarefoot campus after Corgan architects completed the building in March 2017.

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PHOTO: TOYOTA

retain corporate clients,” HKS Principal and COO Kirk Teske says. When considering how DFW stacks up to other metros, Teske says demand for “green” projects is still relatively low, but rethinking how designers approach conversations about sustainability can have a positive response. When designers or developers can prove to building owners, lenders, or investors that, say, lowering energy or water usage positively impacts the bottom line, they’re more likely to pursue environmentally conscious practices. Finding the right words to use, and finding the things the client can be most passionate about can make a difference says 5G Studio Collaborative Associate Principal Christine Robbins-Elrod. Depending on who you’re talking to, “sustainability” may be a controversial word, “but resiliency — [such as] preparedness for extreme weather events — is something we all want,” she says.

WHAT MAKES CONSTRUCTION SUSTAINABLE? Buildings are capable of significantly impacting energy consumption when it comes to factors such as production, operation, and maintenance. Sustainable construction incorporates environmentally efficient elements that contribute positively to the future of the area, such as lowering greenhouse gas emissions. Successful sustainable construction meets economic and social needs, while remaining ecologically conscious—but that doesn’t necessarily mean it’s LEED certified. Some industry experts in DFW say that LEED doesn’t have as much appeal as it did a decade ago. Kyle Whitesell, executive vice president of Arlington-based Bob Moore Construction, says it’s mainly large corporations that take the LEED route, while smaller clients steer towards meeting baseline state environmental codes. Sustainability Manager at CxL Building Services Jolene Young, who works with numerous construction companies in the DFW area, agreed. “The biggest trend we’ve seen is that city, county, and state environmental

SUMMER 2018

F FEATURE TOYOTA MOTOR NORTH AMERICA From compost bins in the cafeteria to a rainwater capture system, Toyota Motor North America’s Legacy West campus in Plano sets high standards for its environmental footprint. And last fall it proved as much when the 100-acre campus, developed by KDC and designed by Corgan, became the largest LEED Platinum project in Texas. MULTIFAMILY

HALL ARTS RESIDENCES

HALL ARTS RESIDENCES COULD BE THE FIRST REGISTERED WELL-CERTIFIED MULTIFAMILY BUILDING WHEN THE PROJECT IS COMPLETED IN 2020. RENDERING: HALL GROUP

code regulations have been catching up to LEED certification standards the last few years,” Whitesell says. “It’s going to be up to local governments to implement new environmental code if DFW is going to become a ‘greener’ metro area.” While DFW is on its way to a more sustainable future, major steps need to be taken that go beyond the fundamentals—a challenge that will require tapping into renewable solutions, according to Corgan Design Director Chuck Armstrong. “Renewable power sources, notably solar power collectors and wind generators, ease demand on the electric grid and start to answer the question of what can we do on any given site to not only reduce power consumption, but to also make our own power,” says Armstrong, adding, “Evolving and improved battery technologies are beginning to provide stronger solutions for storing extra power until it is needed.”

THE COMPETITIVE FACTOR Beyond the environmental impact, sustainability can offer a competitive advantage for companies. As recruiting and retaining top-notch talent becomes ever more important, businesses are increasingly looking to differentiate themselves and their office space. Sustainability and wellness can help employers do that, experts say. Employee wellness—a close cousin of sustainability—has emerged as a key differentiator. Businesses that offer sit-stand desks, access to walking trails or fitness amenities, and natural daylight in workspaces, have a leg up on ones that don’t. And as the wellness field gains traction, more and more academic research emerges proving that employees are more productive and healthier in wellness-minded work environments, thereby saving employers on turnover and healthcare costs. Like LEED in the sustainability realm, many third-party certifications are emerging to help companies measure up. DPR’s Chris Gorthy

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HALL Group’s HALL Arts Residences 28-story condo tower hopes to be the state’s first registered WELL certified multifamily building when Austin Commercial, HKS, and Emily Summers Design Associates complete the project in 2020. Says Teske about the project: “Craig Hall has always accepted and embraced sustainability and looked at the ways a building can aid in wellbeing. That’s the future of high-end residential, and people are willing to pay more for heightened quality of air, water, etc.” RETAIL

TREEHOUSE In what is possibly the most energyefficient big-box retail store around, TreeHouse opened its energy positive (meaning it puts energy back into the grid thanks to solar panels and a Tesla battery pack) home improvement store in June 2016 in Dallas after architects Lake | Flato and Looney Ricks Kiss took care to consider how every aspect of the store would impact the environment. HOTEL

NYLO DALLAS SOUTH SIDE A former coffin manufacturing facility turned funky hotel, Matthews Southwest’s NYLO Dallas South Side was the first LEED-certified NYLO in the region, and one of a pioneering historic renovation LEED project. Architect 5G initially targeted LEED Silver but achieved Gold, thanks in part to comprehensive rainwater harvesting that irrigates landscaping through an underground cistern.

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F FEATURE INDUSTRIAL + DATA CENTERS

NESTLE CENTRAL BOTTLING FACILITY The Nestle Central Bottling Facility in Dallas received LEED Silver certification in 2009.

INTERNAP DALLAS DATA CENTER

In 2012, the Internap Dallas Data Center was the first public data center in Texas to receive Green Globes certification from the Green Building Initiative. PHOTO: GEORGE W.BUSH PRESIDENTIAL CENTER

The Bush Presidential Center at Southern Methodist University in Dallas achieved Platinum certification by the U.S. Green Building Council—the first presidential library to achieve that status. According to its website, the center features green roofing systems that reduce heating and cooling demands, solar panels for producing electricity and hot water, building materials that were sourced from the North Texas region to lower transportation impacts, and a rainwater recycling system that provides 50 percent of the irrigation needs of the native Texas landscaping.

GE TRANSPORATION

In Fort Worth, a building near Texas Motor Speedway that’s home to a subsidiary of GE Transporation that manufactures locomotives, is LEED Certified Core and Shell. That’s a rating system designed for projects in which the developer controls the design and construction of the entire mechanical, electrical, plumbing, and fire protection system, but not the design and construction of the tenant fit-out, according to the U.S. Green Building Council. The plant is one of two facilites in the nation where GE Transportation manufactures modern, efficient locomotives for the railroad industry.

PIONEER 360 BUSINESS CENTER

In Arlington, the three-building, 1.16 million-square-foot Pioneer 360 Business Center built by Bob Moore Construction in 2009 for Flaherty Development is the largest LEED Gold Core and Shell. SPORTS

APOGEE STADIUM In 2012, the 31,000-seat Apogee Stadium at the University of North Texas in Denton received LEED Platinum, the fisrt such certification of its kind. It was designed by HKS Sports and Entertainment Group and built by Manhattan Construction Co. Among the most visible features of the stadium are three wind turbines that provide roughly a half a million kilowatt hours per year, eliminating roughly 323 metric tons of carbon dioxide.

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calls such benchmarks “super deep green.” He’s being asked by more and more local and national clients about certifications beyond LEED, such as Living Future Institute’s (ILFI) Zero Energy Building (ZEB) Certification or Delos’ Well Building Standard. “If CEOs would understand this—it has a bigger impact on the bottom line,” Gorthy says. In Dallas-Fort Worth, both sustainability and wellness are poised to gain traction for two reasons. First, the region is densifying and becoming more urban. “Sustainability standards often come into play because of transit or density. Texas has always had more land available. But as [Dallas-Fort Worth] has gotten denser in the last five or 10 years, now is the time people are thinking about these strategies,” Gorthy says. Second, corporate office users relocating from elsewhere are setting the pace for the region. Larger, corporate companies—generally build-to-suit office users—are an easy sell for sustainability and wellness measures. As users relocate to the region, they bring along their desires for less environmental impact and increased wellness for employees. HKS’s Teske, DPR’s Gorthy, and 5G’s RobbinsElrod agreed that pursuing sustainability or wellness goals—spanning commercial office, data centers, hospitality, and more—is still largely client driven. In many instances, Texas energy codes have outpaced LEED standards, HKS’s Teske says. “It’s time to move beyond sustainability and toward a more regenerative mind thinking,” he says. And as more and more projects serve as a litmus test for proving a slew of positive impacts—increased returns, lower energy bills and operating expenses, more efficient employees, stronger recruitment and retention—more developers will pursue third-party certifications. Though it may take a few more pioneering projects spanning varying asset classes from multitenant offices to retail stores in order to reach a critical mass of environmentally conscious development. “It’s going to take a lot more bold projects to push the region beyond an attitude of doing things for the style of it,” says Lake | Flato Associate Lewis McNeel, whose team worked on Treehouse’s Dallas location. Treehouse became the world’s first retail store to produce more energy than it uses. “We’re trying to convince people that their city is worth building in a sustainable way for human health, comfort, and the long-term sustainability of the world. Dallas-Fort Worth has huge possibilities.” Associate Editor Alex Edwards contributed to this report.

SUMMER 2018

F FEATURE

GREEN BUILDING LEEDERS Sustainable construction practices have gone far beyond office and residential buildings, and have become common in industrial, manufacturing and other types of non-office construction in North Texas. Cities and educational institutions, too, have embraced sustainability, producing an array of unique structures — from fire stations, and factories to a presidential library and even a university’s football stadium.

KAY BAILEY HUTCHISON CONVENTION CENTER IN DALLAS

MOODY PERFORMANCE HALL

SABINE HALL SCIENCE BUILDING

LEED SILVER As one of the only LEED-certified convention centers in the country, Dallas’ Kay Bailey Hutchison Convention Center gets 100 percent of its electricity from renewable sources, saves 7 million gallons of water annually through lowflow plumbing, efficient cooling towers, and has landscaping that requires little water.

LEED PLATINUM This Arts District theater with 750 seats utilized simple and smart methods to make it more earth-friendly. Formerly known as the Dallas City Performance Hall, the building faces north, allowing it to use daylight with minimal heat gain. Many recycled materials were used during construction, and little carpet and paint can be seen throughout, which minimizes maintenance.

LEED PLATINUM The science hall at Dallas’ Richland College uses creative methods to dispose of chemical waste and ventilate classrooms. Construction of the building also used many recycled and sustainable materials. Energy for the 118,000-square-foot education building largely comes from solar panels.

DALLAS LOVE FIELD AIRPORT

DART POLICE – MONROE SHOPS

DALLAS FIRE STATION NO. 6

LEED PLATINUM This historic building which is home to DART, achieved a perfect score in LEED’s scorecard sections for sustainable sites, water efficiency, and innovation, and also earned top marks in energy and atmosphere, materials and resources, and indoor environmental quality categories.

LEED PLATINUM Dallas Fire Station No. 6 is an LEED Platinum Carbon Neutral Building on Pennsylvania Avenue. The design of the 12,000-square-foot station is focused on energy conservation with carefully designed solar orientation and window placement, solar hot water, 30 geothermal wells, and PV canopies for shaded parking.

DFW INTERNATIONAL AIRPORT’S OPERATIONS BUILDING

PEROT MUSEUM OF NATURE AND SCIENCE

LEED SILVER In 2014, Love Field completed its “Love Evolution” plan—just in time for the newly lifted Wright Amendment—which included renovating 255,000 square feet and adding 637,000 square feet of space with an environmental edge, including waste reduction and water and energy efficiency.

PRAIRIE CREEK BRANCH LIBRARY LEED PLATINUM This branch of the Dallas Public Library uses solar energy and a geothermal heat pump system. Efficiencies such as reusing greywater and HVAC condensate and using native landscaping, which doesn’t need permanent irrigation, helps the library use minimal water.

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LEED SILVER The airport’s administrative staff moved into the three-story, 154,000-square-foot building in 2015 using light-harvesting LED bulbs and a so-called cool roof designed to maximize shade and reduce energy costs in its open-concept

LEED GOLD The Perot Museum of Nature and Science in Dallas was awarded four Green Globes rating from the Green Building Iniative for its sustainability practices including a rainwater collection system. It’s an LEED Gold buidling and certified by the Sustainable Sites Initiative.

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

A ANATOMY OF A DEAL

HUB OF ACTIVITY YEARS IN THE MAKING, THE I N T E R N AT I O N A L I N L A N D P O R T O F D A L L A S THRIVES AS ITS PROFILE RISES BY KERRY CURRY

UNION PACIFICâ&#x20AC;&#x2122;S DALLAS INTERMODAL TERMINAL, LOCATED IN WILMER PHOTO: CHASE MARDIS

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A ANATOMY OF A DEAL It was the late 1990s, and Dallas-Fort Worth developer Mike Rader had a vision for a vast expanse of land south of Interstate 20 flanked by Interstate 35 on the west and Interstate 45 on the east. His vision, for an intermodal freight transport terminal owned and operated by a major railroad, set the stage for what is today one of the highest-profile industrial developments in the country.

A SLOW START

It wasn’t always this way. The inland port coalesced slowly, much to the chagrin of developers and economic development officials in the five-city region comprising its boundaries: Dallas, Lancaster, Hutchins, Wilmer and Ferris. Rader initially wooed Burlington Northern to build and operate an intermodal facility in southern Dallas County, but the deal fell through days before papers were to be signed when BN and Santa Fe Railway announced a merger. It became a moot point because Santa Fe already had a Fort Worth intermodal that the merged railway would use. That intermodal would later become an economic driver for Ross Perot Jr.’s massive Hillwood industrial development at Fort Worth Alliance Airport. Over in South Dallas, meanwhile, Rader started over from scratch, this time with Union Pacific. It would take him seven years to convince UP to build an intermodal terminal in the inland port. The facility, which spans a portion of Wilmer and Hutchins, opened in 2005. Around that time, FedEx — attracted by the confluence of interstates — located a massive ground transportation distribution center in the area. “Because FedEx is such a leader in logistics, it was a real endorsement of us as a location for logistics, warehousing and distribution,” says Guy Brown, economic development director in Hutchins, where FedEx is located and whose entire city

1015 WINTERGREEN IN HUTCHINS

SUMMER 2018

PHOTO: MICHAEL SAMPLES

Known as the International Inland Port of Dallas (IIPOD), the 7,500-acre region contains a Union Pacific intermodal facility and ample, affordable land flanked by three interstate highways. The inland port has attracted the nation’s biggest industrial developers along with many of the country’s most recognizable Fortune 500 companies, including Amazon, FedEx, Kohl’s, and Whirlpool. “It’s starting to take off and prove itself,” Rader says from his nondescript beige metal office building along Wintergreen Road in Hutchins where maps of his and his partners’ land holdings adorn a conference room table and walls. Construction of massive warehouses — some exceeding 1 million square feet — have become routine over the past three years in the IIPOD.

MIKE RADER

limits is within the port’s boundaries. Soon thereafter, a California developer came calling. The Allen Group was convinced intermodals were the future driver of warehouse growth, but its Bakersfield industrial park was too close to the Port of Los Angeles to interest railroads in building an intermodal there. When it learned of UP’s plans in Dallas County, it bought land near the intermodal, says Richard Allen, CEO of The Allen Group. Between 2005 and 2006, The Allen Group bought approximately 6,000 acres of raw land in southern Dallas County. “We understood that the land in and around these intermodals was considered ocean front property,” says Allen, whose development firm would later be selected to develop an intermodal and control development around it on behalf of BNSF in Kansas City. By 2008, there was approximately 5 million square feet of industrial space either built, under construction, or planned in the inland port with only about 500,000 square feet actually occupied, according to Dallas Mayor Mike Rawlings. Then the Great Recession intervened in The Allen Group’s grand 6,000-acre vision — which it dubbed the Dallas Logistics Hub — and the group sought out bankruptcy protection. The developer sold the two buildings it had developed and about 1,700 acres before successfully emerging from bankruptcy in 2012.

