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F BLUEPRINT FOR PROSPERITY

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s r a d e C ANATO

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ON THE COVER

F BLUEPRINT FOR PROSPERITY

The Cedars in Dallas D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

WINTER 2017

Photo Illustration by Michael Samples DFWREALESTATEREVIEW.COM

Landmarks in The Cedars include, from left: The South Side at Lamar development, The Ambassador Hotel, a mural of Albert Einstein at The Lorenzo, and an aerial view of the bustling neighborhood south of downtown Dallas.

Cedars ANATO

MY OF A DEA L

The

S ROOT FE TAKE URBAN LI

A L S O I N S I D E : ARLINGTON: SWINGING FOR THE FENCES OFFICE ROUNDTABLE | THE CRANE REPORT

WINTER 2017

South Side at Lamar photo courtesy of Visit Dallas. All other photos by Michael Samples

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16647_CedarHill_DRC_winter_ad_PR.indd 1

CONTENTS

To read more about The Cedars, go to Page 56.

12/12/16 4:27 PM

21 THE CRANE REPORT

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

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

BUILDING TOMORROW TOGETHER International Outreach . . . . . . . . . . . . . . . . 15

THE CRANE REPORT

36 ROUNDTABLE

Who’s Building What, Where . . . . . . . . . 21

SCORECARD DFW’s Top Office, Industrial, and Retail Leases . . . . . . . . . . . . . . . . . . . . . . 29

ROUNDTABLE The New Brokerage: Office Real Estate Experts Evaluate the Present and Look to the Future . . . . . . . 36

WINTER 2017

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

DFWREALESTATEREVIEW.COM

50 FEATURE Swinging for the Fences Arlington has built itself into a powerhouse of sports, entertainment and manufacturing . . . . . . . . . . . . . . . . . . . 48

D MAGAZINE PARTNERS BUSINESS GROUP PUBLISHER Josh Schimmels

PUBLISHER Quincy Curé Preston 214-523-5215 quincy.preston@dmagazine.com MANAGING EDITOR Lance Murray CREATIVE DIRECTOR Michael Samples CONTRIBUTING EDITOR Julia Bunch

60 ANATOMY OF A DEAL

CONTRIBUTING WRITERS

The Cedars: Urban Living Takes Root The historic neighborhood reshapes itself with loft living and new businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Labor Market Spotlight Garland / Rowlett. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Midlothian / U.S. 67 Corridor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

SPECIAL ADVERTISING SECTION

Amy Wolff Sorter

Merissa De Falcis DIRECTOR OF SALES Kyle Moss 214-523-5247 kyle.moss@dmagazine.com

BUSINESS DEVELOPMENT MANAGER

Economic Development Guide Profiles of cities around the region . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

Stephanie Mojonnet 214.523.0311 stephanie@dmagazine.com

MEDIA DEVELOPMENT MANAGER

COMMUNITY

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Heather Noel Nicholas Sakelaris

PHOTOGRAPHY

TOOLBOX

Event Recap: The Real Estate Council Shark Tank . . . . . . . . . . . . . 18 The Real Estate Council, Impact Investors . . . . . . . . . . . . . . . . 73 Dallas Regional Chamber, Top-Level Members . . . . . . . . . . . . . 74 Dallas Regional Chamber, Leadership Dallas . . . . . . . . . . . . . . . 76

Kerry Curry Dave Moore

Vanessa Santillan

Calendar of Events . . . . . . . . . . . . . . 76 Photos: TREC’s 2017 Giving Gala . . . . . . . . . . . . . . . . 78 The Real Estate Council, TREC Leadership . . . . . . . . . . . . . . . 79 View From the Top: Buddy Tobin . . . . . . . . . . . . . . . . . . . . 80

INTERNS Jewels Clark Meredith Mills Christina Phillips D’Anzia Robertson

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. ©2017 All rights reserved. No part of ths publication may be reproduced or reprinted without written permission. Neither the Dallas Regional Chamber nor The Real Estate Council nor D Magazine Partners is a sponsor of, or committed to, the views expressed in these articles. The publisher is not responsible for unsolicited contributions.


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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 Fort Worth Transp. Authority Frisco Garland Grapevine Irving Mansfield McKinney

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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

2018 LOOKS DAZZLING FROM HERE

PRESIDENT & CEO Dale Petroskey

In the long history of fortune telling, no crystal ball has ever proven to be 100 percent accurate. However, if recent past performance is any indication, we’re fortunate to be living and working in the Dallas Region, as 2018 looks to be shaping up as another dazzling year. More than 750,000 new jobs have been created here since 2010. Our population has grown steadily by 1 million since then, and housing and commercial construction starts are continuing at a healthy rate. No obvious signs point to a slowdown. Economists are predicting an annual growth rate of 4.2 percent per year for the Dallas Region for the next five years, well above the forecast of 3 percent growth for the United States as a whole. There are plenty of reasons for this track record — and for these rosy predictions. Texas will remain income-tax-free with a lighter regulatory environment, which makes us very business friendly. The influx of people into North Texas from around the world will continue to bring fresh ideas and diverse backgrounds, continually energizing the Dallas Region. These newcomers are filling jobs across a broad range of industries, including companies in the financial, energy, manufacturing, and telecom sectors. Many companies in North Texas continue to expand their digital workforce to capitalize on the enormous volumes of data generated by their businesses. Moody’s Diversity Index ranks our region’s economy as the fourth most diverse in the United States. While it’s impossible to anticipate a major recession or the next bubble, the Dallas Fed has said that our state’s growing mix of enterprises has insulated Texas and the Dallas Region well — as evidenced by our relative strengths when the U.S. economy declined with the housing bubble of 2007 to 2009, the oil bust of 2015, or even the damage done by Hurricane Harvey. “When we had an oil bust in the 1980s, we lost 250,000 jobs,” respected North Texas economist Ray Perryman said at the Dallas Regional Chamber’s recent 2018 Year Ahead Summit.

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CHIEF OPERATING OFFICER & CHIEF FINANCIAL OFFICER DALE PETROSKEY President and Chief Executive Officer Dallas Regional Chamber

LINDA McMAHON President and ChiefExecutive Officer The Real Estate Council

Angela Farley COMMUNICATIONS & MARKETING, SENIOR VICE PRESIDENT

“When we had an oil bust two years ago, it was the exact same magnitude, same percentage drop in oil prices, same percentage drop in oilfield employment. The state’s rate of growth slowed down, but instead of gaining 400,000 jobs a year, we gained 160,000 jobs one year, and more than 200,000 the next year.” Dr. Michael Cox has said, “Economic freedom is what drives the Texas economy, not oil.” Developers are continuing to take advantage of the advantages of doing business in Texas because of our pro-business economic climate. In every sector of commercial real estate, sunny days are predicted in 2018. Industrial’s versatility and affordability have expanded the potential tenant base and in terms of return on investment, surpassed senior housing. E-commerce, population growth, and job growth are driving the industrial market, particularly in North Texas. In Dallas, the population growth rate for those aged 15-34 is higher than the national average, as is the five-year economic growth rate. That continued growth will benefit every sector of the commercial real estate industry. There is an incredible amount of investment capital waiting on the sidelines for the right time to invest. So we are optimistic that North Texas will continue to benefit from all of those positive dynamics. Nobel Prize winner Dennis Gabor once wrote, “The future cannot be predicted, but futures can be invented.” Business professionals and political leaders in the Dallas Region have been working hard for decades to create conditions conducive for longterm economic growth. That’s why predicting the continued fortune of our region isn’t hard to imagine.

Darren Grubb RESEARCH AND INNOVATION, SENIOR VICE PRESIDENT Duane Dankesreiter RESEARCH AND INNOVATION, MANAGING DIRECTOR Eric Griffin

2018 CHAIRMAN Ran Holman Cushman & Wakefield VICE CHAIR Jim Knight Stantec PRESIDENT & CEO Linda McMahon VICE PRESIDENT, LEADERSHIP & CULTURE Holland Morris CFO Carla Brandt

WINTER 2017


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

A letter from the Publisher

As 2017 comes to a close, the Dallas-Fort Worth real estate industry continues to shine brightly, with construction of new buildings and leasing remaining strong. In this issue of the Dallas-Fort Worth Real Estate Review, we examine the old and the new — the projects that are reshaping both historic neighborhoods and the face of sports and entertainment in North Texas. Our cover story on The Cedars neighborhood south of downtown Dallas shows that one of the oldest neighborhoods in the city is becoming a popular landing pad for millennials who want an urban living environment, creative businesses wanting to be near the heartbeat of downtown, and entertainment and dining venues seeking success near the urban core. You’ll find the cover story by Kerry Curry beginning on Page 56. Beginning on Page 48, writer Nicholas Sakelaris looks at the Texas Live! development in Arlington that will rise around the new Texas Rangers’ stadium with a retractable roof and the Dallas Cowboy’s home field at AT&T Stadium. The city of Arlington has become a center of sports and entertainment, manufacturing, and education in North Texas, and we detail how the city’s leaders have pursued that lofty perch for more than half a century. In the roundtable, starting on Page 36, an A-list panel of experts engages in a spirited discussion about the office market in North Texas and the factors that are influencing what office employees are looking for — from bocce ball to craft coffee and more. In the Labor Market Spotlight beginning on Page 65, we give you the facts and figures about the Garland/Rowlett area and the Midlothian/U.S. 67 corridor. In our View from the Top feature on Page 80, C&S Propeller General Manager Buddy Tobin tells us what made C&S Propeller take flight from California and land at a new home in Fort Worth. You’ll find the biggest lease transactions in office, retail, and industrial in Scorecard beginning on Page 29, 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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Welcome to the family. Allen is home to many businesses, and we’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


FOUNDATIONS DFW RANKS NO. 2 IN OFFICE JOB GROWTH

Where are office jobs growing the fastest? Dallas-Fort Worth is among the top U.S. markets for office job-creating markets, 2010-2017, according to new research from JLL. DFW ranks second only to New York, a market nearly twice its size. Los Angeles, Atlanta, and San Francisco round out the top fi ve. Other Texas markets performed well, too, with Houston coming in at No. 8, Austin at No. 18, and San Antonio at No. 23. Overall, North Texas has added more than 750,000 jobs since 2010, JLL reports. More than a third of these jobs have been in the office employment sector, comprised of finance, information, and professional and business services. The office job gains have fueled 23 million square feet of absorption in Class A and Class B buildings since 2010. The employment growth also has helped push the average DFW office vacancy rate to 19.2 percent—a near historic low—and helped landlords achieve sustained rent growth for the first time in years.

San Diego Cincinnati Las Vegas San Antonio Columbus Portland Raleigh-Durham Minneapolis Austin Denver Philadelphia Charlotte Tampa Seattle San Jose Boston Phoenix Miami Houston Chicago Washington, DC San Francisco Atlanta Los Angeles Dallas-Fort Worth New York

A baseline for the region’s future

39,700 44,100 52,500 53,600 61,000 62,600 66,900 * 80,000 83,900 86,100 89,500 90,700 93,600 100,300 110,600 120,600 128,200 134,200 136,600 166,400 178,300 189,800 203,000 240,700 257,900

OFFICE-RELATED JOB GROWTH (2010 - 2017 )

386,000 0

100,000

200,000

300,000

400,000

SOURCE: Bureau of Labor Statistics, JLL * January 2010 to September 2017

DFW’S INDUSTRIAL SECTOR RAGES ON

OVERALL INDUSTRIAL VACANCY 10.5% 10.0%

HISTORICAL AVERAGE= 9.6%

9.5% 9.0% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% Q3 2012

Q3 2012

Q3 2014

Q3 2015

Q3 2016

Q3 2017

SOURCE: Cushman & Wakefield

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Strong fundamentals and a burgeoning population continue to drive demand in Dallas-Fort Worth’s industrial sector. Through the first three quarters of the year, the market absorbed a staggering 17.1 million square feet, according to a new Cushman & Wakefield report. It’s on track to absorb more than 20 million square feet for a second straight year. North Fort Worth and the Interstate 20/Inland Port submarkets saw the greatest demand, each absorbing more than 1 million square feet in the third quarter. Overall vacancy stands at 6.8 percent, significantly less than the market’s historical average of 9.6 percent. Developers are responding to tenant demand. More than 3.7 million square feet of industrial space was added to the inventory during the third quarter of 2017, bringing the year-to-date total to nearly 15 million square feet, Cushman & Wakefield reports. Twenty-two new buildings totaling over 9 million square feet are on track to deliver in the fourth quarter, bringing the annual total to 23.9 million square feet—a 161 percent increase over the historical annual average of 9.2 million square feet.

WINTER 2017


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PHOTO: VALENTYNVOLKOV VIA iSTOCK

F FOUNDATIONS

A BREWERY REVOLUTION IN TEXAS

Texans love beer, and as the “foodie” culture has grown, so has the taste for well-crafted brews. That demand is being felt in the commercial real estate sector. According to research from CBRE, the number of craft breweries in Texas grew a whopping 990 percent in the past 12 years, up from 20 in 2005 to 218 in 2017. The driving force behind the beer revolution in Texas Growth in is micro-breweries, number which grew by nearly of craft breweries in 5,000 percent, up from three in 2005 to Texas, 2005-2017 152 in 2017. Brewpubs make up a second segment—with 55 today, this group of restaurant-breweries increased 450 percent. “From its cottage roots before the 2008 recession, to its emergence as a niche beer category during the economic recovery, the Texas craft brew industry represents the spirit of this perspective,” said Robert Kramp, director of research and analysis for CBRE. Since 2005, the amount of industrial and retail space occupied by craft brewers has grown 265 percent to 4.8 million square feet across Texas. The state now generates the third-highest economic output for craft breweries in the United States. Brewery deals are helping to absorb second-generation retail space and sparking redevelopment of properties that previously housed everything from churches to auto repair shops, says Pam Flora, director of retail research for Cushman & Wakefield. Users look for space where they can focus on production, while also incorporating a retail component. As with any high-growth industry, chatter has been rampant about a craft beer “bubble.” Some individual markets may face a shakeout in the next 12 to 18 months, Flora says. “However, we certainly do not see the trend ending soon. Nor do we see it reversing itself, even in those markets where competition is fiercest.”

990%

WINTER 2017

SPEC SPACE IN DALLAS TRENDS HIGHER With big occupiers like Toyota, JPMorgan Chase, Liberty Mutual, and others moving into their new campuses in North Texas, it shines the light on the amount of spec office space underway in the region. JLL breaks it down in a new research snapshot that analyzes the percentage of preleased space for underconstruction projects. Over the last few years, JLL reports, the percentage of DFW Under construction (pre-leased | BTS)

office space under construction that was preleased or built-to-suit for major tenants was extremely high, averaging 65 percent to 70 percent. The number was driven by large, multimillion-squarefoot hubs for major corporations, as well as projects for smaller users, like CoreLogic in Cypress Waters and Raytheon in Plano. Many of those corporations took occupancy in 2017. This has caused a dramatic

shift in the balance of preleased and spec space in North Texas. Currently, preleased space accounts for just 22 percent of new office construction in Dallas, compared to the U.S. average of 49 percent. Of the 6.4 million square feet that’s underway, 5 million square feet of space remains to be leased, JLL reports. The market will need continued strong job growth to drive leaseup, the firm says.

3.1 MILLION

2.3 MILLION

100%

square feet to be leased 2017 1Q

square feet to be leased 2014 1Q

75%

50%

2.8 MILLION 25%

0%

3.0 MILLION

square feet to be leased 2016 1Q

square feet to be leased 2017 3Q SOURCE: JLL

2012

2013

2014

2015

2016

2017

DFW RETAIL MARKET:

CONSTRUCTION, LEASING JUMP The North Texas retail market is maintaining its record-high occupancy rate of 92.7 percent, despite some high-profile store closings. Weitzman reports that existing center leasing, the absorption of vacant anchor spaces, and significant lease-up of new projects are keeping the market “strongly positive.” In fact, the current retail occupancy rate for DFW ties that of 2016 as the highest in more than three decades.

Several factors are coming into play, including a strong metro-area economy, a demandbased construction market, and brisk retail leasing activity. Another important trend: a focus on food, entertainment, services, fi tness, and other experiential-type uses in new and renovated projects. This helps drive customer traffic in a time of increasing e-commerce competition. Based on strong market

fundamentals, DFW is on track to add approximately 3.2 million square feet in new and expanded projects at least 25,000 square feet in size. This represents a notable increase when compared to 2016’s construction total of 2.1 million square feet, Weitzman reports. The new space for 2017 represents the most active development market since 2008, when 4.9 million square feet of new retail space came online.

ECONOMIC FUNDAMENTALS DRIVING RETAIL GROWTH IN TEXAS MARKET

Austin

POPULATION GROWTH

JOB GROWTH

UNEMPLOYMENT RATE

58,301

23,314

3.2%

Dallas-Fort Worth

143,435

96,104

3.8%

Houston

125,005

30,623

5.1%

47,906

20,811

3.6%

San Antonio

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F FOUNDATIONS

OFFICE & INDUSTRIAL: INDUSTRY INSIGHTS EXPERTS DISCUSS WHAT THE FUTURE HOLDS FOR DFW BY AMY WOLFF SORTER

The Real Estate Council/ Real Estate Deal Sheet’s “Industry Insights” on Nov. 1 ran the gamut from a regional overview of commercial real estate to the potential trend of driverless cars. Tim Jordan with JLL started things off by discussing the strength of DFW (the diverse economy) and providing a Dallas market overview (office: strong absorption; industrial: “We’ve been very disciplined,” and retail: “DFW continues to be healthy.”) The panel that followed Jordan’s presentation touched on e-commerce, Amazon’s second headquarters, and a “crystal ball” outlook. Moderated by Glenn Callison of Munsch Hardt Kopf & Harr P.C., the panelists provided the following takeaways.

KIM BUTLER, HALL GROUP

RAMSEY MARCH, STREAM REALTY

“The only thing that could hold DFW (from consideration for Amazon’s second headquarters) is a lack of transit. Other cities have it. But if Amazon decided to come here, I think they could fast-track it.”

“The last people who will give up driving their cars are in Texas. When it comes to self-driving cars, I’m leery of having artificial intelligence driving my kids around. That won’t change overnight.”

RANDY COOPER, CUSHMAN & WAKEFIELD

MICHELE WHEELER, JACKSON-SHAW

“There isn’t much demand for Class B (office) space. Everyone wants to go into the nicest space to meet their needs. Buildings closest to pedestrian/walkable communities and mixeduse are in demand right now.”

“(With office space) it’s important to give people the right experiences, so they can get what they need before they go home. How can you give all people — not just millennials — that experience, and a feeling of better community?”

JOHN HARDAWAY, HPI REAL ESTATE

PAUL WITTORF, TRANSWESTERN

“You don’t want to be in last place with (office) amenities. It used to be you would just build a building with beautiful materials, and that would be enough for tenants. These days, people still like to look at nice buildings, but it’s last on their list.”

“Though there are tons of variables out there, by all accounts, by 2021-2023, driverless cars will be used, if the stars align. I think the Sun Belt states could be the first, and could see a major shift in transportation.”

