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REAL ESTATE ANATOMY OF A DEAL: VICTORY PARK

FALL 2015

ROUNDTABLE DISCUSSION: C-SUITE PERSPECTIVES THE CRANE REPORT: WHAT’S UNDERWAY, WHAT’S PLANNED


Whitley Penn

Understands... Breadth of knowledge and depth of experience are essential in an ever-changing real estate market. For more than 30 years, our professionals have provided audit, tax, and consulting services to real estate developers, lenders, contractors and investors around the country.


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K P M G P L A Z A AT H A L L A R T S

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H A L L T E X A S S C U L P T U R E WA L K

OUR DOORS ARE OPEN Sitting alongside an iconic cathedral and surrounded by architectural masterpieces, KPMG Plaza at HALL Arts is proudly taking its place in the greatest arts district in the nation. This innovative new office building is as modern as it is efficient with a LEED Gold designation and contemporary art-filled spaces at every turn. To learn more about office and restaurant space still available, visit hallarts.com.

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H A L L A R T S PA R K I N G


Building on 25 years. BUILDING THE CITY YOU’VE IMAGINED.

Follow us for the reveal. RECOUNCIL.COM


ON THE COVER: Commissioned by Craig Hall for the lobby of KPMG Plaza at Hall Arts, Dallas Rag is a 43’ x 30’ white Cornish clay work created by British land artist Richard Long. This installation is just one of the many contemporary works in and around the new building.

FALL 2015

CONTENTS

PHOTO BY DARYL SHIELDS, HKS INC.

32 ROUNDTABLE

Welcome Letter . . . . . . . . . . . . . . . . . . . . . . . . . .8 Commentary. . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Publisher’s Note . . . . . . . . . . . . . . . . . . . . . . . 12

FOUNDATIONS DFW Market Statistics, Economic Indicators, and Commercial Real Estate News. . . . . . . . . 14

BLUEPRINT FOR PROSPERITY How Did You Know We Were Looking? . . . . . . . . . . . . . . . . . . . . . 17

21 THE CRANE REPORT

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

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

ROUNDTABLE Architects, Developers, and Executives Share User Perspectives on DFW Office Space . . . . . . . . . . . . . . . . . . . 32 FA L L 2 0 1 5

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

DFWREALESTATEREVIEW.COM

46 ART IN REAL ESTATE

D MAGAZINE PARTNERS BUSINESS GROUP PUBLISHER

Art in Real Estate: For many of Dallas’ top commercial real estate developers, incorporating art in their projects serves just as vital a role as function. . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Josh Schimmels

PUBLISHER Quincy Curé Preston 214-523-5215

58 ANATOMY OF A DEAL

quincy.preston@dmagazine.com

EDITOR-IN-CHIEF Christine Perez

EXECUTIVE EDITOR Krista Nightengale

MANAGING EDITOR Sarah Bennett

ART / PRODUCTION MANAGER Michael Samples

CONTRIBUTING WRITERS

Anatomy of a Deal: Victory Park

Jeff Bounds

After the Great Recession, activity for “Dallas’ Times Square” stalled. But now the development is going through a major makeover. . . . . 58

Hilary Lau Peter Simek

DIRECTOR OF SALES

TOOLBOX

Kyle Moss 214-523-5247

Money Behind Manpower

kyle.moss@dmagazine.com

When Texas businesses need a boost in the training department, the state’s Skills Development Fund is there to help. . . . . . . . . . . . . . . . . . 67

COMMUNITY The Real Estate Council, Associate Leadership Council . . . . 75

Dallas Regional Chamber, Top-Level Members . . . . . . . . . . . . . 72

Calendar of Events . . . . . . . . . . . . . . 76

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Courtney Garza

INTERNS

The Real Estate Council, Impact Investors . . . . . . . . . . . . . . . . 69

The Real Estate Council’s 25th Anniversary Luncheon . . . . . 74

MEDIA DEVELOPMENT MANAGER

Dallas Regional Chamber, Leadership Dallas . . . . . . . . . . . . . . . 76 View From the Top: Cary Evert . . 80

Emily Heft Imani Lytle Arisbet Sandoval

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. ©2015 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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WELCOME

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

BUILDING A SMARTER CITY

DALE PETROSKEY President and Chief Executive Officer Dallas Regional Chamber

By 2040, it is expected that our region will reach a population of more than 10 million people, including 1.6 million that will call the city of Dallas home. Finding solutions that build a smart city is essential to our long-term prosperity. Smart cities are focused on sustainable economic growth, resource efficiency, and most importantly, improving the quality of life for residents. Fortunately, an effort is underway in Dallas that will do just that. In September, at a Washington, D.C. event hosted by The White House Office of Science and Technology Policy (OSTP) in conjunction with the inaugural Smart Cities Week, Dallas announced the formation of a publicprivate partnership dedicated to executing a smart cities plan for Dallas. The Dallas Innovation Alliance (DIA) is a coalition of stakeholders from the city, corporations, civic and NGO organizations, academia, and private individuals who are invested in Dallas’ continued evolution as a forwardthinking city. Operating from a vision that smart cities are about people and not just technology, DIA is focusing on the end user and building a critical mass of the most highly engaged citizens in the country. Across the city, innovative projects have been implemented in recent years, from organizations including the Dallas Arts District, Dallas Police Department, and Dallas Area Rapid Transit. An initial goal of DIA is to aggregate all the good work being done, and leverage results and lessons learned into a comprehensive plan focused on a single neighborhood that can be replicated throughout the city. Initial efforts will be centered in the West End district of downtown, where a confluence of multi-modal transit, walkability, historic buildings, and a burgeoning innovation district will be home base for the city as a living lab, where a threepronged strategy will center on infrastructure, mobility, and connected living. DIA will leverage insights and momentum stemming from recent initiatives, including the 2014 New Cities Summit, Downtown Dallas 360 plan, and results from Dallas’ IBM Smarter Cities Challenge Grant as a catalyst to execute a multi-phased strategy reflecting Dallas’ commitment to sustainability and strengthening the urban core. This work will be complemented through the city and Texas Research Alliance’s participation in the MetroLab Network, a national effort also announced by The White House. MetroLab is committed to strong regional partnerships and cross-regional collaboration focused on solutions to improve infrastructure, city services, and other public sector priorities. It brings university researchers and cities together to research and develop solutions for problems facing our local systems and infrastructure. As Charter members of DIA, the Dallas Regional Chamber and The Real Estate Council are thrilled to be a part of a collaboration that is focused on finding sustainable solutions for the problems of today and tomorrow. For more information and to get involved, visit DallasInnovationAlliance.com.

2015 CHAIRMAN OF THE BOARD H. Ralph Hawkins, FAIA, FACHA, LEED AP Chairman HKS, Inc. PRESIDENT & CEO Dale Petroskey CHIEF OPERATING OFFICER & CHIEF FINANCIAL OFFICER Pat Priest COMMUNICATIONS, VICE PRESIDENT Amy Ramos BUSINESS INFORMATION & RESEARCH, VICE PRESIDENT Duane Dankesreiter BUSINESS INFORMATION & RESEARCH, DIRECTOR Eric Griffin COMMUNICATIONS, DIRECTOR Meredith Turner

2015 CHAIRMAN Sue Ansel Gables Residential VICE CHAIR Diane Butler Butler Burgher Group PRESIDENT & CEO Linda McMahon VICE PRESIDENT MARKETING & EVENTS Debby Hanson VICE PRESIDENT FOUNDATION Robin Minick DIRECTOR OF FINANCE Susan Sellers

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C COMMENTARY

AFFORDABLE HOUSING MEANS BETTER NEIGHBORHOODS FOR DALLAS A cornerstone of our region’s vital economy is access for all families to safe, quality, affordable housing. The term “affordable housing” has numerous negative connotations, because it’s often misunderstood. Affordable housing is defined by housing that costs less than one-third of a household’s income. Families that spend more than onethird of their income on housing could face a short-term crisis, which would financially cripple them and constrain their ability to spend money on necessities, such as medical care and clothing. Add to the situation the cost of transLINDA McMAHON President and Chief portation, which is often an expensive necessity for famExecutive Officer ilies to get to work and be able to provide for their loved The Real Estate Council ones, and you have a devastating combination. So living close to a job is important for families. Dallas is not alone in having inadequate housing that is affordable for its workforce—it is a national crisis that will impact the long-term economic growth for our region. It is no secret that home ownership, a way for families to build wealth, has declined, not only in our city but also the country. It is also no secret that rents are increasing. The North Texas region has some of the most affordable housing in the country, but for hard-working, middle-class families, it is still not accessible. For our teachers, firefighters, police, and service workers, having solid housing options impacts their quality of life, which impacts our communities. Several years ago, Austin proclaimed that not having emergency personnel living within city limits could create a serious public safety issue. Just think about having an emergency in our city in which our critical emergency personnel are not able to get to their jobs. We are not suggesting that we require these essential workers to live in the city, but we are suggesting that we need to create more housing options for them so that they could, if desired, live in a neighborhood that is within the city of Dallas. Also, almost every education professional will acknowledge that mixed-income communities are essential to the economic vitality of our region. With the income gap continuously growing throughout our country and no relief in sight, helping to solve the housing crisis is critical. Mixed-income communities not only help our city, but help our public education system. To help find a solution, Dallas has unveiled a new program called Neighborhood Plus. This is an important program that can transform our disinvested communities and make them vibrant again. We believe the city needs a plan and a program beyond Neighborhood Plus to incentivize affordable housing within market-rate developments—and that housing needs to be accessible to all our citizens. The area median income in Dallas, including Collin County is more than $70,000 a year. For the city of Dallas, the median income is $42,000. We can use existing programs to help incent housing for all families, particularly the middle class, which needs to be encouraged to return. Their return will spur economic development and provide mixed-income communities, which will help our public schools. With more than 90 percent of Dallas ISD students living in poverty, this is essential to the hope of our city and our region. So what do we do? First, we need to come together on the definition of affordable

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  THE NORTH TEXAS REGION HAS SOME OF THE MOST AFFORDABLE HOUSING IN THE COUNTRY, BUT FOR HARD-WORKING, MIDDLE-CLASS FAMILIES, IT IS STILL NOT ACCESSIBLE. housing. To us, it means that every family needs to have housing available within their means. The Real Estate Council supports initiatives that provide options to the community to assist in the development of more housing for families at all levels of affordability. Second, we need to do it responsibly and ensure that these developments are financially feasible. We are ready to collaborate with all stakeholders to develop a policy and program that provides a variety of incentives to encourage developers to create mixed-income properties. Incentivebased programs have been successful throughout the country, and we want to encourage best practices in incenting mixed-income housing throughout Dallas. Additionally, we support Neighborhood Plus. This program is a great step forward in addressing our most disinvested communities. We stand ready to help increase housing options so that our region can move forward. Making sure we having safe, quality, and affordable housing will ensure that we continue to lead the country in making this region the best place to do business.

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OFFICE/FLEX • INDUSTRIAL • RETAIL • RESIDENTIAL AWARD-WINNING COMMERCIAL DEVELOPMENTS A GROWING, EDUCATED POPULATION BUILDING FOR THE FUTURE UPSCALE LIVING & RECREATION IN THE HEART OF D/FW METROPLEX Top 20

Top 10

Best Places to Live in the U.S.

Most Affordable Homes in the U.S.

in Best Suburbs List

Top 25

Top 15

CNN/Money Magazine

CNN/Money Magazine

D Magazine

Safewise

of 50 Safest Texas Cities

Keri Samford, Economic Development Director 972.624.3127 • edc@thecolonytx.org • www.TheColonyEDC.org FA L L 2 0 1 5

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

A letter from the Publisher

Commercial real estate is so much more than buying and leasing. It’s about creating an experience for users that encompasses modern ideas of live-work-play. In this issue of the Dallas-Fort Worth Real Estate Review, we explore the user experience in our roundtable discussion with six business executives, developers, and architects. They share insight into creating high-functioning spaces for their employees, from open-desk floor plans to hightech conference rooms, as well as the benefits of both urban and suburban locations. That conversation starts on page 32. Then, we dive deeper into aesthetic elements of commercial spaces by exploring how top developers have incorporated art into their real estate projects, beginning on page 46. Specifically, we look at eight examples of artistic expression in real estate, ranging from the urban core in Deep Ellum to the suburban north of Frisco. Speaking of the urban core, we examine what’s going on in Victory Park, as the once-deemed “Times Square of Dallas” revamps its development plans. There, we found a group of female business owners anchoring the project’s retail base; they refer to themselves the “Chicks on the Vic.” Find all of that starting on page 58. In our Toolbox report this month (page 67), we bring you a detailed look at workforce training resources available to North Texas employers. And, as always, we bring you the latest information on new office, industrial, and retail projects in the Crane Report (page 28). And with that, we’re rolling onto our winter issue to close out the year. Until then, our website (dfwrealestatereview.com) and Facebook feed are great sources for daily insights. As always, we welcome your thoughts. We’d love to hear from you.

Quincy Curé Preston Publisher

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DREAM Sculpture featured in Downtown Arlington

ARLINGTON: WHERE DREAMS GET DONE. Arlington,“The American Dream City,” is in the spotlight and perfectly situated at the epicenter of North Texas. With 99 square miles of opportunity, the possibilities are endless. Office of Economic Development | ArlingtonTX.gov/ecodev | ecodev@arlingtontx.gov | 817-459-6155


FOUNDATIONS

A baseline for the region’s future BY CHRISTINE PEREZ

OFFICE CONSTRUCTION PIPELINE:

NEARLY 60 PERCENT OF SPACE ALREADY SPOKEN FOR The crane continues to fly as the (unofficial) state bird of Texas. That’s especially true in Dallas-Fort Worth, where more than 7.7 million square feet of office space is under construction. Unlike previous development cycles, though, this boom seems to have an especially sound foundation. As JLL points out in a recent construction pipeline report, North Texas has an incredibly diverse economy. Energy isn’t a key driver like it was in the 1980s and 1990s. Demand is coming from a wide variety of users—insurance companies, global manufacturers, defense contractors, retailers, and professional services firms. What’s more, single-tenant build-to-suits

comprise nearly half—48 percent—of the pipeline. Another 10 percent are spaces that have been preleased by tenants. Those are numbers even lenders would love. According to the researchers at JLL, “this level of preleasing is a solid showing and does not suggest that our market is overheated. What’s even better, this economic cycle still has legs, so we expect rent gains to continue, even though vacancy may begin to drift up gradually in 2016.” As large space users take occupancy, the preleased share of construction in the pipeline will decline, but it will not be a noticeable market trend until mid-2016, JLL reports.

LARGE BUILD-TO-SUITS STILL INFLUENCING DALLAS’ OFFICE DEVELOPMENT PIPELINE

58%

BIG BLOCKS

Here’s a look at some of the larger build-to-suits under construction in North Texas. USER

SPACE

LOCATION

DEVELOPER

OCCUPANCY 2017

TOYOTA

2.1 million SF

Plano

KDC

STATE FARM (Phase II)

500,000 SF

Richardson

KDC

2016

RAYTHEON

490,000 SF

Richardson

KDC

2015

7-ELEVEN

325,000 SF

Irving

Billingsley Co.

2016

ALCATEL-LUCENT

250,000 SF

Plano

Cawley Partners

2016

STUDY RANKS DALLAS A TOP U.S. CITY FOR SMALL BUSINESS A survey of 18,000 small businesses in 95 cities ranks Texas as the country’s No. 1 state for small businesses, with four cities in the top 10. Dallas came in at No. 2, with Austin at No. 4, Houston at No. 7, and San Antonio at No. 10. The study, performed by technology marketplace Thumbtack, asked participants to rank markets based on ease of starting a business, ease of hiring, regulations, health and safety, employment, tax code, licensing, environmental, zoning, and training and networking programs. Dallas earned an overall “A+” grade. In the report, economists wrote, “We have found that state and city governments that promote local business training and focus on ease of regulatory compliance are consistently perceived as being friendliest to small business. Once again, we found that entrepreneurs’ perceptions of tax burdens were among the least important factors in judging governments.”

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Buildto-suit/ preleased

7.7 million SF office space under construction

42%

Space remaining for lease

Source: JLL

DALLAS-FORT WORTH STANDS OUT AMONG U.S. METROS Economic opportunity is driving population growth in metropolitan areas at an unprecedented rate. Census data shows that U.S. metros are home to 83 percent of American citizens, a figure that continues to grow. This is one reason why the Brookings Institution devotes a significant amount of effort in researching metros, which, they say serve “as incubators of innovation and entrepreneurship that can help generate quality jobs and spur sustainable economic growth.” For instance, 92 percent of U.S. patents are concentrated in just 100 metro areas. Dallas-Fort Worth is squarely in the middle of this action. With the fourth-largest population among U.S. metros, and the sixth-largest GDP, the region stands out in

a number of ways. Here are a few significant statistics: > 21 Fortune 500 (and 41 Fortune 1000) companies are headquartered in DFW. > Four Global 500 companies are headquartered in DFW. > DFW is third in job growth among large metros, behind New York and Los Angeles. > DFW maintains the sixth-largest concentration of high-tech workers among large metros. > DFW was selected by the U.S. Chamber of Commerce Foundation as the best place for startups, and ranked No. 1 by Kiplinger among great cities for starting a business.