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

A ANATOMY OF A DEAL

MAJOR DEVELOPERS OF THE INTERNATIONAL INLAND PORT OF DALLAS

L AY O F T H E L A N D I N T E R N AT I O N A L I N L A N D P O R T O F D A L L A S

VA NORTH TEXAS HEALTH CARE SYSTEM

THE ALLEN GROUP

DALLAS

San Diego-based Allen Group specializes in railserved industrial developments, office, retail and mixed-use properties. The group currently owns about 1,400 acres in the Dallas Logistics Hub. The group developed two buildings that were later sold and is selling land to developers. “I think it’s great that the Grow South initiative exists and that political minds have seen the light and see the advantages of developing land where there was higher unemployment and the availability of a labor force.” — Richard Allen, CEO and founder

CORE5 INDUSTRIAL PARTNERS Atlanta-based Core5 is a full-service real estate property company with expertise in development and acquisition of Class A inventory and build-to-suit industrial facilities. A 754,000-square-foot building with 416,000 recently leased to VM Innovations. “I think what really helped them in the location selection was the access to the freeway system being off of Interstates 45 and 20 and also the FedEx Ground that is only about 1.5 to 2 miles away from our property.” — John Leinbaugh, vice president, investments

TRINITY FOREST GOLF COURSE AND CLUB

PAUL QUINN COLLEGE

AMAZON DC

SCHNEIDER NATIONAL

HOME DEPOT DC

HYUNDAI MOBIS PARTS DC

UNIVERSITY OF NORTH TEXAS AT DALLAS

NIAGRA BOTTLING

QUAKER DC

FREIGHT CONSOLIDATED LINER PIONEER CASTING FORZEN FOODS

KOHL’S DC

DESOTO HELIPORT SOLAR TURBINES DIAB GROUP MARTEN TRANSPORT

CINTAS DC WALMART DC

DESOTO

BMW DC

MARS PET CARE DC

L’OREAL DC CEDAR VALLEY COLLEGE

AMAZON DC

SWIFT TRANSPORTATION WAYFAIR DC

HUTCHI

VISTAPRINT

ADESA BENTWOOD KITCHENS AT&T DC

LANCASTER BRASS CRAFT

GLENN HEIGHTS

ONCOR SYSTEM OPERATING SERVICES

DERMODY PROPERTIES Reno, Nevada-based Dermody Properties is involved in industrial real estate investment, development, acquisition, and management. Phase 1 of the LogistiCenter in Dallas is a 626,439-square-foot distribution center expandable to 1.1 million square feet. If Phase 1 isn’t expanded, a Phase 2 building of 447,457 square feet will be developed.

DUKE REALTY Duke is an Indianapolis-based publicly traded REIT that owns 16 million square feet of industry properties in Dallas-Fort Worth. Duke has built six buildings in the inland port totaling 4.5 million square feet, with 2 million square feet of that in the last couple years. Its tenants include American Standard, Unilever, Whirlpool, Shippers Warehouse, and WayFair.com. “We can reach about a third of the U.S. population within a one-day truck drive from Dallas-Fort Worth.” — Jeff Thornton, regional senior vice president

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GAINING MOMENTUM

Today, The Allen Group controls about 1,300 to 1,400 acres of raw land within the inland port’s boundaries and has been selling off parcels to developers. It remains bullish on the inland port’s future. “It isn’t just the intermodal that’s driving development,” Allen says, “it’s also the interstate highway system. That region is literally surrounded by highways. That was a huge area of vacant land; it was just a perfect spot. Right now that’s the hottest industrial market in the Metroplex.” Rader, who—with partners—controls about 4,000 acres in the IIPOD, including some land purchased from The Allen Group, points to a Stream Realty study as an indication of the market’s strength. The Dallas-Fort Worth region delivered 26.8 million square feet of industrial space in 2017, according to the Stream Realty report, which used CoStar Realty Information Inc. data. The Inland Empire in Southern California was second, delivering 20.2 million square feet and Chicago was third with 19.7 MSF. Today, Rawlings notes that, according to a recent analysis, more than 32 million square feet of industrial space has been built, is under construction, or is planned in the inland port with over 24 million square feet occupied or under

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SHIPP

UN PA DA INT TE

A ANATOMY OF A DEAL

LEGEND

BLW CONCRETE CONTRACTORS

TRINITY RIVER AUDUBON CENTER

ALLIED WASTE SERVICES O’REILLY AUTO PARTS DC

GEORGIA PACIFIC DC

INS

PERS DC

TRI

NIT

AMERICAN STANDARD DC

IVE

MEDLINE DC ACE HARDWARE DC MAKITA USA DC SPROUTS DC UNILEVER DC

WILMER

WHIRLPOOL DC

PROCTER & GAMBLE DC

FERRIS

ELLIS COUNTY

TEN YEARS AGO, YOU SAW MEANINGFUL DEVELOPMENT. NOW, FAST-FORWARD 10 YEARS, AND YOU’VE GOT HALF THE DEVELOPERS IN TOWN BUILDING DOWN THERE. — JEFF THORNTON, DUKE REALTY’S REGIONAL SENIOR VICE PRESIDENT construction with an occupant designated. The developing port has become a welcome tax base for the cities that occupy its boundaries: Dallas, Lancaster, Hutchins, Wilmer, and Ferris. “In 2007, the taxable value of real property in the Dallas-portion of the inland port was approximately $19 million,” Rawlings said. “By 2015, the taxable value of real property in the Dallas-portion of the Inland Port had grown to over $135 million. In terms of job creation, the inland port now has over 3,000 direct jobs.” Duke, an Indianapolis-based publicly traded real estate investment trust (REIT)

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KAUFMAN COUNTY

NION ACIFIC ALLAS TERMODAL ERMINAL

HILLWOOD Fort Worth-based Hillwood is involved in all facets of industrial development, including land acquisition, master planning, building design, and construction. Developments include The Crossroads Trade Center (DeSoto) with three buildings totaling more than 4.5 million square feet; Commerce 20 Industrial Park with two buildings totaling over 1.1 million square feet; and Commerce 45 with two buildings totaling more than 1.5 million square feet. Hillwood developed the buildings occupied by Georgia-Pacific and Kohls.

HINES

DALLAS COUNTY

FEDEX DC

MAJOR EMPLOYER INLAND PORT BOUNDARY MAJOR HIGHWAY COUNTY BOUNDARY DC DISTRIBUTION CENTER

Houston-based developer Hines is a global real estate investment, development, and management firm with $111 billion in assets under management. The 125-acre development includes a 1.5 million-squarefoot logistics park consisting of a 1 millionsquare-foot center, expandable to 1.5 million square feet. If Phase 1 isn’t expanded, a Phase 2 building of 450,000 square feet will be built. “We’ve seen a trend of regional distribution centers continuing to get bigger and tenant requirements continuing to grow. Part of that is driven by the onslaught of e-commerce-related users but also a reworking of supply chains to be more efficient.” — Connor Tamlyn, director

MAJESTIC REALTY CO. Majestic Realty Co. is the largest privately owned industrial developer in the U.S. Majestic has proposed buildings in SouthPoint: a 525,770-square-foot building for a single tenant and a 717,410-square-foot singletenant building, both in the city of Hutchins.

PROLOGIS Prologis Inc. is an owner, operator, and developer of industrial real estate around the world. Prologis Park 20/35 is located in Lancaster. Prologis has developed several build-to-suits in the inland port.

PRIME45 DEVELOPMENT Dallas-based Prime45’s Mike Rader brought the UP intermodal to the inland port and has been a key player in the inland port’s development. Prime45’s 4,000 acres is spread across several parks, including 3,000-acre Prime Pointe rail served by Union Pacific Railroad. “The whole inland port area is seeing a lot of growth, and we still have a lot of land available to be developed.” — Mike Rader, President 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

UNION PACIFIC’S DALLAS INTERMODAL TERMINAL

RIDGE PROPERTY TRUST Ridge is the industrial development arm of Houston-based Transwestern Development Com. Development includes a build-tosuit for L’Oreal in 2013, and is 100 percent leased to the cosmetics maker. The facility and surrounding park were purchased by State Farm in 2014.

SCANNELL PROPERTIES The Indianapolis-based real estate development and investment company focuses on build-to-suit and speculative development in the U.S. and Canada, including Sunridge Business Park 2, a 715,520-square-foot spec building. It also did a 450,000-square-foot build-to-suit for Constellation-Biaggi and a 320,000 squarefoot build to suit for Makita.

TRAMMELL CROW CO. Trammell Crow is one of the nation’s leading developers and investors in commercial real estate. Trammell Crow was one of the first and most prolific developers to put up warehouses in the Inland Port—before it had that moniker—with the first building going up in 2001. It has developed over 3 million square feet in the inland port, leasing some buildings and selling others. “The product movement from Mexico to the East Coast has made the I-20/I-35 corridor one of the most important logistic centers in the country for most large distributors. We see the IIPOD rivaling the Inland Empire Industrial Market over the next 10-20 years and want to continue to provide first-class facilities to meet the needs of the tidal wave of large companies attracted to the area.” — Jack Marks, principal

VANTRUST REAL ESTATE Kansas City-based VanTrust Real Estate is a full-service real estate development company. DalParc I-20 Logistics development includes Building 1 — 920,275 square feet— amd Building 2 — 145,800 square feet. Both were completed in 2017. Two more buildings, totaling 1.37 million square feet are planned.

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PHOTO: MICHAEL SAMPLES

and S&P 500 company (NYSE: DRE), is one of the most prolific developers in the IIPOD, having developed six buildings totaling 4.5 million square feet – with 2 million square feet of that in the last two years. It owns all but one of the buildings it developed there. “Starting about 10 years ago, the South Dallas submarket started to gain momentum as the new frontier for industrial development,” says Jeff Thornton, Duke Realty’s regional senior vice president. “Ten years ago, you saw meaningful development. Now, fast-forward 10 years, and you’ve got half the developers in town building down there. It’s the most active submarket with about 12 million square feet of speculative space under construction or on the ground.” When looking at all industrial markets in Dallas-Fort Worth, those to the north, west, and northwest of Dallas were first to develop and are transitioning to infill markets, says Thornton. South Dallas, with its abundant land, intermodal facility, confluence of interstates, and available labor pool holds the advantage for future industrial activity in North Texas, he says. “As an industrial developer and someone who has a vested interest in that area of town, it’s been great to see the city of Dallas and the Dallas Regional Chamber get behind the Southern Sector,” Thornton says. “Mayor Rawlings’ push with his Grow South initiative and the chamber’s attention to promoting that area of town really reinforces the viability of the area and has helped fueled the growth.” As mayor, Rawlings initiated the Grow South strategy in 2012 to improve economic conditions in the southern sector of Dallas, which has been plagued by poverty and high unemployment. The initiative lays out a growth strategy for eight focus areas, with one of the focus areas being the education corridor/inland port. Since 2006, the city of Dallas has invested over $40 million in bond funds for infrastructure to enable development on the Dallas portion. The city also collaborated and coordinated with county, state, and federal partners for roughly $30 million more in infrastructure funding. It has used incentives that range from tax abatements to grants, to leverage private investment and job creation.

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ointe site

Ft. Worth, Prime Pointe rinity Inland Port, Dallas

Lines

PRIME POINTE PARK

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Located in the fastest growing area of Dallas/Ft. Worth, Prime Pointe Located in the fastest growing area of Dallas/Ft. Worth, Prime is the PREMIER rail-served industrial park at Trinity Inland Port, Pointe Dallas is the PREMIER rail-served industrial park at Trinity Inland Port, Dallas County. County. )

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SOLD SOLD UNDER CONTRACT SOLD UNDER CONTRACT

PRIME POINTE PRIME PARK POINTE PARK

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Union Pacific Rail Lines Completed Union Pacific Rail Lines Future Completed 8/2018 Future 8/2018

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Exclusively rail served by Union Pacific Railroad Exclusively rail served by Union Pacific Railroad

“ There is something wonderful that happens when smart and talented people unite around the purpose of making their city better. That is TREC. Ran Holman TREC CHAIRMAN CUSHMAN & WAKEFIELD

”

Join us! as we honor the City of Dallas’ GrowSouth initiative Imagine. Empower. Impact.

Special Guest: Mayor Mike Rawlings Get your tickets now at recouncil.com 214 692 3600

PHONE

3100 McKinnon Street NO. 1150, Dallas, Texas 75201

A ANATOMY OF A DEAL Atkins says he’s been a longtime supporter of the inland port, including using economic incentives to attract companies and developers, as he sees the port as a major jobs driver. The city approved $1.7 million in incentives for Vistaprint with an incentives package that includes a tax abatement and workforce development funds. Although Vistaprint is in the city of Dallas, the plant is near the city limits of Lancaster, which expects its labor force to benefit from the jobs. Shane Shepard, economic development director for Lancaster, says e-commerce operations such as Vistaprint and Wayfair.com are gaining a foothold in the port. Cities like e-commerce operations because municipalities are able to collect sales tax on the transactions. WAYFAIR’S DISTRIBUTION CENTER IN LANCASTER

“For the city of Dallas, we’re looking to continue to capitalize on robust market conditions by using strategic investments in infrastructure and incentives to support development of the remaining parcels of land in the Dallas portion of the Inland Port,” Rawlings says. “We see opportunities to step up our efforts in partnering with employers, nonprofits, local colleges, and other governmental entities such as the Dallas Independent School District and the Dallas County Community College District to support the continued creation of quality employment opportunities for southern Dallas residents through workforce development and job training initiatives.” One of the city of Dallas’s recent initiatives involved a $1.3 million grant for street construction and a 10-year, 90-percent real property tax abatement to facilitate the construction of the 600,000-square-foot LogistiCenter. Developed by Reno, Nevada-based Dermody and completed in 2017, LogistiCenter offers the potential expansion of up to 1.1 million square feet or a second phase with a separate building of 447,000 square feet. It’s just one of a handful of recent construction projects in the port.

MANUFACTURING PUSH

Although the inland port, to date, has largely been focused on massive distribution centers served by rail, truck, or both, the region has expressed interest in attracting manufacturing plants. In June, the city of Dallas announced a major coup: commercial online printer Vistaprint will invest $50 million to establish a manufacturing plant in the IIPOD that will create more than 600 high-paying jobs over a three- to four-year span and 100 annual seasonal jobs. Vistaprint is the largest business of Netherlands-based printing conglomerate Cimpress, which employs more than 11,000 and operates 20 portfolio brands around the world that serve small businesses with customized printing products. “We need more manufacturing companies coming in, and this might just be the start of manufacturers coming into the inland port,” says Tennell Atkins, Dallas City Council member, whose district will include Vistaprint.