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TEXAS

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B BUILDING TOMORROW TOGETHER

PHOTO: MICHAEL SAMPLES

A

NEW DIMENSION BY MIKE ROSA SENIOR VICE PRESIDENT, ECONOMIC DEVELOPMENT, DALLAS REGIONAL CHAMBER

WINTER 2017

Southern Business and Development Magazine reported in its Spring 2017 edition that Dallas-Fort Worth “has entered another dimension in economic development.” DFW’s 2016 economic development success, as tabulated by the magazine, was the highest of any metropolitan area in the publication’s 23-year history. It was a tough act to follow, but 2017 felt as successful. We know already that DFW looks like a winner in job growth for 2017 among all U.S. metro areas, with 94,400 new jobs reported from October 2016 to October 2017. Looking back at a few Dallas Regional Chamber-involved projects in 2017 — for anyone active like me in our region’s economic development activity for quite a while — a year that includes a Boeing headquarters move here is a great year. The DRC was delighted to help Boeing Global

IN ECONOMIC DEVELOPMENT

Services study our region, and it was a lot of fun to see the company’s headquarters landed successfully by Plano. Another very satisfying project was Louis Vuitton. That company announced a workshop in Johnson County that will eventually employ 500. It’s a project that, for us, started with a coffee meeting at a Starbucks in San Dimas, California in fall 2016. Our final meeting with the company prior to the announcement was in Paris three months ago, during a weeklong marketing trip to the UK and France. Another international company, Bombardier Recreational Products (BRP), recently announced plans for its U.S. headquarters in Plano. I met a BRP leader during a joint Dallas-Fort Worth International Airport mission to Montreal in June and subsequently met a project team here. The post-mission meeting was a “let’s find a

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B BUILDING TOMORROW TOGETHER

PHOTO: MICHAEL SAMPLES

spot” meeting at a local hotel. We took over a coffee table and some chairs in the lobby, spread out some maps and data displays, and I spent an hour or so encouraging and reinforcing why DFW was the place to be. Those kinds of meetings are a lot of fun — and I’ve noticed over the years, usually work out pretty well. Our touch with the final project I’ll highlight, Golden State Foods, began about two years ago. Golden State Foods will construct a significant manufacturing facility in Burleson. In addition to the traditional work done for that project, we hosted one of the C-level executives, a big Cowboys fan, at a game. It’s great to have such a fantastic, asset-rich region to sell. I’m fortunate to have a strong DRC team, backed by our members and economic development investors, to sell it with. It’s impressive to visiting companies and consultants that cities in our region are represented by expert economic developers that know how to work and win major opportunities — and work together when called upon to do so, as with Amazon. Amazon asked for a single bid from any North American MSA of 1 million or greater in population interested in being its second home. Amazon received 238 bids: three times the number of qualified metro areas in North America. Clearly, there are regions that split, did not work together, and there were rogue responses. Those places, in my view, ironically ignored our very customer-centric customer and missed a chance to make an important first impression. The leaders and economic developers representing communities in DFW deserve a great deal of credit for working together and

trusting us to aggregate one unified regional response. I appreciate the hard work that I and the DRC team saw firsthand by so many cities and members of the real estate community, and truly value the outstanding partnership of the Fort Worth Chamber of Commerce joining with us to shape the regional response. The pipeline for 2018 is strong. The DRC hosted 40 company visits to its offices in 2017, more than in any recent year. We expect several to convert to wins in the new year. We see a strong flow of industrial deals, especially manufacturing with an emphasis on food and beverage. We are also involved with headquarters opportunities that are not named Amazon. A dozen projects are in what we call “finalist” stage, meaning the company should soon make a decision, and DFW is one of a very few locations being considered. All signs point to another good year ahead for DFW.

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

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

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

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WINTER 2017


C COMMUNITY BEYOND THE EVENT:

THE REAL ESTATE COUNCIL

SHARK TANK BY NICHOLAS SAKELARIS

Three major South Dallas projects are scheduled to start construction next year after investors from The Real Estate Council Shark Tank event all promised a combined $2 million.

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

PHOTO: JAMES EDWARD

Money from the “sharks” could be just the beginning as the publicity from the Nov. 2 TREC event at Gilley’s Dallas perks the interest of other investors. The sharks were Tillie Borchers, director of investments at Civitas Capital Group; Bill Cawley, CEO of Cawley Partners; Michael Dardick, founding partner and CEO of Granite Properties Inc.; Craig Hall, chairman and founder of HALL Group; and Frank Mihalopoulos, owner and president of Corinth Properties. The three proposals the sharks heard will bring additional affordable housing, medical care, and high-paying jobs to the region. Maria Schneider, an entrepreneur and CEO of the Dallas Unity Fund, has a unique plan to put affordable housing on vacant lots around Fair Park. Dr. Michelle Morgan, a longtime dentist, wants to establish the Legacy of Hope Health and Wellness Center in an abandoned hospital on Martin Luther King Jr. Boulevard in Dallas. And, Rodney O’Neil Burchfield, president of Burchfield & Partners, wants to build a 90,000-square-foot maintenance repair and overhaul facility at Dallas Executive Airport. The TREC Shark Tank was part of the Grow South initiative championed by Mayor Mike Rawlings, who spoke at the event. “It’s the forgotten part of Dallas. It’s a major part of the city in itself,” Rawlings says. “I’ve always said southern Dallas is an investment opportunity, not a charity case.” Mark Cuban, one of the sharks on the real

AT THE REAL ESTATE COUNCIL SHARK TANK EVENT: MAGGIE PARKER, FRANK MIHALOPOULOS, TILLIE BORCHERS, BILL CAWLEY, DALLAS MAYOR MIKE RAWLINGS, MARK CUBAN, ANNE MOTSENBOCKER, CRAIG HALL, DEMOND FERNANDEZ, LINDA MCMAHON, AND MICHAEL W. DARDICK

ABC show “Shark Tank,” also spoke prior to the event, talking about efforts to build bridges across the Trinity River and the benefits of investing in the region. “When I invest in Dallas companies … the energy, the excitement from the entrepreneurs — they’re all about getting it done,” Cuban says. “No matter what I do for Dallas, it will never equal what Dallas has done for me.”

HOMES FROM POPULAR TV SHOW MOVING TO SOUTH DALLAS South Dallas’ resurgence starts with drawing people to live there by building quality, affordable housing, Maria Schneider says. Finding the right location isn’t hard — the neighborhoods around Fair Park are full of vacant lots that have left a void in the community. And, finding a surplus of freshly remodeled historic homes isn’t that hard, either. The DIY Network show “Texas Flip N Move” has dozens of homes ready to move in the Azle area. Schneider plans to buy a handful of vacant lots on Coolidge Road and then buy houses from the television show to move to the site. “Texas Flip N Move” takes the houses down to the studs and rebuilds them with new drywall, electrical, plumbing, and flooring. They are all up to code. They will sell for $100,000 to $150,000. “I’m just struck by how cool they are. Each one is unique. They’re little custom homes. It’s so hard to get that sense of personality when you’re trying to build new houses,” Schneider says. “It’s hard to find homes in that price range.” The project got the attention of one shark, Borchers, who offered to invest $250,000 in the project. Since, then the project has gotten the attention of other investors. The permitting process will take about two months. Schneider plans to do

WINTER 2017


C COMMUNITY

MARIA SCHNEIDER PRESENTS FOR THE DALLAS UNITY FUND AT THE REAL ESTATE COUNCIL SHARK TANK.

about three lots at a time. Homesites will be prepared with utility hookups, and porches or sunrooms will be added, depending on what the buyer wants. Long term, Schneider would like to add 25 new houses to the neighborhood surrounding Opportunity Park in Dallas. The Dallas Unity Fund will assist with down payments and financing in hopes that homebuyers will flock to the area, put down roots, and improve the sense of community, Schneider says. There’s an old city park wedged between the neighborhood and the railroad tracks that Schneider says could become a small park or community garden. “These kinds of projects, if a lot of people do them — that’s what builds a city and rebuilds a neighborhood,” she says. “Hopefully, that will attract other people, [who will] regard those properties as valuable.” Bringing more people to the neighborhood will increase the economic vitality of the region. “I would love to see those areas revitalized so people can start their own businesses,” she says.

OLD HOSPITAL COULD BECOME A MEDICAL BEACON Having proper access to medical care also will be critical for South Dallas’ future. Dr. Michelle Morgan grew up in South Dallas and has served the community as a dentist for decades. She’s all too familiar with the so-called medical desert in the area. The lack of access to medical care means many residents must travel long distances to go to the doctor and often end up in the emergency room for routine issues.

WINTER 2017

Morgan’s plan is to remodel the 18,000-square-foot hospital at 2516 Mar– tin Luther King Jr. Blvd. into the Legacy of Hope Health and Wellness Center. Three doctors have already committed to the project, in addition to her own practice. The facility will need specialists in various medical fields and has about 4,000 square feet of space left to lease. Morgan lured all five sharks to bite: They committed $500,000 toward the project, with an offer to go up to $750,000 if Morgan increases her own investment. Since the Nov. 2 event, word of the project has spread to the Dallas City Council. “It’s generated so much interest and so many supporters on all levels,” Morgan says. “Political, financial, and just the people in the community. It’s a collective energy that is going to make this happen.” Churches and banks are interested in the project now, and construction could start early next year with the Legacy of Hope opening in 2019. Anyone interested in learning more about the project can call Olivia Gray at 703-307-6461 or visit http://morgansmiles.com. The hospital they are moving in to was founded by a group of black doctors in 1965. It’s been abandoned for years but Morgan and the other tenants who move in will give the facility a new finish. Morgan says this type of facility is much needed in the area, and that the doctors also could mentor the next generation of medical professionals. “I grew up here [and] walked to school by myself,” she says. “But 30 years later, it doesn’t look like where I grew up. It’s really easy to see where the disparities are.”

JOHN BAILEY AND DR. MICHELLE MORGAN

RODNEY BURCHFIELD MAKES HIS PITCH AT THE REAL ESTATE COUNCIL SHARK TANK EVENT.

NEW $12.9M FACILITY WILL ELEVATE DALLAS EXECUTIVE AIRPORT High-paying jobs and a thriving municipal airport are also important to the region’s future. Burchfield received the largest investment from the sharks for the $12.9 million maintenance, operations, and overhaul facility (MRO) he plans to build at Dallas Executive Airport. He requested $500,000 but went home with $1.35 million from the sharks. Burchfield has an operator who will be the tenant for the 90,000-square-foot facility, but he can’t disclose the name. Construction could start by July with it opening in 2019. Having a new MRO at Dallas Executive Airport, coupled with runway and taxiway improvements, will elevate the airport’s status. The project will create 30 jobs in the first year, and that could double within five years. The average salary would be $75,000. “This positions the airport to be a premier general aviation destination in South Dallas. The users would be highnet-worth individuals who have corporate jets or corporations that use jets,” Burchfield says. “It’s really an opportunity for us to capitalize on the growth that the entire Metroplex is experiencing, and it’s a testament to the commitment that the City of Dallas has made to the airport.” The facility requires a ground lease with the City of Dallas. That’s scheduled to go to the City Council for approval in January or February. Mihalopoulos and other sharks saw huge potential for the project. “It’s a sleeper. If we could be the pioneers of something that’s coming to this airport, that’d be great,” Mihalopoulos says.

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


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THE LUMINARY IS CURRENTLY UNDER CONSTRUCTION IN THE WEST END.

THE CRANE REPORT

Winter 2017

The demand for office space in Dallas-Fort Worth continues to be strong with many firms looking for a “work, live, play” environment. Lenders have tightened requirements for speculative development, and that could have an impact on preleasing for many of the new developments. In each issue of the Dallas-Fort Worth Real Estate Review, we showcase projects that are underway or planned in the Crane Report. Data for the office and industrial sectors was provided by Xceligent Inc., while 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

JOHNNY JOHNSON

Executive Managing Director, Cushman & Wakefield

“Dallas has won the favor of a diversified tenant base for relocations, consolidations from other cities, and expansions within. The engine that drives demand for office space is job growth to support these companies. We are fortunate to have a deep and educated workforce — particularly among younger professionals — that supports this demand.”

WINTER 2017

INDUSTRIAL

MULTIFAMILY

SUSAN ARLEDGE

JEFF THORNTON

JORG MAST

SVP, Texas Region, Duke Realty

Senior Vice President, JLL

“Never before has the U.S. been faced with such a chronic shortage of qualified workers. The future growth of every organization will depend, in part, upon the location of [their] real estate, because over the next fi ve years, each will be competing for quality employees.”

“E-commerce, consumer products distributors, and third-party logistics providers have been the leading lessors of new bulk warehouse space in DFW over the past year, and their requirements are driving developers to provide facilities that conform to their needs. Design advancements include: higher clear heights, mezzanines, and heavy electrical power for material handling equipment and conveyors.”

“Developers and investors are actively staying ahead of demand, securing sites that are in short supply while juggling continually rising construction costs and generating new opportunities through municipalities. The development pipeline will tighten due to headwinds related to costs, but thanks in part to the level of job growth in our region, demand will adequately absorb and justify the supply.”

President, Site Selection & Incentives, ESRP

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


THE CRANE REPORT:

● ANNOUNCED ● UNDER CONSTRUCTION

OFFICE

CYPRESS OFFICE 1403 E MCKINNEY ST

OAKMONT OFFICE CONDOS

ANNOUNCED + UNDER CONSTRUCTION

OLD TOWN BLVD NORTH

4961 LONG PRAIRIE RD

ANNOUNCED DEVELOPMENTS THE RAILHEAD

2

HERITAGE CREEKSIDE

SIZE: 384,000 square feet DEVELOPER: Rosewood Property Co. and Patrinely Group ADDRESS: Custer Road and President George Bush Turnpike, Plano DETAIL: The office tower will be the first building in the mixed-use Heritage Creekside’s planned “office quad.” The building is expected to deliver in Q4 2019. Heritage Creek is a 156-acre, $1-billion development which includes apartments and single-family homes.

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

404 KELLER PKWY

801 ENTERPRISE DR MAIN STREET CO

BEAR CREEK OFFICE PARK

SOUTHLAKE COMMONS 1750 KELLER PKWY

1

V R

PINNACLE POINT GRAPEVINE STATION

CARILLON COURT OFFICE

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

1

PRAIRIE COMMONS 870 LONG PRAIRIE RD LAKESIDE CROSSING

TROPHY CLUB TOWN CENTER

SIZE: 250,000 square feet DEVELOPER: Koa Partners ADDRESS: Dallas North Tollway, south of Wakeland High School, Frisco DETAIL: The office building is part of the 80-acre Railhead development, which will include 1,200 residential units. Koa Partners acquired the acreage from the Newman and Wade families, which are also collaborating on the development. 5G Studio Collaborative of Dallas is designing the office building.

NORTHWEST PLAZA

MEADOWLANDS ADDITION

POINT WEST

HIDDEN LAKES

SOUTHLAKE TECH CENTER THE PONDS

HERITAGE OFFICE PARK

32

THE AP LAS COLINAS CROS

54 FOSSIL CREEK STATION

7105 GOLF CLUB DR PAD SITE

5851 NORTH FWY

7114 MID CITIES BLVD

4301 FOSSIL CREEK BLVD

ADVENT PARC 6513 PRECINCT LINE RD

AIRPOR HQ CE

AMERICAN AIRLINES

464 BAILEY AVE

3736 CAMP BOWIE BLVD

EXPEDITION PLAZA

2803 GREEN OAKS BLVD

THE OFFICES @ HAMPDEN WOODS

FAIRWAY 9701-9703 CENTRE WHITE SETTLEMENT RD OFFICE

FROST TOWER FORT WORTH OVERTON TOWER III

2201 AVENUE J

BALLPARK PLAZA

1200 6TH AVE CLEARFORK RIVER CAMPUS 4015 W I-20

WATERSIDE BLDG L 111 LARSON LN

THE GARDENS AT TOWN CENTER

MATLOCK PROFESSIONAL OFFICE PARK

SUMMER CREEK STATION GARDEN HULEN VILLAGE OFFICE

CANNON PROFESSIONAL PLAZA HIGHPOINT COMMONS

THE ATRIUM REGENCY STATION

360 SE JOHN JONES DR

3

WEIR’S FURNITURE REDEVELOPMENT

SIZE: 50,000 square feet (retail and office) DEVELOPER: Geyer Morris Co. ADDRESS: Knox and Travis Streets, Dallas DETAIL: The Weir family is partnering with Geyer Morris to build a high-rise retail and office development on the site of the current Weir’s store, which is 70 years old. The project will preserve the Highland Park Soda Fountain building; architects GFF and ArchiTexas designed a mixeduse development to wrap around the twostory soda fountain building.

WINTER 2017


VICTORY AT FRONTIER BLDG 4 WHISPERING FARMS PROSPER OFFICE PARK

PROSPER CROSSINGS

GARDENIA VILLAGE OFFICE PARK

CITY OF

NORTH RICHLAND HILLS

SUMMIT PARK II

1402 CUSTER #501

LAKE FOREST PLAZA

1

TOWER AT FRISCO SQUARE

FRISCO SQUARE

STONEBROOK BUSINESS PARK

SOUTHERN HILLS OFFICE PARK

ONE FOUNTAIN COURT

35W

WATCHGUARD VIDEO

HALL PARK 17 NETSCOUT BUILDING LEGACY DISTRICT

ECONOMIC DEVELOPMENT DEPARTMENT

5001 COLLIN MCKINNEY PKWY

SAI PLAZA

THE FORUM AT WADE PARK

LAKES OF TENNYSON PROFESSIONAL UNIT 5030 WINDHAVEN PLACE ONE

PARKER ROAD THE PROFESSIONAL REALM OFFICES THE OFFICES CROWN CENTRE AT WILLOW BEND 4101 HIGHWAY 121 BYPASS BLVD INTERNATIONAL HERITAGE BUSINESS PARK VISTA RIDGE CREEKSIDE ROCKBROOK OFFICE NORTH DALLAS MEDICAL CENTER II THE GRID

N OPPELL

WATTERS JUNCTION ONE BETHANY AT WATTERS CREEK WATTERS CREEK OFFICE PARK III WATTERS CREEK AT MONTGOMERY FARM LEGACY CENTRAL 5

PARK TOWER AT DALLAS MIDTOWN - OFFICE

377

201 OLYMPUS BLVD THREE HICKORY CENTRE ROYAL TOWER PHASE I

2

PALISADES CENTRAL

SE OF FM 544 & BRAND RD

MURPHY MEDICAL OFFICES

400 WHITE HALL ST

PARK CITIES PLAZA

HIDDEN RIDGE

FORT WORTH

121 183

SPRINGFIELD PROFESSIONAL CONDOS BAYSIDE NWC OF DALROCK RD AND I-30

RIDGEMARK OFFICE BUILDING

360

820 30

20

THE HILL BAYSIDE OFFICE TOWER

FOUR ENERGY SQUARE

3

WEST LOVE

4437 BUENA VISTA ST

PARKLAND KNIGHT ROLEX TWO VICTORY PARK THE UNION DAVIS STREET MARKET OFFICE

ROCKWALL COMMONS PHASE II

8010 PARK LN

4401 W LOVERS LN

26 183

CAMPBELL CROSSING OFFICE PARK

35E

635

35W

FOURTEEN555

TOWER AT PRESTON HOLLOW VILLAGE

121

114 377

7 CITYLINE

FOUR GALLERIA TOWER FOUR LINCOLN CENTRE

PEX AT SSING

35E

114

399 MELROSE DR

9797 ROMBAUER RD

RT 161 ENTER

CONLEY COMMONS

VICTORY AT CRESCENT STONEBRIDGE PARC 6579 VIRGINIA PKWY

COBB FARM WEST OFFICE PARK ELDORADO OFFICE PARK AVON @ LEGACY COMMERCE PARK

1840 LAKE FOREST BLVD

4

3001 TURTLE CREEK BLVD TWO ARTS PLAZA 1900 N PEARL ST EPIC

SOLA ON LAMAR

SUNNYVALE PROFESSIONAL PLAZA

324 W JEFFERSON BLVD

CLIFFVIEW CROSSING

ONLINE EXTRA

THE CRANE REPORT: INTERACTIVE VERSION

online at dfwrealestatereview.com

UNDER CONSTRUCTION MIDTOWNE

4

THE LUMINARY

SIZE: 104,979 square feet DEVELOPER: Crescent Real Estate LLC and Long Wharf Capital LLC ADDRESS: 401 N. Houston St., Dallas LEASING AGENT: JLL DETAIL: The Luminary, billed as “West End’s tallest building,” was designed by Corgan and represents an expansion of the architect’s office. Crescent Real Estate acquired the headquarters of Corgan, which will then lease back the existing 57,731 square feet. Crescent and Long Wharf are offering the remaining space for lease.