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F FOUNDATIONS TEXAS: A RETAIL POWERHOUSE OCCUPANCY IN THE STATE’S TOP FOUR MARKETS

OCCUPANCY 92%

OCCUPANCY 96%

OCCUPANCY 96%

OCCUPANCY 93.5%

DFW

AUSTIN

HOUSTON

SAN ANTONIO

INVENTORY: 152 million SF

INVENTORY: 46.3 million SF

INVENTORY: 152 million SF

INVENTORY: 42.9 million SF Source: The Weitzman Group

THREE THINGS TO KNOW ABOUT TEXAS’ TOP FOUR RETAIL MARKETS Texas’ major metro areas—DallasFort Worth, Austin, Houston, and San Antonio—each have different histories, cultures, and leading industries. But when it comes to the health of their retail markets, they are all on the same page, reports The Weitzman Group. Job and population growth are continuing to drive demand, and lenders are keeping developers in line. This has helped avoid an overbuilding situation. At the same time, retailers—especially grocers—are continuing to expand, absorbing some of the big-box space that became vacant after the Great Recession. Here, The Weitzman Group’s Ian Pierce outlines three key takeaways for retail conditions in the state’s top four markets. 1. THE MARKETS ARE AS STRONG AS THEY HAVE EVER BEEN. Austin and Houston are reporting the tightest markets in Texas, both with 96 percent occupancy. (Austin’s rate is based on an inventory of 46.3 million square feet. Houston’s inventory, of course, is much larger; it’s more than three times as large with 152 million square feet.) San Antonio and Dallas-Fort Worth are not far behind with, respectively, 93.5 percent and 92 percent. To put those occupancy rates in perspective, DFW is enjoying its lowest vacancy rate in 15 years, at only 8 percent. And it was only four years ago that DFW reported a 13 percent vacancy rate. On an inventory of 190 million square feet, 13 percent means a lot of vacant space. 2. ALL OF THE MARKETS ARE SEEING ONE TREND IN CONSTRUCTION: limited to the existing level of demand, with extremely limited speculative small-shop space. Austin is the most limited, with only about 1 million square feet coming online this year. The market is seeing a few grocery stores, mainly Walmart and H-E-B, plus a handful of other anchors

like Bass Pro Shops and LA Fitness. Because the market for small-shop space is so constrained, dozens of small 10,000- to 15,000-square-foot strips are being built in tight submarkets. In Dallas-Fort Worth, new space for 2015 will top 3.8 million square feet, nearly double what the market saw in 2014. Still, most of the new space opens completely occupied by anchors like grocers. Limited small-shop construction is keeping retail rental rates firm and growing. Houston also is seeing construction jump, by nearly 1 million square feet, to 2.6 million square feet on track for 2015. That total, though, is still extremely constrained for a market that is one of the largest in the country. The Houston metro area is seeing construction dominated by grocery stores, led by Kroger, along with several major mixed-use projects and, in contrast to the other three markets, new mall space. This comes from expansions at Houston Galleria and Baybrook Mall, which together represent nearly 700,000 square feet of new space. In San Antonio, the market is underway with approximately 1.3 million square feet of new space this year, down slightly from last year’s total. Walmart dominates the new space with five new Supercenter and Neighborhood Market locations. 3. AS GOOD AS 2015 LOOKS, 2016 MIGHT BE EVEN BETTER. Retail construction has remained in pace with demand, so the market shows no risk of overbuilding. The retailers expanding in the four major Texas markets are dominated by the categories of food, entertainment, fitness, and, to a lesser extent, medical. All of these categories are Internet-resistant. That spells good news for the long term for our four very different markets that share one thing: a healthy outlook.

OFFICE PARKING RATIOS LEAP ACROSS THE REGION Tenant demand is driving up parking ratios at North Texas office spaces, according to the research team at CBRE. The region spans 12 counties and is geographically larger than the states of Rhode Island and Connecticut combined. This makes car mobility a key factor for a labor force of 3.6 million workers in an economy that by August had already added 85,000 new jobs. More than 80 percent of area workers drive to work. And as employers continue to strive for lower occupancy costs—optimizing space requirements to have lean, efficient footprints—parking configurations are increasingly a crucial part of a tenant’s search and space decision. Given these two dynamics—more efficient floorplates and a rising driving/working population—parking ratios for newly constructed office buildings are escalating sharply as developers rush to attract tenants. Looking more closely at the data, CBRE Research determined that DFW’s Class A suburban product (built since 2007) averages 4.3 spaces per 1,000 square feet of space. This is markedly denser than metro areas with similar financial, telecom, and professional/business services employment bases like Atlanta (3.6 per 1,000) or Charlotte, North Carolina (3.5 per 1,000). Even in Texas, DFW slightly “outparks” other big metros like Austin (4.2 per 1,000) and Houston (4 per 1,000). In downtown Dallas, which has historically low ratios, empty lots are disappearing as developers and investors snap up land for future projects, placing pressure on landlords to construct new parking structures or reconfigure buildings to accommodate tenants and their commuter workers. Projects built before 2007 have a market-low ratio of 1.5 spaces per 1,000; newer buildings match the suburban average of 4.3 spaces per 1,000—an increase of 65 percent. The most generous parking can be found in Las Colinas, which, for projects built in the last wave, offers 6.3 spaces per 1,000.

SELECT CLASS A OFFICE PARKING RATIOS CLASS A, BUILT SINCE 2007 RICHARDSON/ PLANO

FAR NORTH DALLAS

4.4

4.3

LAS COLINAS

6.3

LBJ FREEWAY

PRESTON CENTER

5.3

3.5

CENTRAL EXPRESSWAY

5.7

UPTOWN/ TURTLE CREEK

2.9

DALLAS CBD

BUILT BEFORE 2007

SUBMARKET Downtown Dallas Central Expressway Las Colinas LBJ Freeway Far North Dallas Preston Center Richardson/Plano Uptown/Turtle Creek

1.5 3.3 4.2 3.6 3.8 3.1 4.2 3.0

4.3

BUILT 20072015 % CHANGE 4.3 5.7 6.3 5.3 4.3 3.5 4.4 2.9

65% 42% 33% 31% 12% 11% 5% -1%

Source: CBRE Research

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PHOTOS: SHUTTERSTOCK

B BLUEPRINT FOR PROSPERITY

CORPORATE RECRUITING

HOW DID YOU KNOW WE WERE LOOKING? BY JESSICA HEER

Recruiting corporate headquarters is one of the Dallas Regional Chamber’s [DRC] primary economic development goals. Toyota, Kubota, Hilti, and Active Network are some of the recent moves DRC helped coordinate. Since 2010, we’ve counted a total of 70 corporate headquarters relocations into Dallas-Fort Worth—almost one per month. Of those, 30 are from California. Another 40 are from 18 other states or countries. So, while California has deserved and will continue to earn a fair share of attention from our recruitment team, it’s not the only place we’re targeting. There are thousands of corporations headquartered in the U.S. that we would love to see in DFW. However, many would not be great candidates to recruit. A corporation with headquarters and all of its stores and operations in the Pacific Northwest or a major utility company that serves the East Coast are examples. In order to avoid spending energy and resources on unlikely suspects and to

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instead focus on companies much more likely to consider a move, we developed a multivariable model as a filter. The model considers both characteristics of the company and its current headquarters location and compares each against what Dallas has to offer. The model basically scores a company’s likelihood of interest in the “Why Dallas” pitch. Fortune and Forbesranked companies and others are first screened this way. We can even tune the model so that issues such as talent attraction and international direct flights, which are growing in importance, are weighted accordingly. Our team meets regularly with companies and consultants considering moves. We keep up in real time with the factors that drive decisions. CONTINUED 3

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B BLUEPRINT FOR PROSPERITY One of the variables that has always been part of our model and seems to be elevating in importance is what we’ve named “big fish, small pond.” This variable considers the size and scale of each corporation with the size and scale of its headquarters location. For this variable, we highly score companies that are currently headquartered in smaller metropolitan areas that, despite being quality cities or regions, might not have the critical mass, talent base, global access, or other attributes that can be important for a large corporation to grow and innovate. Another variable that is often a function of the size of the pond is air access. We evaluate the direct domestic and international destinations, including frequencies, from the local passenger airports in the cities where companies are headquartered. Our model highly scores those companies headquartered in locations with limited international destinations, or without service to the entire U.S., or from which executives must make lots of connections through hubs such as DFW, Atlanta, or Chicago. After companies are evaluated with the model, hundreds pass the first cut and emerge as targets for additional evaluation. Our second cut involves researching each of those companies individually to identify obvious reasons to either enhance or cancel outreach efforts, and to prioritize the contact efforts. One reason we might cancel a high-scoring company from the target list is that the company just completed a headquarters move. Conversely, we would elevate a target and prioritize outreach if the company has a new CEO with strong ties to Dallas. Today, our list is comprised of nearly 1,000 companies located in just about every state in the country. We’ve expanded our efforts, adding more focus on targeted

TODAY, OUR LIST IS COMPRISED OF NEARLY 1,000 COMPANIES LOCATED IN JUST ABOUT EVERY STATE IN THE COUNTRY. WE’VE EXPANDED OUR EFFORTS, ADDING MORE FOCUS ON TARGETED INDUSTRIES AND CORPORATIONS WITH REVENUES IN THE $500 MILLION TO $2 BILLION RANGE. industries and corporations with revenues in the $500 million to $2 billion range. Communication to C-level executives occurs regularly by staff and Blueprint investors, those DRC members who provide additional, dedicated funds to the Chamber’s economic development program. As planned communication occurs through the corporate-contact program, new major targets are added and rotated off the list. Each year, the DRC will coordinate about a dozen marketing trips throughout the country, often lasting a full week. The targeted companies are ones we focus on as we schedule marketing trips and invite executives to special events held in the Dallas region. We’re certain that among the companies on our target list are future corporate residents of our region. The target model and corporate-contact program efforts have proven to be effective tools for recruitment efforts. On a recent trip to California, the CEO of a company who accepted our cold call request for a meeting asked, “How did you know we were looking?” We didn’t until that moment, but our model predicted the company would be receptive.

WANT TO LEARN MORE ABOUT HOW TO GET INVOLVED IN BLUEPRINT FOR PROSPERITY?

Contact Jessica Heer, Vice President, Economic Development, Dallas Regional Chamber 214-746-6691 jheer@dallaschamber.org

BLUEPRINT FOR P R O S P E R I T Y,

BLUEPRINT FOR PROSPERITY

OUR NEXT STEPS FORWARD

region’s success. This additional investment made by more than 130 organizations in addition to annual

The Dallas Regional Chamber’s economic development program, Blueprint for Prosperity, provides organizations in Dallas-Fort Worth with an accelerated investment opportunity that helps advance our 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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innovate. collaborate. outperform.

w w w. a - p. c o m


MICHAEL SAMPLES

DALLAS COWBOYS’ NEW HEADQUARTERS, THE STAR, UNDER CONSTRUCTION IN FRISCO.

THE CRANE REPORT

Fall 2015

From South Dallas to Frisco and Grand Prairie to North Fort Worth, the development boom continues throughout North Texas. In each issue of the Dallas-Fort Worth Real Estate Review, we detail projects that are planned and underway in the region in The Crane Report. Data for the office and industrial markets is provided by Xceligent Inc. Data for the multifamily market is provided by Axiometrics Inc. BY CHRISTINE PEREZ

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

OFFICE

TIM TERRELL

Partner, Stream Realty Partners

“The DFW office market continues to see strong demand and, as a result, tightening of the existing supply. Construction starts are up across the city, and preleasing is becoming more common.”

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CHUCK SELLERS

Principal, Avison Young

“Total absorption year-todate is 5.9 million square feet, which is a 10-year high. Richardson is the most active submarket, followed by Far North Dallas and Uptown/ Turtle Creek. CBD absorption is encouraging at 500,000 square feet.”

INDUSTRIAL

MULTIFAMILY

BLAKE ANDERSON

BRIAN O’BOYLE

Senior Managing Director and Principal, Cushman & Wakefield

“DFW is the most soughtafter market for companies to expand into, and local businesses are wanting to upgrade their image and expand their footprint, too. I don’t see a slowdown anytime soon.”

Vice Chairman, ARA

“The market continues to be very active. The performance of multifamily properties remains excellent, and the level of sales activity is brisk. We should hit some new high-water marks for price per square foot.”

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


BONNIE BRAE MEDICAL OFFICE CONDOS RAYZOR RANCH MEDICAL PARK BLDGS 1-4 35 MEDICAL CENTRE

THE CRANE REPORT:

OFFICE

THE PRESIDIO @ 3 EIGHTY BLDG 2

CYPRESS OFFICE

8500 E HIGHWAY 380

UNICORN LAKE BLDG 2 SE OF SMOTHERMAN RD AND FM 423 BLDG 1 OAKMONT OFFICE CONDOS BLDG 4

ANNOUNCED + UNDER CONSTRUCTION

WESTSIDE MARKET PHASE II FRISCO STATION

OLD TOWN BLVD NORTH BARTONVILLE TOWN CENTER

THE BRIDGES AT CASTLE HILLS

4431 LONG PRAIRIE RD

ANNOUNCED DEVELOPMENTS

NE OF MORNINGSIDE ST AND S OAK ST AVONDALE HASLET CENTER

1

NORTHWEST PLAZA

MEADOWLANDS ADDITION BLDG I THE VILLAGE CENTRE PHASE I

2850 NORTH HARWOOD

SE OF GOLDEN TRIANGLE BLVD AND OLD DENTON RD

SIZE: 228,000 square feet KEY PLAYERS: Harwood International, HDF LLC LEASING AGENT: Jihane Boury, Harwood International DETAILS: The latest addition in the Harwood District features a showstopping design and more than 12,000 square feet of retail and restaurant space with adjacent gardens. Features include ninth-floor terraces and top-floor penthouse office space.

10740 OLD DENTON RD

4101 HIGHWAY 121 BYPASS BLVD

PRAIRIE COMMONS 801 ENTERPRISE DR

TROPHY CLUB TOWN CENTER 2111 E SOUTHLAKE EXECUTIVE KIRKWOOD BLVD MEDICAL CENTER

610 STONEGLEN DR

PARKER RD AND OLD DENTON RD

THE PLAZA OFFICE CONDOMINIUMS BLDG 3

SW OF FM 2499 AND GERAULT RD

5

2320 DEAN WAY

FREEPORT COMMONS

CORELOGIC

THREE 7 ELEVEN HICKORY CORP. HQ CENTRE SOUTHLAKE 8821 DEVELOPMENT DAVIS BLVD HERITAGE OFFICE CONNECTION WILCOX 8825 N PARK PHASE II TARRANT PLAZA PARK 4501 HERITAGE PKWY AT LAS TRACE PKWY 1501 COLINAS THE PONDS HUGHES RD TEXAS BLDGS A-E BEAR CREEK THE APEX AT MUSIC COLLEYVILLE OFFICE PARK LAS COLINAS FACTORY MEDICAL CENTER CROSSING DECKER COMMONS SE OF MID 7114 BLDG 400 &600 MID CITIES CITIES BLVD AND PRECINCT BLVD LINE RD GRAPEVINE STATION

FAA CORPORATE CAMPUS

1212 N LOOP 12 THE OFFICES @ HAMPDEN WOODS EXPEDITION PLAZA

SE OF OAKDALE RD AND MACARTHUR BLVD

111 BOLAND ST

2

NE OF W 7TH ST AND ARCH ADAMS ST

640 TAYLOR OVERTON TOWER III

CLEARFORK I & II TEXAS SHALE TOWER WATERSIDE BLDG L

CHISHOLM TRAIL

D. R. HORTON HEADQUARTERS

906 W CANNON ST

1000 FOREST PARK BLVD 1200 6TH AVE

VICTORY MEDICAL CENTER

NW OF W PLEASANT RD AND S BOWEN RD LOT 4 BLDG A 4015 IH 20 W

CLEARFORK RIVER CAMPUS

3050 S CENTER ST

TEXAS HEALTH SOUTHWEST MOB MATLOCK PROFESSIONAL OFFICE PARK BLDGS 2 & 3 CANNON PROFESSIONAL PLAZA BLDGS 4, 8, & 9

HULEN VILLAGE OFFICE BLDGS II, III, & IV

HIGHPOINT COMMONS

BEAR MEDICAL PLAZA LOT 1, 3, 5, 6, & 7

1756 BROAD PARK CIR

624 N MILLER RD NE OF E BROAD ST AND N MILLER RD

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

2

640 TAYLOR

SIZE: 313,000 square feet KEY PLAYERS: Anthracite Realty Partners (an affiliate of Jetta Operating Co.), Stream Realty Partners LEASING AGENTS: Seth Koschak, Ramsey March, and Tyler Maner of Stream Realty Partners DETAILS: This 25-story steel-and-glass tower will be built in downtown Fort Worth at Taylor and West 5th streets. Jetta Operating Co. is anchoring the project with a 70,000-square-foot lease for its new headquarters. Along with street-level retail, amenities include a restaurant, events center, fitness center, and tenant terraces.