SUMMER 2018

IMPROVING THE INFRASTRUCTURE

The five cities within the inland port, along with Dallas County, are making a variety of infrastructure improvements to make still-undeveloped land more attractive. The Loop 9 project, beginning with six lanes of frontage roads, is expected to begin soon and will connect I-45 to I-35, running through portions of Dallas and Ellis counties. A variety of other road, sewer, and water projects are planned or in the works. Lancaster, meanwhile, is building a $2.5 million terminal building at its airport—often the first impression for executives coming into the port for tours. Construction began in the spring and is scheduled to be completed by the end of 2019. The airport’s masterplan includes an eventual extension of the runway from 5,500 feet to 8,000 feet.

ENJOYING THE FRUITS

David Miracle, executive director of economic development for the city of Wilmer, which still has thousands of undeveloped acreage available, says brokers, site consultants, the governor’s office, the Dallas Regional Chamber, and others have been calling and providing steady leads. “Sometimes it’s overwhelming — the number of projects that are looking at us,” Miracle says. “These industrial sites are some of the most looked-at properties in Texas and the United States. It’s one of the hottest markets out there. It’s exciting to have that much interest and activity.”

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

I INNOVATION

DATA CENTERS IN NORTH TEXAS CREATING A CLASS OF THEIR OWN DFW IS A TOP FIVE MARKET FOR THE MULTIMILLION-DOLLAR FACILITIES, WHICH PRODUCE TAX REVENUES THAT SUPPORT INFRASTRUCTURE AND COMMUNITY SERVICES BY DAVID KIRKPATRICK

One particular — and maybe even peculiar to some people — type of real estate development project has been an increasing source of regular industry news over the last several years. These projects are data centers, buildings full of blinking and humming racks of computer servers that are often shrouded in a veil of secrecy due to their contents and with almost all of the building amenities geared toward keeping its servers comfortable and secure. So how popular is North Texas for data center projects? North Texas is one of five Tier 1 markets for data centers in the U.S., a list that includes Chicago, Metro New York, Northern California, and Washington D.C., and places the Dallas-Fort Worth area as a key international data center market, making it a destination for both national and global providers. There are more than 115 active data centers in the market with a total of over 4 million square feet and a market estimate of power well over 400 megawatts. Social media giant Facebook’s north Fort Worth data center has made waves in real estate news, and new data center developments are regularly announced across the entire area. Recent examples include: a $500 million

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project in Midlothian by tech giant Google, Stream Data Centers announcemnt of a Garland project in April, last August Digital Realty announcing a $1 billion project in Garland, and early last year, Dallas-based Provision Data Services opened a new data center in the heart of downtown Dallas in a former office tower.

WHAT MAKES NORTH TEXAS ATTRACTIVE?

Being a Tier 1 market for data centers is an obvious selling point, but North Texas has a number of elements that make it an attractive location. “The DFW area is unique because it’s located in a central time zone, is not coastal, and there is technically no seismic activity. Also, this area is not prone to large scale flooding or weather extremes, which makes it an ideal location for data centers. It’s also supported by the dependable ERCOT power distribution grid serving almost exclusively about 75 percent of the state, offering some of the lowest power costs in the nation,” says Brion Sargent, AIA, Gensler Regional Practice Area Leader for Critical Facilities, neatly summing up what is considered the conventional reasoning of why North Texas is a draw for data centers. While these attributes are all contributing factors, concentrated population growth might be a more key driver for data center growth says Rick Hughes, Executive Managing Director, Cushman & Wakefield. He has 20 years of experience in the data center space selling data center land for development, selling existing data centers, and representing clients in purchasing and leasing data centers. Hughes says population growth has also made the ERCOT power grid less of a differentiator because rapid population growth hasn’t been met with the expansion of power generation and the grid now shares the same brown-out risks faced by the rest of the nation. “Data centers need to be near the things they operate (streaming data, phone apps, smart machinery, etc.), and Texas will be the country’s largest mega-region for these things in the next 10 years,” says Hughes. “Of the state’s large population centers (San Antonio, Austin, Houston, and Dallas-Fort Worth), DFW provides

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I INNOVATION

the ideal data center location. Houston is prone to hurricanes, the price of power in Austin is 40 percent to 50 percent higher than North Texas due to the municipal-owned Austin Energy, and San Antonio lacks the connectivity. DFW has it all and is at risk for few natural perils — a tornado being the only one, and North Texas is not in the heart of tornado territory.” Hughes points to another attribute of the area that sets it apart from the other Tier 1 markets—the viability of many great sites that are suitable for data center development. Land costs are higher in other comparable markets around the U.S., and Hughes says this will continue to be the case far into the future. Data centers are becoming more common in North Texas, and the projects are also good for the real estate industry, says Bob Morris, chairman, Corgan. He says shared colocation data centers have created a thriving real estate business in purchasing land, speculatively building new ground-up data centers and then continually expanding those centers for their tenants. Investors are seeing data centers as quality investments and real estate brokers have a new tech-savvy market. “Given that data centers are increasingly large and are costlier per square foot than nearly all other types of commercial buildings, North Texas manufacturing, supplier, design, and construction industries also benefit,” Morris says. The projects are good for business in general, too, he adds. The tax dollars they pay provide support for infrastructure and services such as roads, schools, and police while they have small operations crews who don’t add a lot of stress to these services. Morris says the data center industry is also driving the development of new renewable power and reusable waste technologies that benefit all businesses and communities over time. Hughes also emphasizes the tax impact of data centers. “Being a Tier I market, data centers are a major economic driver and taxpayer in Dallas-Fort Worth,” he says. “Data centers are assessed at tax values that far exceed office, residential, and other real estate uses. Data centers have become an asset class of their own and are no longer considered industrial real estate.”

THE FACEBOOK EFFECT

Cloud data centers are also known as “hyperscale” data centers with companies including Facebook, Alibaba, Baidu, Tencent, Apple, and other noted cloud, social media, and e-commerce companies falling under the hyperscale moniker. According to Synergy Research Group, up to 24 global brands are considered hyperscale, depending on the exact determining criteria. The Facebook data center in north Fort Worth was significant because it was the first hypescale development in North Texas, says Hughes. What does hyperscale mean? Hyperscale computing is an architecture that contracts and expands based on the immediate needs of a business, producing seamless scalability via a system

“GIVEN THAT DATA CENTERS ARE INCREASINGLY LARGE AND ARE COSTLIER PER SQUARE FOOT THAN NEARLY ALL OTHER TYPES OF COMMERCIAL BUILDINGS, NORTH TEXAS MANUFACTURING, SUPPLIER, DESIGN, AND CONSTRUCTION INDUSTRIES ALSO BENEFIT.” — BOB MORRIS, CORGAN of flexible memory, storage, and networking capabilities. Hyperscale servers are customized for the particular needs of a data center and intended to meet the needs of millions — perhaps billions — of computer users. “The presence of the hyperscale providers draws many other data center users that utilize parts of the hyperscale’s platform. Many applications needed for business, commerce, industry, and social media are all of the compute from these platforms,” he says. “Much like when a large corporation relocates a major headquarters or manufacturing operation to the region, other companies that supply to, and benefit from, the presence of the large installation are lured here as well.” Hughes adds, “What’s more, major hyperscale users signify a ‘seal of approval,’ as data centers cluster together. They think, ‘If Facebook or Google is here, then it’s safe for my corporate data center facility to be here, too.’”

A CLOSER LOOK AT DATA CENTERS

Corgan founded its Critical Facilities practice almost 40 years ago, and has completed around 1,100 data projects totaling 70 million square feet and more than 3 billion watts of computer power, Morris says.

DATA CENTERS INCLUDE FIVE BASIC TYPES: ENTERPRISE

Enterprise centers are built and owned by a single end user, such as a large corporation. Examples in DFW include T5 Data Centers LLC, CyrusOne, DataBank, and Stream Data Centers.

MANAGED SERVICES PROVIDERS

Managed service providers are companies that outsource their data handling to telecom or big tech providers. Examples in DFW include Pegasus Technology Solutions, Fluid IT Services, Protostar, and Austin Lane Technologies.

COLOCATION

A colocation, also referred to as a shared data center, is a facility that offers space to clients who maintain their own IT functions within the center. Examples in DFW include Cologix*, TEL-X Dallas, RagingWire*, and Dallas Data Center*.

WHOLESALE

A wholesale or multitenant data center is where tenants are charged based on their power allocation. Examples in DFW include Infomart Data Centers, Digital Realty Trust*, and Carrier-1.

CLOUD

The cloud stores data off-premise on the Internet, and is seen as competition for traditional enterprise data centers. Examples include Amazon Web Services, Google, Salesforce, and Microsoft’s Azure.

*Some data centers may be classified in more than one category. SUMMER 2018

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

I INNOVATION DATA CENTERS OF ALL TYPES AND SIZES ARE LOCATED IN DFW. Data Centers Data Centers Clusters

AVAILABILITY OF NETWORK PROVIDERS

820

Data Centers Data Centers Clusters 190

35W 75

635

175

SOURCE: DALLAS ECONOMIC DEVELOPMENT GUIDE 2018

HE WORLD

Dallas-Fort Worth is 35W home to data centers 35E of all types and sizes that specialize in various activities from internet hosting for multiple clients to large IT services for one 183 company. The list below 12 includes a sample of both colocation and 30 360 enterprise data centers in the region.

121

INDUSTRY CLUSTERS | DATA CENTERS

The biggest challenge in a data center project is the “mission critical” nature of the facility to the daily functions of government, business Worth is and even individuals, he says. Dallas-Fort While uptime home to data centers was once the main concern withofdata centers, all types and sizes that specialize in improvements in computing hardware and TERS. various activities from internet hosting for software is easing those concerns. The new multiple clients to large challenge in the industry, Morris IT says, is scaling services for one company. The list below physical size and infrastructure capacity, OR DATAboth CENTERS. includes a sample of and designing data centers with built-in fl exibilboth colocation and enterprise data centers ity to adapt to future emerging technologies. in the region. TS NEW YORK CITY Outlining the key attributes for a data center CHICAGO development, Morris lists reliability, redun1600 Plano Parkway Ltd WASHINGTON, D.C. 2020 Live Oak and dancy, maintainability, threat resistance, AIG then future proofing through the Alignedscalability Data Center Allied Marketing Group Inc. and adaptability of the building and its critical Ally Financial ATLANTA infrastructure systems. Trends include moduAlpha Data Center NEW YORK CITY Fort Worth lar buildings and MEP systems toAlpheus lower the upAmeritrade H Asset Acquisition I LP CHICAGO front costs with the option to later ramp up the Associated Solutions Inc. space and MIAMI load capacity, along with ongoing imAT&T WASHINGTON, D.C. provements in power and coolingAtos systems. Aurum Technology Inc. Examples of these improvements include Bank of America Blue Cross Blue Shield of new technologies in air and liquid cooling sysTexas LABILITY OF Broadridge Financial tems to keep the server racks cool. Power effi -Solution WORK PROVIDERS ATLANTAC I Host Dallas ciencies have also made a difference. Carrier-1 ximately 75 network providers operate Cassiopeia Internet Dallas th Texas, including“Not 14 of thetoo top 25many years ago, data centers re(Constellate) rovidersDALLAS of fiber for business services. / CEB quired two to three watts of electrical power oncentration of fiber access and total FORT WORTH CenturyLink width guarantees low latency and coming into the building in order to fi nally deCisco Systems Inc. es redundancy. Citigroup liver just one watt of power to the power cord on OR CARRIERS LOCATED IN DFW Club Billing Services Inc. MIAMI Cogent the computer itself. Today, that incoming power eus Level 3 Cologix munications Communications requirement has been reduced 40ColoGuys to 50 percent T Suddenlink ColoMart by more effi cient power and cooling equipment uryLink Unite Private Comcast Corp. ter andNetworks system designs,” says Morris.Companion Data Services US Signal LLC ent Another consideration with data center projComputer Sciences Corp. munications Verizon (CSC) ects is simply determining how the building type solidated Zayo

Global IPParkway Networks Ltd CoreSpace Inc. 35W ND ITG (Clearview) SunGard 1600 Plano Negma Business Solutions, CoreXchange GNAX Switch & Data Dallas 2020 Live Oak Inc Countrywide H5 Colo T5 Data LLC local is recognized, says Sargent. He says Gensler has “become an expert atCenters assisting NeoSpire Inc. Crescent Processing Co.AIG LP Health Care Services (BCBS) TEL-X Dallas NTT Data Crestside Facilities Corp. Horizon Datahow Centerthis unique authorities inAligned determining building type is to be recognized.” This 30 The Cambay Group Data Center Opus-3 Solutions, LLC Dallas I Cuban The Planet 360 is important because the term “data center” isn’t found in building code, there’s no HP Enterprise Services Allied Marketing GroupLLC Inc. Pilgrim’s Pride Cyberverse TierPoint Texas LLC Quality Technology Services IBM defined, and it’s not CyrusOne specific occupancy type typically found in zoning ordinances. Ally Financial TLCurban Rackspace Ignite Technologies Inc. Dallas Data Center TNA North America Raging Wire Data Center Data Centers Data Specialists Inc. Alpha Infomart 820 Verification Unified Infrastructure Rapid Reporting Input of Texas Inc. DataBank Alpheus Fort Worth Services Company, LP Internap Dataflow Services Unifocus LP Regulus Group LLCwith more Ameritrade The continuing ofCapital the hyperscalers, along corporations movInternational DCI Technology Holdings LLC growth (Transcentra) Union Datacom JP Morgan Acquisition I LP and out Dedico Ricoh USA ing their dataAsset centers off -premises of the offi ce campus to retail or wholeUniversal Cadworks Inc. Kaneb Information Services, Delm2 Inc. Global IP Networks Inc. 35WVazata Communications Associated Solutions Inc. SavvisCoreSpace Inc sale colocations and the cloud, are two data center trends, Cushman & Wakefi eld’s Digital Realty Trust SecureCoreXchange One Data VeriCenter GNAX AT&T LBJ Data Center Duggan Realty Advisors Solutions LLC Hughes cites. Verizon EarthLink - Dallas Data Atos Level 3 Countrywide H5 Colo Serverphase ViaWest Limestone Center What might be an Ventures LTD data center pricing is evenNetworks more signifiSimba cantCrescent trendPlano isProcessing that Co. LP Aurum Technology Inc. Viceroy InvestmentsHealth Care Service Lincoln Rackhouse Enterhost Skyrise Properties coming downBank dueof toAmerica three factors, according to Hughes: data centerMutual infrastrucWashington M&A Technology Equinix Crestside Facilities Corp. Horizon Data Center SoftLayer Waymark Communications MBNA Technology Inc. Espenel SourceHOV tureInc.has dropped precipitously over the last few years, falling from $9 million per LLC Dalla Solutions, Cuban Blue Cross Blue Shield of Xerox MMC Group, LP Facebook Statement Systems Inc. Texas HP Enterprise Servic megawatt of infrastructure to $4 or $5 million per megawatt; most of the large Cyberverse XO Communications Nationwide Internet First Data Corp. Stratus Computer Inc. Fiserv Inc. NaviSiteFinancial Dallas Stream Data Centers zColo Broadridge Solution IBM