WINTER 2017

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


US 380 BUSINESS PARK BLDG 5 OAK HILL BUSINESS PARK

THE CRANE REPORT:

WESTGATE BUSINESS PARK

INDUSTRIAL

5075 TIM DONALD RD

ANNOUNCED + UNDER CONSTRUCTION

GATEWAY BUSINESS PARK

LEWI NW OF I-35W AND FM 1171 BLDG 8 SPEEDWAY DISTRIBUTION CENTER BLDG C

ANNOUNCED PROJECTS ● ANNOUNCED ● UNDER CONSTRUCTION

MCLANE CLASSIC FOODS HEADQUARTERS & MANUFACTURING FACILITY

1

TRAMMELL CROW @ 35-EAGLE BLDG J

LAKESIDE RANCH BLDG 1

12500 WILLOW SPRINGS RD

LOGIS CENTE

SIZE: 150,000 square feet ADDRESS: HighPoint Business Park East, Interstate 35W, Burleson DETAIL: Groundbreaking is scheduled in early 2018 for the company, which supplies food products to restaurant chains including Potbelly Sandwich Shops, Denny’s Panera Bread and Logan’s Roadhouse. The project will be the first in the HighPoint development.

1005 CHISOLM TRL

12801 HARMON RD

PHASE I - BLDG I @ COLLEYVILLE BLVD 5761 PARK VISTA CIR

PARK 820 BLDG 2

1815 RELIANCE PKWY

PARC NORTH BLDG 5

PARKER PRODUCTION FACILITY

4000 STATE 157 HWY BLDG 4

1460 AVENUE S

1009 NE 11TH ST

360 GLOBAL LOGISTICS PARK LAND TRACT A

901 S CHERRY LN 2809 SHAMROCK AVE

2317 W ARKANSAS LN

PARK 20/36 BLDG V 1301 MARKUM RANCH RD

NUTRIBIOTECH USA

SIZE: 685,000 square feet ADDRESS: Jupiter and Miller Roads, Garland DETAIL: Nutribiotech is planning to expand its Garland facilities from 60,000 square feet at the old Raytheon campus at an estimated cost of $100 million. The new facilities will sit on approximately 35 acres, and will bring 1,600 new jobs to the area.

8600 WILL ROGERS BLVD

DATA SOURCE: AXIOMETRICS INC.

2

SOUTH CENTRAL DISTRIBUTION CENTER II

KENNEDALE PKWY F

MAJESTIC FORT WORTH SOUTH BLDG 5

1

ONLINE EXTRA

THE CRANE REPORT: INTERACTIVE VERSION

1102 ENTERPRISE PL

350 GARDEN ACRES DR BLDG B

619 S WISTERIA ST

online at dfwrealestatereview.com SW OF E FM 917 & LONGHORN DR

UNDER CONSTRUCTION

MIDLOTH BUSINESS

3

75/WILMETH@MCKINNEY

SIZE: 200,000 square feet DEVELOPER: Hunt Southwest and McKinney Economic Development Corp. ADDRESS: Wilmeth Road near U.S. 75, McKinney DETAIL: The development is the first phase of a two-building, speculative industrial project, which will total 200,000 square feet. The first building is scheduled for a summer 2018 completion. The second building is planned at Corporate and Commerce drives.

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

WINTER 2017


PROSPER BUSINESS PARK BLDG 6

2211-2241 REDBUD BLVD BLDG 2 FRISCO PARK 25 BLDG D

3

CORPORATE DR

COBB BUSINESS PARK

7 THE TECH CENTER ON GREENVILLE BLDG 3

ISVILLE CORPORATE CENTER BDG B

NW OF HILLSIDE DR & N MILL ST

CREEKVIEW 121 BLDG 4

INTELLIGENT EPITAXY TECHNOLOGY, INC

121 RIVERVIEW CROSSING

MARY KAY

PLANO TECH CENTER 8

1401 MACARTHUR DR

2910 GUILDER DR

PROLOGIS PARK 121 BLDG 7 MAIN STREET COPPELL S3

STICS ER VI

SIGNET JEWELERS

PROLOGIS VALWOOD CORPORATE CENTER BLDG 4 COTTON RIDGE BUSINESS PARK

ROYAL TECH 18

3000 FOREST LN

5 2

PARC 114 BLDG 9 4.93 ACRES - N STEMMONS FWY

DFW/161 DISTRIBUTION CENTER 300

2040 KRISTY LN

JUPITER MILLER BUSINESS CENTER 2

9749 CLIFFORD VALLEY VIEW DFW AIRPORT

2300 SHORECREST DR

LIBERTY PARK GSW NORTH BLDG 1 FEDEX PROLOGIS/ BUCKNER LAND

2909 W OAKDALE RD

S

3325 INOVATIVE WAY BLDG 1

GRAND LAKES III DCT MIDPOINT DISTRIBUTION CENTER

60

HIAN PARK

ASHLEY FURNITURE 5858 W KIEST BLVD

LIBERTY PARK MOUNTAIN CREEK MOUNTAIN CREEK BUSINESS PARK BLDG 8 FIRST MOUNTAIN CREEK DISTRIBUTION CENTER

STONERIDGE 16

PARK 20/45 BLDG 1 PLANNED POINTSOUTH LOGISTICS & COMMERCE CENTRE 1 1701 S I-45

6 STONERIDGE 14 WAYFAIR

SUNRIDGE BUSINESS PARK BLDG 1

DISCOUNT TIRE

4

SUNRIDGE BUSINESS PARK BLDG 2

DUKE INTERMODAL III DALPORT TRADE CENTER 3

DFW INLAND PORT I

NW OF E OVILLA RD & N CENTRAL BLVD

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

WAYFAIR REGIONAL SHIPPING HUB

4

SIZE: 874,566 square feet DEVELOPER: Duke Realty Corp. ADDRESS: Interstate 35E and Wintergreen Road, Lancaster DETAIL: The fulfillment center includes more than 14,000 square feet of office space, and is expected to open in late 2018.

WINTER 2017

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


DISCOVERY PARK

THE CRANE REPORT:

WOODLANDS APARTMENTS I 404 INDUSTRIAL STREET

MULTIFAMILY ANNOUNCED + UNDER CONSTRUCTION

HICKORY CREEK RANCH

DISTRICT OF HIGHLAND VILLAGE

ANNOUNCED DEVELOPMENTS 1

HILLSTONE RIVER WALK

● ANNOUNCED ● UNDER CONSTRUCTION

WEST DALLAS PROJECT

UNITS: 280 DEVELOPER: Toll Brothers ADDRESS: 400 W. Commerce St., Dallas DETAIL: The seven-story complex, the Toll Brothers’ first in North Texas, will break ground in June 2018.

ELAN FLOWER MOUND

ONLINE EXTRA

THE CRANE REPORT: INTERACTIVE VERSION

AURA FOUR44

JUNCTION CROSSING

online at dfwrealestatereview.com

SAGEWOOD VILLAGE

THE STANDARD AT BOSWELL MARKETPLACE

DOLCE LIVING HOME TOWN II

HILLSTONE AT CENTREPORT THE VIEW OF FORT WORTH I ELAN AT RIVER DISTRICT

THE RIVER EAST I

5 ELAN AT CROCKETT ROW

ALEXAN SUMMIT

MAG & MAY

JEFFERSON EAST BRANCH

UNITS: 700 DEVELOPER: JPI ADDRESS: Dallas North Tollway near Interstate 635 (LBJ Freeway), Dallas DETAIL: The plan calls for a two-phase buildout, along with ground-floor retail space. The 10-acre site was originally to be the site of a high-rise office building.

ALTA WATERSIDE

COLUMBIA AT RENAISSANCE SQUARE

THE WATSON

THE QUADRAN

DATA SOURCE: AXIOMETRICS INC.

2

3

ARLINGTON COMMONS PH I (THE ROOSEVELT)

4 AURA 3SIXTY

THE EN MIRA L MAIN STREET LOFTS I

UNDER CONSTRUCTION AUBERGE OF BURLESON

4 3

THE WORTH

UNITS: 115 DEVELOPER: Zamco Properties LLC ADDRESS: North Henderson Street, bounded by West Bluff, Mills and West Peach streets, Fort Worth DETAIL: The 24-story structure will be a condominium tower with a sales office scheduled to open in 2018. GDA Architects is the designer.

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

STEVENSON OAKS

UNITS: 259 DEVELOPER: Methodist Retirement Communities and Greystone ADDRESS: Chisolm Trail Parkway at Bryant Irvin Road and Altamesa Boulevard, Fort Worth DETAIL: The $140 million retirement development will be built on 19 acres. Construction is expected to begin in late 2019.

5

ELAN AT CROCKETT ROW

SIZE: 380 units DEVELOPER: Greystar ADDRESS: University Drive, Fort Worth DETAIL: Located in Fort Worth’s Cultural Arts district, the project is scheduled for Q1 2019 delivery. Meeks + Partners is the architect.

WINTER 2017

MANSFIELD THE GREEN


SOVEREIGN PRESTON RD ASCEND AT WESTRIDGE

DAVIS AT THE SQUARE

WESTRIDGE VILLAS THE VILLAGE AT LAKEFRONT I

THE CARMICHAEL

PDG FRISCO

PARKVIEW APARTMENTS ARTISTRY AT PCR

ARCOS CRAIG RANCH DOMAIN AT THE GATE VERUS I VERA WATTERS CREEK THE HUNTINGTON

ALAQUA

LVL29 RAVELLO STONEBRIAR

McKINNEY, TX

THE KINSTEAD

Situated for business.

LUXE ALLEN DOLCE LIVING TWIN CREEKS PH I MONTGOMERY RIDGE

THE RESIDENCES THE HUDSON AT AT LEGACY AUSTIN RANCH

HEBRON 121 STATION IV

JEFFERSON GALATYN PARK

THE SWITCHYARD

THE SOUND

BRICKYARD AT MERCER PARK II

2

THE BRISCOE

VITRUVIAN WEST

VILLAGE OF ROWLETT

TERRA LAGO

LOOKOUT AT LAKE HIGHLANDS TOWN CENTER

THE LAUREL

JEFFERSON LAS CO

THE DOMAIN AT FIREWHEEL

THE NASH THE ROYAL

JEFFERSON EASTSHORE

INWOOD STATION

T T

TOWERS AT SPRING CREEK

IMT PRESTONWOOD

JEFFERSON LANDMARK

ALTA LUNA I

WATERWALK LAS COLINAS

THE LYLA

JEFFERSON WOODS I

TRINITY MILLS PLACE

GRAPEVINE BLUFFS

THE PARC AT WYLIE

MORADA PLANO

BROADSTONE EVOKE

SLOANE STREET

ALEXAN MAPLE ALTA STRAND THE KATY

THE ELLISON

THE ASH AT THE BRANCH

PARC AT GARLAND

THE KATY MAGNOLIA ON MOSER

ARDAN

MODERA HALL STREET

1

BROADSTONE LTD

6 EPIC

TAYLOR LOFTS MAGNOLIA ON ZANG BISHOP HIGHLINE

NGLES EAGLE CROSSINGS

NCLAVE AT LAGOS II

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6

FARMERS MARKET PROJECT

UNITS: 200 DEVELOPER: Lynd Development Partners ADDRESS: Harwood and Cadiz Streets, Dallas DETAIL: Lynd has filed building permits with the city for the $33.5 million development which will be across the street from Dallas’ Farmers Market. Merriman Anderson Architects is the designer.

WINTER 2017

McKINNEY ECONOMIC DEVELOPMENT C O R P O R AT I O N McKINNEYEDC.COM INFO@McKINNEYEDC.COM 972-547-7651 D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 2 7


CURATED AMENITIES FOR UNMATCHED CONVENIENCE. ROSS AVENUE REINVENTED.

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


S SCORECARD

FLIX BREWHOUSE IN MANSFIELD

SCORECARD

Winter 2017

The overall markets for office and industrial leases remain strong in the Dallas-Fort Worth area. Companies continued to move to Dallas-Fort Worth, many seeking amenity-rich buildings in prime locations. The retail sector saw several large lease deals throughout the area. Here, we examine the top five office, industrial, and retail leases in the past three months throughout North Texas. Data was provided by Xceligent Inc. BY JULIA BUNCH

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

OFFICE

INDUSTRIAL

RETAIL

JORDAN WADE

MIKE EBBITT

DAVID ESEKE

STEVE GRAY

“As long as developers continue ‘going vertical’ with exciting, amenity-rich products, companies will continue to pursue new office space to recruit and retain the dynamic workforce that each company is striving to attract.”

“With the overall market expected to remain healthy, some factors to watch are the continued strong regional growth and [the] market embracing new urban trends around employment centers. Also, coworking firms that are off ering companies flexible, short-term arrangements along with new workplace strategies will drive prices in 2018.”

“E-commerce continues to propel demand for big-box industrial space. Even more encouraging is organic growth we’re seeing in the demand for shallowbay space. This has led to record-low vacancies at infill locations, which pushes rental rates and encourages redevelopment of obsolete product—all signs of a healthy and maturing industrial market.”

“Retail occupancy should remain stable in 2018. Retailer store downsizings and closings should be off set by the limited amount of speculative retail development. Continued positive economic news also helps. 2018 should be another solid year for retail in DFW.”

Associate, Transwestern

WINTER 2017

Associate, Lee & Associates

Director, Cushman & Wakefield

Managing Principal, Coldwell Banker Commercial Advisors

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S SCORECARD

OFFICE LEASES

4 1

2

3

5 0 - 5,760 SF 5,761 18,804 SF 18,805 54,646 SF 54,647 152,086 SF C

152,087 327,183 SF

M

Y

CM

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

LARGEST OFFICE LEASES

MY

CY

1

NTT DATA

CMY

LOCATION: Campus at Legacy West in Plano SIZE: 233,000 square feet TENANT REPS: Steve Jarvie with ESRP Real Estate LEASING AGENT: John Conger with Colliers International

3

2

GARTNER INC.

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PACIFIC UNION FINANCIAL

LOCATION: 1601 Lyndon B. Johnson Freeway in Dallas SIZE: 132,237 square feet TENANT REPS: Steven Thelen and Conor McCarthy with JLL LEASING AGENT: Duane Henley with Transwestern DETAILS: In addition to renewing its 88,220-squarefoot lease at Browning Place II, the full-service mortgage HENLEY company expanded by an additional 44,017 square feet in Browning Place I.

4

K

ALKAMI TECHNOLOGY

LOCATION: 5601 Granite Pkwy in Plano SIZE: 90,000 square feet TENANT REPS: Jeff Ellerman, Clay Vaughn, and Preston Lynn with CBRE LEASING AGENTS: Robert Jimenez, Aarica Mims, and Avery Bush at Granite Properties DETAILS: The online banking solutions company renewed and expanded its lease by 55,000 square feet at Granite Park Three, part of Granite Properties 3-million-square-foot office campus.

5

ISNETWORLD

LOCATION: 3232 McKinney Ave in Dallas SIZE: 68,263 square feet TENANT REPS: Craig Wilson, Randy Cooper, Dan Harris, and Wills Bauer with Cushman & Wakefield LEASING AGENT: Elliot Prieur with Gaedeke Group DETAILS: The Dallas-based human resources firm renewed its lease at the 263,921-square-foot One McKinney Plaza owned by Gaedeke Group.

WINTER 2017

IMAGES VIA XCELIGENT OR COURTESY OF THE COMPANIES, XCELIGENT.

LOCATION: 6011 Connection Drive in Irving SIZE: 152,086 square feet TENANT REPS: Randy Cooper, Andy May, Matt Heidelbaugh, and Amber Roberts with Cushman & Wakefield LEASING AGENTS: Joel Pustmueller and Sarah Hinkley with Peloton, and Joe Pangburn and Damian Miller with Piedmont Office Realty Trust DETAILS: The Connecticut-based technology research firm signed a lease at Piedmont’s three-building The Commons of Las Colinas through 2034.

DETAILS: The Japan-based system integration company will move out of its Plano Parkway campus and into the Dreien Opportunity Partners’ Campus at Legacy West in 2018.


S SCORECARD

INDUSTRIAL LEASES

3

4 5

121 24,581 SF 24,582 86,845 SF 86,846 204,556 SF

1 2

204,557 492,322 SF 492,323 1,041,600 SF

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

LARGEST INDUSTRIAL LEASES

1

AMAZON

LOCATION: 3350 Balmorhea Drive in Lancaster SIZE: 920,275 square feet LEASING AGENT: Dave Anderson, Nathan Lawrence, and Krista Raymond with CBRE

2

WAYFAIR

3

AMAZON

LOCATION: 944 W Sandy Lake Road in Coppell SIZE: 604,800 square feet TENANT REPS: Ryan Keiser with CBRE LEASING AGENT: Nathan Orbin with Cushman & Wakefield DETAILS: Amazon fully leased the distribution warehouse near S.H. 121 and Freeport Parkway built in 2006.

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4

WOODS DISTRIBUTION SOLUTIONS

LOCATION: 2900 Meacham Blvd., in Fort Worth SIZE: 250,000 square feet TENANT REPS: Becky Thompson with Lee & Associates LEASING AGENT: Ryan Wood with TCRG Properties DETAILS: The Haltom City-based third-party logistics provider leased this distribution center in northeast Fort Worth.

5

ECOLAB

LOCATION: 2101 Reeves Place in Fort Worth SIZE: 192,000 square feet TENANT REPS: J.R. Tomlinson with Jackson Cooksey LEASING AGENT: Donnie Rohde and George Jennings with Holt Lunsford Commercial DETAILS: In October, Hunt Southwest leased 192,000 square feet to energy technology firm Ecolab and an additional 68,000 square feet to PODS moving and storage company in its northeast Fort Worth Riverbend West Distribution Center.

WINTER 2017

IMAGES VIA XCELIGENT OR COURTESY OF THE COMPANIES.

LOCATION: 2820 N I-35 E in Lancaster SIZE: 874,566 square feet TENANT REPS: John Brewer, Ben Phillips, John Lashar, and Jon Varholak with Transwestern LEASING AGENT: Matt Hyman with Duke Realty DETAILS: Developer Duke Realty started building the furniture store’s new regional shipping hub in November with a 2018 opening date.

DETAILS: The Seattle-based e-commerce giant leased its sixth DFW fulfillment center in VanTrust Real Estate’s DalParc Logistics Center in Lancaster.


53,128 DESOTO POPULATION

$71.7K

DESOTO, TEXAS

AVG. HOUSEHOLD INCOME

AT THE HEART OF BUSINESS

92.5%

HIGH SCHOOL DEGREE OR HIGHER

LOCATION,

WW

LOCATION,

W.D ED

LOCATION!

15 10 31

MINUTES SOUTH OF DOWNTOWN DALLAS MINUTES FROM THE DALLAS EXECUTIVE AIRPORT MINUTES FROM THE DFW INTERNATIONAL AIRPORT

G

Business and industrial park offering more than 400 acres of land with easy access to I-35E, I-20, and I-45

Low-cost, building-ready land with an existing space inventory

Home to Kohl’s e-Commerce Fulfillment Center, Solar Turbines – A Caterpillar Company, and Sam’s/Wal-Mart Distribution

Development plans that aid in our partners success

Skilled workforce

FOR MORE INFORMATION CONTACT:

DeSoto Economic Development Corporation 972-230-9611

C .O R

211 E. Pleasant Run Rd. DeSoto, TX 75115


5

S SCORECARD

RETAIL LEASES 2 3 04,587 SF

1

4,588 14,022 SF 14,023 32,637 SF 32,638 76,429 SF 76,430 152,946 SF

4

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

LARGEST RETAIL LEASES

1

2

SPIRIT HALLOWEEN

LOCATION: 6513 Meadowbrook Drive in Fort Worth SIZE: 48,248 square feet LEASING AGENT: Michael Pactor with Quine & Associates Inc. DETAILS: The Halloween costume, decorations, and accessories store leased temporary space during the fall at Meadowbrook Shopping Center in Fort Worth, a stand-alone property built in 1971.

3

MICHAEL PACTOR

BURLINGTON

LOCATION: 6411 E Northwest Hwy in Dallas SIZE: 40,002 square feet LEASING AGENT: Jeff Kittleson with CBRE DETAILS: Burlington will open its third Dallas store at High Point Crossing near Northwest Highway and Abrams Road, after Houston-based Ainbinder Co. completes development on the 170,000-square-foot center.