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

3

PARK DISTRICT

NW OF E MAIN ST AND GEORGE HOPPER RD 2

MIDTOWNE SIZE: 502,000 square feet KEY PLAYERS: Trammell Crow Co., Met Life, HKS Inc., Balfour Beatty Construction DETAILS: Building permits were filed in October for Trammell Crow Co.’s huge new mixed-use project along Klyde Warren Park in Uptown. The 19-story office tower and adjacent 34-story, 257unit residential tower will both feature groundfloor retail space.

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BLDGS C, D & E

TUSCAN TOWN SQUARE

2020 E MELISSA RD

SE OF PROSPER TRL AND COIT RD 1831 HARROUN AVE

181 S MAIN ST

METHODIST 5801 VIRGINIA MCKINNEY PKWY PHASE II OFFICE CONDO BLDGS 3600 C, D & E NE OF ELDORADO ELDORADO PKWY AND TEEL PKWY PKWY THE FORUM AT PROSPER WEST

9255 DALLAS PKWY

STONEBROOK PARK I

NW OF CHAPEL HILL BLVD & DALLAS NORTH TOLLWAY ALCATELLUCENT

STONEBROOK PARK II-IV STARWOOD PROFESSIONAL BUILDING THE FORUM AT WADE PARK BLDGS 1-6 VICTORY AT STONEBRIAR BLDG 1-5

ANGEL FIELD CENTER BLDG 3

FOUR GALLERIA TOWER

SANYO ENERGY HEADQUARTERS

NW OF FM 544 AND WESTGATE WAY CENTRE AT THE COLONY PHASE II

CAMPBELL CROSSING OFFICE PARK

TOYOTA HQ

FRISCO HIGHLANDS OFFICE PARK THE STAR

LEGACY WEST

VILLAGE OF COMMUNICATION BLDGS 1-7

US HWY75 @ RENNER SHOAL ROAD CREEK BLDG 1

6351 PRESTON RD NW OF SH 121 AND PHASE II INDEPENDENCE PKWY

5540 GRANITE PKWY

PIZZA HUT HEADQUARTERS

RIDGEVIEW VILLAGE MEDICAL CONDOS BLDG C

ALMA OFFICE CONDOS IN CRAIG RANCH BLDGS & B

ONE CHAMPIONS PARK

STONEBRIAR COMMONS ON LEGACY BLDG 9

CITYLINE STATE FARM BLDG 4

PALISADES CENTRAL

FRISCO SQUARE BLDGS A1, B1, B2, B5, B9, C2, C5, C8, C9, D1, E5 STONEBROOK BUSINESS PARK

SW OF MAIN ST AND FRISCO ST STEWART CREEK OFFICE CENTER I & V

VILLAGES OF EXCHANGE PARKWAY

CITYLINE RAYTHEON

INTERNATIONAL BUSINESS PARK

PARK TOWER AT VICTORY AT DALLAS RIVERSIDE MIDTOWN BUILDING 4

SUMMIT PARK II

TWIN CREEKS GRANITE PARK V LAKES ON TENNYSON

QUEST RESOURCES

TOLLWAY CENTER

SW OF MAIN ST AND COLEMAN BLVD

RIDGEVIEW BUSINESS CENTER WATTERS JUNCTION

7

SE OF TECHNOLOGY DR & DALLAS N TOLLWAY

CHESTNUT COMMONS PHASE I & 2

MCKINNEY MEDICAL OFFICE PARK BLDG 5

WESSEX@ ALMA ROAD

THE GATE

A CLOSER LOOK AT COLLIN COUNTY

CONLEY COMMONS PHASE I & 2

VICTORY PLAZA AT CUSTER UNIT 6 LAKE FOREST VILLAGES OF OFFICE CONDOS SUNCREEK & BLDG A & B MCDERMOTT TWIN CREEKS OFFICE PARK

PRESTON BEND ONE PRESTON PARC II LEGACY CENTER PRESTON LEGACY CENTER

LEGACY BUSINESS LAKES OF TENNYSON PARK PROFESSIONAL PARKWAY SPRING CREEK PROFESSIONAL COMMONS CENTER BLDG C, E, F, & G OAK TREE OFFICE PARK

CORPORATE CENTER THREE & FOUR

ALLEN PLACE I-IV WATTERS CREEK THE BLUFF ON OFFICE PARK I-IV MCDERMOTT ANGEL FIELD CENTER BLDG 2

● ANNOUNCED ● UNDER CONSTRUCTION

6901 ROWLETT RD BLDGS 1 & 2

MIDTOWN MEDICAL CENTER

UNDER CONSTRUCTION

MEADOW GREEN MEDICAL CENTER THE TERRACES 8421 PRESTON RD DEVELOPMENT PARK CITIES PLAZA 6517 HILLCREST AVE

6

2727 TURTLE CREEK BLVD 3000 TURTLE CREEK PLZ 2505 TURTLE CREEK BLVD TWO ARTS PLAZA ROLEX TWO 1900 VICTORY PARK N PEARL 1018 N ZANG BLVD

4 13

4 SHALEM 3405 N BELT LINE PARKRD GALLOWAY MEDICAL ARTS 276 S COLLINS RD 278 280 S COLLINS RD

DAVIS STREET MARKET

THE ROLEX BUILDING

SIZE: 136,857 square feet KEY PLAYERS: Harwood International, HDF LLC, Kengo Kuma & Associates. Sadafumi Uchiyama DETAILS: This build-to-suit for Rolex in the Harwood District promises to stand out, even in Uptown. The first project in Dallas to be designed by a Japanese architect, the sevenstory structure will feature tiered gardens with waterfalls cascading over the sides.

5

KUBOTA TRACTOR HEADQUARTERS

SIZE: 193,000 square feet KEY PLAYERS: Corgan, CBRE DETAILS: In another major DFW relocation from Torrance, California, the global maker of tractors is building a new headquarters in Grapevine. It consists of a 125,000-square-foot headquarters and 68,000-squarefoot research and development facility.

ONLINE EXTRA

THE CRANE REPORT: INTERACTIVE VERSION

online at dfwrealestatereview.com

6

THE TERRACES AT DOUGLAS CENTER

SIZE: 171,583 square feet KEY PLAYERS: PegasusAblon, Lionstone Investments LEASING AGENT: Mike Ablon, PegasusAblon DETAILS: This new 12-story office tower will be situated in the heart of Preston Center at 5960 Berkshire and offer unobstructed views of downtown Dallas from the upper floors. Built to LEED Silver certification and features a concierge and high-end finishes throughout. The project will be ready for occupancy in the first quarter of 2017.

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7

CAPITAL ONE EXPANSION

SIZE: 205,000 square feet KEY PLAYERS: GFF, DPR Construction DETAILS: Capital One is expanding its 75-acre campus in Plano with a seventh building at its campus. The new facility will house up to 1,200 employees with six training rooms, a full-service cafeteria, collaboration spaces, and a game room. It will open in 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 BLDGS 1-5

2834 GEESLING RD 1450-1500 N WESTERN BLVD DENTON CREEK WESTGATE BUSINESS PARK BUSINESS PARK BLDG 1-5 BLDG 2 MARKET STREET WESTGATE INDUSTRIAL PARK BUSINESS PARK BLDG 4 & 5 BLDG 3

THE CRANE REPORT:

INDUSTRIAL ANNOUNCED + UNDER CONSTRUCTION

GATEWAY BUSINESS PARK LOT 6, 7 & 8

SPEEDWAY DISTRIBUTION CENTER BLDG C

ANNOUNCED PROJECTS

NORTHPORT 35 BUSINESS CENTER BLDG C

FARMER BROTHERS COMPANY

1

TRINITY CROSSING

SIZE: 322,853 square feet DEVELOPERS: Cabot Properties and Stream Realty Partners LEASING AGENTS: Cannon Green and Luke Davis, Stream Realty Partners DETAILS: Cabot aggregated three tracts totaling 40 acres then sold off about 21 acres to a third party, leaving it with 18.4 acres for Trinity Crossing. The twobuilding project will target users looking for 30,000 to 175,000 square feet. It’s expected to deliver in the second quarter of 2016.

PARKVIEW COMMERCE CENTER BLDG 4 DFW AIRPORT NORTH DISTRIBUTION CENTER II & III

NORTHPORT 35 BUSINESS CENTER BLDGS A & B

SE OF EAGLE PKWY & OLD DENTON RD

● ANNOUNCED ● UNDER CONSTRUCTION

DCT WATERS RIDGE

MAJESTIC AIRPORT CENTER DFW BLDGS 4,6,&7 PROLOGIS PARK 121

KUBOTA TRACTOR CORP WAL-MART

12500 WILLOW SPRINGS RD

TRINITY PARK SOUTHLAKE

1005 CHISOLM TRL

RIDGE RAILHEAD BLDG 1 & 2

1001 KENNEDY LN

RAILHEAD INDUSTRIAL PARK BLDG 1, 3, 5, 7 & 8

FREEPORT NORTH LOGISTICS CENTER V DFW TRADE ROYAL CENTER VIII TECH 18 LOGISTICS CENTER III & IV LOGISTICS CENTER II

NORTH FORT WORTH LAND

1363 BRUMLOW AVE BLDG 7

1815 RELIANCE PKWY

PARC 114 BLDGS 7, 8, & 9 DFW EAST LOGISTICS CENTER BLDG A, B, & C

DFW/161 DISTRIBUTION CENTER 100, 200, & 300

COUNTY LINE RD LIBERTY PARK GSW NORTH BLDGS 1-3

CENTREPORT BLDGS 1-8

PARC NORTH BLDGS 1-4

GSW GATEWAY PHASE II BLDG 4 & 5

  THE COMPLEXITY OF PUTTING THIS TOGETHER REALLY SPEAKS TO THE LACK OF HIGH-QUALITY LAND SITES IN CORE SUBMARKETS.

3

GSA FBI BUILDING

TRINITY CROSSING BLDGS 1 & 2 2909 W OAKDALE RD

1460 AVENUE S PARK 161 DISTRIBUTION CENTER - AVERA

WILDLIFE COMMERCE PARK BLDG 3

LOGISTICS CROSSING 2

— CANNON GREEN, STREAM REALTY PARTNERS

SOUTH CENTRAL DISTRIBUTION CENTER II

2 FIRST ARLINGTON COMMERCE CENTER II

KENNEDALE PKWY F

MOUNTAIN CREEK BLDGS 1 & 2

MOUNTAIN CREEK CORPORATE CENTER MOUNTAIN CREEK BUSINESS PARK

ONLINE EXTRA

THE CRANE REPORT: INTERACTIVE VERSION

online at dfwrealestatereview.com

619 S WISTERIA ST 1475 HERITAGE PKWY BLDG 2

UNDER CONSTRUCTION 2

I-20/161 CROSSING

SIZE: 430,188 square feet KEY PLAYERS: Mohr Capital, GSO Architects, RLG Consulting Engineers, Rogers O’Brien Construction LEASING AGENTS: Cannon Green, Blake Kendrick, and Sarah Ozanne, Stream Realty Partners DETAILS: Geared toward large users (minimum of 100,000 square feet), this project off Bardin Road in Grand Prairie has easy access to Interstate 20 and State Highways 161 and 360.

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

3

PARC 114

SIZE: 191,262 square feet KEY PLAYERS: Hines, AEW Capital Management LEASING AGENT: Bob Hagewood and Jeremy Kelly with Stream Realty Partners DETAILS: Hines kicked off a two-building second phase of its 52-acre industrial park on North Belt Line Road in Irving. The new facilities join six buildings that total 404,777 square feet. Tenants include Chrysler, Nissan, and Walgreens.

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4


FRISCO CENTER II BLDGS A, B, & C

1406 W AUDIE MURPHY PKWY

FRISCO COMMERCE CENTER BLDG D

TECH CENTER ON GREENVILLE BLDGS A, B, & C

CREEKVIEW 121 BLDGS 1-4 DOZIER PLACE

PLANO TECH CENTER 1, 8, 12, 13, & 14 501 W FM 544 WORKPLACE RESOURCE GROUP

2910 GUILDER DR

1

VALWOOD CORPORATE CENTER BLDGS 1-4

DIPLOMAT I & II

SW OF MARQUIS AND NICHOLSON BLDGS 1-2

MERCER BUSINESS PARK BLDGS 2-4 11070-11090 N STEMMONS FWY 9726 BROCKBANK DR

9749 CLIFFORD DR

TURNPIKE WEST

PROLOGIS/ BUCKNER LAND

MUSTANG CREEK BUSINESS PARK NORTH

I-30 BUSINESS CENTER BLDG 3

SOUTHWEST DISTRIBUTION CENTER NW OF IH 20 AND JJ LEMMON RD SOUTHFIELD PARK 35 BLDGS 2-4

SOUTHPOINTE BLDGS A & B

PLANNED POINTSOUTH LOGISTICS & COMMERCE CENTER I-III INTERMODAL BUSINESS CENTER

RIDGE LOGISTICS CENTER BLDGS 1-5 STONERIDGE PROLOGIS BUSINESS PARK SUNRIDGE BUSINESS PARK EAGLE BLDG 11 PARK BLDGS 1 & 2 20/35 PARK CROSSROADS 20/35 SOUTHPORT TRADE CENTER RADE CENTER BLDG III BLDGS 1-5 I 35 DALPORT INTERCHANGE I TRADE CENTER 6

SOUTHPORT LOGISTICS PARK BLDGS 1-9 SE OF PLEASANT RUN RD & SUNRIDGE BLVD DALPORT TRADE CENTER 2-3 DFW INLAND PORT BLDGS 1-2

Xceligent reports 61 North Texas industrial projects totaling 13.6 million square feet are underway; another 76 projects totaling 17.8 million square feet are planned or proposed.

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

4

KIMBERLY-CLARK DISTRIBUTION CENTER

SIZE: 874.200 square feet KEY PLAYERS: Prologis, Alliance Architects, The Conlan Co. DETAILS: Activity continues to pop along Interstate 20 in South Dallas. Kimberly-Clark is the newest tenant to sign on for space in the corridor, leasing a massive distribution center Prologis has underway. The project is expected to be ready for occupancy next spring.

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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


WOODLANDS APARTMENTS I

THE CRANE REPORT:

MULTIFAMILY

URBAN SQUARE AT UNICORN LAKE II

ANNOUNCED + UNDER CONSTRUCTION

DISTRICT OF HIGHLAND VILLAGE

ANNOUNCED DEVELOPMENTS 1

RIVERWALK VILLAGE

ENCLAVE AT WESTPORT

THE CASE BUILDING

UNITS: 337 DEVELOPER: StreetLights Residential and Westdale DETAILS: Amenities planned for this 17-story project—the first multifamily development in Deep Ellum—include a business lounge, full-service bar, private dining room, dog-washing station, and fitness center overlooking an outdoor pool and courtyard.

MANSIONS AT TIMBERLAND WATERFORD GLEN SAGEWATER VILLAGE

DOLCE LIVING HOME TOWN AVENUE900

ELAN WEST 7TH

HUNTER PLAZA

5 THE KELTON AT CLEARFOK

PINNACLE BANK PLACE HIGHPOINTE ON SOUTH MAIN

404 BORDER

THE BERKELEY II THE GROVE AT WATERSIDE

● ANNOUNCED ● UNDER CONSTRUCTION VILLAS DI LUCCA II

ONLINE EXTRA

THE CRANE REPORT: INTERACTIVE VERSION

2

online at dfwrealestatereview.com

LEGACY WEST HIGH-RISE

UNITS: 312 DEVELOPER: Palladium USA International DETAILS: This 30-story luxury high-rise will transform the emerging Legacy West development in Plano. Two sides of the parking garage will be framed by two-story townhomes and four levels of flats. It was designed by Humphreys & Partners.

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

PARC AT MANSFIELD MANSFIELD ON THE GREEN

UNDER CONSTRUCTION 3

411 N. AKARD

UNITS: 215 DEVELOPER: HRI Properties DETAILS: This conversion will transform the upper floors of the historic Mayflower Building in downtown Dallas, and will also include 14,000 square feet of retail space. Key players include Merriman Associates (architect), Andres Construction Services (general contractor), and E Smith Realty (retail leasing).

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STRATFORD LAND MCKINNEY RANCH DEV

PARKVIEW APARTMENTS THE ABLON AT FRISCO SQUARE STREETLIGHTS AT THE CANALS AT GRAND PARK

LAKESHORE LANDING

PARKSIDE AT CRAIG RANCH II

VILLAS AT CHAPEL CREEK

TWIN CREEKS CROSSING I

ORIGIN AT FRISCO BRIDGES DISCOVERY CASTLE HILLS ROSE HILL APARTMENTS

LEGACY WEST

2

AMLI AT THE BALLPARK II

LOFTS AT WATTERS CREEK III

HERITAGE CREEKSIDE ELAN PLANO

SALADO APARTMENTS

CREST AT LAS COLINAS STATION APARTMENTS

4

THE DAVIS

THE STANDARD AT CITYLINE

CREST AT PARK CENTRAL

MERCER CROSSING AT LUNA II LINCOLN WATERS EDGE II TRAMMELL CROW LAS COLINAS

AMLI CAMPION TRAIL

LOT A AT CITYLINE

Just North of Dallas. Far from Ordinary. Close to Perfect.