LOOKING TOWARD THE FUTURE

wholesale providers are now publicly tradedCyrusOne and not facing the aggressive returns C I Host Dallas allowing projectsDallas Ignite Data Center of private equity investors, to become profitable faster; and theTechnologies Carrier-1 Infomart Data Cente Data Specialists Inc.providers fighting playing field has more competition with multiple major global AND USE TAX EXEMPTIONCassiopeia Internet Dallas Input of Texas Inc. DataBank in North Texas, including 14 of the top 25 for the same business. (Constellate) Internap Datafl owofServices U.S. providers of fiber for business services. >centers Consist at least 100,000 square feettopic of gross electrical equipment, cooling systems, power A data center exemption applies to stateCorgan’s sales Morris also sees the future of data as an interesting and CEB area in an entire of portion of a facility infrastructure ,and software. The sales tax use tax on certain items necessary and International Capita The concentration of fiber accessandand total DCI building Technology Holdings LLC points to the coming impact of the Internet of Things (IoT) and initiatives such as > Capital investment of at least $200 million CenturyLink exemption may be available for 10 to 15 years and essential to the operation of a qualified data ATE bandwidth guarantees low latency and JP Morgan over a five-year period can be accessed by owners and tenants in single- Dedico center. The program provides 100 percent Toyota’s vision for autonomous ground vehicles and Uber Elevate’s vision for drone Cisco Systems Inc. Wh) ensures redundancy. > Create 20 new direct jobs or multitenant data center properties. To qualify Delm2 exemption of sales taxes on business personal region reduces operational risk Kaneb Information S Inc. electric short-haul s. These will dependent for Citigroup the salespassenger tax exemption, aircraft the data center must developments property essential to data center operations. d the likelihood of business disruption > Pay wages equivalent to atbe least 120% of the Inc on Digital Realty Trust 60 MAJOR CARRIERS LOCATED IN DFW county average meet the following minimum requirements: Property includes exempted computers, Clubstorage, Billing Services Inc. data processing, and communication largely powered by data centers. LBJ Data Center Duggan Realty Advisors 145 Alpheus Level 3 Looking at Cogent the future of data centers fromEarthLink a more practical real estate perspecLevel 3 Dallas Data Cologix 144 Communications Communications tive, Morris says another trend is the development data Limestone Network Center of ground-up multistory ColoGuys LEGEND: 34 AT&T Suddenlink Lincoln centers in the U.S. as the projects become larger or are built in areas withOCCUPATION high land Rackhouse Enterhost ORMATION COMPUTER SOFTWARE NETWORK AND COMPUTER NETWORK COMPUTER NETWORK COMPUTER HARDWARE ColoMart ECURITY PROGRAMMERS DEVELOPERS, COMPUTER SYSTEMS ARCHITECTS SUPPORT SPECIALISTS ENGINEERS 074 JOBS | MEDIAN HOURLY EARNINGS M&A Technology Equinix CenturyLink Unite Private costs or in places that don’t the space for large single-story buildings. NALYSTS SYSTEMS SOFTWARE ADMINISTRATORS Comcast Corp.have 8,258 | $39.41 5,083 | $53.62 7,520 | $37.22 1,930 | $54.06 Networks 871 | $44.34 12,366 | $50.67 11,828 | $41.74 MBNA Technology In Espenel Inc. “Manufacturers and designers are developing better multistory power and Charter Companion Data Services MMC Group, LP Facebook US Signal LLC cooling solutions with users becoming more comfortable with multistory de65 Cogent 2018 2018 DCorp. A L L A S ECONOMIC DEVELOPMENT GNationwide UIDE 1 2 7Internet First Data Computer Sciences Corp. signs,” Morris says. “More ground-up multistory data centers have been built Communications Verizon 64 Fiserv Inc. NaviSite (CSC) where high quality data center in other countries land is dearer, such as the UK Dallas

munications rlight Approximately tier SOURCE: FierceTelecom 75 network providers DATAoperate CENTER SALES

SOURCE: JLL Data Center Outlook North America

60 052 48 45 43

Consolidated Communications Fiberlight Frontier

SASTERS

Zayo

SOURCE: FierceTelecom

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

and parts of Asia, but often with less efficient cooling systems than we prefer to use in the U.S. New and more efficient cooling system designs that work well in multi-story data centers will generate more multi-story data centers in the US in the near future.”

DATA CENTER SALES AND USE TAX EXEMPTION A data center exemption applies to state sales and use tax on certain items necessary and essential to the operation of a qualified data

electrical equipment, cooling sys infrastructure ,and software. Th SUMMER 2018 exemption may be available for 1

I INNOVATION KEY PLAYERS GENERAL CONTRACTOR: RagingWire selfperformed Phase 1 (shell and core, site work, and first 8 megawatts). Holder Construction Company performed Phase 2 (second 8 megawatts). ENGINEERING FIRM: Page ARCHITECT: Page

RAGINGWIRE

CIVIL ENGINEERING AND LANDSCAPE ARCHITECTURE: Stantec

THE DALLAS AREA “HIT THE BULLSEYE” IN ATTRIBUTES RAGINGWIRE WAS LOOKING FOR WHEN PLANNING ITS DALLAS DATA CENTER CAMPUS. BY DAVID KIRKPATRICK

“Dallas is the number four city globally for Internet traffic, also there’s a large pool of very skilled labor, inexpensive and reliable power, and lots of fiber,” RagingWire Sr. Vice President and Chief Revenue Officer Joe Goldsmith says. “Those are the magic ingredients for a great data center market.” The 42-acre campus in Garland has space for five interconnected buildings, 1.5 million square feet of space, and a total of 80 megawatts of capacity with room to expand that capacity, if needed. The campus’ first building is the RagingWire Dallas TX1 Data Center, a wholesale private vault and retail colocation facility with 16 megawatts of critical IT power in 230,000 square feet of space that launched last spring. TX1 was built with RagingWire’s target customers in mind, including enterprise, cloud, largescale deployments, and customers expecting highgrowth in coming years. It also fits into the tech company’s strategy of providing data centers in the top U.S. data center markets. The RagingWire data center campus in Garland joins three developments in Ashburn, Va., and three facilities in Sacramento, Calif. The company’s footprint extends globally through the portfolio of parent company NTT, which has 140 data centers in 20 countries worldwide.

DEFINING THE BULLSEYE

RagingWire pointed out its first Dallas area data center is in the Garland/Richardson/Plano area known as the “Telecom Corridor” that quickly is becoming better known as the “Data Center Corridor,”

SUMMER 2018

and that the campus is near the President George Bush Turnpike, the CityLine campus, and both Love Field and Dallas Fort Worth International Airport. Beyond the location considerations in the Data Center Corridor, RagingWire highlighted four bullseye factors that give the area what it described as “significant value” for data center customers: ■ FIBER CONNECTIVITY – RagingWire said the two large carrier hotels—at the Infomart and 2323 Bryan St. bringing together about 70 carriers—are fiber-connected to TX1 and offer access to onsite carriers such as Cogent, FiberLight, Frontier Communications, Level 3, and Zayo. ■ BUSINESS GROWTH – The company sees value in the area’s significant business growth over the past few years along with having Fortune 500 companies such as Exxon Mobil, Texas Instruments, and J.C. Penney headquartered in North Texas and providing opportunities for colocation data centers. ■ RELIABLE, LOW-COST POWER - Multiple options for power, as opposed to other locations where a single provider dominates the market. ■ STANDALONE POWER GRID - Dallas’ connectivity is also attractive to data center customers because of the standalone ERCOT power grid. ERCOT is one of three main power grids that power the continental United States and RagingWire said smart data center companies have a presence across all three grids to provide superior reliability.

Take a look inside RagingWire and TX1 at DallasInnovates.com/ InnovativeSpaces.

FURNISHINGS: Bauhaus

KEY FACTS

16 MEGAWATTS OF CRITICAL IT LOAD

230,000 SF

DATA CENTER BUILDING

118,000 SF

OF WHITE SPACE

10,000 SF

OF CLASS A OFFICE SPACE

1,400 SF

STORAGE & STAGING SPACE

28,000 SF OF

CUSTOMER AMENITY SPACE (I.E., CONFERENCE CENTER, MEETING ROOMS, AND GYM)

7 VAULTS, EACH

BETWEEN 6,200 SQ. FT. AND 34,300 SQ. FT.

15 GENERATORS (EACH 2.25 MW) PROVIDE A TOTAL OF 34 MW BACKUP POWER TO FACILITY

ROOF TO FOUNDATION DESIGNED TO WITHSTAND AN

EF3 TORNADO

OF 136 MPH

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

I INNOVATION

EFFICIENCY AND SUSTAINABILITY DRIVE FACEBOOK’S FORT WORTH DATA CENTER KEY PLAYERS DEVELOPER: Hillwood GENERAL CONTRACTOR: DPR Construction ARCHITECTS: AlfaTech SP-Arch The facility is powered with 100 percent renewable energy thanks to the more than 200 MW of new wind energy that Facebook worked with Citigroup Energy, Alterra Power Corp., and Starwood Energy Group to bring to the Texas grid.

BY DAVID KIRKPATRICK

Data centers have become big news in North Texas real estate development and no project garnered more ink than Facebook opening the first North Texas hyper-scaler project last spring. The social media giant went on a buying spree in north Fort Worth eventually totaling around 150 acres for a development that will include five buildings, 2.46 million square feet, and a total value of over $1 billion. Facebook’s Fort Worth Data Center is part of its global network of 14 data centers that are already online or currently under construction. Like many enterprise data center developments, Facebook was attracted to its Fort Worth location by what Matt VanderZanden, director of Data Center Site Selection at Facebook, described for Dallas Innovates as its “excellent access to fiber and a robust electric grid with an abundance of renewable energy resources, a strong pool of talent for both construction and operations staff, and a terrific set of community partners.” As one of the cloud data center developers known in the industry as hyper-scalers — a group that includes Google, Amazon, Apple, Salesforce, and other noted cloud, social media and e-commerce companies — Facebook’s data centers are a key part of the infrastructure it relies on to provide apps and services to its over 2 billion users globally. “These buildings, and the hardware inside them, support our mission to give people the power to build community and bring the world closer together,” VanderZanden says. “They also help us accommodate

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the growing number of photos and videos being shared and scale as we create more immersive experiences through live video, 360 photos and videos, and virtual and augmented reality.”

EFFICIENCY AND SUSTAINABILITY ARE BUILT INTO THE DESIGN

The Fort Worth data center is one of the most-advanced and energy-efficient data centers in the world says VanderZanden, and features what he calls Facebook’s “hyper-efficient” hardware design, a template the social media company openly shares to drive innovation, efficiency, and sustainability in the data center industry. One example is the cooling system for the buildings uses outdoor and direct evaporative cooling systems 100 percent powered by clean and renewable energy. DPR Construction saw this focus as a learning opportunity. “This project presents opportunities for us as a team to work together to find new solutions. In particular, it

SUMMER 2018

I INNOVATION

AN AESTHETIC BASED ON LAND AND LOCATION Facebook’s more-than $1 billion Fort Worth data center features local artwork throughout its administrative areas. The administration building connects two data center buildings, forming an H. The third data center is a standalone building.

KEY FACTS

FACEBOOK’S FORT WORTH DATA CENTER IS 2.46M SF AND WILL EVENTUALLY CONSIST OF FIVE BUILDINGS. THIS MURAL IS A TRIBUTE TO FORT WORTH WITH ICONS OF THE CITY.

THE ADMINISTRATIVE AREAS FEATURE FLEXIBLE SEATING AND MEETING OPTIONS FOR EMPLOYEES

THE ENTRY WAY OF FORT WORTH DATA CENTER BUILDING

has been an exciting experience for our younger team members to see various ways to design and deliver a data center on this five-building campus. For example, they are learning about new server cooling methods. The collaboration and sharing lessons learned with the other general contractors has been a very exciting and different opportunity to grow together as industry leaders,” says Travis Bright, senior project manager at DPR Construction. One design element—Facebook’s “H” design where buildings 1 and 2 on the campus form an “H” when viewed from above – was first used at the Fort Worth Data Center and has now been incorporated into most of its data centers VanderZanden says. This configuration allows Facebook to have a single administrative area with support functions such as security, breakrooms and meeting rooms for two data halls, he says. AlfaTech and SP-ARCH designed the center. As part of Facebook’s effort to incorporate local art, furniture, and interior design elements at its numerous

SUMMER 2018

EMPLOYEES HAVE ACCESS TO A GAME ROOM IN THE DATA CENTER.

CURRENTLY HAS 200 FULL-TIME EMPLOYEES

THE CAFE SEATING AREA INSIDE THE DATA CENTER.

AN EMPLOYEE USES PLAYS A VIDEO GAME INSIDE THE CENTER’S GAME ROOM

data centers, the Fort Worth Data Center includes murals from local artists, furniture from local woodworkers, and design cues that point to Fort Worth. Each Facebook data center has elements based on the land and location, says VanderZanden, and changes it has applied to data center design over the last few years has been geared toward increasing overall efficiency. “We design the hardware in our data center to be hyper-efficient, and we contribute these designs through the Open Compute Project to help drive efficiency improvements across the industry,” VanderZanden says. “Through OCP, we’ve shared the full physical layers of our data center stack with the community — including designs for the building, cooling, power, battery, open rack, networking, compute, and storage.”

MORE THAN 500 CONSTRUCTION WORKERS ARE ON-SITE EACH DAY CONTINUING CONSTRUCTION OF BUILDINGS FOUR AND FIVE USES 75 PERCENT LESS WATER THAN TYPICAL DATA CENTERS

100 PERCENT POWERED BY WIND ENERGY

For more on Facebook’s Fort Worth Data Center, go to DallasInnovates. com/InnovativeSpaces.

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

LEWISVILL

There’s always something

SPECIAL ADVERTISING SECTION

Low Bus of t Lew hol tax bus bef Lewisville, Texas continues to draw in growing businesses as it retains its title as a first-rate, thriving economic hub within DFW. From Fortune 500 companies to innovative start-ups, the dynamic business community within Lewisville is unlike any other. The City’s location and infrastructure, inside the I-35 Corridor, offers easy access by air, train, or car for every business. An estimated 130,000 vehicles per day will travel throughout the Corridor over the next year, placing Lewisville in a prime position for growth and development. Lewisville offers a vast number of activities and is home to the 269-acre Railroad Park, a 2,000-acre nature reserve, as well as shopping and dining within the historic downtown of Old Town Lewisville. Whether you’re here to live, work, or play -- there is always something happening in Lewisville, TX.