HOME ZONE FURNITURE

5

4

FLIX BREWHOUSE

LOCATION: Northeast corner of U.S. Highway 287 and East Broad Street in Mansfield SIZE: 35,000 square feet

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TENANT REPS: Chris Corbin with Venture Commercial Real Estate LEASING AGENT: Andrew Lehner with CBRE

DETAILS: The Round Rockbased dine-in cinema will open its second DFW location at The Shops at Broad in Mansfield in summer 2019.

LA FITNESS

LOCATION: Northwest corner of U.S. 380 and Gee Road in Prosper SIZE: 34,000 square feet LEASING AGENT: Amy Pjetrovic with Venture Commercial DETAILS: The Californiabased health club leased the anchor space, joining tenants such as Altitude Trampoline Park and Jamba Juice.

WINTER 2017

IMAGES VIA XCELIGENT OR COURTESY OF THE COMPANIES.

LOCATION: 7520-7656 NE Loop 820 in North Richland Hills SIZE: 36,296 square feet LEASING AGENT: Jordan Cluff with Woodcrest Capital DETAILS: The Texasbased furniture store has opened its 10th Dallas-Fort Worth store as the anchor in North Richland Hills’ 189,000-square-foot North Hills Village.


OFFICE/FLEX • RETAIL • RESIDENTIAL

AUSTIN RANCH

THE CASCADES

GRANDSCAPE

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


R ROUNDTABLE

THE NEW BROKERAGE As tenants demand amenities, wellness options, and greenspace, brokers have pushed beyond the business of real estate transactions. Here’s a look inside the minds of six seasoned office brokers on what tenants really want. BY JULIA BUNCH | PHOTOGR APHY BY MICHAEL SAMPLES

Baby boomers, millennials, and every other generation occupy office space unlike any other time in history. Bocce ball, walking trails, craft coffee, and good highway access are just some of the things office employees are now demanding, and North Texas is delivering in spades. As sticker shock from rising office rents continues and talent wars rage on, where businesses choose to locate has become, if possible, even more critical. To sort through what tenants really want—and how real estate brokers can help them get it—we turned to the experts: Susan Arledge, T.D. Briggs, Bill Brokaw, Kim Butler, Marijke Lantz, and Paul Wittorf. 3 6 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

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R ROUNDTABLE

How does the Dallas-Fort Worth office market look at the end of 2017?

T.D. BRIGGS: Demand has surprised us — absorption is substantially higher than I would have thought. And, there’s a chance the fourth quarter could get close to 6 million square feet of absorption, which would surprise everyone. The first and fourth quarters were very dynamic. The second and third were fairly slow. PAUL WITTORF: There was a little apprehension in the first and second quarters. There was a lot of uncertainty driven by the election. From a macro-level, there might be a little bit of gridlock. We’ve provided some certainty, and I think we’re seeing a “thawing out” of some of it. That could lead to a strong close in the fourth quarter—and certainly a good palate for 2018. MARIJKE LANTZ: We see a lot of activity. From our perspective, there’s also a trend for new product. The [build-to-suit] product is slower, but tenants are looking to go to the higher-end properties in all submarkets. They’re willing to pay up for the higher-end properties: They can be more efficient in those products. BILL BROKAW: I’d echo that. Whether it’s an existing Class A asset or a new development, the push is to be in those environments—not only from an amenities standpoint, but from a recruiting standpoint. [Tenants] typically bring some connection to nature and other amenities that millennials and baby boomers are looking for. That works for all ages. SUSAN ARLEDGE: A tenant doesn’t have the luxury of knowing when they want to choose their lease. It expires when it expires. Market conditions are sometimes great and sometimes not — and they’re not so great from the tenant cost outlook. We see companies stepping back, rethinking, and echoing what Marijke said, “How do we have a more efficient space because rents are so high? We can’t continue to pay those kind of rents, but we need to attract and retain people.” KIM BUTLER: It’s so apparent when you tour companies, whether they are coming from out of town or are in town: The HR person used to be one of the people on the tour, and perhaps they would consult in the decision. Now they are driving the decision. The questions that are being asked are from HR, and it’s all related to, “How are we going to create an environment for their company to attract and retain the very, very best?”

WINTER 2017

ARLEDGE: I saw a recent poll that 63 percent of CPOs are concerned about their talent pool. They’re not concerned about real estate cost.

Are you seeing the bulk of demand in Class A space, or have you also seen it elsewhere?

BROKAW: I think it’s market by market. A telling fact is there have been nine new buildings in the cycle that are Class A, AA product in the Uptown/Arts District area. And, [as of early November] all of that new product sitting at 75 percent leased and the rest of the Uptown market is 92 percent occupied. It shows excitement over the new product and the higher-end Class A product.

Do we know how deep our Class AA market is yet, or is that still forthcoming?

BROKAW: It shows that the absorption is happening in those buildings. LANTZ: You see that in the Legacy West and Cypress Waters markets. You are see that happening in different suburban/urban markets. You can still have the amenity-rich areas that aren’t the Uptown-type buildings. WITTORF: Regardless of where we’re at in the cycle, in the last five or seven years, the product that’s been developed here has been labor-centric. It will continue to drive users to look to that kind of product. That will still drive the needle over to newer developments. Take Houston, for example. The difference between that new

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R ROUNDTABLE construction versus an ’80s Class AA building is everything. BRIGGS: It’s forcing all owners and developers to be ridiculously competitive. You either have to have the quality of the asset or the walkability of the neighborhood. We all missed it five years ago—we should have invested in fitness centers and coffee beans and all these things that are becoming amenities. And, if it’s a B building, it’s getting redone to try to compete with the new product. It’s forcing developers to be creative and distinctive. Point is, how do you give tenants a home-court advantage—whether it’s recruiting and retaining or new business? BUTLER: I’m seeing companies that—for the first time—are concerned with retaining. With as many new jobs as we’re creating, particularly in the Legacy West market, companies are looking at making sure their employees don’t get poached. ARLEDGE: One thing we can’t really account for is the corporate relocations that are hovering out there looking at our market. And I’m not talking about the Amazons. I’m talking about the more day-to-day transactions. Meg Whitman, [CEO] at Hewlett-Packard Enterprise, recently made the comment that they cannot hire in Silicon Valley any longer. They said they hire, they train, they spend

BRYAN MARSH

upwards of $100,000 a year for employee training, and [the employee] will move for $10,000 a year. Then all that cost is lost. She said they are looking at Dallas, Houston, Chicago, and Boston as markets. As long as Dallas continues to create a pool of talent, we’ll continue to win a lot of that relocation business.

How is the robust Class A pipeline impacting older suburban buildings?

LANTZ: As T.D. said, you can be a stand-alone building and put in a fitness center and a coffee shop, but you’re still a stand-alone building surrounded by a parking lot. It doesn’t create the environment that everybody wants. They [want to] take their laptops and sit outside in a park and play pingpong and have a real environment. You can have the boxes checked, but I think it’s hard to renovate a building and have the amenities—and create the environment. WITTORF: A secondary challenge to that is efficiency. Tenants are using space

SUSAN ARLEDGE

T.D. BRIGGS

BILL BROKAW

Susan Arledge is President of Site Selection Services at ESRP. ESRP is a national commercial real estate firm focused on providing solutions to tenants and occupiers of space. Prior to joining ESRP, Arledge was Managing Director at Cresa Dallas, and before that, she was President and CEO of Arledge Partners Real Estate Group for more than 20 years.

T.D. Briggs is Partner at Peloton Commercial Real Estate. Briggs and Joel Pustmueller founded Peloton in 2002 after several years at Trammell Crow Co. Briggs has more than 30 years of experience and has helped grow Peloton’s portfolio to include more than 24 million square feet of leased and managed properties.

Bill Brokaw is Senior Vice President at Hillwood Urban and has put together more than 6 million square feet of office deals in his career. Brokaw oversees leasing and marketing for Hillwood’s office division. Prior to joining Hillwood Urban in 2015, Brokaw was Executive Director at Cushman & Wakefield and Vice President at Cousins Properties.

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WINTER 2017


R ROUNDTABLE What are the biggest challenges you’re facing in North Texas right now?

differently today. An ’80s-vintage building and a new construction building sometimes have a 10- or 20-percent difference in efficiency. That reduces that cost differential, and that’s hard to compete with. BROKAW: A lot of renovations of existing buildings, whether they are B or A-minus, are doing it just to stay relevant and not necessarily increasing the rate or gaining a ton of occupancy. People understand that quality, location, and access to amenities are key components. Whether these decision makers are HR or corporate real estate people, they want to make the safe decision. The more items you can address to make it a safe decision for the client, the better off you are. WITTORF: Not to mention, access and ability to get in and out easily is something that we’ve always wanted. That’s still fundamentally important, especially since getting around town is increasingly harder.

ARLEDGE: CFO “sticker shock” would be on the tenant-rep side. A lot of companies coming out of leases on the north part of the Tollway, for example, are saying, “I can’t pay $40 a square foot for space.” There will be some flight back to A-minus or to new buildings in the LBJ area. Some just aren’t able to pay the kinds of rents that are out there, but leases are still expiring, and there’s a lot of comfort you have to provide. LANTZ: For us on the development side, tenants are still asking for a lot of parking. And they are not using it. Often, the tenant [says], “We need six parking spaces per 1,000 square feet of space.” When you look at their existing space — or you go in after they are in the new space — they aren’t using it. We’re all reading about what’s happening with [rideshare and driverless] cars. How much land and parking do you distribute to these new developments? BUTLER: We’re doing a couple of things. Interestingly, [HALL Group Chairman and Founder] Craig Hall has been a big proponent of autonomous vehicles. We’re doing a pilot at HALL Park in March with a company by the name of Main Mobility in conjunction with the city of Frisco. For five days, they’re going to have

KIM BUTLER

MARIJKE LANTZ

PAUL WITTORF

Kim Butler leads leasing at Dallasbased HALL Group, including the firm’s nearly 3 million square feet of office space at HALL Park and KPMG Plaza at HALL Arts. Prior to joining HALL Group, Butler spent more than 25 years leasing and marketing office properties at Transwestern.

Marijke Lantz is Senior Vice President of investments and build-to-suits, and leads investment property acquisitions for Billingsley Co. Lantz has more than 25 years of experience, including holding previous leadership roles at Valencia Capital Management and Cushman & Wakefield.

Paul Wittorf is Executive Managing Director at Transwestern and market leader for the firm’s North Texas operations. Wittorf has more than 17 years of experience representing tenants and landlords throughout Texas, and has become one of the firm’s top producers since joining in 2000.

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R ROUNDTABLE autonomous vehicles running a route through our park over to The Star. It’s so fun to talk to the folks. Not only is it a pilot, but we think that we could be fully operational by July with a program that is an autonomous shuttle. The technology is here. The other thing related to parking that we’re doing—and we are planning our next new building at HALL Park—is putting parking on a pedestal at two per 1,000 and the building on top. Then we’re going to build a pedestal on the piece of land next to it that’s also two per 1,000 to hedge our bets for the future. Initially, they will park in the pedestal below the building and the adjacent pedestal, but we’re designing that [second] pedestal so we can add a building on top. Ultimately you might have two buildings that only need two per 1,000 parking in the future. ARLEDGE: With our clients, we’re looking to see if they can manage part of that by [giving a] badge to everybody. They check the badges and see how many times [employees] are coming into the office and using the parking. We can manage from that and know if they really have parking needs of seven per 1,000. But, they have to go through that process and create some formulas to see how many people are really in the office on a monthly or annual basis. BROKAW: Construction pricing is hitting hard right now. I think that will come down a bit next year because a lot of contractors and subs are looking out a few months and saying, “Hey, we’re busy.” But there are a lot of projects that are going to be completing over the next six months. As that happens, people [will be] wanting jobs again. That may stabilize pricing a little, but it’s a big challenge we’re dealing with right now. WITTORF: You have natural inhibitors to growth, which is a quality labor force. You’ve got a tight labor market here. As the city grows, it becomes increasingly harder to get around by transit. Driverless cars—I agree—are very real. It’s coming a lot quicker than most people expect. By 2021, it will make more sense to get rid of your car and have a driverless vehicle. Like a lot of Sun Belt markets, that will be a big boom for us in Dallas. If you do have driverless cars, all of the sudden, mass transit is a little bit less important.

For you developers, have you seen a lot of your labor going to the markets that have been hit by hurricanes?

LANTZ: We haven’t seen it on our side. BUTLER: There’s plenty of work here for them.

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MARIJKE LANTZ

WITTORF: I’ve only heard speculation from [general contractors] concerned about losing some of that labor force to Houston but nothing [as of now]. BRIGGS: I think we’ve lost more labor to Toyota than anything else. ARLEDGE: That’s probably true.

Do you consider coworking to be a disruptor or a complement to brokerage? How do you frame coworking in reference to what a broker does?

BUTLER: Marijke and I were in a meeting yesterday, and it was brought up that coworking disrupting the office business is the equivalent of e-commerce disrupting the industrial business. It’s that prevalent. Disruption is not always a negative thing. It can raise the bar and make everybody operate more efficiently. LANTZ: Tenants want options and flexibility. Coworking just gives them another option and more flexibility. I don’t think it’s going to go away. We have Industrious at [One Arts Plaza]. I think everybody is going to have some sort of coworking within their space. Some tenants are mandating it—under a certain square footage they have to go into coworking. I think it’s a good thing. WITTORF: You are seeing more and more corporate users [use coworking] as a percentage of their space needs. What’s interesting is that tenants can brand their space inside of those coworking spaces. I always saw that as a little bit of a challenge for a Deloitte, [for example], to go into a coworking space, but now they are mixed in. They can accomplish their branding inside that space. Flexibility, moving forward, is a huge premium. I think coworking is somewhat of a competitor to traditional landlords. You see big groups, like Hines and Brookfield, start to think, “How do we implement a strategy to take advantage of this section of the market?” That’s smart. BRIGGS: I don’t know what the percentage is, but [coworking] is minuscule compared to the 365-million-square-foot office market. It’s here to stay for sure. Most of the smaller deals done this year in Preston Center came out of the executive suite shared space. So, I view it as a feeder. The danger for the landlords is, what’s the longevity of it? Who’s going to win? Who’s going to lose? And, I hate the idea of what it looks like on the reuse after you built this thing. What do you do on the exit? BROKAW: From the landlord’s perspective, it brings high energy to an existing asset, and it provides an incubator for folks that do want to grow into regular office space, but still have their membership in a coworking environment.

WINTER 2017


BILL BROKAW

R ROUNDTABLE

  LIKE T.D. SAID, THE SPINE IS THE TOLLWAY, BUT NOW YOU HAVE DFW [AIRPORT] THAT IS THE MAJOR ENGINE. WE SEE THINGS MOVING WEST. —BILL BROKAW

BUTLER: We think it’s complementary — it’s a feeder. With the high cost of TI [tenant improvements], landlords require longer-term leases. Tenants want flexibility. Coworking may be an interim step. And, change is happening so rapidly that companies determine they have space needs, and they need it right now. They don’t have the luxury of planning six months in advance. It’s a great opportunity to house people while they are looking and building out longer-term space. It’s a great temporary solution. BROKAW: Yeah, and I think the strong survive. The bigger ones with the most equity, the ones that are out there growing, expanding, and providing optionality for their clients — those are the ones that are going to survive. I don’t think they all will. BUTLER: There’s going to be a lot of consolidation very quickly. WITTORF: Those that have better name recognition or are better capitalized are going to get better locations. They’ll thrive off those locations.

Which submarkets around North Texas have new or continued strong demand?

WITTORF: You have about 50 percent of your new construction in two concentrated areas: Legacy and Uptown. That tells you a lot of what you need to know. We’ll see leases roll in less-amenitized areas where they gravitate to one of those two kinds of barbells, but pricing is going to have an impact. Some tenants will say, “We’re not going to pay that, but there are some other options where we can move.” Las Colinas is going to have renewed enthusiasm with Music Factory and Water Street. Central [Expressway] feels like it’s poised to continue to do well. BUTLER: With 30 percent rent growth in North Central in the last three years, it’s a great option for tenants. BRIGGS: It’s already rolled almost beyond Central. Park Central right now is getting a lift. Now LBJ [Freeway] is fixed. I call it the pixie dust. The Tollway is the backbone of Dallas. It always has been, always will be. I remember staring at a map with [Billingsley Co. Partner] Lucy Billingsley 20 years ago. She asked, “What do you think about that?” She pointed to what would become Cypress Waters. How many acres is it? LANTZ: 1,000. BRIGGS: There are 1,000 acres of some contaminated lake of nothing around it, and I go, “Lucy, I don’t see it.” And, she goes, “No, you’ve got to build a place

WINTER 2017

where people want to come.” And, she did it. Consequently, she created a market. Earlier, Marijke didn’t say Las Colinas. She said, “the Cypress Waters market.” That’s exactly right. You created a place where people want to go. Point is, a lot of us are trying to take what’s been done in the ’80s and fix it, and the fix is hard. But, when you have a blank sheet of paper you have got to think big. HALL Park is another beautiful example. I love that dynamic, and it was in the middle of nowhere 20 years ago. BUTLER: Look at CityLine and what’s happened there. BRIGGS: Exactly. ARLEDGE: Do you remember the billboards Craig Hall put up when the park was first being built? It said 20 minutes north of the Tollway. That’s a laugh now: The Tollway dead-ended before it got to HALL Park.

Where is the next Cypress Waters, the next HALL Park?

BROKAW: Like T.D. said, the spine is the Tollway, but now you have DFW [Airport] that is the major engine. We see things moving west. We have ownership in Williams Square in Las Colinas, and we tout 4 million people within 35 minutes. You are dead center of both airports, and you’ve got DART rail access. And, then we’ve got Circle T Ranch in North Fort Worth that is available for 10 million square feet of corporate development. LANTZ: The Cotton Belt Line [is] coming which will make a big difference. At Cypress Waters, we delivered a building in May, and we were 90 percent leased before we had the first tenant

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R ROUNDTABLE

KIM BUTLER

  WE THINK [COWORKING] IS COMPLEMENTARY — IT’S A FEEDER. WITH THE HIGH COST OF TI, LANDLORDS REQUIRE LONGERTERM LEASES. TENANTS WANT FLEXIBILITY. SO COWORKING MAY BE AN INTERIM STEP. — KIM BUTLER move in. We have one under construction. We are breaking new ground on another. ARLEDGE: Just proves to me you should locate next to The Dump [furniture outlet store]. LANTZ: It’s what we started out talking about— people want to be able to work when they want to work. It’s not 8 to 5. They want to have craft beer after work. Then they’ll go back in at night and have a conference call because they’re doing some international business. They don’t want to feel like they’re alone in a dark office building by themselves. BUTLER: It’s not just the millennials. BROKAW: I think you need to look out for Las Colinas because Water Street and the Music Factory are enormous. We’ve been waiting for that for five to eight years, and it’s going to be a huge impact. It’s called the urban center for a reason. We still see occupancy rates either being stable or increasing. ARLEDGE: You had the first autonomous driving system out in the urban center.

Is it only important for some tenants to locate in amenity-rich areas or is it across the board?

ARLEDGE: They all want it. They just all can’t afford it. WITTORF: There are different profiles for different user groups. With price being equal, of course, we all want the walkability and the environment. But, there are some employers that the vast majority of their workforce has kids, and they’re trying to get home to soccer practice or whatever. They’re busy, and it’s getting harder to get around town. So, their No. 1 goal

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is to have something they can get in and out of quickly. But, the overwhelming trend is highly amenitized, green space, walkability. ARLEDGE: We did an analysis for someone who drives 30 miles each way to work, which is not so far anymore. That cost—not wear and tear on your car—just gasoline and tolls, is between $600 and $800 a month. And now [with] more toll roads proposed, it could cost someone $2,500 a year just to use [them]. BROKAW: Labor and turnover costs are the largest expenses companies have, and rent is second. But if you can somehow relieve some of your labor and turnover costs by paying a little more in rent and being in an environment people want to be in—that makes a big difference. BUTLER: As an owner, how do we help companies create that environment? We’re evaluating how to create a place where people can get outdoors, get food easily, work out, get farmers market vegetables on the way home. It’s not just millennials who want that. How do you make people’s lives easier? We feel an obligation to the companies who office with us to do that. ARLEDGE: Gartner Research just did an analysis that showed it takes 32 business days to fill the average position, and that critical roles with defined skills are taking as long as five months. You layer that on top of the cost just to replace and retrain— the opportunity cost is huge. LANTZ: It used to be, as a landlord, you do a five-year [or] 10-year lease, and it was a transaction. Now, it’s event planning ... we’re doing yoga in the park. It’s not a transactional relationship anymore. It’s an ongoing daily relationship and partnership with the tenants. The way real estate used to be done on a transactional basis has changed. WITTORF: You’re exactly right. If you think about a 5-star hotel, they’ve got to win business on a daily basis. You are seeing owners be real smart and paying attention to that ongoing relationship and providing that hospitality level of service. BUTLER: We have a Director of Park Experience, and her role is to go out and talk to the tenants—we survey them annually—and find out what they need.