CARRIAGE HOMES ON THE LAKE I

MUSTANG STATION

JEFFERSON LAS COLINAS

ALEXAN CITYLINE

THE LOFTS AT CITYLINE II

GREENVUE APARTMENTS

AURA PRESTONWOOD I

AMLI ON RIVERSIDE

JUNCTION 15 AURA ONE90

ALTA MARKET KELLER SPRINGS TOLLWAY CENTRAL CROSSING PLAZA EASTSIDE II

LAKEVIEW POINTE

PARSON`S GREEN II

BELLA TERRA AT TWIN CREEKS I

THE BOAT HOUSE

THE AVENUES AT CARROLLTON HEBRON 121 STATION III

MCKINNEY URBAN VILLAGE

HARRY HINES BOULEVARD MIXED

PRESTON HOLLOW VILLAGE BANDERA APARTMENTS

EVERTON APARTMENTS AMESBURY PROJECT PHASE I VISTA DEL LAGO THE TEAK AT THE BRANCH THE ARMSTRONG AT KNOX

THE MCKENZIE

MAPLE DISTRICT ALEXAN FAIRMOUNT ALEXAN RIVEREDGE TRINITY GREEN

3

VILLAS AT VANSTON PARK LOFT + ROW STATE THOMAS APARTMENTS ELAN CITY LIGHTS BUTLER BROTHERS LTV TOWER BUILDING APARTMENTS

1

SOUTHSIDE FLATS BY JEFFERSON ALEXAN WEST DALLAS

ALTA YORKTOWN

VILLAS GRAND PRAIRIE

THE ENCLAVE AT MIRA LAGOS I

DATA SOURCE: AXIOMETRICS INC.

4

JEFFERSON RIVERSIDE

UNITS: 371 DEVELOPER: JPI DETAILS: Scheduled for completion in 2017, this project is located at the southwest corner of Northwest Highway and Riverside Drive in the urban center of Las Colinas. By the end of the year, JPI expects to have 3,000 units underway throughout North Texas.

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5

SOUTH 400 APARTMENTS

UNITS: 209 DEVELOPER: Ventures Development Group DETAILS: The first multifamily project in the Near Southside community of downtown Fort Worth, this five-story development will be anchored by ground-floor retail. It will be managed by Stream Realty Partners.

McKINNEY ECONOMIC DEVELOPMENT CORPORATION

McKinneyEDC.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 / 2 7


S SCORECARD

GEICO’S FUTURE NORTH TEXAS REGIONAL OFFICE IN RICHARDSON

SCORECARD

MICHAEL SAMPLES

Fall 2015

Even with new construction that’s underway, vacancies are tightening as tenants continue to move in and expand. The region benefits from strong job and population growth, solid market fundamentals, and a diverse economic base. Here we look at the top five office, industrial, and retail leases of the past three months, with data provided by Xceligent Inc. BY CHRISTINE PEREZ

ON-THE-G RO U N D I N S I GH TS

OFFICE

SHARON FRIEDBERG Senior Vice President, Bradford Commercial Real Estate Services

“It’s exciting to see the incredible level of activity and focus on the entire DFW area. The deal flow is probably greater than it has ever been. At the same time, the market overall is relatively tight.”

INDUSTRIAL

GRANT ENGLISH

Director of Brokerage Services, Altschuler + Co.

“We will continue to see vacancy tighten and lease rates increase in urban submarkets through the election year and beyond. We’ll also see more development in the Design District and more buildings trade hands in downtown Dallas.”

2 8 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W

TREY FRICKE

Principal, Lee & Associates

“Occupiers are transacting in a way that demonstrates long-term confidence in the market. Many 10-, 15and, in some cases, 20year industrial leases are occurring.”

RETAIL

TIM HUGHES

President and CEO, Falcon Realty

“Retail activity is probably the best I have experienced in 30+ years. If job growth holds and we continue to be responsible with new development, it should be sustainable through 2016 and beyond.”

FA L L 2 0 1 5


S SCORECARD 4

649,052 SF

OFFICE LEASES

9,05232,419 SF 32,41988,000 SF

2

88,000232,000 SF

1

232,000399,788 SF

3 5

LARGEST OFFICE LEASES

1

GEICO

SIZE: 233,000 square feet at 2280 North Greenville Avenue in Richardson TENANT REPS: Tom Lynn and Nick Lee of NAI Robert Lynn, and Griff Bandy and Jon Silberman of NAI Partners LANDLORD: CNL Commercial Real Estate, represented by Lauren Perry of Peloton Commercial Real Estate and Chuck Sellers, formerly with Peloton, now with Avison Young DETAILS: Berkshire Hathaway’s GEICO (Government Employees Insurance Co.) will relocate its North Texas office from Farmers Branch to Fossil Inc.’s former headquarters in Richardson early next year. About 1,600 employees will make the move. TOM LYNN

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2

FRONTIER COMMUNICATIONS

3

HUNTON & WILLIAMS

3

DALLAS COWBOYS

SIZE: 190,000 square feet in Lakeside Campus at 2201 Lakeside Boulevard in Richardson LANDLORD: Cawley Partners and GEM Realty Capital, represented by Bill Cawley and Addie Ludwig of Cawley Partners

DETAILS: The fast-growing telecom firm has signed a short-term deal (through the end of 2016) in Nortel’s former headquarters building along North Central Expressway, while it mulls a more permanent space strategy.

JOHNNY JOHNSON

SIZE: 88,000 square feet in Fountain Place at 1445 Ross Avenue in Dallas TENANT REPS: Larry Toon, Elizabeth Cooper, Jeremy McGowan, and Brad Selner of JLL LANDLORD: Goddard Investment Group, represented by Johnny Johnson and Lauren Napper of Cushman & Wakefield DETAILS: After considering other options, the corporate law firm decided to keep its Dallas office in the iconic downtown tower, inking a long-term renewal in the 60-story, I.M. Pei-designed skyscraper.

SIZE: 80,000 square feet in The Star at 1 Cowboys Way in Frisco LEASING AGENTS: Worthey Wiles of Lincoln Property Co. DETAILS: A new headquarters for the Dallas Cowboys anchors The Star, a 91-acre mixed-use development in Frisco that also includes a 12,000-seat events center and training facility for America’s team. Office space in the complex, which sits off the Dallas North Tollway at Warren Parkway, was designed by Gensler. The Cowboys will take ocucpancy in 2016.

5

FROST BANK

SIZE: 73,000 square feet at 640 Taylor in Fort Worth TENANT REP: Todd Burnette and Pat McDowell, JLL LANDLORD: Anthracite Realty Partners DETAILS: Frost Bank is joining oil and gas concern Jetta Operating Co. Inc. to anchor this 25-story, glass-and-steel tower, the first built in downtown since 2008.

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S SCORECARD

4

RETAIL LEASES

1 3 5 2 1003,733 SF 3,73310,576 SF 10,57623,500 SF 23,50052,620 SF 52,620123,000 SF

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

LARGEST RETAIL LEASES

1

HOBBY LOBBY

3

LA FITNESS

SIZE: 55,000 square feet at Park Boulevard and Plano Parkway in Plano DEVELOPERS: The Retail Connection and Rockstreet Partners, with capital provided by Inwood National Bank LEASING TEAM: Jenny Reynolds (brokerage) and Chad Bradshaw (development) with The Retail Connection DETAILS: Developers acquired 4.5 acres at the highprofile location in Plano for the new Hobby Lobby store. The retailer has more than 600 stores in 45 states.

SIZE: 37,000 square feet at State Highway 78 and Woodbridge Parkway in Sachse TENANT REPRESENTATION: John Zikos, Jonathan Cooper, and Cheryl Hill of Venture Commercial Real Estate; and Walt Brown Jr. and Tim Dollander of Diversified Partners LEASING AGENT: David Watson of Direct Property Services Inc. DETAILS: The fitness chain’s new venue will anchor the Woodbridge Gate development in Sachse. The club is expected to open in early 2016.

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JENNY REYNOLDS

FITNESS NATION

SIZE: 40,000 square feet at 1805 Airport Freeway in Bedford TENANT REP: Maury Levy of CBRE|UCR LANDLORD: Sidelock Properties and ETB Properties LLC, represented by Edward Bogel, David Davidson Jr., and Clay Mote of Venture Commercial Real Estate DETAILS: This is Fitness National’s second North Texas location. The company signed a 10-year lease with expansion options.

4

TOTAL WINE & MORE

SIZE: 24,000 square feet at the South Loop 28 and Brinker Road in Denton TENANT REPS: Darrel Hernandez with CBRE|UCR LANDLORD: RPAI, represented by Jack Weir and David Levinson of The Retail Connection DETAILS: Total Wine & More is the country’s largest independent retailer of fine wine. Typical stores stock more than 8,000 different wines and 2,500 different beers.

5

BUYBUYBABY

SIZE: 23,428 square feet at Gateway Plaza in Southlake TENANT REPS: Peter Russell of Bed Bath & Beyond Inc.; Steve Lieberman and David Fazio of The Retail Connection LANDLORD: RPAI, represented by Jason Kasal and Bonnie Threadgill of RPAI; David Levinson and Jack Weir of The Retail Connection DETAILS: buybuyBABY is opening a venue at Southlake’s Gateway Plaza, off East STEVE Southlake Boulevard LIEBERMAN at State Highway 114.

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S SCORECARD

1

INDUSTRIAL LEASES

5

12517,675 SF

4

17,67556,688 SF 56,688133,304 SF

2

3

133,304304,608 SF 304,608529,155 SF 529,1551,005,398 SF

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

1

WALMART

SIZE: 1.02 million square feet in Alliance Center North 2, 15101 North Beach Street TENANT REPS: Chris Teesdale and Tom Pearson, Colliers International LANDLORD: Hillwood, represented by Steve Aldrich DETAILS: Walmart is expanding its e-commerce center at Alliance, Hillwood’s 18,000-acre masterplanned development in North Fort Worth. It will take occupancy of its new space in January 2016.

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LARGEST INDUSTRIAL LEASES

2

STEVE ALDRICH

ULTA BEAUTY

SIZE: 670,000 square feet at 4800 Mountain Creek Parkway in Dallas LANDLORD: Prologis DETAILS: This $18 million development is projected to generate nearly $14 million in sales from e-commerce transactions in the first year of business and employ 450 full-time employees by 2019. The company operates more than 800 stores in 48 sites.

5

SHIPPERS WAREHOUSE

SIZE: 589,362 square feet at Prime Pointe I near Interstate 45 in Hutchins TENANT REPS: Al Leon and Larry Leon, Logistics Realty LANDLORD: Duke Realty, represented by Matt Hyman DETAILS: Shippers Warehouse selected Duke Realty to build it a new distribution center near the Union Pacific Dallas Intermodal Terminal in South Dallas. Shippers Warehouse will consolidate two facilities in Dallas and Garland under one roof.

4

FALKEN TIRE

SIZE: 255,000 square feet at Wildlife Commerce Park in Grand Prairie LANDLORD: Crow Holdings Industrial, represented by Will Mundinger Jr. DETAILS: Crow Holdings Industrial has broken ground on a build-to-suit for Falken Tires, an affiliate of Japan’s Sumitomo Rubber Industries. It will be the third building constructed so far in the developer’s 220acre Wildlife Commerce Park.

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OWENS & MINOR

SIZE: 223,190 square feet at Lakeside Ranch in Flower Mound TENANT REPS: Jim Cooksey and Adam Faulk, Jackson & Cooksey LANDLORD: Duke Realty, represented by Randy Wood DETAILS: Owens & Minor, a national distributor of medical and surgical supplies and supply-chain management company, renwed its lease at Lakeside Ranch, Building 20, at 550 Lakeside Parkway in Flower Mound. The project provides easy access to Interstate 635 and State Highways 121 and 114.

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R ROUNDTABLE

OFFICE SPACE Goodbye, cubicles of the 1990s. Architects and developers must keep lifestyle trends and tech advances at the forefront when planning new office space, especially as both corporations and small businesses continue to expand in North Texas.

CALVIN CARTER

MIKE BERRY

MANNY FERNANDEZ

Calvin Carter, CEO and founder of Bottle Rocket, launched his fullservice mobile app development enterprise in 2008. The company has created more than 80 iPhone, iPad, and Android apps for brands such as NPR, ESPN, the History Channel, and Starwood Hotels and Resorts.

Mike Berry is president of Hillwood Properties and leads development at AllianceTexas, an 18,000-acre masterplanned development in North Fort Worth. It includes more than 37 million square feet of commercial space and 9,000 single-family homes. Berry also is president of Hillwood Urban, which was launched in June 2015 to focus on large corporate office and mixed-use developments.

With 31 years of experience in the public and private sector, Manny Fernandez is managing partner of KPMG’s Dallas office, where he leads about 1,500 employees, including more than 100 partners. He began his career with the firm in 1984 as a senior manager and took on his current leadership role in 2009.

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R ROUNDTABLE BY CHRISTINE PEREZ | PHOTOGRAPHY BY MICHAEL SAMPLES

In the past, workers would move to where the jobs were. These days, it’s the companies that are chasing employees. In a brain-based economy, they’ve learned they must locate their businesses where workers want to live—and provide the kind of work environment top talent requires. From downtown Dallas and Uptown to new “suburban-urban” mixed-use projects in Richardson, Plano, Frisco, and beyond, developers are striving to incorporate amenities that reflect the ever-changing work culture. We recently gathered a panel of leading architects, developers, and business executives to discuss user perspectives on office space—how things have changed, what trends are driving these changes, and where we’re headed. The discussion was moderated by Christine Perez, editor-in-chief of the Dallas-Fort Worth Real Estate Review.

CHRISTINE PEREZ: Let’s begin by getting a summary of your roles within your organizations.

MIKE BERRY: I actually wear two hats. Hillwood has just launched a new division called Hillwood Urban to try to build here in the core of Dallas, downtown and Uptown, on some sites we already own in Victory, along Woodall Rodgers, and off Turtle Creek, where we’re building our new campus and headquarters. We’re also developing a project in Frisco called Frisco Station, which is a highly dense, urban-style, mixed-use project. We’re CONTINUED 3

DUNCAN FULTON

BOB MORRIS

PAUL ROWSEY IV

As CEO and co-founder of GFF Architects, Duncan Fulton brings more than 35 years of strategic leadership experience to the firm’s key ventures. He specializes in corporate developments like technology-intensive buildings and build-to-suits. Fulton also has worked on many projects within the Dallas Arts District.

Since Bob Morris joined Corgan in 1978, he has seen the firm grow 40 times in size—and has been a key driver of that growth. Today Corgan is one of the top 10 architecture firms in the country. Morris was named president and CEO in 2010. Nationally known as a pioneer in technologydriven facilities, his work led to the formation of Corgan Critical Facilities Studio.

Paul Rowsey IV is vice president of office development at RED Development, a Phoenixbased developer of retail and mixed-use properties. Working out of the Dallas office, he predominantly works on The Union, a new office tower at Field Street and Cedar Springs Road in Uptown.

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R ROUNDTABLE also continuing to develop Alliance Town Center, a 900-acre, mixed-use project within Alliance. So, we’ve got our footprint spread throughout the North Texas region. MANNY FERNANDEZ: I’m the managing partner of the Dallas office of KPMG. We’ve got about 1,500 employees here in Dallas, and we just moved into our new office at KPMG Plaza at Hall Arts at the end of July. I also chair the Economic Development Committee for the Chamber. DUNCAN FULTON: I’m CEO and co-founder of GFF Architects, formerly Good, Fulton & Farrell, and we’re a 125-person firm headquartered in North Texas, but we’ve got a national practice. I personally spend about a third of my time on projects, a third of my time managing the firm, and a third of my time answering, “Hey, you got a minute?” PAUL ROWSEY IV: I’m vice president of office development for RED Development. I office here in Dallas, but our corporate headquarters are in Phoenix, Arizona. I’m leading a project here called The Union Dallas. It’s located between Field and Akard streets, just north of Cedar Springs Avenue. CALVIN CARTER: I’m the founder and CEO of Bottle Rocket. Bottle Rocket is a full-service mobile solutions provider to large, global brands. We build the mobile solutions, apps, and strategy around them and engineer everything for companies like Starwood Hotels, Chick-fil-A, NBC, and all of the NBCUniversal brands like Bravo and Syfy, MacKenzie, PetSmart, Qdoba, and Jack in the Box. The vast majority of our work is for large, established businesses that are trying to build a great app experience or mobile solution for their customers, prospects, or employees. BOB MORRIS: I’m president and CEO of Corgan. We’re a 77-year-old architectural firm. I’ve been with the company for 37 of those years. We’re based in Dallas and have eight offices in total: six in the U.S., including Dallas, and two internationally. Our aviation sector here locally has been involved in the newly renovated Love Field and the work out at DFW Airport going on. Some of the great projects we’ve worked on recently include State Farm at CityLine, the Toyota at North America headquarters, and the Kubota headquarters. We also are involved with mission-critical data centers, of all things. I know where Siri lives. We’ve done large data centers around the country and the world. We also have a healthcare practice that just recently helped complete the new Parkland Hospital. We

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CALVIN CARTER

have an education practice that does a tremendous amount of schools, particularly K through 12. We’ve done 60 schools in Frisco alone.