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

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SPECIAL ADVERTISING SECTION

SUMMER 2018

Pos Lew day mu The volv age

Boo The ma com nat are mu ing new are tion wel and

PHOTO: HILLSIDE VILLAGE SPECIAL ADVERTISING SECTION

CEDAR HILL: WHERE BUSINESS + FUN GROW NATURALLY

SUMMER 2018 SPECIAL ADVERTISING SECTION

DALLAS PHOTO: SEAN FITZGERALD

Located at the highest elevation in Dallas County and just 20 minutes from city center, sits the beautiful, family-friendly city of Cedar Hill, where opportunities grow naturally. A bustling and diverse community of just over 45,000 people, Cedar Hill combines the best of big-city living with natural beauty and outdoor recreation found nowhere else in the Metroplex. Culturally, economically, and geographically, Cedar Hill’s appeal is broad and palpable. “Our prime location within the metro area is a key strength, with easy access to major highways, DFW Airport, and the International Inland Port of Dallas,” said Cedar Hill Mayor Rob Franke. “It provides businesses a competitive advantage with regards to logistics, as well as various transit options for locals and visitors.” With its low cost of doing business, ample workforce, and attractive quality of life, Cedar Hill is experiencing an influx of both startups and established companies. “Cedar Hill’s trade area is vast, attracting shoppers from the surrounding four-county area,” said Frank Mihalopoulos owner of Corinth Properties. “It’s been a great experience working with their team. I fell in love with the town, and I fell in love with the people.” Business owners operating in the city take pride being part of Cedar Hill’s growth, connecting with its principles in stewardship of the environment. Local business owner Abdiel Ruiz and wife Rosemary of Ruiz Financial Solutions share, “the best part of working in Cedar Hill is the people and daily interactions we are able to have. My wife and I have a long-term investment in the growth of our city and the relationships we have with the people of Cedar Hill. That is why live, work, and worship in

this wonderful city.” In addition to the growing business climate, Cedar Hill corners the market on natural beauty. Its uniquely diverse geological area with abundant wildlife offers some of the most breathtaking views in North Texas. The scenic rolling hills are reminiscent of the Texas Hill Country, yet conveniently nearby, making it the preferred destination among nature enthusiasts, hikers, cyclists, mountain bikers, boaters, campers, and adventure-seekers alike. Whether it’s a visit to Dogwood Canyon Audubon Center, where the ecosystems of east, west and central Texas converge, containing the widest variety of rare species in North Texas, or the Cedar Hill State Park, nearly 2,000-acres, located on Joe Pool Lake, Cedar Hill is an ideal location for learning about environmental science and nature. Add this to an extensive city park system, and outdoor recreational experiences exists at every turn. “Cedar Hill has an entrepreneurial spirit like nowhere else in the region,” shares Shadi Awad, co-founder of Technagy. “That spirit combined with its natural beauty made it the perfect spot to launch our company. I really believe the eyes of the Metroplex will be on this city over the next ten years like never before.”

CEDAR HILL

CEDAR HILL RETAIL TRADE AREA POPULATION

946,223 MEDIAN EFFECTIVE BUYING INCOME

$61,789 LAND AREA

36 SQUARE MILES DEVELOPED WITHIN CITY LIMITS

56% DEVELOPMENT INCENTIVES

YES CONTACT CEDAR HILL ECONOMIC DEVELOPMENT CORPORATION 972.291.5132 CHEDC@CEDARHILLTX.COM CEDARHILLEDC.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

ALLEN–WELCOME TO THE FAMILY WE KNOW YOUR BUSINESS IS YOUR BABY, AND THAT’S WHY WE’VE CREATED A GREAT ENVIONMENT TO HELP YOUR BUSINESS GROW. We’re the place to raise your business right. Allen’s vibrant economy continues to attract businesses and residents to our city. We can rattle off the standard stats and accolades—like being named #2 Best Place to Live in the Nation by MONEY Magazine or being ranked as the Best Suburb for Millennials in Texas by CNBC—but we do things differently. And that is what makes us great: We are a vibrant and active community that can think outside the box to connect our companies, workers, and residents together to open the door for new opportunities. We’ve got excellent amenities. Great places to live also make for great places to work, allowing companies to leverage our abundant shopping and dining, entertainment and sports teams, and award-winning parks and trails as a valuable recruitment tool. Our Parks and Recreation Department recently won the National Gold Medal Award and for good reason: every location in Allen is only a five-minute walk to nearly 1,200 acres of parks and 62 miles of scenic nature trails. We’ve got a diverse, educated population. Companies in Allen have access to a highly-skilled

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workforce and a pipeline of future talent with over 1.5 million workers within a 30 minute drive. The Collin College Technical Campus—breaking ground in September 2018 and opening in 2020— will bring 6,000 students to Allen, making this the county’s hub for professional training and technical education. These are just a few of the reasons that MONEY Magazine named Allen as the #2 Best Place to Launch a Career. We’ve got space to grow. With over $550 million in projects coming online in 2018, Allen has moved into its next stage of evolution as companies are taking notice of the city’s growth. Nine million square feet of Class A office (equivalent to the inventory of Preston Center) is being planned. Options range from individual buildings—such as One Bethany at Watters Creek, which opened its first five-story building this year and is planning its next phase—or corporate campuses in mixed-use environments such as The Strand, a 130-acre development by Hines, and Monarch City, a 238-acre development by The Howard Hughes Corporation at the hard corner of Central Expressway (US-75) and Sam Rayburn Tollway (SH-121). Both sites are ready to host companies seeking a fully-programmed experience by award-winning developers with on-site retail, urban living, and green space in a premier location. We’re the place to raise your business right. To find out if this is the family for you, visit AllenEDC.com.

DALLAS ALLEN POPULATION

104,636

FASTEST-GROWING CITIES IN THE NATION

#27

WORKFORCE WITH BACHELOR’S DEGREE OR HIGHER

55%

AVERAGE HOUSEHOLD INCOME

$107,602 CONTACT DANIEL S. BOWMAN 972-727-0252 900 WEST BETHANY DRIVE, SUITE 280 ALLEN, TX 75013

SPECIAL ADVERTISING SECTION

SUMMER 2018

Welcome to the family. Allen is home to many businesses, and weâ&#x20AC;&#x2122;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

SPECIAL ADVERTISING SECTION

FORT WORTH

DALLAS ARLINGTON

ARLINGTON – WHERE BIG DEALS DON’T STOP THE REGION’S PREMIER ENTERTAINMENT DESTINATION IS NOW LEADING THE REGION IN DEVELOPMENT PROJECTS.

ARLINGTON RANKING AMONG NORTH TEXAS ECONOMIC DEVELOPMENT AGENCIES IN DEAL VALUE:

-DBJ DEGREE SEEKERS AT UTA:

45,000 VISITORS PER YEAR:

14 MILLION MILES FROM DFW AIRPORT:

CONTACT ARLINGTON OFFICE OF ECONOMIC DEVELOPMENT 101 W ABRAM ST, ARLINGTON, TX 76010 (817) 459-6155

Home to three professional sports teams, two world-class theme parks, and some of the largest concerts in the Metroplex, Arlington attracts over 14 million visitors each year. But it’s more than just tourists who are attracted to Arlington — a long list of high profile businesses and developments have recently made Arlington their home. In fact, over the past year, Arlington’s value of economic development deals surpassed all other Metroplex communities. It has been hard to miss Arlington in the headlines recently. Since General Motors announced a $1.4 billion investment in its Arlington Assembly Plant in mid-2015, the city has hardly gone a month without another big announcement. Such announcements have included the headquarters of Fortune 500 homebuilder, DR Horton; a $1 billion new stadium for the Texas Rangers; a $400 million mixed-use entertainment district, Texas Live, and the 300-room Live by Loews hotel; a 1.6 million-square-foot industrial development, Park 20/360; and several major distribution centers for companies like UPS and Summit Racing. All in, these deals have amounted to investments of more than $3.2 billion over the past two years. While Arlington has definitely had a recent uptick in development activity it is no stranger to large projects. Centrally positioned between Dallas and Fort Worth, Arlington is a convenient home base for companies doing business across

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the Metroplex. A mere eight miles from Dallas Fort Worth International Airport, Arlington executives can easily travel to either coast in no time at all. Arlington’s position along two major interstates and premier rail lines make the city a no-brainer for supply chain and distribution companies. Such qualities are why Arlington was among the first DFW suburbs to develop and why it was the site of one of the country’s first master-planned business parks, the Great Southwest Industrial District. While Arlington’s position in the community has always made it a prime location for business, businesses are increasingly being drawn for other reasons; chief among these being the University of Texas at Arlington. UT Arlington is now on its way to being the largest university in the University of Texas system. With 45,000 degree seekers in Arlington, companies are attracted by the educated workforce that Arlington has to offer. Now that UT Arlington is a tier-one research institution with nationally ranked science and engineering programs, the business case for Arlington is even more compelling. With all the recent capital invested, the booming job market, and the exponential growth of UTA, there’s a lot to be excited about in Arlington. Branded as “the American Dream City,” dreams are coming true, and the future is bright in Arlington.

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SUMMER 2018

COMING SOON TO ARLINGTON

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DALLAS

DALLAS POPULATION GROWTH SINCE 2010:

+120,000 DAILY CITY WORKFORCE:

1.13 MILLION SMALL BUSINESSES:

59,000 BUSINESS ACCELERATORS / INCUBATORS / COWORKING SPACES

65 CONTACT CITY OF DALLAS OFFICE OF ECONOMIC DEVELOPMENT DALLAS CITY HALL 1500 MARILLA STREET ROOM 5CS DALLAS, TX 75201 (214) 670-1685 COURTNEY POGUE, DIRECTOR COURTNEY.POGUE@ DALLASCITYHALL.COM

DALLAS IS NORTH AMERICA’S CITY CENTER The City of Dallas is the urban core of one of the world’s most dynamic and diverse economies in the world. The city center is the hub of DFW’s talent, technology, culture, and infrastructure, and was recently ranked the top U.S. city for downtown development potential (per research from Yardi Matrix and PropertyShark). With a rich history of success, entrepreneurship, art, and family, Dallas is the perfect reflection of an increasingly interconnected world. Business. Dallas is home to diverse industry leaders, including AT&T, Texas Instruments, Southwest Airlines, Tenet Healthcare, Jacobs Engineering, and Neiman Marcus. From the tallest downtown high-rise to the modern custom corporate campus, Dallas is the city with a perfect place for any office. Skills. With access to a labor force of 3.6 million, Dallas is ranked the top metro in the country for talent attraction. Drawing the brightest and best for all business needs, it is also ranked the fourth fastest growing metro for tech jobs. Ideas. In Dallas, ideas become industries. The city’s legacy of innovation includes convenience retail (7-Eleven), modern computing (Texas Instruments), information technology (EDS), casual dining (Chili’s), Internet streaming video (Broadcast.com) and even the frozen margarita (Mariano’s). Today’s entrepreneurs build on this foundation in a vibrant and supportive startup community centered in downtown with one of the largest collections of coworking spaces,

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accelerators, forums, and funders in the southern U.S., all within walking distance. Networks. Dallas is globally connected, with two large airports, five major interstate highways, and three major freight railroads. 35% of the U.S. population is within a 48-hour truck haul, 98% within 48-hours by rail and all major North American business centers are within a four-hour flight. DFW’s transportation networks converge on Dallas, including major highways and the region’s only comprehensive mass transit system. Dallas Love Field is centrally-located for domestic air travel, within minutes of the City’s major business centers. Living. With diverse neighborhoods, lifestyles and culture, Dallas provides a vibrant and high quality of life that only an urban center can provide. The City has over 23,000 acres of parkland, a 145-mile trail network, nationally ranked schools in nine different districts, eclectic and opulent retail choices, and a vibrant, innovative restaurant scene. Culture. Dallas has the nation’s largest arts district, world-class museums, sporting venues, and exciting nightlife. We’re home to the State Fair of Texas, White Rock Lake, the Great Trinity Forest, the PGA Tour Byron Nelson Championship, the Dallas International Film Festival, not to mention the birthplace of southwestern cuisine. Make Dallas the center of your business plan. For more information on how to partner with the City, visit us at www.dallasecodev.org.

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SUMMER 2018

DALLAS THE URBAN CORE OF ONE OF THE WORLD’S MOST DYNAMIC AND DIVERSE ECONOMIES

AND RANKED THE #1 U.S. CITY FOR DOWNTOWN DEVELOPMENT POTENTIAL

#1 U.S. METRO FOR TALENT ATTRACTION COMMITTED TO A GREEN & SUSTAINABLE CITY 3 AIRPORTS & 5 MAJOR INTERSTATE HIGHWAYS HOME TO THE LARGEST URBAN ARTS DISTRICT IN THE U.S. INNOVATION HUB WITH 59,000 SMALL BUSINESSES DALLAS ECONOMIC DEVELOPMENT

CONNECT WITH US

17 FORTUNE 1000 CORPORATE HEADQUARTERS RANKED #1 U.S. METRO FOR FAMILY-FRIENDLINESS 4TH FASTEST GROWING U.S. METRO FOR TECH JOBS PERFECT 100 SCORE FOR HUMAN RIGHTS CAMPAIGN MUNICIPALITY EQUALITY SCORE #1 U.S. MARKET FOR LOCAL PUBLIC & PRIVATE INVESTMENT (214) 670-1685

ECODEVINFO@DALLASCITYHALL.COM

W W W. D A L L A S E C O D E V. O R G

S U MPhotos: M E R 2 0 1Dallas 8 D A L L A S - F O R T W O R T H R EBurton A L E S TAT E REVIEW / 73 Skyline-Urban Fabric Photography; Klyde Warren Park Book Kiosk, Oﬀice Workers, Southwest Airlines Headquarters-Kauwuane Photography

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FORNEY: ONE OF NORTH TEXAS’ FASTEST GROWING CITIES DALLAS FORNEY

FORNEY LOCATION

21 MILES FROM DOWNTOWN DALLAS MEDIAN HOUSEHOLD INCOME

$90,000 CONTACT FORNEY ECONOMIC DEVELOPMENT CORPORATION 101 E. MAIN ST., P.O. BOX 826 FORNEY, TX 75126 INFO@FORNEYTEXASEDC.ORG WWW.FORNEYTEXASEDC.ORG (972) 564-5808

Forney, Texas, located 21 miles from the heart of Dallas, is currently experiencing rapid growth due to our exemplary school district, master-planned communities, and convenient location. It was recently ranked by the Dallas Business Journal as the fourth fastest-growing city in North Texas. Boasting over 800 acres of industrial land, Forney offers businesses a myriad of location options to suit their needs. Forney’s strategic location provides a talented workforce pool of over one million people – one of the largest in the country. Our infrastructure includes access to millions of gallons of water, deregulated electric rates, an abundance of fiber optics, Union Pacific rail-served sites, and two major eastwest highways—US Highway 80 and Interstate 20. From high tech to distribution, Forney can support your company’s land, infrastructure, and workforce needs. With the Forney market growing at approximately 6,000 people per year, our growing retail sector continues to flourish, as our primary trade area population of over 52,000 people continues to soar. Our median household income of approximately $90,000 and abundance of young families ensures tremendous opportunity for retail development. Accompanying this growth includes award-winning schools, a Baylor Scott & White medical facility, 170-acre Community Park, 5,000-seat amphitheater and a charming historic Downtown District.

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Our quality of life is second-to-none among communities our size. One of Forney’s signature developments is Gateway, a 2,000-acre mixed-use development by Petro-Hunt, featuring 1,850 single-family home lots, luxury multifamily options, and planned retail, as well as commercial and industrial sites. Connecting the north and south ends of this exciting development is the new $23 million six-lane Gateway Bridge. Gateway is a key part of Forney’s future, as it makes Forney a regional hub for commerce and housing activity. Forney is a place where the past is preserved, the future embraced and where businesses and families thrive. To learn more about Forney, please visit our website at www.forneytexasedc.org.