What’s on a tenant’s wish list?

BUTLER: There’s a renewed interest in green space. A third of all we have in [HALL Park] is green space. It’s amazing to see the difference in the number of people who take advantage of walking. They’re walking in 105 degrees. LANTZ: That’s because your phone tells you to stand up, and your watch tells you when you haven’t done your walking. BUTLER: There are so many studies documented by universities on how productivity

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R ROUNDTABLE

PAUL WITTORF

YOU HAVE ABOUT 50 PERCENT OF YOUR NEW CONSTRUCTION IN TWO CONCENTRATED AREAS: LEGACY AND UPTOWN. THAT TELLS YOU A LOT OF WHAT YOU NEED TO KNOW. —PAUL WITTORF

increases if people can look out the window and see green space — but even more so if they can get out in green space. The University of Michigan took a group of students, gave them a test, and took half of the group out to walk in an arboretum, and took the other half to walk down city streets. They brought them in and took the same test. The people who had been in the park scored 20 percent higher than they had previously. The people who were on the city street scored the same. WITTORF: You’ve seen the amenities in buildings go from check-the-box amenities, to creating the experience. In the WeWork context, WeWork tries to create a community. What they are trying to do is bring the experience outside the walls of the office space so that you do have a little bit more of that communal experience. ARLEDGE: We had a corporate relocation client that was looking in the Legacy area, and a Tollway/LBJ property owner offered to pick up the CEO every day and drive him to and from the office. That was their concession for the location because they had to compete with Plano/Legacy. Now, from a workplace standpoint, how is the CEO going to explain that to his people? It’s a flawed strategy. BROKAW: Green space is a huge, huge component. We’re incorporating it in all of our new developments by adding parks and the ability to get to trails. Several of our customers run a lot of employee surveys, and one of the components they find is the importance of exterior light in their space

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and a connection to nature. We’re seeing how these things help people to be more productive. That’s what employers want. BRIGGS: Everyone feels like they’ve got to have it to keep up. Why is the Tollway the best market? You have three hubs—Uptown, Preston Center, Legacy—with restaurants, fitness options, banks, hotels, and pharmacies. You see the rates thriving there for a reason. They are the best markets in town.

We’ve seen a shift toward focusing on employee and building wellness. Why is that?

BUTLER: People want it. Everybody is focused on their health. LANTZ: All employers are looking at their insurance costs and wellness. So if you can, as an employer, provide a fitness center, it helps them on their insurance costs. And, it helps get their employees healthy, and then the employees are happier. It helps them on multiple bottom lines. WITTORF: And [makes them] more productive. LANTZ: It’s not just the old fitness centers. Remember the old ones in the basement or dark spaces that you can’t lease? BRIGGS: It would be a converted room with three added pieces of fabric. LANTZ: These [new fitness centers] are like spa fitness centers that are high-end and in a prominent, leasable space. WITTORF: And people use them. They work. They make sense. BRIGGS: To me, it’s not live, work, play. I think it’s work, eat. That’s what people want. BUTLER: Work, eat, exercise. ARLEDGE: Work, eat, drink coffee. BRIGGS: Work, consume ... how about that? A lot of offices want food options. BROKAW: When people say amenities—I think you’re right. Where can I eat? Where can I drink, or where can I get coffee? BUTLER: That’s number one, clearly.

How do you satisfy the demands of all generations in the workplace?

LANTZ: We all want the same things as everyone else. BUTLER: I don’t think they are that different, frankly. WITTORF: I think that’s changing a little bit. I agree with you, Kim. They are merging a bit, and the millennial thinking is winning out. You still have examples of where it’s in stark contrast, but some of the changes driven by the millennial mindset are being embraced by baby boomers.

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R ROUNDTABLE

T.D. BRIGGS

  WE’RE A COMPLETELY DIFFERENT CITY THAN WE WERE FIVE YEARS AGO. WE WERE A 12-HOUR CITY. WE’RE NOT QUITE A 24-HOUR CITY ... WE’RE AN 18-HOUR CITY. THEREFORE THE RULES HAVE ALL CHANGED. —T.D. BRIGGS BUTLER: With technology, it allows you to work anywhere, anytime. We take advantage of that just as much as millennials do. When is the last time you put your head down at 8 and worked until 6 without going and doing something? BROKAW: Baby boomers are embracing change a whole lot more than maybe their parents did. But, the old-school mentality of “this is the way we used to do it” — that’s not the norm anymore. People like to be modern. Baby boomers are a good example of that. ARLEDGE: The biggest issue is not philosophical. The differences between the two—it’s just a numbers game. In five to six years, 75 million baby boomers will leave the workplace, and there’s not enough of the millennial generation coming in to backfill that. We don’t have enough people. In eight or 10 years, that creates a zero-sum game. If you want to hire someone, you’re going to have to steal them from your competition, and that’s the environment everyone wants to get away from. They can’t afford to be trapped in a loser location, or in a market where if they’ve got to hire somebody, they have to steal them. So the focus is creating a workplace millennials want to work in. I think it’s less about the philosophies. BROKAW: Gen Xers are going to be wanted next.

How is technology impacting the brokerage side of real estate?

ARLEDGE: It used to be about the cost of real estate. Now it’s about the science of where and why. Someone will say to me not, “What does it cost to be here?” But, “What are the tangible differences between this location and that location? Show me why.” That means drive times,

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commute analysis, all of these factors. There’s a lot of data and analytics that now goes into the justification of why. WITTORF: You have better intelligence on the labor, and it enables you to validate and make more convicted decisions — and sometimes pay out more for your real estate because you can really understand that the cost is worth it. BUTLER: As an owner, technology has provided tools that help us show employers how we create that environment. Virtual reality is a perfect example. When a building isn’t finished, how do you show them what their environment is going to be like? They can see it in the glasses. You can only tell people so much. People are mostly visual. Technology has improved the tools that we have to show people what we can do for them. BRIGGS: Technology is helping us on the markets side like crazy. LANTZ: I agree. BRIGGS: It’s absolute magic. The real estate industry as a whole is in the Stone Age when it comes to the CRM — the data base management — and integrating everything we want technology to do from a CRM side to our reporting. Every company spent a lot of money, and we still don’t have the right solutions. We have components that we’re trying to link together. And, if I hear “open API” one more time, I think my head’s going to fall off. We’re all struggling to get the perfect back-end piece to help our companies run efficiently. WITTORF: I couldn’t agree more.

What’s your market outlook as things stand right now?

ARLEDGE: I think Dallas is going to continue to be on the top of corporate relocation lists for the next few years until we get to that zero-sum point, but right now the workforce is there. We have the fourth-largest job growth of any city in the U.S. WITTORF: Second, only behind New York. ARLEDGE: If we ride that wave for the next two or three years, it’s going to be up to our regional area to try to find ways to solidify that growth, retain more of our students that are graduating from here, and be able to prove that. BROKAW: I agree. The outlook is still strong. The fundamentals are there. Construction has been managed by lenders. Equity still wants to invest in DFW. Banks want to loan here, and people want to move here. Those are all the ingredients to be a good real estate market. BUTLER: I don’t think I’ve ever seen supply and demand balanced so well in my career. That makes for a good future.

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R ROUNDTABLE

SUSAN ARLEDGE

  IT USED TO BE ABOUT THE COST OF REAL ESTATE. NOW IT’S ABOUT THE SCIENCE OF WHERE AND WHY ... WHAT ARE THE TANGIBLE DIFFERENCES BETWEEN THIS LOCATION AND THAT LOCATION? SHOW ME WHY. — SUSAN ARLEDGE WITTORF: What sticks out to me in Dallas is the diversification of the demand base. If you couple that with a few other things—being in a business-friendly state, the relative low cost of doing business, and living in Dallas and in Texas—I think Dallas is poised to do extremely well in the future. It would take some macro event to throw it off. LANTZ: I think it’s going to continue to be strong. We’re still seeing a lot of activity from companies looking to relocate here. We’re looking forward to a good ’18 and ’19.

BRIGGS: We are right where we should be, I think. We’re a completely different city than we were five years ago. We were a 12-hour city. We’re not quite a 24-hour city ... we’re an 18hour city. Therefore the rules have all changed. And who knows where we are, but let’s keep running.

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F FEATURE

TEXAS LIVE! IS EXPECTED TO BRING AN ESTIMATED 1,025 PERMANENT JOBS TO ARLINGTON, AS WELL AS 3 MILLION NEW VISITORS TO THE CITY. IT WILL HAVE A NEW $150 MILLION LIVE! BY LOEWS HOTEL, THE FIRST OF ITS KIND IN THE NATION.

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F FEATURE

SWINGING FOR T HE

FENCES

Nestled neatly between Dallas and Fort Worth, the city of Arlington has spent more than 60 years building itself into a powerhouse of sports, entertainment, and manufacturing in North Texas. Now, it’s building a reputation for corporate relocation and logistics, too.

BY NICHOL AS SAKEL ARIS

A home run. A touchdown. You can pick your sports metaphor when it comes to the city of Arlington becoming a dynamic part of the North Texas economy. The city’s hard work and foresight has made it much more than just the midway point between Dallas and Fort Worth.

DR HORTON’S ARLINGTON HEADQUARTERS

PHOTO: CITY OF ARLINGTON

SIX FLAGS OVER TEXAS

PHOTO: SIX FLAGS

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PHOTO: DANIEL T. POPE

The impending construction of the new $1.1 billion Globe Life Field and the adjacent $250 million Texas Live! entertainment district show that the city is committed to staking its claim as a major player in DFW. The city’s rise from being a mere road stop on what once was called the DallasFort Worth Turnpike began in the middle of the last century, led by visionaries who saw its potential. Today, Arlington sits off Interstate 30, the Tom Landry Highway, and it is arguably the entertainment and sports capital of North Texas — home to AT&T Stadium where the Dallas Cowboys play, the Texas Rangers’ Globe Life Park, and Six Flags Over Texas. The city is a center for education, research, manufacturing, and logistics. Already a major tourism destination, Arlington rapidly is becoming a jobs magnet, too. Texas Live! alone is expected to bring an estimated 1,025 permanent jobs to Arlington. It will have a new $150 million Live! by Loews hotel, the first of its kind in the nation. Developers hope Texas Live!, which could attract more than 3 million new visitors to the city, will be open in time for the 2018 baseball season. Not far from the Texas Live! entertainment district, the return of homebuilding giant D.R. Horton’s headquarters campus from Fort Worth to Arlington is another win the city can claim. Horton’s relocation in June shows the city’s draw for corporate residents. The headquarters building sits on the north side of I-30 at 1341 Horton Circle, not far from Globe Life Park and AT&T Stadium. It’s the second time the nation’s largest homebuilder has moved from Fort Worth to Arlington, the first time in 1993. Horton moved back to the Sundance Square area of Fort Worth in 2004, where it remained for 13 years. The four-story headquarters building provides great exposure for the company

AT&T STADIUM

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F FEATURE

SIX FLAGS OVER TEXAS PHOTO: SIX FLAGS

PHOTO: CITY OF ARLINGTON

— its brand faces the access road east of Collins Street in full view of the thousands of people who go to events at Globe Life Park and AT&T Stadium. The stadium, entertainment district, and D.R. Horton are the latest in Arlington’s drive for success. Here’s how it all started. In the years after World TOM VANDERGRIFF War II, Arlington found itself on a similar trajectory as suburbs across the U.S. were transforming into bedroom communities. Most of the jobs and big attractions were migrating to the big cities. In 1951, Tom Vandergriff took Arlington in a different direction — it was something of an interception, much like the Dallas Cowboys defensive backs who someday would play in Arlington. The then-25-year-old Vandergriff ran car dealerships with his father, and he knew General Motors wanted to build a plant in North Texas. Even as president of the Arlington Chamber of Commerce, Tom Vandergriff couldn’t get GM’s CEO in Michigan to return his phone calls. The rejection drove Vandergriff to seek

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political office in Arlington. Undeterred by rumors that Fort Worth was destined to get the plant, Vandergriff ran for mayor, won the race, and began pursuing GM in earnest. “Within four months of being mayor, he had outmaneuvered Dallas and Fort Worth to get the GM plant,” says Tom’s son, Victor Vandergriff. “He just had a vision that he wanted to be a part of. He tried to create a city and an atmosphere to where Arlington would grow the fastest.” Today, the 4.3-million-square-foot GM plant employs more than 4,100 people, pumping $1 million a day into the local economy. GM is spending $1.4 billion to expand the plant to meet future demand for SUVs. And that’s just the beginning of how Arlington developed its own identity and, as former Mayor Richard Greene quips, became “nobody’s damn suburb.” “There’s just a certain civic pride and work ethic that, to me, has always existed to take the things that are really hard to do and go get them done,” says Trey Yelverton, Arlington city manager, who has been with the city since 1993.

SPORTS AND ENTERTAINMENT

Arlington’s love affair with entertainment started as a fling. Businessman Angus G. Wynne wanted to expand the already successful Great Southwest Business Park, but couldn’t find an industrial user for a large patch of land. So, he started an amusement park on the site called Six Flags Over Texas as a placeholder for future industrial development. “The weird dynamics of all that, is that the economics of industrial development never could overtake it,” Yelverton says. “The tourism side had its own economic base that was stronger than that.” And that’s just the beginning. In the late 1950s, Vandergriff began his crusade to bring America’s Pastime to Arlington. A passionate baseball fan, Vandergriff saw the sport expanding to new cities across the country and tried repeatedly to put ownership groups together to form a new team.

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THE CURRENT GLOBE LIFE PARK, ORGINALLY KNOWN AS THE BALLPARK IN ARLINGTON, OPENED IN 1994.

F FEATURE

PHOTO: CITY OF FORT WORTH

“The owners were always a combination of someone from Dallas and someone from Fort Worth,” Victor Vandergriff says. “He was the leader of it all.” Vandergriff tried six or seven times throughout the 1960s, but Arlington continued to lose to other cities because of the condition of Turnpike Stadium. Finally, his luck changed in the 1970s. “He was tipped off that the Washington Senators, early in 1971, might be amenable to relocating but they would need help,” Victor Vandergriff says. “So he went after them.” After 13 years and a mountain of rejections, Vandergriff ’s persistence paid off as the Senators moved to Turnpike Stadium in 1972 and became the Texas Rangers. That put Arlington on the national sports map and would be a harbinger of things to come. By the 1990s, the Rangers needed a new stadium, putting then-mayor Greene on the hot seat to find funding for a stadium before another city lured them away. “Mayor Greene faced a very real threat of the team moving somewhere — at one time to Tampa Bay or Miami,” Victor Vandergriff says. There was even talk of Dallas stealing the Rangers. The Arlington City Council made a fateful decision in the early 1990s to propose raising the sales tax a half-cent to pay for construction of a new stadium. The election in January 1991 was contentious, but it did pass with a nearly two-thirds majority vote. “We realized that the first one was going to be toughest. And it was. But we won,” says Robert Cluck, who was Arlington’s mayor from 2003 to 2015. The Rangers Ballpark in Arlington, now known as Globe Life Park, hosted its first game in April 1994. That half-cent sales tax paid down the debt for the ballpark, allowing the city to pursue another big fish — the Dallas Cowboys. Cluck was Arlington’s mayor when he found out Cowboys owner Jerry Jones wanted out of Texas Stadium in Irving. Cluck arranged a meeting in Valley Ranch to talk about the possibility of moving America’s Team to Arlington.

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“He and I had a relationship — we were friends,” Cluck says. “The first thing I said to Jerry was, ‘You can do no better than Arlington. I can almost assure you that the Council and the citizens of Arlington would be very receptive and help you economically.”’ They shook hands within the hour, and the deal was done. They just had to get voter approval to continue the half-cent sales tax that had paid for the Rangers stadium. “It scared me to death. We’re talking about millions of dollars,” Cluck says. “He turned out to be the most honest person I ever met. Whatever he said, he did. No matter what the expense.” Voters approved Cowboys Stadium, now known as AT&T Stadium, and construction started in 2006. The stadium made its debut in the 2009 NFL season and hosted the 2011 Super Bowl. In 2016, rumors swirled that the city of Dallas could offer the Rangers a new stadium with a retractable roof near downtown when the lease ended on Globe Life Park in 2024. Arlington took preemptive action by again asking voters to renew the half-cent sales tax to fund a new Rangers ballpark to be called Globe Life Field. It will have a retractable roof and is scheduled to open for the 2020 baseball season.

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F FEATURE

ARLINGTON’S GENERAL MOTORS ASSEMBLY PLANT PHOTO: MICHAEL SAMPLES

Construction started earlier this year just south of the existing ballpark. Next door, Texas Live! with restaurants, a hotel, and outdoor entertainment also is under construction. The first phase of Texas Live! is scheduled to be completed by late summer 2018. “[The new air-conditioned stadium] will help with attendance during the summer,” Cluck says. “That’s going to be something to see. It’s going to have not only a ballpark, [but also] entertainment venues, and a hotel — and all that’s going to be great for the city.”

GM PLANT DRIVES ARLINGTON’S ECONOMY

Tom Vandergriff first got into politics to lure General Motors to his town in the 1950s, but it was up to future mayors to keep the GM Assembly Plant from leaving. Greene was mayor when he got a phone call from a GM executive. “It was basically the chairman of General Motors telling me they were likely going to close the plant,” Greene says. “Losing the plant not only would have been a blow to our local economy, but it would have been the loss of the whole achievement that got Arlington started.” Greene mobilized a congressional delegation that included the governor to fight hard to keep the plant open. GM not only kept the plant open in the 1990s but retooled

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it to manufacture all their full-size SUVs from GMC, Chevrolet, and Cadillac. During Cluck’s term as mayor, GM officials expressed interest in expanding the plant, but they needed incentives from the city. GM didn’t threaten to close or relocate the plant, Cluck says. “They never said that to me, but the inference was there,” Cluck says. “I didn’t want to be the mayor who was there when we lost GM.” The effort to keep GM extended into current Mayor Jeff Williams’ term and ended with GM promising a $1.4 billion expansion. For its part, Arlington committed $28.7 million in tax breaks as long as GM maintained staffing levels. Today, the plant produces 1,200 vehicles per day with three shifts, and the expanded body shops, paint shop and general assembly areas are scheduled for completion in late 2018. “It’s one of the few plants that never shuts down the assembly line,” Greene says. Arlington has become a hotspot for logistics, too, with UPS building a $200 million package operations facility on Bardin Road near the junction of Texas 360 and Interstate 20. The facility is scheduled to open in late 2018 with 1,400 full-time equivalent jobs and the latest technology for processing packages and mapping routes. FedEx is following close behind with plans to lease a 365,000-square-foot distribution center on Bardin Road and I-20. Williams Sonoma and Office Depot also have distribution hubs in that area. And, Summit Racing recently opened a retail/warehouse facility near the junction of I-20 and Texas 360. “The industrial demand in that corridor has been strong,” Yelverton says. “The future of that was laid out in a land-use plan in the late 1990s.”