Well, we’re certainly eager to get your perspectives today. Let’s start by talking about the factors companies are considering when deciding where to locate their offices, and how that has evolved.

FERNANDEZ: We’ve always been downtown. We moved to the Arts District with our latest move. Probably 80 percent of our professionals are under the age of 30, so I think being in downtown and being central to Uptown and all of the hip places for our younger population to live was critical in our decision to stay downtown. It’s vibrant, as you can see. There are companies like ACTIVE Network, which just recently relocated here from California. They decided that they wanted to put up shop and have more than 1,000 employees right here in downtown, so I think that bodes well for Dallas’ future. MORRIS: The employee population and the concerns about where that demographic is coming from have always been important, but increasingly, in this last business cycle, it’s also the brand of the company that matters. When you think about yourselves as being a downtown company in financial services, that’s the right fit for the brand. So there’s not a right answer about suburban, urban, renovated, or new. It is about employees and it’s about the brand of the organization. CARTER: We went with Addison. We have a really strong relationship with the city. They go way out of their way to take care of us. Addison is very centrally located, at least within our universe, and then also has a really nice mixture of good for business and a good lifestyle place, and it’s just so well connected.

Mike, you’ve got projects in both urban and suburban areas. What are you seeing in terms of location decisions?

BERRY: My immediate answer would be that it’s driven by the workforce population

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R ROUNDTABLE of that particular company, which hits all the points that have already been made; it’s housing proximity, school proximity, amenities, quality of life that are offered in an area. Every company has a different criteria, but I think fundamentally they’re making location decisions based upon their highest and best probability of attracting the best and brightest talent that they need. In your case, Manny, your story resonates with your younger, millennial recruitment efforts and the ability to be down in the core urban area of Dallas with Klyde Warren Park and all the new restaurants and all that the residential offers. But then affordability also becomes an issue in this environment. So we’re seeing a lot of companies go the other direction. They want that same sector—maybe not the same skill set, but the same demographic—yet the housing affordability still isn’t here, so they’ve got to move farther out. I tell people when I travel around that I think the Dallas-Fort Worth market has the ability to become the next tech center of North America with everything that we have in place in the form of infrastructure, education, workforce-development programs, and the talent that we’re able to attract.

Even the suburban developments—the newer ones—are “suburban-urban,” where developers are creating an urban experience.

FULTON: At the exact same moment that you’ve got the rising millennial who is wanting the amenities to central city, the realities of the workplace are that you’ve gone from a density of about 300 square feet per person to now on average about 180 square feet per person, and with that comes parking. And so you’ve got a parking desire in these large users for five and six spaces per 1,000 square feet; yet when you look at downtown, you’ve got one per 1,000 or even a 0.5 per 1,000 in the city of Dallas. As a result of that, you’re seeing the rise of Legacy Town Centers. You’re seeing the rise of Cypress Waters. You’re seeing the rise of projects like the ones that Mike is doing. And I think you’re going to continue to see that, and the gravitating to these newer projects that are in the suburbs provide that parking. CARTER: Parking was one of our No. 1 filtering concerns on our needs list, because we probably run about 6.5 to seven per 1,000 in our office density, and most people drive to work. We immediately started crossing buildings off the list when they could not creatively come up with

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MIKE BERRY

solutions. I just said, “If you can’t be an entrepreneur, then I can’t be an entrepreneur with you.” If you can’t figure out where to park a car, I can’t work with you.

What are some of the current demands when it comes to collaboration and conference space and how do you create an environment that works for both millennials and baby boomers?

CARTER: We sent out a survey to all of our staff asking what do they like about our current office or what do they not like. So when we designed the space, we designed it that no one would have an office, except for four people—the head of HR, the controller, and our two internal recruiters. We work in team environments, where we can just very quickly come together. We found that teams that worked together are usually quiet together and loud together. To address the quiet time, we peppered the space with lots of one-person, two-person, and three-person rooms, versus lots of big conference rooms.

Was it a big adjustment for you when you moved out of your own private office into an open environment?

CARTER: Yeah, but only for about a month. It’s interesting. It’s like when you get rid of something that you think is important and then you realize that’s not important, and then you find other things that are more important. I also think it sent a really strong message to the people we work with, our partners and our suppliers, as well as our own “rocketeers” and our clients, that this is just how we roll, and if this doesn’t work for you, that’s OK, but this is how we do it. I don’t have to have an opendoor policy, because I don’t have a door. You don’t have to worry about any of that stuff. You can focus on your work. MORRIS: It’s just the sense of being aware that you really are part of a larger team. I remember I worked on a project for the relocation of a technology company here in Dallas. The CEO said I, too, will be an open office, and his open office was, I think, 12 by about 20 feet. He had 240 square feet of open office. That was not the right message out there. So change management of the communication to the folks about why this is good and why it’s going to work and then find the balance about people do need their privacy and their focus. And if they can do that with headphones, that’s great. Some of them need that space to do it with. You still want to be able to provide that open, collaborative kind of group space. FERNANDEZ: I think all of that fits us at KPMG, but with a slightly different feel

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R ROUNDTABLE because we’ve got flexibility. We’ve got conference rooms that can fit 150 to conference rooms that fit four. So, we’ve built that flexibility in. We have about 150 partners that used to be in offices along the outside of building. We now have them all on the inside and the square footage has been reduced, but being in my office now for a month and a half, I feel like I have more work space. It feels like I have more efficient work space today in the office I’m in than the office I had previously. So, it’s very good. We have to be able to go into spaces that are private and confidential—we have a lot of client information that we deal with. So we have to have private conversations either in teams or an individual partner having a conversation with a client. So that’s why we have the project rooms and we have the smaller conference room and we have the partner offices, which have a sliding glass door so what you see is what you see. There’s no tempered glass. But at the same time, from an audio perspective, you can have that confidentiality if you need it. We also have our conferencing floor, which allows for a mix of clients and our professionals to work together.

CARTER: Flexibility and variety are very important, all the way from the large rooms to the tiny, one-person rooms. We don’t have the scale that KPMG does, but in our own way, we have a 50-person room that has a wall that connects to another 50-person room, so it becomes 100. So we have like a 6,000 square foot contiguous if we want to pull everything back, which will allow us to host more events in our space. We wanted to break down the barrier between us and the rest of the world and us and the community, and we wanted to invite in and help model what the community could be, in at least in our little space. So that was a very important thing to us, giving a rocketeer the ability to go anywhere from the garage where it has wet/dry application and 3-D printers to a fairly high-end boardroom. FERNANDEZ: You call them rocketeers. We call them KPMGers. You mentioned break rooms. Our seventh floor is a conferencing floor, so it’s full. But each other floor has what we call a hub, and it has coffee machines and a refrigerator. It’s an open-environment hub. There are no glass doors or anything. It’s open and people are in there getting coffee and they’re mingling, and so it allows people to collaborate as well on a very informal basis. We love our hub space. ROWSEY: Chances are, we’re going to have anywhere from 10 to 20 tenants that all have slightly different businesses and have slightly different philosophies on what they want their office space to be like. We’re really trying to design it from the inside out and say, “How can we give you the most flexibility and give you the best, efficient space to do whatever you really want to do with it?” So whether it’s closed-wall offices or an open-office environment, my job is to make sure the depth from the core to the window wall is correct and that the column spacing accounts for the furniture systems that you’re going to put in your open office, but also where the hard walls are going to hit the window mullions and make sure that those things are divided in

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R ROUNDTABLE such a way that meets the requirements of today’s law firms, banking institutions, and technology companies that are changing every day. What we really try to do is try to be nimble and entrepreneurial as we work with all of our potential tenants to create the best environments for them. FERNANDEZ: We identified 15 individuals who had been with the firm for six months all the way to 30 years, a cross-section of folks, and we call them the vision committee. So our interior design folks came in and interviewed them as a group, and said, “What do you want your office to represent?” The designers were from Atlanta, so they also asked, “What is Dallas like? What do you want it to look like?” They wanted an industry feel, so each of our floors has a slightly different feel by industry. You’ve got the energy floor. You’ve got the financial services floor, a technology floor, and a healthcare floor. Each one has a different feel. CARTER: Like in color and texture and things like that? FERNANDEZ: Texture. In our hub in the financial services floor, for example, we’ve got bulls and bears. On the oil and gas floor, we’ve got oil wells in the energy floor. I mean, the footprint is the same, but the meeting areas in the corner might be a little bit different looking. CARTER: Little things like that can become a pretty big competitive advantage, especially as you’re growing and trying to attract talented people to your business, and the reality is, unfortunately, there are not enough companies that are thinking the way you are. Maybe that’s changing and maybe I’m wrong. Maybe it’s the majority now, but I think a lot of like businesses I visit, I’m like, “Oh, gosh. I can’t imagine working in this space an hour a day, let alone eight hours a day, and I sure as hell wouldn’t stay overtime. I’m going to get out of here as fast as I can.” The physical space becomes an important part of that decision, especially when the physical space was filled with a great vibe. Space becomes exceptionally important.

In this brain-based economy, how is the office environment, including technology, being used to enhance and support productivity? Mike, talk about the visits that Ross [Perot, chairman of Hillwood]set up with the Center for Brain Health, as a prelude to designing the new headquarters.

BERRY: That drove the design of the new headquarters building, and he got involved in the

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MANNY FERNANDEZ

Brain Health Institute, and he went through all the training and quiet time, with all the bombardment of distractions that we all face every day. You’ve got to find these periods of time throughout the day where you can get away from all of that. So that drove us a little bit in the opposite direction to force more of a traditional, private office plan in our new headquarters building to allow the ability to get that quiet time and actually think and concentrate. But to offset that and to not feel like we were all siloed, we also created a lot of these common spaces. We built a hub right in the middle of the building, and it’s where everyone converges. It’s the dining facility, but it’s also a place with the kind of setup where people can have ad hoc meetings. We just went to Facebook’s headquarters and saw the opposite extreme. It was incredible. They have put together the ultimate recruiting tool in the form of their campus. They had literally a Disney World-like Main Street filled with restaurants and other service amenities that are all at no cost to the employee population. Most of them are open at least 16 to 18 hours a day. So that encourages people to stay in the workplace, and then they just finished building their new building, which is a Frank Gehry design. They created spaces with outdoor whiteboards and benches that are in a circular form. We would see teams of people with their laptops and on the whiteboards in a complete outdoor setting. That’s the extreme example, but I think it goes to some of the things we’ve talked about. You’ve got to create ways that people can collaborate more easily in the workplace, and it breaks down a lot of these technology and email challenges that we have as managers of getting people back to talking to one another. We kind of lost that somewhere along the way, and you have to get people back to the days of personal communication.

There’s also the issue of well-being and health, and that’s becoming more of a factor in office design, too. Mike, when I talked with Ross, he was mentioning how much he’s going to charge for a Snickers bar. He said, “If you want to have a healthy snack, we’ll subsidize it. But if you want a candy bar, it’s going to cost you.”

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R ROUNDTABLE BERRY: We haven’t completely pushed all of the non-healthy items out, but it’s pretty close to completely.

But that plays into productivity, too.

MORRIS: The one thing we’ve been talking about is the notion of creating these sorts of collaborative environments, and that gives you latitude, in some cases, to have a smaller, dedicated workstation for individuals. It creates more space for collaboration and more options for productivity in that sense. So by decreasing sizes of workstations and making them more efficient, you’re able to gain that other space that you can use for collaborative, special purposes that can increase productivity. And then the other side is technology. We started putting in some workstations where you have essentially a conference table with a couple of monitors. You can walk in, plug in a laptop, and immediately be exchanging ideas across laptops with real simple intuitive technology. The technology is going to have huge impacts on our productivity, not just the technology in the office, but the mobile technology that’s out there. BERRY: We’ve been touring a lot of spaces over the last year or so. Everywhere you go, regardless of the company or the industry, you’re seeing these huddle rooms and teaming rooms pop up throughout the space. MORRIS: We’re finding when you start looking at the number of seats, not square footage, but seats that might be collaborative in some context, like your dining hall as a meeting room for small and large meetings, the ratio of those seats to fixed, permanent positions is rising and rising and rising and even exceeding the fixed positions at this point. BERRY: And I think there needs to be a fun element in all of these spaces, regardless

of how with the private versus open mix is. Companies across all industries seem to be want to put a little bit more fun in their space. CARTER: The concept of work/play and playing at work is important. Decades ago I think we probably lived in a world where you had your work part of your day, and then you had the play part of your day, and the family part of your day or whatever. I don’t think we live in that world anymore, and I think we live in this kind of combination of experiences and you make choices: is this a play moment, a work moment, a family moment, whatever. We might go to an extreme. For example, our vacation policy: We have an unlimited, self-managed vacation policy. We don’t dictate how much time you take per year. You decide how much time you take per year, but you’re responsible for making sure that your things get taken care of. You communicate clearly with your team, and then you work on how your things are going to get done, and then you take the time off. Then that’s it. There’s literally no limit to what you do. We just hope people make good choices, and we trust that they will. The other thing you talked about—productivity.

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R ROUNDTABLE I agree with you. Technology is a very important part of that, and I think it’s also a consistent application of that technology. I visit our clients a lot and this room won’t have the adapter for that, but this other room does, so I just said, “Let’s keep it simple.” Every single room has an Apple TV and a Chromecast and an HDMI cable, and every single dongle needed for every single device currently known by man, and it’s just zip-tied together. It’s as simple as that. Grab the dongle, plug in, and we’re ready to go. We don’t have to worry and wait for 15 minutes to figure it out. Every single common space, like a conference room, whether it’s a small or a big one, has an iPad sitting on the outside, and that’s used to walk up and book the space or see when it’s available. We didn’t want to use proprietary systems that are banked into the walls. It’s literally an iPad that is magnetically stuck to the wall with the conductive charging system to it. And we wanted to make to have the consistency throughout and our desks are about this size. They’re all on wheels. All our filing cabinets are on wheels. When you roll together, when you roll on a project, you literally roll on a project and off a project. We’ve done the best we can to lay out the best tools we can afford and spread it consistently throughout the entire workplace. Now we want to get out of your way and let you get to work and figure out how to use those tools, and if you find yourself needing a tool that we didn’t think about, tell us what it is and if we agree, we’re going to put it in every single room. So then you don’t have to ever think if I go into this room, will there be a TV, when I go into that room, will there be a something else? I’ve got a place where everyone can do anything they want at any time and it’s pure consistency. MORRIS: Consistency is essential. Training so folks know how to use those tools when they get in the room is essential. We see so many people—even with our clients—when they walk into a room, they’ve got the best stuff but they don’t know how to use it. It’s ultimately frustrating and they abandon the idea of doing it. The other thing with technology and productivity is being willing to take the chance. In 1983, we bought our first computer that could draw, and it was me and another guy who went to a trade show in Chicago, came back, told Jack Porter we should buy computers that draw, and he did. And it was $500,000 for two workstations. At that point in time with really no sheer certainty about how we would use it or how well it would work, you have to be able to make leaps of faith.