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SUMMER 2018

SPECIAL ADVERTISING SECTION C

FALL IN LOVE WITH LANCASTER, THE SHINING STAR OF TEXAS! DALLAS LANCASTER

LANCASTER LOCATION

LESS THAN 15-MINUTES FROM DOWNTOWN DALLAS CONTACT SHANE SHEPARD DIRECTOR OF ECONOMIC DEVELOPMENT MSSHEPARD@ LANCASTER-TX.COM 211 N. HENRY ST. LANCASTER, TX 75146 WWW.LANCASTER-TX.COM

Lancaster is a gem hidden in North Texas. It is one of a very select few communities that enjoys a rural ambiance while being less than 15-minutes from Downtown Dallas. We have a sky as wide as the great state of Texas, where the sun shines brightly and the stars flicker crystal clear– a rarity in the region. Where else in the world can you live on an acre of land only minutes away from world-class sports, dining, and entertainment? Residents and visitors enjoy nationally known restaurants and the unique flavors of the city—Casserole Soul, Taste of Jamaica, Hickory House BBQ, Roma’s Italian Restaurant, and the legendary Lovin’ Oven Bakery. The Lancaster ISD has one of the best STEM programs in the State of Texas. Students continue their education in familiar settings as they advance to their two-year degree at Cedar Valley College and receive an advanced degree at the University of North Texas in Dallas. The community is located in between Interstates 20, 35E, and 45. DART services the community college, and rail is less than a quarter mile north of town—park and ride. Lancaster has the only southern sector airport in the region and is 20 minutes from Love Field; 35 minutes from

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Dallas Fort Worth International Airport. Go anywhere in the world! Need a ride? Uber and Lyft will pick you up. Take a deep breath of fresh air away from the city as you walk trails, go fishing in several ponds, and enjoy a stroll along the neighborhoods in downtown, established in 1852. Come enjoy two nature preserves, an indoor aquatic center, the Country View Golf Course, the Cold War Air Museum, and more—all in Lancaster. Try a stay-cation from the comfort and serenity of a home in Lancaster. Residents wake up on any given day and decide on a drive less than 15 minutes to one of ten cultural districts in the region: the largest Arts District in the United States, the nation’s largest planned nature park, a plethora of museums, the Dallas Aquarium and Zoo, the Dallas Arboretum, concerts by world renowned performers, or watch professional sports. And best of all, there’s little to no traffic to contend with, on the best side of the DFW Region. Everyone is welcomed with smiles when they come to Lancaster. Come discover and enjoy our city—you will soon call it home. Lancaster is yours to fall in love with!

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SUMMER 2018

CMY

www.Lancaster-Tx.com

LANCASTER is a vibrant and growing community where residents enjoy the comfort and safety of friendly neighborhoods only a few minutes from world-class entertainment and activities in Downtown Dallas.

LANCASTER THE

SHINING

STAR OF TEXAS

Sitting squarely within the boundaries of three major freeways I-35, I-45, and I-20, the city is in close proximity to DFW while maintaining a quaint community where the stars still flicker at night. Lancaster is recognized by Scenic City, Tree City USA, and Playful City USA, offering a variety of natural beauty and amenities to create a great place to live, learn, work, and play. Municipal Parks and Hike and Bike Trails 2 Nature Preserves: Ten Mile Creek Preserve Bear Creek Nature Park Recreation Center and Full Service Senior Life Center Indoor Aquatics Facility- 2 Story Water Slide and Lap Lanes Regional Airport Countryview Golf Course Visitor Center and State Auxiliary Museum Hometown & authentic food, art, & entertainment

8 1 0

Near Cedar Valley College and UNT Dallas Award Winning Public School District- 5th Consecutive School Year All Lancaster ISD Campuses Met Stateâ&#x20AC;&#x2122;s Highest Accountability Rating l i v e . l e a r n . w o r k . p l a y

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MCKINNEY

DALLAS

MCKINNEY POPULATION

180,000 MEDIAN AGE

34 LAND DEVELOPED WITHIN CITY LIMITS

69% CONTACT MCKINNEY ECONOMIC DEVELOPMENT CORPORATION 972-547-7651 WWW.MCKINNEYEDC.COM

MCKINNEY, TX — CONNECTING YOUR BUSINESS TO THE WORLD McKinney is close to Dallas, but far from it. Not only is the City of McKinney the third fastest growing city in the country with a current population of more than 180,000, more than 30 percent of the city’s land area is still available for development. McKinney offers the perfect mix for successful business development: a highly educated workforce, availability of land for expansion, convenient location to the DFW metroplex, local corporate airport, competitive incentives and a nationally acclaimed quality of life. City efforts are firmly focused on attracting, retaining and expanding businesses that add vitality to the local economy. McKinney is home to McKinney National Airport, the premier general aviation airport in North Texas. With more than 7,000 feet of runway, an air traffic control tower, on-site U.S. customs and a full service fixed base operator, McKinney National Airport attracts businesses who travel both domestic and internationally. McKinney Air Center, McKinney National Airport’s fixed based operator, was rated #1 in the country in 2017 Pilots’ Choice Awards by FltPlan.com and will debut a new state-of-the-art Executive FBO terminal in 2019. Companies in McKinney experience first-hand our stable, business-friendly environment that

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is unrivaled. Fortune Global 500 corporations and publicly traded companies like Emerson, Raytheon, PACCAR and Encore Wire, as well as cutting edge technology companies like Playful and Vazata call McKinney home. With McKinney’s renowned reputation for quality living, businesses attract the kind of talented workforce that values a true live, work, play environment that appeals greatly to those seeking balance. As a community, McKinney stands above the rest for many reasons. Other cities try to replicate what we already have, like an authentic and charming historic district, cultural diversity, natural beauty set alongside new business, and a place that families gravitate to for excellent schools. These elements all work together to make us “Unique by Nature,” and have done so throughout the city’s history. McKinney is a rapidly growing city full of spirit and life. From our beautiful natural topography, to our opportunities for growing businesses, we’re proud of the city McKinney has become. But we’re not resting on our laurels or stopping anytime soon. One brick at a time, one park at a time, one road at a time, one business at a time, we’re laying the foundation for a bright future. We hope you join us.

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SUMMER 2018

McKINNEY, TEXAS

The Best Place to Live, Work, Play Connecting your business to the world. •

McKinney is only 69% built out within the current city limits and ETJ

•

Approximately 30 minutes to DFW International Airport & Dallas Love Field Airport

•

McKinney National Airport, an easy ﬂy-in-and-out corporate airport, is conveniently located 32 miles to downtown Dallas

•

Competitive incentives and easy to work with development services

•

A nationally acclaimed quality of life, with home sale prices 15% lower than surrounding communities

Onsite U.S. Customs

McKINNEY ECONOMIC DEVELOPMENT CORPORATION McKINNEYEDC.COM • INFO@McKINNEYEDC.COM • 972-547-7651

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DALLAS SEAGOVILLE

SEAGOVILLE LOCATION

20 MINUTES FROM DOWNTOWN DALLAS CONVENIENCE

ACCESS TO FIVE INTERSTATES NEW HOMES

1,400 HOMES CURRENTLY PLANNED OR UNDER CONSTRUCTION CONTACT SEAGOVILLE ECONOMIC DEVELOPMENT CORPORATION 105 N. KAUFMAN STREET SEAGOVILLE, TX 75159 PHONE: 972-287-9944 WWW.SEAGOVILLE.US

SEAGOVILLE: SMALL TOWN COMFORT, BIG CITY AMENITIES Seagoville, a suburb with all of the charm of a small, rural town, is just 20 minutes outside of downtown Dallas. Its proximity to Dallas provides a feeling of comfort and convenience, and offers the amenities of a large city in a small town. The tight-knit community is growing, with nearly 1,400 homes either in the planning or construction phase, and rightly so—people are becoming more and more drawn to living in Seagoville for its natural beauty that can be seen at the community parks, as well as the festivals, youth sports leagues, small businesses, and boutiques.

ECONOMIC DEVELOPMENT Seagoville is a highly attractive place for local businesses and larger corporations alike. From O’Reilly Auto Parts Distribution Center and Rockwell American Manufacturing to Heartland Express, Best Mechanical, Tractor Supply, and PrecisionHayes—businesses have found Seagoville to be a prime location considering its accessibility to major area highways and an affordable place to operate. The Seagoville Economic Development Corporation is a knowledgeable group dedicated to helping business owners looking to establish their operations in Seagoville. The City of Seagoville staff, including the Economic Development Corporation and Chamber of Commerce, serves as an invaluable resource to business owners and residents looking to move to Seagoville.

QUALITY EDUCATION Seagoville falls within the Dallas, Crandall, and Mesquite school districts for primary and secondary school. Seagoville High School boasts Magnet and P-TECH programs, which are intended to provide specialized education in specific fields and

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trades. AT&T, Accenture, and other companies sponsor the P-TECH program at Eastfield College, and students are able to graduate with an associate degree or industry certificates in their pathway of interest. Within the surrounding areas of Seagoville are Southern Methodist University, Dallas Baptist University, University of North Texas, Eastfield College, and Cedar Valley Community College for those pursuing college degrees.

QUALITY OF LIFE The close-knit feeling of community in Seagoville is upheld by numerous traditions, activities, and amenities citizens participate in. The annual Seagofest, Mayfest, and Fourth of July Fireworks in the Park are events those can expect in Seagoville. Movie in the Park is another event the community enjoys several times throughout the year. The city is also home to several parks, and the Bruce Central Park boasts a pond, walking trail, playground, pavilion, splash pad, and sports courts. The John Bunker Sands Wetland Center is also located in Seagoville for the community to visit. It is one of the largest constructed wetlands in the US, and national observers follow the wetland eagles via LIVECAM. The Wetland Center partners with regional school districts to provide students with educational programs on wetland and river ecosystems, bird migrations, and water conservation.

EASE OF TRAVEL • Seagoville sits just minutes away from 5 Interstates (I-20, I-635 I-30, I-45 and I-35). • Bus and Rail transportation can be easily and quickly accessed through Star Transportation.

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SUMMER 2018

OPEN SKIES. OPEN DOORS. OPEN FOR BUSINESS. SEAGOVILLE is a close-knit community that is growing. Come grow with us. Whether your business is expanding, relocating, or just starting up, we invite you to give us a call to see what business-friendly Seagoville has to offer.

SEAGOVILLE TX The City of Opportunity

SEAGOVILLE ECONOMIC DEVELOPMENT CORPORATION 105 N. Kaufman Street, Seagoville, TX 75159 | Phone: 972-287-9944

www.seagoville.us

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LEWISVILLE LEWISVILLE LEWISVILLE There’s There’s always always something something happening happening in Lewisville, in TX TX There’s always something happening in Lewisville, Lewisville, TX There’s always something happening in Lewisville, TX

Lowest Lowest Combined Combined Tax Rates Tax Rates in DFW in DFW Lowest Combined Taxable Rates in to DFW Businesses Businesses and workers and workers are are to able keep keep moremore Businesses and workers are able to keep Lowest Combined Tax Rates in DFW of their of hard-earned their hard-earned money money as they as prosper they prosper in more in of their hard-earned money as they prosper in Businesses and workers are able to keep more Lewisville’s Lewisville’s tax-friendly tax-friendly environment. environment. Lewisville Lewisville Lewisville’s tax-friendly environment. Lewisville of their hard-earned money as they prosper in holdsholds the title theof title one ofof one theoflowest the lowest combined combined holds the title of one of the lowest combined Lewisville’s tax-friendly environment. Lewisville tax rates tax rates in DFW, in DFW, making making the incentive the incentive for new for new tax within rates in DFW, making the incentive for new holds thewithin title of one of the lowest combined business business the area the stronger area stronger than ever than ever business within the area stronger than ever tax rates in DFW, making the incentive for new before. before. before. within the area stronger than ever business before. Positioned Positioned for Growth for Growth and Development and Development Positioned for Growth and Development Lewisville Lewisville is home is home to a vibrant to a vibrant workforce workforce and and Lewisville, Lewisville, TexasTexas continues continues to draw to draw in growing in growing Lewisville is home to a vibrant workforce Positioned for Growth and Development Lewisville, Texas continues to draw in growing daytime daytime population population of 115,882, of 115,882, thanks thanks to a to aand businesses businesses as it retains as it retains its title itsas title a first-rate, as a first-rate, thriving thriving daytime population of 115,882, thanks a Lewisville is home to a vibrant workforce and businesses as itDFW. retains its title a first-rate, Lewisville, Texas continues to as draw in growing multitude multitude of large of large employers employers withinwithin the area. theto area. economic economic hub within hub within DFW. From From Fortune Fortune 500 500 thriving multitude large employers the daytime population ofare 115,882, thanks toarea. a economic hub DFW. From Fortune 500thriving businesses as innovative itwithin retains itsstart-ups, title as dynamic a the first-rate, The residents The residents ofof Lewisville of Lewisville active are within active and inand incompanies companies to innovative to start-ups, the dynamic The residents of Lewisville are active and inmultitude of large employers within the area. companies to innovative start-ups, the dynamic economic hub within DFW. From Fortune 500 volved in theinarea, the area, and together and together hold an hold averan averbusiness business community community withinwithin Lewisville Lewisville is unlike is unlike any any volved volved in the area, and together hold an averThe residents of Lewisville are active and inbusiness within unlike any age family to innovative start-ups, the is dynamic age family income income of $88,518. of $88,518. other.companies other. The City’s Thecommunity City’s location location and infrastructure, andLewisville infrastructure, inside inside age family income of $88,518. volved in the area, and together hold an averother. The City’s location and infrastructure, inside business community within Lewisville is unlike any the I-35 theCorridor, I-35 Corridor, offersoffers easy access easy access by air,bytrain, air, train, or or age family income of $88,518. the I-35 Corridor, offers easy access by air, train, or other. The City’s location and infrastructure, inside Booming Booming with with New New Business Business and Housing and Housing car for car every for every business. business. An estimated An estimated 130,000 130,000 Booming with New Business and Housing car for every business. An estimated 130,000 the I-35 Corridor, offers easy access by air, train, or The high The quality high quality of life of offered life offered in Lewisville in Lewisville vehicles vehicles per day perwill daytravel will travel throughout throughout the Corridor the Corridor The high quality of life offered in Lewisville Booming with New Business and Housing vehicles per day will travel throughout Corridormakes car for every business. An estimated 130,000 makes the boom the boom of 1,000,000 of 1,000,000 square square feet of feet of over the over next the year, next year, placing placing Lewisville Lewisville in a prime in the a prime makes the boom oflife 1,000,000 square feet The high quality of offered in Lewisville over the next year, placing Lewisville in a prime vehicles per day will travel throughout the Corridor commercial commercial and industrial and industrial development development the theof position position for growth for growth and development. and development. Lewisville Lewisville commercial and industrial development the makes the boom of 1,000,000 square feet of position for growth and development. the next year, placing Lewisville in ahome prime natural progression progression of theofarea. the area. New homes New homes offersover offers a vast anumber vast number of activities of activities and isand home isLewisville to theto thenatural natural progression of the area. New homes commercial and industrial development the offers a for vast number ofadevelopment. activities and is home to the position growth Lewisville are arising are arising as single as single family, family, townhomes, townhomes, and and 269-acre 269-acre Railroad Railroad Park, Park, a and 2,000-acre 2,000-acre nature nature reserve, reserve, are arising as single family, townhomes, and natural progression of thetoarea. New homes 269-acre Railroad Park, a 2,000-acre nature reserve, offers a vast number of activities and is home to the multi-family multi-family projects projects continue continue expand, to expand, placplacas well asas well shopping as shopping and dining and dining withinwithin the historic the historic multi-family projects continue to expand, placare arising as single family, townhomes, and as well as shopping and dining within the historic 269-acre Railroad Park, a 2,000-acre nature reserve, ing Lewisville ing Lewisville in the in perfect the perfect position position to house to house downtown downtown of OldofTown Old Town Lewisville. Lewisville. Whether Whether you’reyou’re ing Lewisville in the perfect position to house multi-family projects continue to expand, placdowntown of Town Lewisville. you’re new companies as well as shopping and dining within the historic new companies and business and business coming coming to theto the here to here live, towork, live, work, orOld play or --play there -- there is always isWhether always new companies and business coming the Lewisville in 17,000 the perfect position to to house here to live, work, or play -there is always downtown of Old Town Lewisville. Whether you’re area. ing area. The City’s The City’s 17,000 square square foot convenfoot convensomething something happening happening in Lewisville, in Lewisville, TX. TX. area. The City’s 17,000 square foot convennew companies and business coming to the something in Lewisville, TX. here to live, happening work, or play -- there is always tion center tion center is within is within walking walking distance distance of many of many tion center is within walking distance of many area. The City’s 17,000 square foot convensomething happening in Lewisville, TX. well-appointed well-appointed hotel hotel rooms, rooms, entertainment entertainment well-appointed hotel rooms, entertainment tion center is within walking distance of many and dining and dining experiences. experiences. and dining experiences. well-appointed hotel rooms, entertainment and dining experiences.