UTA COULD CHALLENGE ITS BIG BROTHER IN AUSTIN

Like the city itself, The University of Texas at Arlington has shed many stereotypes to become a national powerhouse. For years, it was known as a commuter school with no football program. The basketball team played on a theater stage. Now, UTA has more than 41,715 students enrolled on campus and thousands

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Texas Live! Rendering

HIGHLIGHTS FROM 2017 Arlington ranked No. 1 in the Dallas Business Journal’s Economic Development Deals list, with $1.55 billion in deals done. Summit Racing Equipment opened a $82 million warehouse facility, retail superstore and customer support center. The City of Arlington, The Texas Rangers and the Cordish Companies celebrated the groundbreaking of a new ballpark, Globe Life Field, and Texas Live!, a mixed-use entertainment complex featuring dining, entertainment, hotel and convention facility. Office of Economic Development arlingtontx.gov/business | ecodev@arlingtontx.gov | 817.459.6155


BUSINESS WORKS BETTER HERE Explore for facts supporting why Dallas Fort Worth’s business climate is more than favorable, the workforce is highly skilled, and highly educated, and the location is about as close to perfect as it comes. Each page contains a snapshot of the DFW region, our people, companies, and industries. Use this fact-rich tool to promote the region, attract businesses to your community, and expand existing ones.

THE DALLAS-FORT WORTH REGIONAL ECONOMIC DEVELOPMENT GUIDE. AVAILABLE AT DALLASCHAMBER.ORG/DFWFACTS/


F FEATURE REDEVELOPMENT BREATHES NEW LIFE INTO REAL ESTATE THAT’S RUN ITS COURSE

UNIVERSITY OF TEXAS AT ARLINGTON PHOTO: UTA

more taking online classes. The rapid development around downtown Arlington means the university now has more than 10,000 students living on campus or nearby. “We have drawn the attention of many private student apartment developers from all over the country who are developing sites adjacent to the campus,” says John Hall, UTA’s vice president for administration and campus operations. Yelverton called UTA the largest economic generator in the city with an annual impact of $1.3 billion. “Clearly, it’s a state institution so they don’t pay any taxes,” he says. “You need that brainpower developing. What they put into the economy is significant, and we have to work hard to keep it strong.” The campus will add another 2,500 beds over the next two years. Tower cranes loom all over campus with more than 400,000 square feet currently under construction, in addition to a 1,500-space parking garage. UTA is also the seventh-fastest growing public research university in the country over the last decade, according to the Chronicle of Higher Education. The College of Nursing Health and Innovation has seen double-digit growth in enrollment and graduation with nearly 25,000 students attending classes in person and online, making it one of the top five in the country. Anne Bavier, dean of the UTA College of Nursing, says it’s become a leading destination for health care education and research. The addition of College Park Center not only gave men and women’s basketball and volleyball teams a place to play, but attracted the WNBA’s Dallas Wings to locate in Arlington and move away from Tulsa, Oklahoma. “College Park Center has had a tremendous impact on the spirit of being a Maverick,” Hall says. “The feeling among students about the center is almost palpable. It allows for better recruiting.” In addition, discussions are ongoing for the Mavericks to add women’s soccer in the next few years, Hall confirmed. Restoring the football program, though, is still years away, if ever. “If sufficient funding were raised, the university would consider bringing back football,” he continues. College Park Center hosts concerts, high school graduations and special events. Downtown Arlington has become a popular destination for UTA students with new restaurants and attractions within walking distance. More road, park and trail improvements are planned. “The upcoming improvements to Abram Street along with UTA’s continued growth will incentivize further the redevelopment of downtown Arlington,” Hall says. Arlington’s leaders continue to steer the city toward a booming future that’s rooted in the visionary minds of the past.

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The retail landscape is changing quickly, and Arlington hasn’t been immune to that. Two former shopping malls, Six Flags Mall and Forum 303 Mall, closed years ago as shoppers migrated to more modern shopping centers. “Both those malls, while they were dark for a little bit of time, we were able to partner with the market to repurpose the land for a higher and better use and preserve the tax base,” Yelverton says. The old Six Flags Mall has been demolished at the northeast corner of State Highway 360 and East Division Street to make way for the future Arlington Automotive Logistics Center. The 1.2-million-square-foot facility will supply parts to the GM Assembly Plant across the highway. Just south on S.H. 360, the Forum 303 Mall was closed and razed more than a decade ago, paving the way for several industrial developments on the site. That leaves The Parks Mall in south Arlington as the lone traditional, indoor mall in the city. Currently, there are about 500 such malls still open around the country, but not all of them will survive, Yelverton said. So far, the feedback from GGP, the company that manages the mall, has been positive, Yelverton says. H&M recently opened in the store. “That’s the kind of thing that they’re going to have to continue to do to make sure the shopping experience is great — make sure they have cutting edge retailers in there that people want to see,” Yelverton says. “We’re going to hope that the mall holds its own and continues to do well because it’s a huge sales tax generator for Arlington.” Other major repurposing included the former National Semiconductor facility on I-20 near Cooper Street. “Places like Intel and Texas Instruments survived,” Yelverton says. “They [National Semiconductor] weren’t the player that survived everything.” The microchip manufacturing plant couldn’t be converted into anything else so it was torn down, Yelverton says, adding that a developer is constructing a spec industrial building on the site. The former High Point Church at the northwest corner of S.H. 360 and I-20 took over the former Johnson & Johnson Medical complex but was forced out by foreclosure in 2014. Now, a developer proposes building up to eight industrial buildings on the 119-acre site.

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s r a d e C

A ANATOMY OF A DEAL

The

SOUTH SIDE ON LAMAR

THE LORENZO HOTEL

A ANATOMY OF A DEAL

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THE AMBASSADOR


A ANATOMY OF A DEAL

U R BAN L I FE TA K ES R OOT With a history dating back to the 19th century, The Cedars section south of Downtown Dallas was the home of stately mansions and cedar tree-lined streets. It has been reshaped into a place where loft living mixes with the Dallas Police headquarters and an influx of new businesses. BY KERRY CURRY

1500 BLOCK, GRIFFIN STREET

XXXXXX

PHOTOS: MICHAEL SAMPLES / AMBASSADOR RENDERING

WINTER 2017

Bennett Miller is gone now but the Dallas urban pioneer — who bristled at being called a real estate developer — was the first to reimagine buildings in The Cedars when most people were avoiding this neighborhood situated on the southern fringe of downtown Dallas. It was the early 1980s, and Miller bought several old buildings that he would convert into edgy urban lofts, starting a movement that would eventually gain steam and return Dallas’ oldest neighborhood to some of the vibrancy it enjoyed in its heyday. Today, the speed of development in The Cedars continues to increase as new development begets more. In the 19th century, The Cedars was an enclave of stately Victorian homes and cottages for entrepreneurs, wealthy business leaders, and the city’s Jewish population, but as the years passed, it entered a period of decline. By the 1980s, The Cedars had become a blighted, gritty part of town that had transitioned from residential to heavy commercial and industrial uses. People avoided it. Increased homelessness and crime plagued the area, but Miller saw its potential. He envisioned new uses for old buildings and saw the opportunity they presented to affordably house people near downtown. One of his most iconic developments was the transformation of the old American Beauty Mill flour plant into apartments offering dramatic views of the Dallas skyline.

A giant bowler hat sculpture sits atop a 20-foot-tall steel "coat rack" overlooking Interstate 30 in The Cedars. The two-ton derby has become an iconic feature of the neighborhood. D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 5 7


A ANATOMY OF A DEAL THE LORENZO HOTEL

PHOTO: MICHAEL SAMPLES

EARLY ADOPTERS AND ADVOCATES Phillip Robinson, president of The Cedars Neighborhood Association (CNA), moved into one of Miller’s renovated loft-style apartment buildings in the 1990s and soon became passionate about The Cedars and its future. “I was fortunate enough to be renting one of his loft apartments in Jack Ruby’s old building,” Robinson says. “In 2005, [Miller] built the first new construction this neighborhood had seen in 60 years — a row of townhouses, and I bought the first one.” Miller believed ownership was an important element for neighborhood stability and revitalization. Property owners, not renters, have a vested stake in the future health of a neighborhood. As residential ownership began to increase in The Cedars, new owners began to advocate for their part of town — an area they felt had been neglected by the city. Neighborhood advocates such as Robinson arose to demand treatment on par with

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other areas concerning issues such as garbage pickup, access to recycling bins, code enforcement, and crime control. “Once these homes were built, we realized, we can make this neighborhood better,” Robinson says. “When I bought my house, this was not a great neighborhood.” The CNA opens its membership up to businesses and property owners, not just residents, and seeks a partnership relationship with developers, Robinson says. “We wouldn’t want someone coming in and telling us what to do. We make a considerable effort not to tell people what to do,” he says. The group does, however, ask questions and makes its feelings known. It supported a special revitalization loan for the Lorenzo Hotel, for example, to the point of going to see elected officials to voice support. After Miller made initial inroads, more developers began eyeing the downtown-fringe neighborhood for its old buildings and inexpensive vacant land. Jack Matthews’ sweeping renovation of the massive Sears Roebuck & Co. Catalogue Merchandise Center, a portion of which dates back to 1913, brought media coverage and more interest to the area. The 1.2 million-square-foot property, which spans a full city block, opened as South Side on Lamar in 2000 with 457 residential lofts, 25 artists’ lofts, and 120,000 square feet of office commercial and retail space. “It was 17 acres close to downtown and was for sale at the time,” Matthews, the president of Matthews Southwest, recalls, explaining what initially attracted him to the property. “That’s what got us originally looking at The Cedars. There are a bunch of things going on now, but if we look back 15 years ago — did we think it was going to develop faster? Yes, we probably did, but it just took the city a long time to accept that

WINTER 2017


A ANATOMY OF A DEAL

part of the city,” he says. “It takes a long time for perceptions to disappear, and the perception of ‘unsafe’ has now been replaced with the perception of ‘incredibly safe’ — a full change. The safest place is a busy place, and it just gets busier and busier, and at night that is now one of the busiest spots in town,” Matthews says.

FROM STANLEY MARCUS TO JACK RUBY, THE CEDARS HAS A HISTORY

PRIME LOCATION AND AVAILABLE PROPERT Y One of the neighborhood’s biggest drawing cards is its location on the southern edge of downtown Dallas. Because it doesn’t have any large corporate offices within its boundaries, the neighborhood has a much different feel from the central business district. The artists and entrepreneurs working in The Cedars, along with a growing residential base, give the neighborhood its own vibe. Since developing South Side on Lamar, Matthews has also developed Alamo Drafthouse, Southside Flats, Gilley’s, The Cedars Social, the NYLO Hotel, The Beat Condominiums, and several restaurants, businesses, and taverns. He estimates that he’s invested about $200 million in the neighborhood. He also owns the largest available contiguous tract of vacant land in the area — 60 acres — just west of the Alamo Drafthouse, an area he refers to as “The Rivers.” Development is on hold, awaiting a high-speed bullet train to come to the area. Matthews, a director of the bullet-train entity Texas Central Partners, is one of 17 Texas family shareholders in the private high-speed rail project, which was endorsed by The Real Estate Council in January. He is also the developer of the transit-oriented development that is planned around three terminals: One in Houston, one outside of College Station, and one in Dallas. The Dallas site, just west of the Alamo Drafthouse, is expected to have a major impact on the growth of downtown

BY KERRY CURRY

THE ROOFTOP POOL AT THE NYLO HOTEL IN THE CEDARS

PHOTO: VISIT DALLAS

WINTER 2017

The Cedars, named for the trees that once populated this area just south of downtown, is often called the city’s first neighborhood. The neighborhood, which dates to the 1870s, began as a district of moderately priced homes, later becoming a favored location for Victorian mansions and cottages housing the city’s business entrepreneurs, Jewish population, and some of its wealthiest citizens. The Cedars’ famous residents included Stanley Marcus, the founder of downtown luxury retailer Neiman Marcus and nightclub operator Jack Ruby, who shot and killed JFK assassin Lee Harvey Oswald. Ruby had several properties in The Cedars including a striptease bar, a theater, and a brothel. The former brothel — in a building that is now more than 100 years old — later was renovated into apartments and today houses condos. The neighborhood’s wealthy eventually left for enclaves to the north and east, and The Cedars evolved into a heavy commercial and industrialized neighborhood. Most of its 19th-century homes didn’t survive the evolution and are gone now. Many of its old industrial buildings still stand, however, including the original Ford dealership building and the Southwestern Bell switching station. “People moved out and you had that flight to the suburbs as things became industrial,” says Phillip Robinson, president of the Cedars Neighborhood Association. “It stayed that way right through the 1990s and into today there are still vestiges of the industrial era.”

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A ANATOMY OF A DEAL Dallas and The Cedars. Preliminary plans call for office, residential, hotel, and retail space around the terminals.

RISING PRICES Prices, while still affordable, are on the rise, and some of the area’s highly fragmented property owners seem more hesitant to sell as they wait to see if values continue to rise, says Scott Lake, urban land director at Davidson Bogel. He has worked extensively in The Cedars and understands its complexities. Land sites, he says, are selling between the low $20s to the mid $30s per square foot with more than 100 acres of vacant, developable land in The Cedars. The area also has its fair share of dilapidated buildings for those who can imagine future uses. However, assigning a value to existing buildings in the neighborhood is a challenge as the quality varies widely, and the value is relative to the user, Scott Lake says.

T HE CEDA RS WA S A N AT UR A L F I T F OR US BEC A USE W E S AW T HE NEIGHBORHOOD A S A U T HE N T IC A L LY DI V E RSE . T HERE A RE A L O T OF A R T IS T S , S OCIOEC ONOMIC GROUP S , A ND E T HNIC GROUP S T H AT A RE A L RE A D Y EMBEDDED IN T HE NEIGHBORHOOD A ND M A K E T HE CULT URE OF T HE CEDA RS RICH . GRE G L E F T W ICH C O - F OUNDE R F OUR C ORNE RS BRE W E R Y

INTEREST ON THE RISE While Miller and Matthews were among the first to see potential in The Cedars, interest has been rising among a variety of local and international players, including an Australian developer, Australian Development Consortium, which envisions a six-story mixeduse development at 1601 Akard St. “We’ve seen a lot of interest from developers,” Scott Lake says. “It’s my opinion that The Cedars has tremendous upside.” Zad Roumaya, an entrepreneur, artist, and the owner of Buzz Works, has been in The Cedars for 18 years, bootstrapping incremental redevelopment projects while the area was still considered a fringe location. His first new construction project, The Buzz Lofts, was completed in 2007, and more recently he completed Digit 1919, a 102-unit apartment complex. He owns a total of seven properties in The Cedars. “At any one time I’ve had seven to 10 personal guarantees in this district; that’s how committed I have been,” Roumaya says. EcoView Homes, which has mostly developed in East Dallas until now, is one of the more recent entrants. It was attracted by price and downtown proximity, says Mike Smith, owner and manager of the

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PHOTO: MICHAEL SAMPLES

eco-friendly builder, who says rising prices in East Dallas have made it challenging to keep price points under $400,000. EcoView bought two acres along Ervay about a year ago and is planning a condo development. Jim Lake, known for his adaptive reuse of old urban buildings, says he first looked at the old 1915-era Ambassador Hotel — located on the eastern edge of The Cedars — more than three years ago. It was a reluctant tour, done at the insistence of his son, Scott Lake, who saw potential in the old structure — the city’s first suburban luxury hotel. About a year after seeing the historic hotel, Jim Lake purchased it and is making plans to redevelop it into apartments with a restaurant and retail on the first floor, a speakeasy and co-working space in the basement and a rooftop bar. Construction is scheduled to begin in the first quarter of 2018. He’s also in talks with the city of Dallas about connecting the Ambassador property to the city’s adjacent park, Dallas Heritage Village, which includes historical structures from Dallas County.

LOCATION. LOCATION. LOCATION. Jim Lake describes The Cedars’ best attribute this way: “Location. Location. Location. Literally right there on the southern tip of the Dallas downtown core.” Just across from the Ambassador, Four Corners Brewery opened a retail taproom in mid-October. The microbrewery began brewing at the site in August after moving from smaller rented space in West Dallas that it had outgrown. “We were looking for a place that we could purchase and own,” says co-founder Greg Leftwich. “We wanted to be as close to center of Dallas as possible from

WINTER 2017


A ANATOMY OF A DEAL

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a cultural perspective and for tourism,” he says. “The Cedars was a natural fit for us because we saw the neighborhood as authentically diverse. There are a lot of artists, socioeconomic groups, and ethnic groups that are already embedded in the neighborhood and make the culture of The Cedars rich.” “The good news about The Cedars is that there are a lot of existing structures that are ready to be used or repurposed,” Leftwich says. “I think the neighborhood was excited that we didn’t come in and just tear the property down and build something new.” One of the two buildings on the site — the tap room — was built around 1915 and served as the horse stables and carriage house for the Ambassador Hotel, situated across the street.

'IT'S NOT COOKIE-CUTTER STUFF' Funky favorite Lee Harvey’s, owned by photographer Seth Smith, has achieved iconic status as a dive bar in a former pier-and-beam house on Gould Street. It was voted "Best Dive Bar" by the Dallas Observer in 2016. Homegrown businesses such as the coffee roasting studio and “listening studio” Full City Rooster contribute to the neighborhood’s distinctive flavor, as does Baby Back Shak, which has showcased Memphis-style barbecue for more than 21 years. The MAC Gallery, a nonprofit organization that advocates for creative freedom, moved into The Cedars in 2015 from McKinney Avenue. One of the most exciting new developments in The Cedars is the Lorenzo, a hotel that is Larry Hamilton’s first project in the district. He also hopes to “juice up the

WINTER 2017

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THE BEAT LOFTS

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SOUTHSIDE FLATS

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entrance” to The Cedars with a 42-foot-high umbrella sculpture. Hamilton, founder and CEO of Hamilton Properties Corp., said the umbrella was inspired by another artistic vanguard for the neighborhood, the giant bowler hat sculpture by artist Keith Turman that sits atop a custom 20-foot-tall steel column overlooking Interstate 30. “To be perfectly honest, its proximity to the convention center was more alluring than it being in The Cedars,” he says. Hamilton discovered that some hotel brands viewed The Cedars negatively and declined to be involved in the project. “We saw it positively, as an area that was coming of age — the next area of expansion.” Jack Matthews says he understands why developers have fallen in love with the reinvigorated neighborhood, and he continues to invest there. “Even though prices have gone up, The Cedars is still the best buy in the city,” he says. “It’s an easy place to fall in love with. It’s not cookie-cutter stuff. It has its own character, which is unique and real. It attracts people who like something different.”

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A ANATOMY OF A DEAL

FIRS T L OOK : T HE A MBASS A DOR HO T EL REDE V EL OPMEN T The 112-year-old, six-story Ambassador Hotel in The Cedars neighborhood is being adapted into micro-multifamily units. Owners and developers Jim and Amanda Lake are planning for the rehabilitation and adaptive reuse of the historic hotel with amenities on the ground floor and lower level including a speakeasy and a coworking space. Merriman Anderson/Architects will design the project to qualify for State of Texas and Federal Historic Tax Credits. The hotel, originally called the Majestic Hotel, once was considered one of Dallas’ most luxurious residential properties. Here's a peek at how the Ambassador will look when completed.

Built in 1905, The Ambassador Hotel will find new life after its adapted as micro mutifamily living.

The renovation and redesigned plans will have about 23 units on each floor from levels two to five and will result in roughly 103 total units.

A ground-level swimming pool, retail space on the first floor, and tenant amenities including a lounge are among the planned features for the Ambassador.

MERRIMAN ANDERSON/ARCHITECTS

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T TOOLBOX

GARLAND / ROWLETT PHOTOS: CITY OF GARLAND, CITY OF ROWLETT

TOOLBOX:

LABOR MARKET SPOTLIGHT A talented and highly-skilled workforce is a driving force behind North Texas’ booming commercial and residential real estate markets. In this section of the Dallas-Fort Worth Real Estate Review, we profile specific areas that have grown in conjunction with the influx of professionals who continue to relocate to the Dallas region. We also profile worker commuting preferences and highlight the proximity of employees’ homes to their places of work.