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DUNCAN FULTON

What’s really great today is our young people will find things to do with technology to make it productive that we hadn’t imagined. They’re incredible at doing that, and it’s really wonderful to watch the stuff they come up with. FERNANDEZ: What did you call that vacation policy? CARTER: We used to call it “unlimited vacation.” And while it’s still unlimited, we like the idea of “self-manage.” FERNANDEZ: You’re empowered. CARTER: You’re empowered, but you’re also responsible. FERNANDEZ: And have you done any tracking? How long has it been in place? CARTER: We have. I’d say probably three years it’s been in place. FERNANDEZ: Have they done any tracking on what people took previously? CARTER: That’s a good question: did we do a comparison? I’m sure we did. I think we determined that there were some people in the office that actually took less time. We also track if there’s a lot of use, because that’s what we were nervous about— someone taking like six or seven weeks off. And there are some people who take six or seven weeks off, but some of those people are our best performers. They simply are just getting their stuff done. And they’re getting done more than maybe some other people who are taking less time. So there’s not necessarily a correlation to your productivity and the amount of time that you work in the workplace. I’ve never liked this concept of work from home, but we kept getting a lot of requests for work from home, and frankly some of our direct competitors have 100 percent work-fromhome opportunities, especially for engineering staff. It was really tough to compete against that. So then we kind of dissected that and said, “What are you trying to achieve?” And they’d say, “Well, we’re trying to achieve greater focus, you know. We wish that there was a day every once in a while where we didn’t have to deal with the commute. I could totally focus on catching up, digging in deep. From time to time I really don’t need to be with my team. I need time alone.” And so we said, “Oh, great.” Now they’re called “focus days,” and the team works on that together. So an

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BOB MORRIS

individual manages their vacation, and the team works on when the focus days are. So there’s built-in self-policing and agreement. Are we going to take it every week, every two weeks, are we going to do it at home? And then we ask just one thing, which is stay in touch with your team. Because communication is still key, even if it’s just throughout the day, and that has worked out well. FULTON: There’s something important to point out, though. In our practice, we’re seeing technology is not the central issue, and it’s not the central issue for the first time in a long time. And we deal with both users and office developers, so I want to talk about office development perspectives because that’s how a lot of our office space gets delivered. We’ve had basically one significant building spurt each of the last four decades. In the ’80s, the central issue that everybody was trying to figure out how to deal with was how to accommodate this new office systems approach that people were adopting. It resulted in things like early adopters—people who were typically not the executives officing in those and it resulted in buildings where there was a lot of stuff happening on corners, so the offices that you did have could gravitate to the corners. In the ’90s, the central issue was how to deal with the computer and the energy and heat-producing equipment that are now everywhere. And that drove a lot of things like higher electrical loads, but it was technology. In the 2000s, there was this sort of post-dot com building spurt and a “prepost”— a pre-dot com building spurt that didn’t last that long. Then in the 2010s, the central issue has been how to deal with the advent of the internet and flat-screen monitors that allowed offices to basically become less like offices and more like cockpits, and it’s driven a lot of the changes we’ve talked about. What I see developers trying to deal with today isn’t technology for the first time. It’s what do millennials want? Every developer we’re working with, that’s what we’re spending time talking about, and it’s an interesting shift. The technology, I think, is almost ubiquitous. It’s there. You know how to deal with it, whether or not it’s the dongle solution, which I think sounds pretty brilliant. For the first time in 30 years, the central thing driving

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R ROUNDTABLE general office design isn’t something that’s happened that we’ve got to respond to. It’s now kind of a generational shift. ROWSEY: The biggest selling point for our project here at The Union has been this: the grocery store. I don’t that know there’s another grocery store in the footprint of an office building in Dallas, but it’s a full 60,000-square-foot store, and the way I see it is, I look at my family. My wife and I both work. We are very limited for time. We have two children. We’re trying to get a lot done in a short period of time, and so having a grocery store in our workplace is an immense help. I can fill my prescriptions there. I can pick up the groceries on the way home. It’s saving someone almost an hour. And then technology is part of it, too, because you have mobile apps. Tom Thumb has a mobile app where you can order your groceries and pick them up at the store, or they’ll deliver them to your office. So, either way you cut it, having these vertically integrated services, whether it’s a grocery store or a restaurant or a bar or a park, can be public or it can be exclusive to your development. All those places are the third space: it’s the spaces outside your office that are creating these environments that people really want to be in this next generation.

You mentioned parks and green space. What you guys are doing with regard to the Katy Trail?

ROWSEY: When we talk to the city and they were explaining their plan for the trail system, there was a natural void between where the Katy Trail ends and the American Airlines Center, and I know there’s a current plan for it to continue to go south, but we looked at it and we said, “We’re going to be doing offsite improvements anyway. We’re going to have sidewalks. We have Tom Thumb on the north side of our site. Why don’t we help in whatever way we can and work with the city to create at least our part of a connecting piece from Victory Park to the Klyde Warren Park, and then from Klyde Warren south wherever it needs to go to loop back up?” We talk about transportation. We talk about mobility, whether it’s bike lanes, jogging paths, the trolley, DART, or light-rail. And then there’s traditional vehicular traffic as well. How do we merge all those things and work together as developers to create a better environment that creates an innovation district, not just an innovation place? How do we create an innovation district? And I think that’s really what’s

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R ROUNDTABLE going to help continue to attract people Uptown and downtown is that we’re a community standing together who has a common goal. FERNANDEZ: Can I ask a question of the developers? How are you seeing Dallas development planning better, worse, or efficiently, compared to other cities? Are we doing a good job in Dallas in planning for the environment that is multiuse? Are we differentiating ourselves? I know Klyde Warren Park is a great add-on to connect Uptown and downtown, as an example. BERRY: I think if you just look in the last decade and look at an aerial photo or an oblique shot of this area 10 years ago and fast-forward to today, I mean, that tells you a lot. I think it’s amazing what has happened just in a few short years. FULTON: I think one of the most remarkable things is the degree to which all those issues are now of interest to the general public. There was a time when the transportation planning, place-making, and all that—you’d hear about it through Greater Dallas Planning Council or at AIA, but now you’re reading about it in letters to the editor. You’re reading about it in regular editorials. The way that conversation has elevated in the last five years is really remarkable, as people have seen the benefits of places like Klyde Warren Park and regeneration in the city. MORRIS: And it has happened so almost organically, if you will. We all remember how unpopular DART was when we were just talking about the concept and getting communities behind that, and now it’s an incredibly successful system—the notion of public and private partnerships that have come together to develop the Arts District, Klyde Warren, Main Street, Bishop Arts, and places like that. FULTON: And you’ve got the philanthropic community now funding planning grants because of the value of it that you see in the city—folks like the Real Estate Council Foundation. It’s really remarkable. MORRIS: The quality as a culture center with the museum, downtown, and all the performance centers—it’s just a texture of the downtown communities and how wonderful they are for people who live and play and now work here.

OK. Let’s wrap things up with a closing statement from everyone. Think of it as your opportunity to say whatever you haven’t yet had a chance to say. Would you like to start, Mike?

BERRY: At the end of day, you heard a lot of

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PAUL ROWSEY

exciting things that are happening, both inside the walls of buildings and outside the walls. The challenge for a developer now is to try to anticipate and accommodate structurally and physically the flexibility and the demands of a variety of types of companies that are trying to create those spaces to attract the best and brightest, but it all comes back to amenitization of everything. It’s amenitization of the interior space and with Klyde Warren Park and Katy Trail and DART and other things, whether it be hard infrastructure or soft. You’ve got to amenitize what’s happening outside the space, too. FERNANDEZ: With the right real estate development concepts, I think we are just another additive as to why North Texas is going to continue to be the fastest-growing region. It’s going to attract not only workforce from other states that come to Dallas, but also other corporations and regional centers that come to Dallas and the North Texas region. Real estate plays a big part in that, along with transportation and roads, educating, the airport, and all of those other good things. FULTON: You’re seeing a lot of things that we used to see in hotels and leisure environments make their way into the workplace because people are living in a more multi-mobile way. They want to play some at work, and they want to work some while they play, and if you’re in workspaces, you’ve got to accommodate that. ROWSEY: I think it’s the walkability and the authenticity of these amenities. We’ve brought all of our retail down to the street level, and we’ve created an open green space. And what we really want to do is open our development to the city around us and not to make it an endemic environment that feels like it’s been created for us. I think young people understand when they’re in a place that’s been manufactured. And they don’t like it. So I think it’s important to take in the city for everything it has and invite that into your development, and I think you’ll be rewarded in that recruiting and retention. CARTER: I’d say from the perspective of a small, high-growth business in a competitive environment, I can say confidently that working very hard to produce an

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R ROUNDTABLE exceptionally special and unique space for us to do our work in has been immensely valuable in building that success. Frankly, it has defined who we are as a business now, and it will continue to define who we are in the future, and that was a realization I think we had in the last couple of years, especially with the space we have now. And being in what I believe is an increasingly culture-based economy and culture-based environment, the space becomes exceptionally important because it is essentially the vessel that embraces our culture. It’s our responsibility as developers and business owners and leaders in our community to lean into that trend and in the envisioned future, so every brick we lay, every square foot we design, every acre we develop, we need to find a way to ratchet it up a little bit, take more chances, try things out, and not do it the same way we did it even a month ago. Even if there are small movements, let’s always be making small tilts to lean into the next thing, because that’s the only way as a group we’re going to support each other to push our entire community forward. MORRIS: All the things we’re talking about with the amenitization space and providing the right things to support people yields productivity and brand. It drives all that. I think we’re doing a great job with individual buildings and in communities as a whole in Dallas, driving that forward. The toughest part is the uncertainty in the future, as rapidly as the future is changing. I don’t think any of us really know what will be out there in a decade as we plan these communities. As we plan these spaces and these buildings, how can we think about the flexibility and the adaptiveness, the nimbleness of that thing that we’re doing today, and how it might be able to adapt to tomorrow? CARTER: I got one more: in a lot of other cities the conversation of collaborative space has become very important. Companies like WeWork, where smaller businesses

or even large businesses that want to have a small footprint, are like a Facebook-style environment—co-working spaces. So businesses like WeWork are really changing. I wouldn’t say transforming across the board, but they are changing the various things that business owners have as options. I don’t think it’s as important in Dallas as it is in other cities, and I don’t know why that is, and I don’t know if that even matters. But I think it’s interesting. If we were in Austin or New York or Denver or whatever, we would probably have talked about that. But it didn’t come up. Is the lack of that in our conversation okay, or is that an opportunity not yet explored? FULTON: It’s going on. There’s an RFP floating around right now for a seven-story co-working environment. You’ve got Granite doing things like purchasing the old West End Market specifically to develop co-working office space. We’re seeing it happen on both coasts, so it’s going on. The developers are doing a lot of that thinking. It’s one of those manifestations of what the millennials want. It’s all part of that question that people are devoting their design attention to, a slightly different issue in this cycle.

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Tenant Data Mapping Vacancy & Absorption

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R ROUNDTABLE

THE CONVERSATION CONTINUES The panelists from Office Space joined other industry leaders to talk about Dallas-Fort Worth, workspace trends, and everything inbetween.

PHOTOGRAPHY BY MICHAEL SAMPLES

DALLAS REGIONAL CHAMBER’S PAT PRIEST (FAR RIGHT) WELCOMES GUESTS TO THE REAL ESTATE ROUNDTABLE RECEPTION HELD AT THE CHAMBER’S OFFICES.

KIMBERLY BURKE, SKANSA USA, AND MAGGIE PARKER, THE REAL ESTATE COUNCIL

JASON MEYER, COOKSEY PR, WITH MICK GRANLUND, O’BRIEN ARCHITECTS

DUANE DANKESREITER, DALLAS REGIONAL CHAMBER, AND CALVIN CARTER, BOTTLE ROCKET

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MIKE ROSA, DALLAS REGIONAL CHAMBER, AND STEWART SLACK, KDC

DUNCAN FULTON, GFF ARCHITECTS; MARIJKE LANTZ, BILLINGSLEY COMPANY; AND BILL GUTHREY, KDC

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BY PETER SIMEK

On a bright July morning, Spanish artist Adrian Torres stands in flipflops on scaffolding in Deep Ellum. He is shirtless, with paint-covered shorts, a backward ball cap, and big black headphones. The wall in front of him, once the side of Brake & Clutch Service, looks as it has for most of the past 80 years—faded, white bricks bearing the marks and scars of old postings, torn-off notices, and billboard paint. Over the next few hours, Torres will slather and spray the wall with paint. After a while, a surrealistic scene emerges from the brick surface: a herd of elephants advancing on this quiet corner at Main Street and Exposition Avenue.

DEVELOPERS FIND VALUE IN MAKING SPACES BEAUTIFUL

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PHOTO: STEPHEN MASKER / HALL OFFICE PARK

HALL OFFICE PARK

Deep Ellum has a long history of mural painting, but the brain behind this latest project is not a community organizer, but a real estate developer driving Deep Ellum’s latest resurgence, Scott Rohrman. Rohrman began acquiring property in Deep Ellum in 2012. He has since gobbled up around six acres of land with hopes of jump-starting a revitalization of the historic neighborhood. Attracting popular restaurants like Pecan Lodge has helped his investment, but Rohrman says bringing art to the neighborhood is just as important. “From the day I started focusing of Deep Ellum, art was on the forefront of my mind,” he says. “If I came down here, I had to include art.” One of the first things Rohrman did after buying property was offer free rent to Kettle Art Gallery, a Deep Ellum mainstay. Then he turned his vacant spaces over to artists, photographers, music video shoots, and community groups. His latest project is to solicit artists of all stripes to create 42 murals to the walls of the historic ’hood. The number was chosen because Rohrman’s company is called 42 Real Estate; it’s indicative of an approach to art that blends branding and community building. “I think there is some altruism, to give back to the community, there,” Rohrman says. “Is it going to drive traffic to Deep Ellum? I hope so. And I hope when they come to see the mural they’ll buy a hot dog or a beer.” Dallas real estate investors have long

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MURAL: ARELI DURAN

A ART IN REAL ESTATE

DEEP ELLUM MURAL BY ARELI DURAN

married art to commerce. Stanley Marcus was a pioneer, bringing significant works of art into his upscale Neiman Marcus department stores. When Raymond Nasher developed NorthPark Center, he created a shopping mall that doubled as a kind of public museum. And developer Trammell Crow and his wife, Margaret, put together an impressive collection of Asian art that is now housed in the Trammell Crow Center. Lucy Billingsley describes herself as “the most practical person on Earth to buy art.” The fact that the lobby of her One Arts Plaza development functions as a rotating gallery has everything to do with that project’s place in downtown Dallas’ Arts District. She paid careful attention to the quality of the art in many of her developments, because she sees it as an important factor that sets her projects apart.

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“I think it is a part of our brand,” Billingsley says. “It is what you come to expect and anticipate.” It is difficult to put a quantitative value on a qualitative amenity like art. But Craig Hall, who turned part of his Frisco Hall Office Park into an outdoor sculpture garden, says art does play a role in attracting and maintaining tenants. “To me, a building needs to be an environment to help tenants recruit and retain their employees,” he says. “That’s done by creating an overall atmosphere that makes it a place people feel they enjoy spending time. We look at the architecture and the art as part of making that environment pleasing.” If you dig beneath the surface, art in any building reflects the passion of an individual property owner. “It is not about art and real estate, it is about art or real estate,” says the Swissborn Uptown pioneer Gabriel Barbier-Muller. “My accountant will come to me regularly and tell me we are spending too much money on art. So I have to go to real estate to be able to collect more.” In these pages, we look at eight real estate projects where art plays a significant role, whether by building a brand, providing a unique amenity, or helping establish a relationship with a community.

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A ART IN REAL ESTATE HALL OFFICE PARK

HALL ARTS

HALL ARTS

HALL ARTS AND HALL OFFICE PARK At first, Craig Hall looked for spaces in his projects where he could place his ever-expanding collection of art. Then, he started designing his projects around his art. That’s how the Texas Sculpture Garden at the Hall Office Park in Frisco came about: it’s a culmination of Craig Hall’s lifelong love of art. “We started doing it in Frisco not because we thought it would get us more occupancy or money,” Hall says. “We did it because we wanted

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to. I wanted to showcase Texas art because I don’t think it gets enough respect.” What Hall observed, though, was that the art helps attract people to his projects. Which is why, when he was planning his new Hall Arts mixed-use project in the Dallas Arts District, he made sure it also functioned as a kind of outdoor museum, with a sculpture walk breezeway running straight through the development. In Frisco, the garden attracts school buses full of children. In downtown Dallas, Hall hopes the sculpture will attract pedestrians and Arts District visitors. “I was there last night walking around—people were on our sculpture walk,” Hall says. “People walking dogs, hanging out who did not work in the building. That’s what I was hoping for.”

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A ART IN REAL ESTATE

THE EYE

PHOTOS: THE JOULE

THE JOULE The Eye, a giant sculpture by Tony Tassett, hovers over Main Street in downtown Dallas, where it has become one of the area’s most popular attractions and an all-too-visible reminder that art lies at the heart of the Headington’s vision for a revitalized downtown. Directly across the street is the centerpiece of that investment, the Joule Hotel, a 1920s neo-Gothic building that underwent more than a $78 million renovation in 2013. For the new look, Dallas art adviser John Runyon oversaw the installation of the pieces from Headington’s

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collection throughout the hotel. This is no run-of-the-mill hotel art. Pieces by Andy Warhol, Richard Phillips, Adam Fuss, Ellsworth Kelly, and Tony Cragg would be right at home in any contemporary art museum. “We feel that art, more than any other asset, provides cultural context,” says Michael Tregoning, president of Headington. “It creates a sense of ‘place,’ and evokes emotional response—which is part of our Main Street DNA.” The centerpiece of the collection at the Joule, however, may not be one of the numerous brand-name artists on display. Rather, that honor belongs to the mosaics created by the late California artist Millard Sheets. The mosaics were salvaged from the Mercantile Bank complex by Tim Headington, then restored and reinstalled in the Joule, a prized piece of Dallas’ artistic history incorporated into a vision of its future.