Nika Nika Reinecke, Reinecke, Nika Reinecke, Director Director of Economic of Economic Nika Reinecke, Director of Economic Development Development & of Planning & Planning Director DevelopmentEconomic & Planning (972) (972) 219-3750 219-3750 Development & Planning (972) 219-3750 nreinecke@cityoflewisville.com nreinecke@cityoflewisville.com (972) 219-3750 nreinecke@cityoflewisville.com nreinecke@cityoflewisville.com

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NORTH RICHLAND HILLS: FIND YOUR PERFECT FIT NORTH RICHLAND HILLS

FORT WORTH

NORTH RICHLAND HILLS AVERAGE NEW HOME VALUE

$400,000+ BRICK & MORTAR BUSINESSES

1,200 MILES OF HIKE & BIKE TRAILS

30 CONTACT

With benefits like a central location, an educated and abundant workforce, and superior quality of life amenities, North Richland Hills (NRH) is the perfect place for your business’s success. NRH is strategically located 15 minutes from Dallas Fort Worth International Airport, the Alliance Global Logistics hub, and downtown Fort Worth. For nearly 70,000 residents, NRH offers a seamless balance of the conveniences of suburban living with easy access to all of the necessary urban resources and amenities, while also being consistently ranked as one of DFW’s safest cities. The City received a number of recent accolades including one of the “Top 10 Best Neighborhoods in DFW” by the Dallas Morning News, ranked #10 on the list of Top 100 Cities to Start a Business by How to Start an LLC, and a “Great Neighborhood” by the American Planning Association. This past year NRH welcomed over $100 million

CRAIG HULSE, CECD, DIRECTOR OF ECONOMIC DEVELOPMENT

SUMMER 2018 SPECIAL ADVERTISING SECTION

in new construction, the opening of 80 new businesses and over 225 single-family starts. The year 2019 plans to be a banner year as the long-awaited TEX Rail commuter line establishes service with two NRH stations, Alamo Drafthouse Cinema offers its first Tarrant County location, and Babe’s Chicken Dinner House establishes their 10th—and largest—location. To find your perfect fit, visit www.NRHED.com. | 817-427-6091

CHULSE@NRHTX.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 / 8 3

DISCOVER WHATâ&#x20AC;&#x2122;S NEW + NEXT IN NORTH TEXAS INNOVATION WHERE

TECH CREATIVES INNOVATORS INCUBATORS EDUCATORS ENTREPRENEURS INVESTORS ENTERPRISE &

CONNECT, CONVERSE, AND CONVERGE ACROSS INDUSTRY SECTORS

DALLASINNOVATES.COM

THE DIGITAL MEDIA PLATFORM COVERING DALLAS-FORT WORTH AS A HUB FOR INNOVATION

COLLABORATION OF OF THE THE DALLAS DALLAS REGIONAL AACOLLABORATION REGIONAL CHAMBER CHAMBERAND ANDDDMAGAZINE MAGAZINEPARTNERS PARTNERS

C COMMUNITY

Ran Holman, Chairman Jim Knight, Chairman-Elect

CHAMPION’S CIRCLE

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

CHAIRMAN’S CIRCLE

Balfour Beatty Construction Billingsley Company CBRE Corgan Associates, Inc Crow Holdings Capital Partners, L.L.C. EY Frost Bank Holt Lunsford Commercial Invesco Real Estate Jackson Walker L.L.P. JLL KDC KPMG LegacyTexas Matthews Southwest Munsch Hardt Kopf & Harr P.C. 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

IMPACT INVESTORS

Each year, The Real Estate Council receives both financial and volunteer support from funding partners and member companies. Special thanks to each of you for contributing your time, talent, and resources to help us achieve our mission.

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

BENEFACTOR’S CIRCLE

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 L.L.P.

Walker & Dunlop Wells Fargo Bank Westmount Realty Capital, LLC

PATRON’S CIRCLE Carrco Painting Drywall Interiors, LP Gentzler Electrical Services Inc. J&S Audio Visual Mckinney Office Supply Parmenter Realty Partners Premier West Builders TD Industries WFAA-Channel 8 Shaw Contract Flooring EHP Consulting & Bellphi Environmental Flooring Effects Polk Mechanical Co LLC RJS Painting, Inc. SWA Group Marek Brothers Systems Inc Alpine Roofing Construction PDL Kellen Flooring Solutions H & H Outfitters Already Design Co Gemini Stage Lighting & Equipment, Co., Inc. Precision Demolition, LLP Rod Stanley Fource Co Gordon Highlander AOS Engineering, LLC Armstrong Flooring Precision Specialty Floors Kite’s Int Lang Partners Facility Solution Epic Paver

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. SUMMER 2018

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

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C COMMUNITY The Dallas Regional Chamber recognizes the following companies and organizations for their membership investment at one of our top levels. Bolded companies are represented on the DRC Board of Directors. For more information about the benefits of membership at these levels call Diana Rivas-Smith at (214) 746-6744.

1820 Productions 7-Eleven, Inc. A G Hill Partners LLC Accenture Acme Brick Company Active Network Addison Law Adept Talent AECOM AECOM Hunt Aerotek Akin Gump Strauss Hauer & Feld LLP Alaska Airlines AlixPartners LLP Alkami Technology Altair Global Amegy Bank of Texas American Airlines, Inc. American Heart Association, Dallas Division AMN Healthcare Andrews Distributing Company of North Texas Armanino LLP Armstrong Relocation At Home AT&T Atmos Energy Corporation Austin Industries AustinCSI Axxess Bain & Company, Inc. Baker & McKenzie, LLP Baker Botts L.L.P. Balfour Beatty Bank of America Bank of Texas Barnes & Thornburg Baylor Scott & White Health BB&T BBVA Compass BDO USA LLP BE&K Building Group Bell Nunnally & Martin LLP BG Staffing, Inc. Big 12 Conference Billingsley Company

BKD LLP bkm Total Office of Texas BLNelson Group LLC Blue Cross and Blue Shield of Texas Boeing BOKA Powell Bottle Rocket Bracewell LLP Brandt Companies Brasfield & Gorrie Brierley+Partners Briggs Freeman Sotheby’s International Realty Brinker International, Inc. BRP Business Jet Center Business Wise, Inc. Capital One Bank Carrington, Coleman, Sloman & Blumenthal, L.L.P. Cawley Partners CBRE Group, Inc. Centurion American Development Group CENTURY 21 Judge Fite Company Champion Partners Chickasaw Nation Children’s Health System of Texas Choctaw Nation of Oklahoma CHRISTUS Health CHRO Partners Cinemark Holdings (Cinemark USA, Inc.) Citi City Electric Supply Clampitt Paper Clark Hill Strasburger CliftonLarsonAllen LLP ClubCorp USA, Inc. Coca-Cola Refreshments Colliers International Comerica Bank Commemorative Air Force Commerce Bank Commit! Partnership Consolidated

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Communications Copart Corgan Corinth Properties Corrientes 348 Corrigan Investments, Inc. CP&Y, Inc. Crestron Electronics Crowe LLP CyrusOne Dallas Baptist University Dallas Business Journal Local Business News Dallas County Community College District Dallas Cowboys Football Club Ltd. Dallas Mavericks Dallas Stars Hockey Club Dallas Wings Dallas Women’s Foundation Dal-Tile Corporation Dannenbaum Engineering Corporation DataMob Deloitte LLP DFW International Airport DHD Films DLR Group Staffelbach Door Dr Pepper Snapple Group Dreien Opportunity Partners LLC Dunavant Distribution Group E Smith Legacy Holdings Ebby Halliday Real Estate, Inc. Egan Nelson LLP EMJ Corporation Equinix, Inc. Eric Affeldt Ernst & Young LLP esrp Estrada Hinojosa & Company, Inc. Ewing Automotive Group Exxon Mobil Corporation FASTSIGNS - Northeast Dallas FedEx Office

Fidelity Investments Fluor Corporation Headquarters Foley Gardere LLP Forest City Texas Inc Fox Sports Southwest Frito-Lay North America Frost Bank Furniture Marketing Group G6 Hospitality LLC Gaedeke Group Gensler George W Bush Foundation Goldman Sachs & Co, LLC Granite Properties Grant Thornton LLP Green Brick Partners Gulfstream Aerospace Corporation Gupta & Associates Inc. Halff Associates Hall Group Harness Dickey & Pierce Haynes and Boone Hazel’s Hot Shot, Inc. H-E-B/Central Market Heritage Health Solutions Inc. Hill & Wilkinson General Contractors Hill + Knowlton Strategies Hillwood Development Company, LLC Hilti North America Hilton Anatole Hilton Garden Inn Downtown Dallas Hines Interests Limited Partnership HKS Inc. HMS HNTB Corporation Hoar Program Management, LLC HOK HollyFrontier Corporation Holmes Murphy & Associates HOLT CAT Hotels.com Howard Hughes Corporation SUMMER 2018

C COMMUNITY HPI Real Estate Services & Investments/Ross Tower Huawei Technologies HUB International Insurance Services Hunt Consolidated, Inc./ Hunt Oil Company Hunton Andrews Kurth LLP IBC Bank IBM Corporation Innovate + Educate Interceramic International Leadership of Texas Invesco Real Estate Invitation Homes Jackson Walker LLP Jacobs Engineering Group Inc. Jamba Juice JE Dunn Construction JLL Jones Day JPI JPMorgan Chase & Co. KDC Real Estate Development Investments Keller Logistics Group Ketchum Public Relations Kilpatrick Townsend & Stockton LLP Kimley-Horn and Associates KPMG LLP LegacyTexas Bank Life School Lincoln Property Company Linebarger Goggan Blair & Sampson, LLP Littler Mendelson, P.C. Live Nation Locke Lord LLP Lockheed Martin Lockwood, Andrews & Newnam, Inc. Manpower, a ManpowerGroup Company Mary Kay Inc. McCarthy Building Companies, Inc. McGough Construction McGuire, Craddock & Strother, PC McKinsey & Company, Inc. McLarty Capital Partners Medical City Dallas Hospital/ Medical City Children’s Hospital Mercantil Bank SUMMER 2018

Methodist Health System MHBT, a Marsh & McLennan Agency LLC company Microsoft Corporation MidFirst Bank Mission Foods USA Munck Wilson Mandala LLP MYCON General Contractors NEC Corporation of America Newmark Knight Frank Northwood University Norton Rose Fulbright NTT DATA Inc. Omni Dallas Hotel Omnitracs, LLC On the Road Lending Oncor Operation Kindness Options Clearing Corporation Origin Bank ORIX USA Corporation Pacific Builders Inc. Park Place Dealerships Parker University Parkland Foundation Paul Quinn College PDS Tech, Inc. Penske Motor Group Perkins+Will Pierpont Communication PlainsCapital Bank PNC Polsinelli Premier Truck Group Prime Rail Interests LLC Promenna PSA Constructors, Inc. PwC Realcom Solutions Regions Bank Reliant, an NRG Company Rent-A-Center Rosewood Property Co. RSM US LLP Salient Global Technologies Santander Consumer USA Sbase Technologies SCHMIDT & STACY Consulting Engineers, Inc. Schneider Electric Scientel Solutions Sendero Sewell Automotive Companies Shackelford, Bowen, McKinley & Norton LLP

Sheraton Dallas Showcall Sidley Austin LLP Silicon Valley Bank Slalom Consulting Smart City Apartment Locating Social Revolt Agency Southeastern Freight Lines Southern Glazer’s Wine and Spirits Southern Methodist University Southwest Office Systems, Inc. Spectrum Enterprise Spirit Realty Capital Squire Patton Boggs (US) LLP Stackpath Stantec State Farm Insurance Companies Stewart Title Stifel Suffolk Construction Summit SunTrust Robinson Humphrey Inc Susan G Komen Target Headquarters TDIndustries TDJ Enterprises Teladoc Telios Telnorm Tenet Healthcare Corporation Texans Can Academies Texas A&M University Texas Capital Bank Texas Central Texas Health Aetna Texas Health Resources Texas Instruments Incorporated Texas Scottish Rite Hospital for Children Texas Star Alliance Texas Woman’s University The Beck Group The Boston Consulting Group The Brinkmann Corporation The Crowther Group The Dallas Morning News The Fairmont Dallas The Freeman Company, LLC

The Kroger Co. The University of Texas at Arlington Thompson & Knight LLP Thomson Reuters Tolleson Wealth Management Tom Thumb Food & Pharmacy Topgolf Torchmark Corporation Town of Addison Toyota Motor North America TracyLocke Transwestern Trinity Groves, LLC Trinity Industries, Inc. Turner Construction Company Uber Technologies, Inc. UMB Bank N. A. UnitedHealthcare University of Dallas University of North Texas at Dallas University of North Texas System University of Texas at Dallas UT Southwestern Medical Center Veritex Community Bank Verizon Wireless Regional Corporate Office Village Green Holdings, LLC Vinson & Elkins LLP Vistra Energy Walgreens Company District Office Weaver Weil, Gotshal & Manges LLP Weitzman Wells Fargo West Monroe Partners LLC WFAA-TV Whitebox Real Estate Whiting-Turner Contracting Company Whitley Penn Willis Towers Watson Wilson, Elser, Moskowitz, Edelman & Dicker LLP Winstead PC Women’s Foodservice Forum

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L LEADERSHIP

PHOTO: YVENA CHOWDHURY

SCRIPPS: ‘I WANT TO SEE THE CITY OF DALLAS EMBRACE ART IN A DIFFERENT WAY.’ “We can, and will,” says the director of the Office of Cultural Affairs. Jennifer Scripps is hard at work on a cultural plan that will shape the future of art in Dallas.