PHOTOS: MERISSA DE FALCIS

MIDLOTHIAN / U.S. 67 CORRIDOR

01 WINTER 2017

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LABOR MARKET SPOTLIGHT: GARLAND/ROWLETT Garland/Rowlett’s workforce skews heavily toward the manufacturing, food production, and food distribution sectors. Kraft Foods’ facility and U.S. Food Service, both located along Forest Lane in Garland, are major employers. The area’s 86,000-person workforce also has strong involvement in industrial production, thanks to numerous employers like Atlas Copco (compressors, expanders and air treatment systems); SilverLine Window; Hatco (Resistol); Plasticpak; KARLEE (sheet metal fabrication), and Arrow Fabricated Tubing. As in most of North Texas at the turn of the 20th century, the Garland/Rowlett area workforce was heavily geared toward agricultural production. Cotton was king until industrial production took center stage in the 1930s with the arrival of Craddock Foods (which produced pickles) and the Byer-Rolnick Hat Corp. (precursor to Resistol Hats), according to the Garland Economic Development Partnership website. Roughly 64 percent of the workforce has at least a high school education; nearly half of all workers’ commutes are less than 10 miles in length. Most of the workers commute eastward to arrive at their jobs in the Garland/Rowlett area. Office and administrative support positions, retail positions, and food prep and serving are the top three occupations in the region, according to federal jobs data. Yet, late 19th century newspaper accounts hold that Garland’s core was nearly engulfed in a conflagration. “Passengers on the Missouri, Kansas and Texas train arriving last night said when they passed Garland, it looked as though the whole town had gone,” The Dallas Morning News reported on Dec. 1, 1899. “All they could see standing in the business portion of the place being one brick storehouse.” The Garland/Rowlett area rose from the ashes as a major first-ring suburb. And master plans of Garland and Rowlett envision their communities’ redevelopment being fueled by residents seeking the benefits of living near a major urban core.

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INDUSTRY SECTORS BY PERCENTAGE OF EMPLOYEES Educational Services Health Care & Social Assistance

Manufacturing

9.6%

10.1%

Other Services

(except Public Administration)

10.4%

9.1%

Construction

6.4% Accommodation & Food Services

10.4%

Wholesale Trade

6.1%

Retail Trade

14.5%

All Other Industries*

17.3%

Public Administration

6.1%

*All Other Industries: Finance & Insurance; Professional, Scientific & Tech Services; Real Estate, Rental & Leasing; Transportation & Warehousing; Arts, Entertainment & Recreation; Information; Administrative & Support & Waste Management & Remediation Services; Management of Companies & Enterprises; Agriculture, Forestry, Fishing & Hunting; Mining; Utilities; Unclassified Establishments. SOURCE: ESRI Total Residential Population forecasts for 2017.

DISTANCE AND DIRECTION OF WORKER COMMUTE N NW

W

8400 14000

NE

E

2800

SE

SW S DISTANCE TO JOB

% OF WORKERS

Less than 10 miles 10 to 24 miles 25 to 50 miles Greater than 50 miles

46% 30% 13% 11%

The U.S. Census Bureau pairs home/ work census blocks in order to describe geographic patterns related to the workforce. Mapping commuter flows, for example, can help employers determine where potential workers live, as well as how far they might be willing to travel for work. Radar images dynamically communicate several important aspects about worker commute patterns. The radar indicates primary and secondary cardinal directions from which a worker travels to a job, and the distance traveled as determined by the color of each pie piece. The size of each pie piece indicates the volume of workers who commute from that direction and distance as indicated by the dashed and numbered concentric circles. Source: U.S. Census Bureau, Longitudinal Employer-Household Dynamics (data based on 2015 employment estimates).

TOTAL JOBS: 86,867 WINTER 2017


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SAMPLE OF MAJOR EMPLOYERS IN GARLAND/ROWLETT 1 Baylor Scott & White Medical Center-Lake Pointe 2 Walmart Supercenter 3 D.R. Horton 4 Super Target 5 Tom Thumb 6 Senior Care CentersSenior Care at Lake Pointe 7 Berry Family Services Inc. 8 Senior Care CentersRowlett Health and Rehabilitation 9 DHI Mortgage 10 The Store Decor Co. 11 Chick-fil-A 12 H & S Manufacturing 13 Tri-Con Services, Inc. 14 Walmart Neighborhood Market 15 McDonald’s-3505 Lakeview Parkway 16 Met One Instruments, Inc. 17 Datatronic Control, Inc. 18 McDonald’s-8503 Lakeview Parkway 19 Sears Logistic Services 20 Kraft Foods 21 US Food Service 22 Atlas Copco 23 SilverLine Window 24 Hatco (Resistol)

22

26

7 2 11 17 10 15 13 16 12

30 27 20 24 21 28

23

25

19 31

4

9

3

32

25 L3 Communication 26 Arrow Fabricated Tubing 27 Valspar

WORKER CHARACTERISTICS AGE Age 29 or younger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.9% Age 30 to 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.5% Age 55 or older . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.6%

EARNINGS $1,250 per month or less . . . . . . . . . . . . . . . . . . 27.6% $1,251 to $3,333 per month . . . . . . . . . . . . . . . . . . . . 37.3% More than $3,333 per month . . . . . . . . . . . . . . . . . . . 35.0%

EDUCATIONAL ATTAINMENT Less than high school. . . . . . . . . . . . . . . . . . . . . . . . . . . 14.8% High school or equivalent, no college . . . . . . . . . . . 20.5% Some college or Associate degree . . . . . . . . . . . . . . 24.4% Bachelor’s degree or advanced degree . . . . . . . . . 17.4% Data not available (workers aged 29 or younger) . . . 22.9% WINTER 2017

5 8 6 18 14 1

29

28 KARLEE 29 General Dynamics OTS 30 Plastipak Packaging

31 Sherwin Williams 32 Daisy Brand

INDUSTRY SECTORS BY PERCENTAGE OF ALL BUSINESSES Construction

8.5%

Health Care & Social Assistance

8.3%

Professional, Scientific & Tech Services

Other Services

7.2%

(except Public Administration)

Accommodation & Food Services

16.0%

6.6%

Retail Trade

Finance & Insurance

5.3%

16.0% All Other Industries

23.8%

Real Estate, Rental & Leasing

5.2%

Unclassified Establishments

5.1%

All Other Industries: Manufacturing; Wholesale Trade; Public Administration; Administrative & Support & Waste Management & Remediation Services; Educational Services; Transportation & Warehousing; Information; Arts, Entertainment & Recreation; Agriculture, Forestry, Fishing & Hunting; Mining; Utilities; Management of Companies & Enterprises. Source: ESRI Total Residential Population forecasts for 2017.

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T TOOLBOX

LABOR MARKET SPOTLIGHT:

MIDLOTHIAN / U.S. 67 CORRIDOR The workforce of the U.S. 67/Interstate 35 corridor is heavily geared toward steel fabrication, cement production, and logistics. Manufacturing companies comprise the largest single source of jobs, at more than 16 percent of the corridor’s jobs. The second-largest jobs providers are in the educational services sector. One of the top employers in the corridor is the Gerdau Ameristeel steel fabrication facility in Midlothian, followed by a major Target distribution center. Other leading employers include Martin Marietta Materials and the LafargeHolcim construction materials manufacturing plant. Also in the corridor is the town of Alvarado, which is home to more than two dozen business and community organizations, including major employer Halliburton, Alvarado ISD, and Sabre Industries Inc. Major distribution centers also include Toys “R” Us, QuickTrip Corp., and the MidTexas International Center, a full-service auto distribution center. Roughly a third of all workers employed in the corridor travel less than 10 miles to their jobs; most commuters travel southbound to work. More than half of the corridor’s workers are between 30 and 54 years of age. Transportation has always been key to the region’s workforce. The earliest mass transit appeared in 1875 when the Chicago, Texas, and Mexican Central railroad urged settlers from surrounding areas to pressure their elected officials to grant a right-of-way for the rail line. That line ran from Dallas, through Ellis County, to Cleburne. Stops included Midlothian and Alvarado. “The Gulf, Colorado, and Santa Fe Railway, one of the strongest companies in the South, will … open up a country to Dallas which the latter cannot now reach, and will assist in handling a vast increase in merchandise, cotton, grain, etc., not now controlled by this city,” The Dallas Morning News wrote in 1885.

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INDUSTRY SECTORS BY PERCENTAGE OF EMPLOYEES Accommodation & Food Services

9.4% Retail Trade

Wholesale Trade

9.3%

13.3%

Educational Services

Other Services

(except Public Administration)

15.3%

7.7%

Health Care & Social Assistance

Manufacturing

16.4%

5.6%

All Other Industries*

17.7%

Construction

5.4%

*All Other Industries: Administrative & Support & Waste Management & Remediation Services; Transportation & Warehousing; Public Administration; Professional, Scientific & Tech Services; Finance & Insurance; Real Estate, Rental & Leasing; Utilities; Arts, Entertainment & Recreation; Information; Agriculture, Forestry, Fishing & Hunting; Mining; Management of Companies & Enterprises; Unclassified Establishments. SOURCE: ESRI Total Residential Population forecasts for 2017.

DISTANCE AND DIRECTION OF WORKER COMMUTE N NW

W

1500

NE

E

500

2500

SE

SW S DISTANCE TO JOB

% OF WORKERS

Less than 10 miles 10 to 24 miles 25 to 50 miles Greater than 50 miles

33.9% 35.5% 15.1% 15.5%

The U.S. Census Bureau pairs home/work census blocks in order to describe geographic patterns related to the workforce. Mapping commuter flows, for example, can help employers determine where potential workers live, as well as how far they might be willing to travel for work. Radar images dynamically communicate several important aspects about worker commute patterns. The radar indicates primary and secondary cardinal directions from which a worker travels to a job, and the distance traveled as determined by the color of each pie piece. The size of each pie piece indicates the volume of workers who commute from that direction and distance as indicated by the dashed and numbered concentric circles. Source: U.S. Census Bureau, Longitudinal Employer-Household Dynamics (data based on 2015 employment estimates).

TOTAL JOBS: 12,076 WINTER 2017


SAMPLE OF MAJOR EMPLOYERS IN THE MIDLOTHIAN / U.S. 67 CORRIDOR 1 2 3 4 5 6 7 8 9 10 11

Gerdau Halliburton Target Distribution Center SABRE Martin Marietta Materials Lafarge Holcim Toys"R"Us Ash Grove Cement Co. Superior Well Services Johnson County Pipe Co. Rich Mix Products

12 13 14 15 16 17 18 19 20 21

T TOOLBOX

American Flat Glass Ennis Inc. QuikTrip Corp. Dynegy Chemtrade MidTexas International Center Niagara LaSalle Corp. Qualico Steel Company Inc. Western Power Sport Buckley Oil Co.

8 6

16 1

17

18 5

13

19 21 7 3 20 14 15 12 11

4 10

2

WORKER CHARACTERISTICS AGE

INDUSTRY SECTORS BY PERCENTAGE OF ALL BUSINESSES Accommodation & Food Services

Age 29 or younger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.1% Age 30 to 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.9% Age 55 or older . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.0%

8.1% Construction

Professional, Scientific & Tech Services

EARNINGS

5.6%

$1,250 per month or less . . . . . . . . . . . . . . . . . . . . . 21.5% $1,251 to $3,333 per month . . . . . . . . . . . . . . . . . . 32.3% More than $3,333 per month . . . . . . . . . . . . . . . . . . 46.2%

Real Estate, Rental & Leasing

Retail Trade

5.2%

13.1%

Finance & Insurance

4.8%

Other Services

EDUCATIONAL ATTAINMENT Less than high school . . . . . . . . . . . . . . . . . . . . . . . . 12.5% High school or equivalent, no college . . . . . . . . . . 23.1%

Health Care & Social Assistance

6.2%

11.1%

(except Public Administration)

15.7%

Wholesale Trade All Other Industries*

21.4%

4.7%

Educational Services

4.0%

Some college or Associate degree . . . . . . . . . . . . . 24.5% Bachelor’s degree or advanced degree . . . . . . . . . 15.8% Data not available (workers aged 29 or younger) . . . . . 24.1 %

WINTER 2017

All Other Industries: Transportation & Warehousing; Unclassified Establishments; Administrative & Support D A L L AManufacturing; S - F O R T W O RPublic T H RAdministration; E A L E S TAT E Arts, R E V Entertainment IEW / 69 & Waste; Management & Remediation Services; & Recreation; Information; Utilities; Agriculture, Forestry, Fishing & Hunting; Mining; Management of Companies & Enterprises Source: ESRI Total Residential Population forecasts for 2017.

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 6 9


SPECIAL ADVERTISING SECTION

ECONOMIC DEVELOPMENT DIRECTORY Looking for a new place for your company to call home? Consider this the start to your search. Dallas-Fort Worth is a great place to do business, and its vibrant and thriving communities offer myriad resources to help companies grow. With its high quality of life, strong state and regional economies, low cost of living, skilled labor force, and lack of corporate and personal income taxes, companies in DFW are well positioned to flourish in a market that ranks among the top three U.S. metropolitan areas for business expansions, relocations, and employment growth. The hardest part of your relocation search might just be choosing between DFW’s various communities, as they each provide unique qualities and impressive benefits. This guide to area economic development agencies at some of the best and most rapidly growing cities can help you get started.

Addison is certainly the place where it all comes together, and the Economic Development & Tourism Department can help. The department’s professionals are charged with developing programs and supporting projects that will help promote economic prosperity in the community. For companies that are looking to relocate or expand, the department can provide information about Addison so that key decisionmakers can get a well-rounded understanding of all that the community has to offer. In addition to this, the department can help identify the right space for businesses, evaluate projects for public support, and open the doors for opportunities that abound in Addison and the North Texas region. With the support of our key stakeholders, the department can also get you connected in local business networks. ADDISON ECONOMIC DEVELOPMENT & TOURISM: 972.450.7076 14681 Midway Road Suite 200 Addison, TX 75001 addisoned.com

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Allen is a vibrant community of creative and talented people driven by achievement. Allen’s success is no accident—it is a testament to the community spirit of amazing people who want a better place for their families. A probusiness environment and a superior quality of life come together to empower Allen’s residents and businesses to achieve higher levels of success. Be Part of Something Bigger– Allen’s community spirit, highperforming schools, family friendly recreation, and vibrant economy continue to attract business and residents to our city. We can rattle off the standard stats and accolades, but we do things differently. And that is what makes us great–we are a vibrant and active community that connects our businesses, workers, and residents together to open the door for new opportunities. ALLEN ECONOMIC DEVELOPMENT CORPORATION 700 Central Expy S No. 210, Allen, Texas 75013 allenedc.com

Perfectly situated in the heart of North Texas and only 8 miles from Dallas Fort Worth International Airport, Arlington enjoys unparalleled access to the Metroplex. Its convenient location, combined with a strong economy, businessfriendly environment, and a skilled, diverse workforce continues to attract high-profile investments to the city. Arlington has an extensive track record of recruiting globally recognized corporations and developing largescale projects. Arlington is home to the only General Motors assembly plant that builds GM’s award-winning, full-size SUVs. It is also home to the University of Texas at Arlington, Texas Rangers’ Globe Life Park, Six Flags Over Texas, and the Dallas Cowboys’ $1.2 billion AT&T Stadium. Arlington is increasingly becoming known as a hub for engineering, advanced manufacturing, technology and medical sciences. This emerging innovation center is fueled in part by Arlington’s skilled, educated workforce.

Opportunities grow naturally in Cedar Hill, with its vibrant businesses, natural beauty, and a familyfriendly quality of life. With a location just 20 minutes from downtown Dallas, 30 minutes from Dallas Fort Worth International Airport, and 40 minutes from downtown Fort Worth, Cedar Hill offers outstanding amenities for business growth and relocation. ALLISON J.H. THOMPSON, Director CEDAR HILL ECONOMIC DEVELOPMENT 285 Uptown Blvd., Bldg. 100 Cedar Hill, TX 75104 972.291.5132 ext. 3 allisonthompson@ cedarhilltx.com cedarhilledc.com

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

WINTER 2017


SPECIAL ADVERTISING SECTION

The Colony is a growing city on the east side of Lewisville Lake, 25 minutes from downtown Dallas and 15 minutes from the Dallas Fort Worth International Airport located along the Sam Rayburn Tollway. Home to approximately 40,000 residents with businesses and retail locating here daily, The Colony continues to maintain its “hometown” feel. Affectionately known as “the city by the lake,” The Colony features 23 miles of shoreline along Lewisville Lake and two lake parks with boat ramps, camping, and many other amenities. Golf courses within the city all provide outstanding lake views with two courses being recognized among Golf Magazine’s top-five in Texas in 2010. The Colony is the proud home of the nation’s largest home furnishings store, the new Nebraska Furniture Mart of Texas, anchoring the 400-acre Grandscape development. When complete, Grandscape will feature unique entertainment, dining and retail venues. KERI SAMFORD, Economic Development Director THE COLONY ECONOMIC DEVELOPMENT CORPORATION 6800 Main St., The Colony, Texas 75056-1133 972.624.3127 edc@thecolonytx.org thecolonyedc.org

WINTER 2017

The City of Dallas Office of Economic Development is a fullservice shop that offers business development and area redevelopment programs, small business assistance, and innovative programs such as the City of Dallas Regional Center and New Market Tax Credits. We can successfully usher a project from beginning to end. The Office of Economic Development offers a range of programs and services to assist developers, investors, and businesses looking to expand or relocate, and small businesses looking to grow. With innovative programs, a supportive business climate and a city full of opportunities, we are ready to make your project a success. HAMMOND PEROT, Assistant Director, Business Services CITY OF DALLAS OFFICE OF ECONOMIC DEVELOPMENT 1500 Marilla St. Dallas, TX 75201 214.670.1685 joseph.perot@ dallascityhall.com dallas-ecodev.org

Located 15 minutes south of downtown Dallas. DeSoto’s competitive advantage lies in a great business park location, excellent transportation access, low-cost building-ready land with an existing space inventory, a skilled workforce and development plans that ensure our partners achieve maximum ROI. The Eagle Business and Industrial Park offers more than 400 acres of land with superb access to Interstate 35 E, Interstate 20, and Interstate 45 via Centre Park Boulevard and Polk Street. For executive air travel, Dallas Executive Airport is less than a 10-minute drive away. In addition, DeSoto offers a wide variety of competitive incentives to help your business grow and prosper. Whether your company needs a new commercial office building on I-35, a manufacturing facility on a hill overlooking downtown Dallas, a fulfillment warehouse, or a service-oriented facility, DeSoto is the place to build your business, raise your kids, enjoy life and retire in style. DESOTO ECONOMIC DEVELOPMENT CORPORATION 211 E. Pleasant Run Road DeSoto, Texas 75115 972.230.9611 dedc.org

The McKinney Economic Development Corp. (MEDC) was created in 1993 to support the development, expansion, and relocation of new and existing companies. The MEDC is an organization with a mission to work to create an environment in which communityoriented businesses can thrive. DARRELL AUTERSON, President and CEO MCKINNEY ECONOMIC DEVELOPMENT CORP. / CITY OF MCKINNEY 5900 S. Lake Forest Drive, Ste. 110 McKinney, Texas 75070 info@mckinneyedc.com 972.547.7651 mckinneyedc.com

Centrally located between DFW Airport and downtown Fort Worth in affluent Northeast Tarrant County, North Richland Hills (NRH) is the third largest city in Tarrant County behind Fort Worth and Arlington. Rapidly growing, NRH added over 500 new single family homes valued over $350,000 in the past three years within the highly-rated Birdville and Keller ISDs. Growth is expected around two transit oriented developments (TODs) along the Fort Worth Transportation Authority’s new commuter rail system TEXRail. Scheduled for 2018, TEXRail will run along the famous Cotton Belt line connecting Downtown Fort Worth to DFW Airport along two separate NRH rail stops. Late 2015 business additions include the expansion of Santander Consumer USA into 200,000 SF and 1,650 employees, the new addition of Southwest ADI, a distributor that purchased and converted a former Sealy bedding plant into their corporate headquarters, and the addition of Digital Alchemy, a technology company occupying 24,000 SF of office space. CRAIG HULSE, Director of Economic Development 7301 NE Loop 820, North Richland Hills, Texas 76180 chulse@nrhtx.com / 817-427-6090 www.nrhed.com

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


No matter who you are or where you’re from, when you Say Yes to Dallas, you’re Saying Yes to more than you might think. s ayye stodal l a s .com


C COMMUNITY

Ran Holman, Chairman Jim Knight, Vice Chairman

CHAMPION’S CIRCLE Bank of America Merrill Lynch/ Foundation Bank of Texas Compatriot Capital Granite Properties HFF JP Morgan NexBank

CHAIRMAN’S CIRCLE Balfour Beatty Construction Billingsley Company CBRE Crow Holdings Capital Partners, L.L.C. Deloitte EY Frost Bank 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/Foundation Chicago Title Company/Fidelity National Financial (FNF) Chief Partners LP Comerica Bank Corgan Associates, Inc Cushman & Wakefield of Texas, Inc. DPR Construction, Inc. Eastdil Secured GFF Goldman Sachs Haynes and Boone, LLP Holt Lunsford Commercial Jackson-Shaw Locke Lord LLP NorthMarq Capital Spirit Realty Capital Stream Realty Partners Texas Capital Bank Thackeray Partners Todd Interests Trammell Crow Company

BENEFACTOR’S CIRCLE Adolfson & Peterson Construction AECOM 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 Champion Advisory Partners Colliers International Communities Foundation of Texas Corinth Properties Cortland Partners Davidson & Bogel Real Estate Deutsche Bank 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 Mark Gibson Mill Creek Residential Trust LLC Mohr Partners MUFG Union Bank OMNIPLAN, Inc. ORIX Real Estate Americas PegasusAblon Properties Peloton Commercial Real Estate Perkins+Will PGIM Real Estate Finance PlainsCapital Bank

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. WINTER 2017

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 Fauxcades Gentzler Electrical Services Inc. Hilton Anatole Hotel Mckinney Office Supply Parmenter Realty Partners Premier West Builders TD Industries

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

D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 7 3


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

BDO USA LLP

CliftonLarsonAllen LLP

7-Eleven, Inc.