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CYPRESS WATERS

A ART IN REAL ESTATE

BILLINGSLEY COMPANY

ONE ARTS PLAZA, CYPRESS WATERS, AND INTERNATIONAL BUSINESS PARK “It’s self-evident,” says Lucy Billingsley of the impetus to pay close attention to the art in her One Arts Plaza development. After all, the building bookends Flora Street, making it one of the most dominant structures in the Arts District. But proximity to the Arts District isn’t the only reason to incorporate art into real estate. In many of Billingsley’s projects, like the International Business Park near the intersection of the Dallas North Tollway and the George Bush Turnpike and the Offices of Cypress Waters near Dallas/Fort Worth International Airport, the developer, working closely with her art consultants, has taken care to choose art that does more than look pretty on a wall. “When anyone is coming into our buildings, we have an opportunity to give them something that complements and enriches their experience of the space,” she says. “A building exudes the brand of the companies that are there. If they come by significant, powerful, happy, bold pieces of art, I think it is the right thing to do.” Billingsley has a particular interest in in contemporary Asian art. She admits that the art doesn’t just complement her developments’ aesthetic, it also offers an excuse for personal growth. “You go on a trip, searching, meeting artists, and looking for the right pieces,” she says. “All of that makes the whole process a lot more fun.”

ONE ARTS PLAZA

PHOTOS: BILLINGSLEY COMPANY

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CYPRESS WATERS

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A ART IN REAL ESTATE

HARWOOD DISTRICT

Gabriel Barbier-Muller says his real estate investments and his interest in art have nothing to do with each other, except for the fact that his success in the former helps fuel passion for the latter. “We don’t collect as an asset class,” Barbier-Muller says. “We don’t collect as a business. We don’t collect as a strategy. We collect as an insatiable addiction as a quest to learn.” The Swiss-born BarbierMuller comes from a grand tradition of art collecting. His grandparents and parents were both major collectors of antiquities from around the world, and his father established a small museum in Geneva. Barbier-Muller recently opened a museum featuring his renowned collection of Samurai armor in the second floor of the renovated Saint Ann school in the Harwood District. His European perspective, he says, shapes his attitude toward both real estate investment and art collecting. His development of Harwood has its goal to turn a corner of Uptown into a vibrant, pedestrian-friendly district. Art is just one of the ways of enlivening and enriching how those individual real estate developments touch the public and the community. “I think that people in general are attracted to what is positive and good,” he says.

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SAMURAI ARMOR FROM THE SAMURAI COLLECTION, ON DISPLAY AT THE SAINT ANN BUILDING. PHOTOS COURTESY OF THE SAMURAI COLLECTION

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A ART IN REAL ESTATE

NORTHPARK CENTER Only in Dallas would one of the city’s best museums also happen to be a shopping mall. And yet the driving vision behind NorthPark Center and its art says so much about this city’s business ethos, which blends civic, philanthropic, and entrepreneurial concerns. When it opened in 1965, NorthPark featured works of art pulled from Ray Nasher’s renowned collection of 20th-century masters, including Frank Stella and Andy Warhol. Today, the tradition lives on. NorthPark continues to showcase the Nasher collection, rotating pieces by Sir Anthony Caro and Thomas Houseago around well-loved mainstays like Mark di Suvero’s towering Ad Astra (2005) and Jonathan Borofsky’s Five Hammering Men (1982). More than an amenity, the art has largely come to define the identity of NorthPark, setting it apart from other shopping centers and advancing a mentality that blurs the distinction between what is good for business and what is good for society. “Every company has a special responsibility to enrich the lives of its customers and the community,” Raymond Nasher once said. “It should serve as a catalyst to link art and business for the benefit of all.”

FROM BEGINNING TO END BY IVÁN NAVARRO

PHOTOS: NORTHPARK CENTER

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PHOTO: DALLAS CVB

COMPANIONS BY TONY CRAGG

AD ASTRA BY MARK DI SUVERO

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ART ININ REAL REAL ESTATE ESTATE AA ART MURAL BY STEVE HUNTER

MURAL BY HAYLEE RYAN

PHOTOS: DEEP ELLUM 42

MURAL BY MICHAEL McPHEETERS

DEEP ELLUM Not long after Scott Rohrman started to acquire property in Deep Ellum, he began to hang out in the neighborhood, chatting with bartenders and waitresses in an effort to learn from them just what made the neighborhood tick. “They stressed from day one that art was part of the community,” he says. Rohrman came to understand that in order for his investment to work, art had to be part of it. He took a forward-thinking approach to

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incorporating art into his real estate. Rather than buying work or commission public sculptures, he simply handed the keys over to some of his vacant spaces to artists. The result was a string of exhibitions curated by locals that were some of the most interesting and innovative art activity in Dallas at the time. His latest initiative is even more ambitious, 42 commissioned murals intended to enliven Deep Ellum’s historic structures. “It’s qualitative—I don’t think there is any way to quantify it,” Rohrman says of the impact of art on his investment. “I’m trying to fill my buildings, but we are trying to do it in a way that is giving back to the community at the same time.”

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A ART IN REAL ESTATE

MUSTANGS AT WILLIAMS SQUARE

There is perhaps no other work of public sculpture in North Texas that so perfectly encapsulates the hopes, dreams, desires, and ambitions of real estate developers than the Mustangs at Williams Square. In 1976, John Carpenter reached out to artist Robert Glen with a one-of-a-kind commission. Carpenter was in the midst of taking his family’s huge swath of pristine ranch land just northwest of Dallas and developing it wholescale into a new city. Las Colinas would rise from the prairie in the hope of becoming a “world-class residential and business development.” Working from a studio in Kenya, it took Glen nearly eight years to carefully

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sculpt and install his larger-than-life stampede of mustangs. Those statues shouldered the task of creating a new civic brand, functioning as iconic attractions, and serving as a gathering place within an invented city. Today, the mustangs stand on a wide, wind-blown plaza like monuments to some post-modern Rome, the equine equivalent of an Imperial arch financial triumphalism enshrined in bronze.

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A ART IN REAL ESTATE

PHOTOS: NEIMAN MARCUS

NEIMAN MARCUS

In 1951, to mark the opening in Preston Center of the second-ever Neiman Marcus store (which later moved to NorthPark), the company commissioned sculptor Alexander Calder to create a work of art. Calder’s Mariposa (1951) became the first piece of art in the Neiman Marcus collection, and it set the stage for one of the largest and most innovative corporate collections of its kind. Under the direction of Stanley Marcus, an avid art collector himself and patron of the Dallas Museum of Art, Neiman Marcus has always placed high value on including art in its stores. Sure, the prestige of works of art by some of the most well-known artists—from Picasso to Warhol to Lichtenstein—helps support the appeal and image of the high-value retailer. But, like Raymond Nasher, art supported Stanley Marcus’ belief that “art enhanced the quality of people’s lives and the customer’s shopping experience.” Today, Neiman Marcus is one of the few retailers in the country with its own art collection. It employs a curator who manages and oversees the installation of a collection that includes more than 2,500 works.

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A ART IN REAL ESTATE

WHERE THE ART IS 1

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P E R S P E C T I V E S O N ART I N R E A L E S T A T E “Art is one of those amenities in and around an office building that can inspire people to flourish. We believe anytime we can add extra ‘life’ to a building through color, interest, diversity—like artwork does—it enhances the human condition and is another outlet for creative thought.” — Michael Dardick, President and CEO, Granite Properties

“Great companies have a distinct product, a point of differentiation in culture, and a DNA that they wish to communicate both internally and externally. Art in the workplace may serve to further these distinctions, or to simply bring beauty to a space. When art may be selected to further both of these ambitious goals, it may bring a true additive value to the workplace.” — Mike Ablon, Principal, PegasusAblon

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REDEVELOPING

VICTORY PARK THEY HOPED IT WOULD BECOME DALLAS’ TIMES SQUARE. WHEN IT DIDN’T, A NEW PLAN WAS CREATED TO CHANGE THE GAME AROUND THE AMERICAN AIRLINES CENTER. BY HILARY LAU

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A ANATOMY OF A DEAL Victory Park, the 75-acre development north of downtown Dallas anchored by the American Airlines Center, has proven to be one of Dallas-Fort Worth’s trickiest parcels of real estate. Initially developed by Ross Perot Jr., whose monolithic contributions to DFW real estate include his Hillwood Development Co.’s AllianceTexas and the creation of the world’s first purely industrial airport, the vision for Victory Park was to be Dallas’ own version of Times Square. And between 2006 and 2008, it looked like Perot would realize that dream. Over those two years, 400 condominiums, 380 apartments, 250 hotel rooms, 500,000 square feet of office space, and more than 200,000 square feet of retail were constructed at Victory, which sits at the intersection of the Dallas North Tollway, Interstate 35, and Woodall Rodgers Freeway

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and is flanked by the Design District and the Arts District. Condominiums were listed for, at the time, twice the going rate for comparable residential space in Turtle Creek. In just three years, the area became home to the W Hotel, Victory Plaza, One Victory Park, and myriad residential properties—all revolving around the 840,000-square-foot American Airlines Center. By the end of 2008, Victory Park had grown the city’s tax base by more than $500,000, and it had paid $40 million to the TIF district that had funded several of its initiatives. It looked like Perot and Hillwood had changed the game, successfully tackling the feat of developing a huge mixed-use project in a historically underdeveloped area that was anchored by a sports facility, while also bringing high-rise living to the area. But then, the housing bubble burst, a nationwide recession ensued, and everything changed.

PICKING UP THE PIECES Hillwood took a huge hit during the Great Recession, when it lost $275 million in equity and forfeited ownership of the buildings in Victory Park to its investment partners. Two months CONTINUED 3

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A ANATOMY OF A DEAL

THE RETAIL CONNECTION

later, the Mandarin Oriental Hotel planned for the west side of Victory Park’s main residential drag, Victory Park Lane, announced that it, too, was walking away from Victory. (The 40-story project would have been one of the tallest buildings in the city, with 120 rooms, 90 residential condominiums, 75,000 square feet of luxury retail, and 275,000 square feet of office space.) Instead, its half-finished parking structure would sit in awkward disconnect with the one-sided retail component on the east side of Victory Park Lane until a host of new players pulled together an ambitious redevelopment venture that’s currently underway. After becoming a partner in the development in 2005, UST XVI Victory Park, an entity managed by Orlando-based REIT Estein & Associates, became majority owner of Victory Park in 2009, after Hillwood forfeited its ownership share. (Hillwood still owns most of the land in Victory.) In 2011, Cousins Properties (now Cushman & Wakefield) was awarded Victory Management responsiblities for UST. In 2012, UST XVI Victory Park partnered with Fort Worth-based Trademark Property Co. to hold an intense design charrette and determine a redevelopment plan. “We embarked and did a bunch of community engagement sessions and focus groups and worked with the city and did an analysis—a big

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  WE ENDED UP DECIDING AND RECOMMENDING THAT IT COULD BE FIXED, AND IT COULD WORK. THERE WERE SO MANY CRITICISMS WHEN WE DID OUR RESEARCH THAT VICTORY IS CONFUSING; IT’S NOT EASY TO USE, WHICH, IF SOMETHING’S CONFUSING AND NOT EASY TO USE, THEN PEOPLE WILL JUST STOP COMING. —TERRY MONTESI, CEO OF TRADEMARK

analysis that involved multiple architects, engineers, placemakers, city folks, developers, leasing folks, et cetera,” says Terry Montesi, CEO of Trademark. “We ended up deciding and recommending that it could be fixed, and it could work. There were so many criticisms when we did our research that Victory is confusing; it’s not easy to use, which, if something’s confusing and not easy to use, then people will just stop coming.” But the players believed Victory could realize its potential. So they set to work, with Trademark coming on as a partner to reposition the retail. The partnership worked with the city on initiatives like taking out the median on Victory Park Lane and trimming its lanes to widen the sidewalks by three feet on each side. The city also helped add a crosswalk and a stoplight at Olive Street across from the W, while also adding a median to Olive Street to shorten the walk between Victory Plaza and the hotel. The once one-way Houston Street and Victory Avenue are being converted to two-way streets, and a dedicated bike lane is being added

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VICTORY PLAZA

52,000 SF Available 2017

Victory Plaza is a two-building Class A office-property located within the dynamic 75acre mixed-use Victory Park development. With unparalleled access to I-35, Dallas North Tollway, Central Expressway (US-75) and I-30, Victory Plaza is the ideal central location for your company. For Leasing Information Contact Cynthia Cowen & Mark Dickenson | 972.663.9600 www.victoryparkoffice.com


MAKE VICTORY YOURS

In the heart of 75-acre Victory Park, Victory Center office tower will offer a well-connected and amenity-rich corporate environment like none other in Dallas. A vibrant and exciting world-class entertainment district is on the horizon. Make Victory Yours.

ŠCraig Kuhner

FOR LEASING INFORMATION

Johnny Johnson, Trey Smith or Ward Eastman 972.663.9600

VICTORY CENTER www.victorycenterdallas.com


A ANATOMY OF A DEAL

  OUR CRITERIA GOING FORWARD IS THAT EVERY SINGLE STOREFRONT, EVERY TENANT HAS TO LOOK COMPLETELY DIFFERENT THAN THE TENANT NEXT TO IT, WHICH IS HOW REAL URBAN STREETSCAPES LOOK. —TERRY MONTESI, CEO OF TRADEMARK

on Houston that will extend the Katy Trail beyond its awkward termination at the Lexus Garage. Decorative benches, pots, and landscaping have been added to create a rich, urban streetscape. The partnership, too, is spending more than $500,000 just on signage to direct patrons to parking and roadways based on whether they’re visiting a restaurant, an office, or going shopping. The overall goal, Montesi says, is user-friendliness. “We really don’t have a three-block-long, two-sided, walkable street retail district,” he says. “So to have a compact, three-block, walkable district with a terminus on both ends—the AAC and the House, and then Perot Museum and House of Blues—it’s going to bring to Dallas street retail that it sorely needs.” The now two-way Victory Park Lane is the primary retail street, and the partnership’s vision for it entails polishing up that unfinished garage that was originally built for the Mandarin Oriental Hotel that never came to fruition. New retail and an updated garage are scheduled to be completed in the second quarter of 2016. At the northwest corner of High Market Street and Victory Park Lane will soon be a multilevel mixed-use building, which will include a 700-seat Cinepolis movie theater, the first of the high-end Mexican brand’s location in Texas. “I don’t think there’s going to be another Cinepolis in Dallas soon,” says Lance Fair, Estein & Associates chief operating officer who is also the vice president of the UST XVI Victory Park partnership. “As I talk to markets in which they are currently operating—Florida, California—those landlords say their delivery is top of the market. … No dis against other theater operators, but I like the idea that we’re going to have a

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unique theater in Victory.” In March of this year, Victory Park announced five restaurant and retail additions totaling more than 10,500 square feet. Read Between The Lines, Simply Elegant Dallas, Buda Juice, Classic Pilates, Jimmy John’s, Joanna Czech, The Hangar, and Victory Park CrossFit opened recently. BuzzBrews and Cafe Victoria will be open by spring 2016. These tenants will join others that occupy more than 160,000 square feet of existing retail and restaurant space. “Our criteria going forward is that every single storefront, every tenant has to look completely different than the tenant next to it, which is how real urban streetscapes look,” Montesi says, referring to what he calls “phase one-half” of the partnership’s redevelopment vision on the retail side. “They don’t look like the heavy hand of an office developer controlled the ground plan or the ground floor. I think if you go out there, and you look at the east side of [Victory Park Lane], you’ll already see that we’ve added four, five, six tenants, and that their storefronts are all different, their signs are all different.”

OFFICE HUB Office development has thrived in Victory Park. It currently houses 620,000 square feet of office space leased by tenants such as EY, TM Advertising, WFAA-Channel 8, and HFF. One Victory Park, a 19-story, Class A tower on Victory Avenue between Lamar and High Market streets, is jointly owned by UST Victory Park managed by Estein & Associates and Houston-based Hines. Its 436,000 square feet are 93 percent leased. Victory Plaza, which includes two five-story, Class A buildings totaling 185,000 square feet overlooking

SPOTLIGHT ON HILLWOOD Hillwood Urban, a division created in June 2015 to focus on landmark office buildings, large corporate office campuses, and mixed-use projects on urban and suburban land sites, is working to activate and promote the development in Victory Park that it controls.

EYES ON VICTORY

Over two years, Hillwood Urban has completed a 1,200-car garage with dedicated arena parking, which the city assumed ownership of. This project freed up additional land around the American Airlines Center.

THE HIGH LIFE

Hillwood sold 5 acres to three high-rise developers who are constructing around 1,200 units in 24- to 25-story towers at the north end of the district. Hillwood still controls 11 acres in Victory Park, some of which require arena parking use.

DOWN THE PIPELINE

Hillwood Urban has three projects in the works: > Two planned office building towers adjacent to the DART Rail station in Victory Park > A planned skyscraper at the corner of Woodall Rodgers Freeway and Field Street overlooking Klyde Warren Park > A Turtle Creek campus of The Perot Companies

SKY’S THE LIMIT

Its skyscraper project at the corner of Field Street and Woodall Rodgers Freeway is on the site of former Chase Bank. The tower is being designed and marketed, and the group is waiting to sign a lead tenant whose input will dictate certain building amenities and specifications before it breaks ground.