BY NICHOLAS SAKELARIS

The Dallas art scene has come a long way since Jennifer Scripps came back to town. And it still has a long way to go. The Dallasite was recruited more than 10 years ago to lay the groundwork for a handson educational museum in Uptown Dallas—a museum now known as the Perot Museum of Nature and Science. That job led Scripps to participate in a Leadership Dallas class hosted by the Dallas Regional Chamber of Commerce. That 2009 class, which included a real “who’s who” in Dallas, opened Scripps’ eyes to the wider discrepancies and deficiencies in the local art scene. She found that social justice, regionalism, health concerns, and transportation problems were all connected. And, that art wasn’t prioritized as much as it should be. “I really consider [Leadership Dallas] a second master’s degree,” Scripps says. “Arts and culture were one of the last [priorities]. It set a really good stage for me to understand the larger picture.” Now, as the director of the Office of Cultural Affairs, she’s hard at work on a cultural plan that will shape the future of art in Dallas. The Cultural Plan started in September 2017 with

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33 community meetings where Scripps and others listened to what Dallas residents would like to have. “I want to see the city of Dallas embrace art in a different way,” Scripps says. “Other cities around the country are doing a lot of placemaking and temporary public art. We need to change some city policies to do that, but we certainly can, and will. It’s been wonderful to get to do this in my hometown.” But this doesn’t mean more large museums and theater buildings—the city’s Office of Cultural Affairs manages 22 art-related venues now. “We’re substantially built out. I’m not saying we won’t ever build another new cultural venue,” Scripps says. “We need to create a sustainable model for all arts organizations across the city and not worry about more ribbon cuttings.”

ARTISTIC VISION Her vision for the future includes spaces for public art, improving access to theaters located inside libraries and using a park pavilion for concerts and spoken word poetry events. “People want to live, work and play in really vital neighborhoods,” Scripps says. “How are we going to make Dallas more rich artistically? How are we going to support artists? How are we going to improve the equity of access to art? Issues around accessibility are real in our city.” Having an arts-related event in a public space promotes a safe use for the space and showcases its potential—as long as residents can get there. The Cultural Plan also will address transportation issues, looking at everything from rideshares and bike shares to roads and walkability. “I don’t think OCA can fix our transit challenges, but again, it’s all about the connections,” Scripps says. She’d like to see more inventive artwork incorporated into the cityscapes, like the brightly colored thermoplastic crosswalk that recently showed up at the

SUMMER 2018

corner of Lemmon and McKinney avenues. That artwork was done by Ricardo Paniagua, a Dallas artist. This encourages pedestrian activity while giving people something artistic to look at, creating a sense of place instead of the normal white ladders of a traditional crosswalk. Dallas has a thriving theater system from small community black box theaters all the way to large venues like the Dallas Theater Center. The Dallas Children’s Theater has gained national notoriety by touring the country. “We have to give people the stage locally to prepare them for the larger opportunities,” Scripps says. “We’re nurturing that whole community. I love talking about what we produce and share nationally.” Many of the city’s libraries have theater space in them, but the hours are dramatically different for the two. The plan looks for ways to resolve that so theaters can be opened later. Through the cultural meetings, Scripps found that Dallas neighborhoods are proud, and they want to show off their individuality. “The Jimmy and Stevie Ray Vaughan public art project at Kiest Park is a really good example of honoring native sons,” Scripps says. “They came from here.” The tribute is in the final planning stages and will honor the brothers at the park. There’s also a project in the works to honor legendary Dallas artist Arthello Beck Jr., whom Scripps calls one of the most influential artists of the 20th Century. The request for proposals went out in January. “We’re really trying to work with emerging artists when it comes to public art,” Scripps says. “Letting people get that first commission is so important.” With all the feedback from the community meetings, Scripps says they expect to finalize the Cultural Plan for the city of Dallas by October and have it ready to present to the City Council by the end of the year.

FULL CIRCLE Scripps returned to Dallas with the goal of inspiring Science Technology and Math (STEM) education at what would become the Perot Museum of Nature and Science. But her heart has always been in the arts. Before joining the Perot, she worked for a theater company in New York City. Since coming back to Dallas in 2007, she’s been along for the ride as art began to transcend the traditional forms and break stereotypes. She’s seen art become more of a priority in education. The old silos are being broken down so people who are good with numbers and computer programming can also express artistic creativity. “Computer design done well is artistic a lot of times,” she says. “It’s literally seamless.” She’s learned a lot through all the community meetings and can’t wait to put the plan into action. “What’s wonderful is how much pride there is in Dallas and how much people want to partake in art,” Scripps says. “I think there’s a greater appreciation now that this is bigger than the Arts District in Dallas. No matter where you live we have a broader understanding of arts and culture in Dallas.”

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.

SUMMER 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.

SEPTEMBER 19 Bank of Texas Speaker Series: Transportation Revolution Belo Mansion TREC’s next Speaker Series event tackles the future of transportation in our region. Michael Rogers, the City of Dallas’ transportation director, will talk about drone use, the hyperloop, and driverless cars with Leandre Johns of Uber, Steven Duong of AECOM, and Rod Schebesch of Stantec, so get your tickets now. [TREC]

SEPTEMBER 20 State of Public Education Union Station Hear an update on statewide and regional public education issues straight from the experts, including Texas Commissioner of Education, Mike Morath, and three of the region’s top education leaders. [DRC]

SEPTEMBER 28 22nd Annual Women’s Business Conference Hyatt Regency Dallas The Dallas Regional Chamber’s 22nd Annual Women’s Business Conference will be presented by Jackson Walker. Keynote speakers include Kathleen Murphy, President, Personal Investing, Fidelity Investments and Cheryl Boone Isaacs, President & CEO, CBI Enterprises, Inc., Former President, Academy of Motion Picture Arts & Sciences. [DRC]

OCTOBER 18 2018 YP Summit The Statler 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]

OCTOBER 18 Giving Gala Hilton Anatole Sculpture Park Fall’s most anticipated event is just around the corner: Mosey on down to the Hilton Anatole and “Dream Big” with TREC during our annual celebration of our members, donors, and good works in the community. Join us for a night of networking and first-class entertainment while raising funds for the Dallas Catalyst Project. [TREC]

OCTOBER 24 Market Matters: Capital Markets Summit The Crescent Gallery Ballroom Get the latest insights and 2019 projections from keynote speaker Mark Gibson (HFF) and our panel that includes Sue Ansel (Gables Residential), Michele Wheeler (JacksonShaw), Creighton Stark (Colliers International), and Alan Shor (The Retail Connection). [TREC]

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C COMMUNITY

THE REAL ESTATE COUNCIL YOUNG GUNS FORUM This year’s TREC Young Guns Forum took place June 14 at Perkins+Will, the site of the former Dallas High School. Attendance reached capacity as the industry’s young professionals learned about Downtown Dallas’s revitalization in recent years, and what the future holds for the neighborhood. The program’s panel was moderated by Downtown Dallas Inc.’s Vice President of Public Space and Design, Dustin Bullard, and featured CBRE SVP Jake Gosnell, Todd Investments Founder and CEO Shawn Todd, Common Desk Founder and CEO Nick Clark, and M-M Properties SVP of Leasing Mike Silliman. Thank you to everyone who participated in the panel and attended the forum.

THIS YEAR’S FORUM WAS HELD AT THE FORMER DALLAS HIGH SCHOOL AND ATTENDANCE REACHED CAPACITY.

TREC’S 2018 YOUNG GUNS FORUM COMMITTEE

A GROUP OF FORUM ATTENDEES CHAT PRIOR TO THE START OF THE PROGRAM.

THE PANEL INCLUDED (FROM LEFT) CBRE SVP JAKE GOSNELL, TODD INVESTMENTS FOUNDER AND CEO SHAWN TODD, COMMON DESK FOUNDER AND CEO NICK CLARK, AND M-M PROPERTIES SVP OF LEASING MIKE SILLIMAN.

TODD INVESTMENTS FOUNDER AND CEO SHAWN TODD

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SUMMER 2018

L LEADERSHIP MICHELLE WHEELER

MICHELLE WHEELER: WORKING WITH TREC TO MAKE THE COMMUNITY BETTER BY NICHOLAS SAKELARIS

FORUM CHAIR WILL DANIELL

COMMON DESK FOUNDER AND CHIEF EXECUTIVE OFFICER NICK CLARK

SUMMER 2018

The Recession of 2008 doesn’t conjure fond memories for the real estate community. Housing prices crashed, spending declined, and commercial projects stopped dead in their tracks. The Real Estate Council provided a beacon of hope during that dark time as industry professionals rallied around Michele Wheeler, the first woman to chair the organization. Wheeler, now the president and COO of Jackson-Shaw, says during that time there was a renewed focus within TREC to make the community better. One of the biggest focus areas was finishing Klyde Warren Park. “People were really engaged in Dallas, and they wanted to be better together,” Wheeler says. “It was a tough time for business, but it was a great time for people to come together. It really was a great time to be chair.” TREC represents more than 2,000 industry professionals from 600 companies, including bankers, brokers, developers, attorneys, and architects. Wheeler credits TREC veterans who mentored her over the years to prepare her for the role. That includes Tony Dona, Will Cureton, Michael Dardick, Will Mundinger, Jeff Swope, Sue Ansel, and Linda Owen. That downturn in the economy is clearly in the rearview mirror with North Texas building at a frantic pace to keep up with the influx of newcomers moving here. But that doesn’t mean there aren’t challenges to overcome, particularly how to keep brick and mortar stores relevant in the age of

e-commerce convenience. “Technology and the immediacy that people want goods and services has changed,” Wheeler says. “You can have something shipped to your house the same day. It’s constantly evolving, and technology is a big part of that.” Through it all, TREC remains a vital tool for networking, sharing best practices, and staying ahead of the curve. Wheeler remains involved in TREC while also running the day-to-day operations at JacksonShaw in Dallas. The private real estate firm is building 2.5 million square feet of industrial multi-tenant warehouses across the country. Wheeler, who has been in the real estate business since 1987, says she remembers when 300,000 square feet was considered a large warehouse. The rise of fulfillment centers has completely changed that market so now 1 million square feet under one roof is the norm, Wheeler says. Closer to home, the focus has been on mixeduse development such as the Cascades development in The Colony. The 110-acre development along the Sam Rayburn Tollway features restaurants, three hotels with conference space, commercial space, and more than 600 homes. The Cascades is definitely a sign of the times with its live, work, and play theme that’s walkable for the residents and hotel guests who provide ever-present foot traffic. “Those hotels originally would have been offices,” Wheeler says. Jackson-Shaw is also developing the 218room AC Hotel in downtown Fort Worth. The 15-story Marriott-branded hotel will take over an old parking lot next to the Kress Building at Main Street and West 5th Street. Despite challenges with rising steel prices and labor shortages, it’s a great time to be in real estate in North Texas. But Wheeler’s been on the real estate roller coaster for 31 years so she knows this current uptick won’t last forever. “Where are we? This has been a long cycle for us,” she says. “We’re the place where businesses and talent want to come. We’ve seen job growth, and we’re very fortunate. We’ve had a really good run, but there’s a bit of caution.” Wheeler is a Texas native who has been married to her husband Jeff for 27 years. They are long-time members of Prestonwood Baptist Church in Plano. She’s also active in the Boys & Girls Club of Greater Dallas and other volunteer organizations.

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VIEW FROM THE TOP

BY LANCE MURRAY

and the arts, sports, access to travel, plus lakes, trails, and parks. Our location, in particular, is the best of both worlds, offering easy access to great communities and schools, but still only a short drive from downtown. We think our team can enjoy active, healthy lifestyles in the Dallas-Fort Worth area.

DFW HAS BECOME KNOWN AS A HUB FOR THE FOOD AND BEVERAGE INDUSTRY. HOW DID THAT INFLUENCE YOUR SELECTION PROCESS?

That was a major factor, both in terms of having an outstanding local talent pool and proximity to high-quality vendors.

WAN KIM CEO & Owner, Smoothie King Smoothie King founder Steve Kuhnau started the company in 1973 as a way to help solve his food allergies by creating nutritious smoothie drinks. For decades, the company was based in Metairie, Louisiana, and went international with its franchises in 2003. Current CEO Wan Kim, a Smoothie King master franchiser, took the reins of the company in 2012, and he’s built it to more than 800 locations, with expansion ongoing across three continents. This year, Smoothie King relocated its headquarters to Cypress Waters in Irving and Kim took time to answer a few questions for the Real Estate Review about the move. TELL US ABOUT THE SMOOTHIE KING OPERATIONS THAT ARE COMING TO DFW. HOW MANY PEOPLE WILL RELOCATE?

We’ve moved in to our new office, and we have about 70 people here. We see that number increasing because Smoothie King is growing very quickly right now. This year we plan to open more than 150 new locations—the most we’ve ever opened in the U.S. in a single year.

IN YOUR SITE SELECTION PROCESS, WHAT TIPPED THE SCALE IN FAVOR OF THE CYPRESS WATERS LOCATION IN IRVING?

There were a number of factors. Because we’re in a new building, we had the 9 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

opportunity to create a beautiful, modern space with all the amenities we need— including a test kitchen—plus room to grow. The lake views bring the outside in, and the lakeside path right outside the building allows our team members to be active, which supports their fitness goals while at work. From a lifestyle standpoint, Cypress Waters is close to great communities for our employees to live in and has easy access to Dallas Fort Worth International Airport.

HOW DOES NORTH TEXAS FIT INTO THE WORK-LIFE NEEDS OF YOUR EMPLOYEES?

The area has so much to offer, with affordable living, great schools, city life, culture

LOOKING AHEAD, WHAT INNOVATIONS WITHIN YOUR INDUSTRY ARE EXCITING?

It’s exciting to be at the forefront of the changing way people eat. We believe our Cleaner Blending Initiative will really resonate with current and new guests who are looking for quick healthy meal solutions to meet their health and fitness goals. Even our approach to creating new smoothies is innovative. Instead of just coming up with new recipes based on flavor profiles and current food trends, we think of what our guests need to support their health and fitness journeys. We work back from there to fill that need. For example, one of our newest smoothies, called The Daily Warrior, was created because we recognized that we have guests who face challenges meeting their daily caloric and nutritional needs. We collaborated with the American Cancer Society to develop a great-tasting smoothie to deliver a high level of calories and important nutrients for overall health. We’re also making moves to be more socially responsible. For example, we transitioned to recyclable plastic cups so that we all can enjoy our environment for years to come. We’ve also introduced the Hydrate and Help private label spring water to support the Challenged Athletes Foundation. SUMMER 2018