BE&K Building Group

ClubCorp USA, Inc.

Acadian Ambulance Service of Texas

Bell Nunnally & Martin LLP

Coca-Cola Refreshments

Accenture

Benchmark Title

Collective Residential

BG Staffing, Inc.

Acme Brick Company

Colliers International

Big 12 Conference

Active Network

Comerica Bank

Billingsley Company

Commemorative Air Force

FASTSIGNS - Northeast Dallas

Addison Law

BKD LLP

Commerce Bank

FASTSIGNS | West Mockingbird

Adept Talent

bkm Total Office of Texas

FedEx Office

AECOM

Commit! Partnership Consolidated Communications

Fidelity Investments

Aegis Therapies

Blue Cross and Blue Shield of Texas

Fluor Corporation Headquarters

Boeing

Copart

Aerotek

Corgan

Forest City Texas Inc

Akin Gump Strauss Hauer & Feld LLP

BOKA Powell

Corrigan Investments, Inc.

Foster Blair Consulting, LLC

Alaska Airlines

CP&Y, Inc.

Fox Sports Southwest

Bottle Rocket

AlixPartners LLP

Crowe Horwath LLP

Frito-Lay North America

Bracewell LLP

Altair Global

Brandt Companies

Dallas Baptist University

Frost Bank

Amegy Bank of Texas

Brasfield & Gorrie

Dallas County Community College District

Furniture Marketing Group

American Airlines, Inc.

Brierley+Partners

American Heart Association, Dallas Division

Briggs Freeman Sotheby’s International Realty

Dallas Cowboys Football Club Ltd.

Gaedeke Group

Andrews Distributing Company of North Texas

Brinker International, Inc.

Dallas Morning News

Business Jet Center

Andrews Kurth LLP

Dallas Stars Hockey Club

Business Wise, Inc.

Armanino LLP

Dallas Wings

C.C. Young

Armstrong Relocation

Dallas Women’s Foundation

Capital One Bank

At Home

Dal-Tile Corporation

AT&T

Carrington, Coleman, Sloman & Blumenthal, L.L.P.

DataMob

Atmos Energy Corporation

CBRE Group, Inc.

Austin Industries

CENTURY 21 Judge Fite Company

Boston Consulting Group

Dallas Mavericks

Dean Foods Company

Estrada Hinojosa & Company, Inc. Etihad Airways Ewing Automotive Group Exxon Mobil Corporation Fairmont Dallas

G6 Hospitality LLC Gardere Wynne Sewell LLP Gensler George W Bush Foundation Goldman Sachs & Co, LLC Granite Properties Grant Thornton LLP Greenberg Traurig, LLP Gruber Johansen Hail Shank

Deloitte LLP

Gulfstream Aerospace Corporation

DFW International Airport

Gupta & Associates Inc.

Champion Partners

DHD Films

Halff Associates, Inc.

Charter Communications

DLR Group Staff elbach

Hall Group

Chase

Door Dr Pepper Snapple Group

Haynes and Boone

Chickasaw Nation

Balfour Beatty

Children’s Health System of Texas

DSI Telecom

Bank of America

Choctaw Nation of Oklahoma

Bank of Texas

CHRISTUS Health

Ebby Halliday Real Estate, Inc.

Barnes & Thornburg

CHRO Partners

Edelman Public Relations Worldwide

Baylor Scott & White Health

Citi

EMJ Corporation

BB&T

City Electric Supply

Ernst & Young

Hillwood Development Company, LLC

BBVA Compass

Civitas Capital Group

ESRP

Hilti North America

AustinCSI Axxess Bain & Company, Inc. Baker & McKenzie, LLP Baker Botts L.L.P.

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Dunavant Distribution Group

Hazel’s Hot Shot, Inc. H-E-B/Central Market Heritage Health Solutions Inc. Hill & Wilkinson General Contractors Hill + Knowlton Strategies

WINTER 2017


Hilton Anatole

Company

Regions Bank

The Kroger Co.

Hilton Garden Inn Downtown Dallas

Mary Kay Inc.

Reliant, an NRG Company

The Options Clearing Corporation

McCarthy Building Companies, Inc.

Rent-A-Center

Thompson & Knight LLP

McKinsey & Company, Inc.

RMG Networks

Thomson Reuters

Rosewood Property Co.

Tom Thumb Food & Pharmacy

RSM US LLP

Topgolf

Santander Consumer USA Inc

Torchmark Corporation

Sbase Technologies

Town of Addison Toyota Motor North America

Hines Interests Limited Partnership HKS Inc. HMS HNTB Corporation

McLarty Capital Partners Methodist Health System

Hoar Program Management, LLC

MHBT, a Marsh & McLennan Agency LLC company

HollyFrontier Corporation

Microsoft Corporation

Holmes Murphy & Associates

SCHMIDT & STACY Consulting Engineers, Inc.

Miller, Egan, Molter & Nelson LLP

HOLT CAT

Schneider Electric

Milliman

Hotels.com

Sewell Automotive Companies

MINT Dentistry

HPI Real Estate Services & Investments

Sheraton Dallas

Mission Foods USA

Showcall

Moss Adams LLP

Sidley Austin LLP

Munck Wilson Mandala, LLP

Slalom Consulting

MYCON General Contractors

Social Revolt Agency

UMB Bank N. A.

Hunt Consolidated, Inc.

NCH Corporation

UnitedHealthcare

IBC Bank

NEC Corporation of America

Southern Glazer’s Wine and Spirits

Universal Mind

IBM Corporation

Neiman Marcus

Southern Methodist University

University of Dallas

Imaginuity Interactive

New York Life Regional Headquarters

Southwest Office Systems, Inc.

University of North Texas at Dallas

Newmark Grubb Knight Frank

Spirit Realty Capital

Northwood University

Squire Patton Boggs (US) LLP

University of North Texas System

Norton Rose Fulbright

Staff One, Inc.

Novataris Inc.

Stantec

Invitation Homes

NTT DATA Inc.

Jackson Walker LLP

Omni Dallas Hotel

State Farm Insurance Companies

Jacobs Engineering Group Inc.

Omnitracs, LLC

Jamba Juice

On the Road Lending

JE Dunn Construction

ONCOR

JLL

Origin Bank

Jones Day

ORIX USA Corporation

SunTrust Robinson Humphrey Inc

KDC Real Estate Development Investments

Oscar Health Insurance

Susan G Komen

Vistra Energy

Pacific Builders Inc.

Keller Logistics Group

Target Headquarters

Walgreens Company

Parker University

TDIndustries

Weaver

Parkland Health and Hospital System

TDJ Enterprises

Weber Shandwick Southwest

Teladoc

Weil, Gotshal & Manges LLP

Tenet Healthcare Corporation

Weitzman

Texans Can Academies

Wells Fargo

Texas A&M University

WFAA-TV

Texas Capital Bank

Whitebox Real Estate

Texas Central Partners Texas Health Resources

Whiting-Turner Contracting Company

Texas Instruments Incorporated

Whitley Penn

Prime Rail Interests LLC

Texas Scottish Rite Hospital for Children

Wilson, Elser, Moskowitz, Edelman & Dicker LLP

Primoris Services Corporation

Texas Star Alliance

Winstead PC

PSA Constructors, Inc.

Texas Woman’s University

Women’s Foodservice Forum

PwC

The Beck Group

WorldLink

Real Eyez Beauty Group

The Freeman Company

WorldVentures Holdings

Huawei Technologies HUB International Insurance Services

Infomart Data Centers Innovate + Educate Interceramic International Leadership of Texas

Ketchum Public Relations Kilpatrick Townsend & Stockton LLP Kimley-Horn and Associates KPMG LLP LegacyTexas Bank Life School Linebarger Goggan Blair & Sampson, LLP Littler Mendelson, P.C. Live Nation Locke Lord LLP Lockheed Martin Lockwood, Andrews & Newnam, Inc. Manpower, a ManpowerGroup WINTER 2017

Paul Quinn College PDS Tech, Inc. Penske Motor Group Perkins+Will Pierpont Communication PlainsCapital Bank PNC Premier Truck Group

Trane Commercial Systems Transwestern Trinity Groves, LLC Trinity Industries, Inc. Turner Construction Company Uber Technologies Inc.

University of Texas at Arlington University of Texas at Dallas UT Southwestern Medical Center

Stewart Title Stifel

Veritex Community Bank

Strasburger & Price, LLP

Verizon Wireless Regional Corporate Office

Summit

Village Green Holdings, LLC Vinson & Elkins LLP

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


L LEADERSHIP

“EVERYBODY’S GOT A STORY TO TELL”

CALENDAR OF EVENTS

Javier Montemayor of Children’s Health found a calling with a Leadership Dallas class project on homeless and poverty issues BY NICHOLAS SAKELARIS

Javier Montemayor felt a little lost and out of place the first time he visited the Austin Street Center in Dallas. The homeless gathered outside immediately picked up on his confusion. One woman asked if he was lost — he explained he was trying to find the main entrance so he could meet with the officials to talk about building a garden. The woman directed him, and commented that the homeless aren’t bad people and would watch his car while he was in there. It was a humbling and eye-opening moment for Montemayor, the chief compliance officer and vice president of regulatory affairs for Children’s Health. Through the Dallas Regional Chamber’s Leadership Dallas class project, Montemayor has found his calling. “I found a significant need associated with the homeless and poverty levels in the city of Dallas,” he says. It all started with the Leadership Dallas capstone project for 2017, where the group raised money and rallied contractors to build the New Hope Garden next to the Austin Street Center. “We took a block of land next to the center that you would never imagine would turn into this amazing garden that provides necessities back to the center with fruits and vegetables,” Montemayor says. “We created a serene place where perhaps these individuals can get away from everything else that they’re dealing with.” Now that the Leadership Dallas class is over, Montemayor and other alumni will volunteer for the Metro Dallas Homeless Alliance’s annual homeless count on Jan. 25. More than just a count, Montemayor

JANUARY 11 Bank of Texas Speaker Series Featuring Gallup CEO Jim Clifton 11:30 a.m.-1:00 p.m., Belo Mansion Kick off 2018 the right way by joining us for a special conversation with Gallup CEO Jim Clifton as he talks about economic trends, emotional intelligence and leadership in the 21st century. [TREC]

FEBRUARY 14 Market Matters: Mixed-Use Development Summit The Crescent JAVIER MONTEMAYOR

says they’ll be talking with the homeless about what they need. “You’re truly interacting with them,” he says. “Everybody’s got a story to tell. That’s one thing we learned last year.” By day, Montemayor oversees the compliance department at Children’s Health in Dallas doing proactive self audits. “There’s regulations from the time that we admit patients to the care that we administer to when they are discharged,” Montemayor says. “All hospitals must be in compliance with 4,000-plus regulations and laws.” He says he sees his job as ensuring that the hospital exemplifies its values with the patients it serves. He’s been at the job for 11 years and has more than 20 years experience overall. “We’re not providing direct patient care but we’re still making a difference,” he says. “We’re still meeting and contributing to the mission of the health system.”

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.

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

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.

Attend the first event in our new Market Matters series, sponsored by Grant Thornton. [TREC]

MARCH 1 Young Guns Casino Night Park District Come together for a night of networking, casino-style gaming and philanthropy as proceeds from this annual event benefit TREC Foundation’s latest fundraising initiative, the Dallas Catalyst Project. [TREC]

APRIL 26 FightNight Hilton Anatole, 6:30 p.m. Let’s get ready to rumble! Commercial real estate’s hottest philanthropic event turns 30! [TREC]

SEPTEMBER 28 Women’s Business Conference Hyatt Regency WBC, presented by Jackson Walker, celebrates women who are achieving excellence in their professions, serving the community in a meaningful way, and helping other women reach their full potential. [DRC]

OCTOBER 18 Young Professionals Summit Statler Hotel YP Summit, a day-long conference for young professionals (ages 22-40) gives guests an opportunity to build relationships, engage in transformative opportunities, and interact with our region’s business and civic leaders. [DRC]

WINTER 2017


DISCOVER WHAT’S NEW + NEXT IN NORTH TEXAS INNOVATION WHERE

TECH CREATIVES INNOVATORS INCUBATORS EDUCATORS ENTREPRENEURS INVESTORS ENTERPRISE &

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C COMMUNITY

THE REAL ESTATE COUNCIL’S 2017 GIVING GALA The Real Estate Council Foundation raised more than $600,000 during this year’s Giving Gala to impact housing, education, jobs and the environment in Dallas neighborhoods. More than 1,000 TREC members and guests danced the night away to Limelight band at the Hilton Anatole Sculpture Park with beautiful weather and fabulous fireworks! TREC also honored a member, a member company and a nonprofit with Impact awards for their service to The Real Estate Council and the Dallas community. Photography by James Edward.

LINDA MCMAHON, MR. AND MRS. MARK BULMASH OF HOWARD HUGHES CORPORATION

ROBIN MINICK AND DAVID CAIN

JIM BERRY, COURTNEY NAUDO, AND ROBIN OFFUTT, ALL OF DELOITTE

TARA WORTHY, JUSTIN GOERTZ, RYAN GARCIA AND TAYLOR EPPERSON

PAT PRIEST, SUSAN ARLEDGE, MARIJKE LANTZ, AND DEBORAH KIRKSMITH

LIMELIGHT BAND

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L LEADERSHIP

THE ULTIMATE TEAM SPORT WINNING WITH PEOPLE YOU CARE ABOUT IS “HUGELY SATISFYING,” SAYS 2018 TREC CHAIRMAN RAN HOLMAN, MANAGING PRINCIPAL AT CUSHMAN & WAKEFIELD. EDITED BY LANCE MURRAY

MR. AND MRS. ROD WASHINGTON

MR. AND MRS. ELIAS BAHAR

WINTER 2017

RAN HOLMAN

PHOTO: BILLY SURFACE

MR. AND MRS. BARRY OLSON

When it comes to commercial real estate, there’s not a lot that Ran Holman hasn’t done. His career has run the gamut from agency leasing and tenant representation to asset management, acquisitions and dispositions, and development. The experiences all come into play in his leadership post at Cushman & Wakefield, where he serves as managing principal in Dallas. “I don’t think you have to have played football to be a good football coach, but I think it helps,” Holman says. He grew up in the business, the son of a retail and multifamily developer. While attending the University of Texas at Dallas, where he studied business and psychology, he launched his own homebuilding business. After school, Holman switched to the commercial sector, working in the “data bank” at what’s now CBRE. He segued into office brokerage, then investment sales and asset services. In 1995, just 10 years into his career, he was tapped to run the firm’s institutional services group in Dallas. From there he was promoted to executive managing director, ultimately overseeing a five-state region. “I learned how big organizations move and how to balance corporate demands with local market demands,” he says. “But at that time, I was in my early 30s and my skill set wasn’t complete.” A yearning to get into development led him in 2000 to join Cawley-Wilcox as president and principal, overseeing multi-market brokerage and office development. There, Holman says, he learned the importance of speed: “This industry is so competitive; you have to be smart, and you have to be able to move quickly, and Founder Bill Cawley is both of those things. He’s also one of the most intuitive deal-makers in the business.” Holman went on to run North Texas operations for developers Hines and Van Trust. Then, in April 2016, he was offered the chance to lead the Dallas operations of Cushman & Wakefield. The company was

entering a period of reinvention, after being acquired by TPG and merging with DTZ and Cassidy Turley. “The pillars of the amalgamated companies were so strong; there was so much upon which to build,” Holman says. Among the first things on his to-do list: getting everyone under one roof. That happened in December 2016, when Cushman & Wakefield consolidated its offices in Preston Center and Rosewood Court to the new McKinney & Olive building in Uptown. Looking ahead, Holman’s focus is on “completing the platform.” That means filling in some gaps in institutional office brokerage sales and multifamily sales, continuing to expand retail services, and, when the opportunity is right, forming a land division. His goal? For Cushman & Wakefield to be No. 1 or No. 2 in the market in every discipline. “And, if we’re No. 2, we want to have a plan to be No. 1,” he says. Holman is stepping into his role as 2018 chairman of The Real Estate Council, with which he has long been involved. TREC touches many things that are important to him, he says: “It creates an environment for all, but particularly youth in our industry to unite around a great purpose and build lifelong friendships. It uses the power of its constituency to generate incredible resources that go to improving our city. And it’s a place where I can connect with other leaders who share the same values. It’s just a win all the way around.”

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VIEW FROM THE TOP

BY LANCE MURRAY

We create places that help communities thrive Supporting our communities from local offices in Dallas, Fort Worth, and Plano. stantec.com BUDDY TOBIN Vice President and General Manager, C&S Propeller C&S Propeller is among the former California companies that now call North Texas home. The company operates a full-service facility in Fort Worth devoted to the maintenance, repair, and overhaul to the 54H60 propeller system, focusing its business on the propeller system found on the Lockheed C-130 airplane. C&S Propeller moved to a facility in southern Fort Worth last year from its longtime facility in Burback, California. Vice President and General Manager Buddy Tobin discusses the reasons for the move, and how Dallas-Fort Worth has met the company’s needs.

WHAT PROMPTED C&S PROPELLER TO WANT TO RELOCATE TO DALLAS-FORT WORTH?

The company’s California lease was coming up for renewal and leadership was concerned with resources and the business environment in the state. Several business-friendly states were reviewed, and the decision was made to relocate to Texas.

IN YOUR SITE SELECTION PROCESS, WHAT TIPPED THE SCALE IN FAVOR OF THE FORT WORTH LOCATION?

There were many things that contributed to Fort Worth being selected as our new home. We reviewed cost of living, area schools, local crime rates, access to vendors, available resources, etc. ... We decided Fort Worth offered a great community for our employees and a business-friendly atmosphere.

HOW DOES THE FORT WORTH AREA FIT INTO THE NEEDS OF YOUR EMPLOYEES?

Fort Worth offers affordable living costs, access to quality schools, great community activities, wide selection of churches — and does all of this with a relaxed atmosphere.

HOW WILL THE NEW LOCATION ENHANCE C&S’ OPERATIONS?

The lower cost of business enables us to be more competitive in the market place.

DID THE LARGE AEROSPACE AND AVIATION COMMUNITY IN DFW PLAY A ROLE IN YOUR RELOCATION PROCESS?

Yes, primarily with regard to access to personnel, vendors, and supplies.

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Dallas-Fort Worth Real Estate Review - Winter 2017  
Dallas-Fort Worth Real Estate Review - Winter 2017  

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