THE PERFECT FIT

In Victory Park, Hillwood holds an 8-acre contiguous tract running north of the DART Rail station. It’s looking for a singletenant user that’s hoping to grow and expand over time and is also interested in taking advantage of the area’s young and vibrant personality—plus the centrality to Uptown and downtown Dallas. Executive Vice President Ken Reese says there’s 1.5 million potential square feet on that site, which Hillwood’s Bill Brokaw is marketing to prospective office tenants. The timeline is unclear, as Hillwood needs the input of a collaborative client before real plans can be drawn, but Reese is optimistic. “It could be the Toyota for downtown,” he says, noting that large, single-tenant users typically set up shop in the suburbs rather than in Dallas’ urban core. But if Hillwood Urban builds it, they might come. “There are so many things that a building can do to enhance the culture of a company, and clearly, mixed-use corporate-style projects are what Hillwood does well.”

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A ANATOMY OF A DEAL

VICTORY CENTER

RENDERING: HINES

AT&T Plaza outside of the American Airlines Center, is 99 percent leased and also owned by UST Victory Park, managed by Cushman & Wakefield. Mark Dickenson and Cynthia Cowen of Cushman & Wakefield handle leasing efforts for both properties. Dickenson and Cowen are also handling leasing on behalf of Victory Center, which is being built just north of One Victory Park by Hines and Atlanta-based Cousins Properties. Announced last November, the 23-story, 466,000 squarefoot project will include office and retail space, plus a rooftop terrace space and a planned fitness center. “We have no [available] office space for rent, and as the market knows, there’s a billion being marketed to be built in office,” says Estein & Associate’s Fair. He also notes that the district’s hotel and entertainment offerings cater to a corporate crowd, with the former 33rd floor Ghost Bar space at the W—now called Altitude—repositioned to accommodate corporate functions after a $3.5 million renovation at the hotel a few years ago. Its meeting space is currently being renovated, which Fair believes will even further bolster Victory’s status as one of the best office markets in town. “We’re continuing to reinvest in the hotel, and it’s continuing to deliver fantastic financial results,” he says.

HAVING IT ALL If the goal of the Victory Park redevelopment is user-friendliness, the partnership has all facets of the live-work-play balance covered. The district is home to more than 1,700 residential units, and plenty more are on the way. The 377 studio, one-, and two-bedroom Arpeggio Apartments sit at the corner of Victory Avenue and Olive Street and opened in 2014. The community was developed by Behringer Harvard in partnership with Mill Creek Residential Trust and consists of two five-story buildings around a central parking garage. Camden Property Trust’s Camden Victory Park sits on 4.7 acres at the northeast corner of the American Airlines Center at All Star Way and Houston Street, and its 425 apartment units will come online in late 2015. The 28-story Cirque high-rise, in addition to offering panoramic views of the city, offers more than 250 one-and two-bedroom apartments. It was opened in 2007. Novare Group’s SkyHouse, which opened in January 2015, offers 336 studio, one-, two-, and three-bedroom apartments at the corner of North Houston Street and

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Continental Avenue. And Alamo Manhattan’s Moda Dallas apartments opened at Payne Street and Harry Hines Boulevard in spring 2014, too. The iconic House at Houston and Broom streets boasts 28 stories of condos for sale, while the House of Blues-adjacent Terrace at Houston and High Market streets offers a midrise version of similarly designed condominiums. The Vista apartments at Houston Street and Museum Way, the first luxury apartment rental community in Victory Park, offer six-story, 129-unit complex digs that were developed in 2006. (It was sold by the partnership to institutional investors in 2012 when it was 98 percent leased.) And all of this construction has boosted leasing rates, which are catching up to Dallas’ other “hot” neighborhoods, with Estein & Associate’s Fair noting that rental rates for multifamily in Victory Park are competitive with communities in neighboring Uptown. Development partners hope to create a place that residents, tenants, and visitors will want to visit. Trademark’s Montesi notes that public art will be a priority, with Victory’s communal spaces eventually becoming an expansion of the Art and Design districts of Dallas through a robust public art program. He says the Victory Park partnership is working with public art consultants and spatial artists in order to be a better steward of Dallas’ artistic soul. And all of this, according to both him and Fair, will reboot Victory Park with its own unique personality. “A destination that we’re proud of, versus a failed effort that we weren’t proud of—that’s really what we want to accomplish,” Fair says. “We could’ve sold almost everything we had and left the retail as a disaster, and walked out of here. But we are committed to staying the course, and making this something that Dallas would be proud of. I think it’s going to be a new destination.”

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A ANATOMY OF A DEAL

CHICKS ON THE VIC

BACK ROW: Anne Howrey, Chad Rookstool Salon; Luciana Gómez, Café Victoria; Joann Cuccurullo, Classic Pilates Studio; Jackie Bolin, V.O.D.

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PHOTO: MICHAEL SAMPLES

FRONT ROW: Melinda Jones, Read Between the Lines; Heather Evetts, Simply Elegant Dallas; Liz Thompson, V.O.D.

North Texas has long been a friendly environment for mavericks looking to forge success. This is still true in Victory Park, where women business owners have harnessed entrepreneurial spirit of the region. They call themselves the “Chicks on the Vic,” for Victory Avenue, where the group of women have leased space for their various companies. Among them is Luciana Gómez. She has started construction on Victory Park’s first coffee shop, Café Victoria, which will open next to Buda Juice in January 2016. Café Victoria stems from Gómez’s fondness of coffee. The Argentina native and self-proclaimed “coffee snob” lives in Victory Park and was drawn to the development when she saw a void in the market. “I invested from a personal standpoint when I got my place here, and now I’m investing from a business standpoint,” Gómez says. The shop was designed by Mitchell Garman Architects principal Kelly Mitchell, whose work includes restaurants Boulevardier, The Hospitality Sweet, and Rapscallion. Café Victoria will seat 12 to 14, mainly serving the commuter crowd with Oak Cliff Coffee Roasters’ brews. Anne Howrey, whose Chad Rookstool Salon has been open since August 2012, recently added the Joanna Czech spa, where she serves as president. She appreciates the camaraderie among business owners on “the Vic,” as well as the changing landscape she has seen in the last six months. Setting up shop in Victory Park has provided a competitive edge for the appointment-based Chad Rookstool Salon, and Howrey says walk-ins and customers from neighboring office and apartment buildings have bolstered the clientele there and at the new Joanna Czech spa. “Chad Rookstool could’ve been another hair salon on McKinney, or at Lovers and Inwood, or in Uptown, but we’re the premier hair salon in Victory Park,” she says. “And we weren’t scared of Victory Park. A lot of people were concerned because it had ‘fallen’ in the past, or whatever. But we didn’t have any problems.”

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A ANATOMY OF A DEAL LD

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COMPLETED IMPROVEMENTS TO VICTORY PARK LANE INCLUDE: > Removal of raised medians and streetlights

E N T E R TA NMENT RESTAURANTS &IBARS

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> Widening of sidewalks to accommodate outdoor patios

R E S TARETAIL URANTS

Havana Social Club AA C10A American Airlines Center Buda Juice A3 Havana Social Club H9 BuzzBrews (spring ’16) CH Cook Hall C7 Jimmy John’s C1 Kenichi H8 C10B Medina Oven & Bar Cafe Victoria Naga Thai Kitchen & Bar Olivella’s Neo Pizza Napoletana Shooters Victory Tavern W Living Room

> New trees > Addition of mid-block crosswalks

TO BE COMPLETED EARLY 2016 > Addition of placemaking elements such as planters, benches, light poles, and banners R E TA I L OTHER/SERVICES

14 Read BetweenF8the Lines 18 Naga Thai Kitchen & Bar Buda Juice 15 Simply Elegant Dallas H1 Olivella’s Neo Pizza Napoletana19 BuzzBrews (Spring ‘16) 16Hall The Hangar A5 20 Cook Shooters 17John’sV.O.D. Boutique Victory Tavern Jimmy A6 21 LR W Living Room Kenichi 22 Medina Oven & Bar 23 Cafe Victoria 24

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Classic Pilates Read Between the Lines C5 Metro Tickets Simply Elegant Dallas C 11 Plains Bank A4 Capital The Hangar (twoC9locations) V.O.D. Boutique WFAA Channel 8 Joanna Czech Chad Rookstool Salon Victory Crossfit

> Two way traffic conversion on Houston Street and Victory Avenue with dedicated bike lanes on Houston Street and shared bike lanes on Victory Avenue OTHER /SERVICES BUILDINGS/PARKING

Cirque

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Classic Pilates

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Metro Tickets

New Construction

R1

Plains Capital Bank

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WFAA Channel 8

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Joanna Czech (Fall ‘15)

C2

Chad Rookstool Salon

H6

Victory Crossfit

W Hotel & Residences East Plaza Building Garages/Lots

The Vista The Terrace

Bicycle Lane

One Victory Park

B U I L D I N G SWest / PA RPlaza K I N GBuilding Cirque

Bicycle lane The Vista

New Construction

The Terrace

W Hotel & Residences

One Victory Park

East Plaza Building

West Plaza Building

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T TOOLBOX

MONEY BEHIND MANPOWER HOW STATE-FUNDED WORKFORCE TRAINING CAN ATTRACT NEW TALENT AND KEEP EXISTING BUSINESSES COMPETITIVE

PHOTO: IMANI LYTLE

KELLEY H. BALL, CHIEF OPERATING OFFICER AT PERFORMANCE POP

BY JEFF BOUNDS

Performance POP creates in-store displays and does related printing for the likes of Heineken, Levi Strauss & Co., Home Depot, and Neiman Marcus. However, as the Dallas company grew, new training was required for its staff, but it needed additional funds to pay for all the skills upgrades its workforce demanded. After all, workforce support and training can be critical when luring and retaining new businesses, or new talent, into the region. Enter the Skills Development Fund, a state-funded program that covers much of the cost of customized job training. The training is provided mostly through public community and technical colleges, along with the Texas Engineering Extension Service. With the skills fund picking up the tab, more than 100 of Performance POP’s roughly 145 employees received schooling in 2014 and 2015 on various elements of their jobs. For instance, some machine operators learned how to set up computer-controlled devices for cutting hard materials, a skill that increased their value to the business. Other workers got up to speed on using software, including Microsoft’s Excel spreadsheet program. And a number of folks learned how to bring to life “lean management” principles for achieving ongoing improvement through small changes in various parts of the company’s operations. “The [development fund] not only helped our company, but I believe it also had a real impact on many of the careers of our employees,” says Kelley H. Ball, chief operating officer at Performance POP. Performance POP is one of thousands of Texas employers that has taken advantage of the Skills Fund since legislation creating the program was enacted in the mid-1990s. In the 16-county North Texas region, the fund made a total of

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$84.5 million in awards from its inception in September 1995 through the end of August 2014, according to the Texas Workforce Commission, which administers the program. The North Texas region, as defined in the Fund’s annual report, has brought in 26 percent of the program’s funding since its inception, according to Kelley Rendziperis, a principal and leader of the economic incentive services division at Site Selection Group, a Dallas-based location advisory firm. But, Rendziperis notes, the North Texas region saw its share of Fund awards grow to 41 percent in 2014. “As the [Dallas-Fort Worth] market expands, the Skills Development Fund may become a more important factor in site selection decisions,” she says. “The fund has been used to develop and build upon the region’s strengths.” During that time frame, the fund has helped 4,074 employers create more than 101,000 jobs statewide and upgrade the skills of more than 215,000 existing workers, Workforce Commission data shows. Businesses in North Texas that have participated in the program range from cosmetics giant Mary Kay to furniture maker American Leather and Doctors Hospital at White Rock Lake. The Skills Development Fund is a vital consideration for companies that are thinking about relocating or setting up operations in Dallas-Fort Worth, according to Susan Arledge, managing principal at Cresa Dallas, a leading tenant representation firm. “It is a very significant program, and critically important to those that will be bringing large numbers of employees or will be seeking highly qualified or trained individuals,” Arledge says. “Texas’ program is attractive, as it incorporates the state’s community and technical colleges, as well as local workforce development boards and economic development partners. Those organizations provide training, new-hire assistance, and customized training programs that the Skills Development Fund helps pay for.” The Fund is also important for companies that are based in Texas or that are expanding CONTINUED 3

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T TOOLBOX ■ Trainees’ wages; ■ Paying for travel costs for either trainees or instructors; ■ Trainees’ drug tests. As a rule, the skills fund targets industries and businesses with high-skill, high-wage jobs that are in demand, Givens says.

GETTING THE WORD OUT PHOTO: IMANI LYTLE

PERFORMANCE POP’S EMPLOYEES RECIEVED TRAINING THROUGH THE SKILLS FUND.

their operations here, according to Mike Rosa, senior vice president of economic development at the Dallas Regional Chamber. “If a company’s hiring and skills needs exceed the local labor force capacity, or the company has a new technology, then having the Skills Development Fund is important,” he says. For small companies in particular, the skills development fund can provide an avenue for improving their operations without a big outlay of cash. “There is no way we could have provided the training for these employees without the funding,” says Ball of Performance POP. “All of the costs associated with the instructors and the materials were covered in full. We are believers.”

FIRST STEP: FIND A PARTNER For an individual firm or a group of companies that need customized training for employees, the first step to taking advantage of the development fund is to join forces with a community or technical college. “The college, in conjunction with the business, develops a customized training plan,” says Lisa Givens, director of communications at the Texas Workforce Commission. The college then completes and submits an application, with the approval of the local workforce board, to the agency for a grant from the Skills Development Fund, she says. The workforce commission makes decisions on “quality applications” within 45 days. The application-to-approval process generally takes 90 days from the date when the business fully commits to participating in a project that the program may fund, Givens adds. Grants from the program go to the college, which can broker relationships with other training providers if need be. The college must sign a contract with the workforce commission before getting any money. The school is responsible for providing assessment services, facilitating training, and administering the grant, Givens added. Ultimately, the amount of a given grant will depend on how many people are receiving training and the types of information they will be learning. A single business may face a cap of $500,000 per grant, based on a target cost of $1,800 per trainee. The program may make grants of more than $500,000, such as for training for consortiums of businesses, Givens says.

WHAT GRANTS WILL, WON’T PAY FOR Broadly speaking, grants pay for both the cost of customizing the training and delivering it to employees. Schools can also use up to 10 percent of the direct-training portion of a grant to buy equipment necessary to provide the training. Money from the development fund cannot be used for any of the following, according to Givens: ■ Training and related costs of a business that moves its worksite from one part of Texas to another; ■ Buying proprietary or production equipment for training of a single local employer;

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Between September of this year and August 31, 2017, the Workforce Commission will dole out a total of $48.5 million in grants for the skills program. That should support 24,864 new and existing workers in Texas. A big part of George Laffoon’s job description is getting the word out about those training dollars. He is projects leader in the solutions development operation of the Bill J. Priest Institute for Economic Development, which is a campus of El Centro College. Aside from the workforce commission, Laffoon’s group works with organizations like Workforce Solutions Greater Dallas, North Texas’ chambers of commerce, and the city of Dallas to find businesses that might be a good fit for a skills development project. “We use business networking and referrals,” he says. For companies that take advantage, the training their employees receive can produce results. Los Barrios Unidos Community Clinic, a health center that serves West Dallas’ large Hispanic population, has been able to develop a system for prioritizing patients’ phone calls and providing guidance to callers because of training its staffers received via the development fund, according to CEO Leonor Marquez. “Our robust telephone triage system is one of the ways we provide the right care, the right way, and at the right time to our patients,” she says.

TO FIND OUT MORE: The Texas Workforce Commission has a group dedicated to assisting companies secure employee training that the Skills Development Fund can help pay for. Reach the agency’s Skills Development Fund Outreach and Project Development Team at 877-463-1777 or skills@ twc.state.us. To find a nearby two-year public community or technical college, visit the Texas Higher Education Coordinating Board’s College Locator at thecb. state.tx.us/apps/GM. VISIT ANY OF THE FOLLOWING WEBSITES: skills.texasworkforce.org texasworkforce.org/selfsufficiencyfund ssb.texasworkforce.org twc.state.tx.us/programs/skills-veteransprogram-overview

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C COMMUNITY

Sue Ansel, Chairman

IMPACT INVESTORS

Diane Butler, Vice Chairman

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.

CHAMPION’S CIRCLE

JP Morgan

US Bank

Locke Lord LLP

Balfour Beatty Construction

Munsch Hardt Kopf & Harr PC

Wells Fargo Bank

Lowery Property Advisors

Bank of America Merrill Lynch & Bank of America Merrill Lynch/ Charitable Foundation, Inc.

NorthMarq Capital

Winstead PC

Mill Creek Residential Trust LLC

Bank of Texas

Republic Title of Texas, Inc. The Howard Hughes Corporation

BENEFACTOR’S CIRCLE

NexBank Peloton Commercial Real Estate

Amegy Bank

PRESIDENT’S CIRCLE

Schwob Companies

American National Bank of Texas

Stonelake Capital Partners

Breitling Royalties Corporation

Beck Group

Strasburger & Price, LLP

Chief Partners LP

Berkadia Commercial Mortgage

Stream Realty

Comerica Bank

Bradford Companies

Thackeray Partners

Corgan

Capital One Bank

The Retail Connection

DTZ

Corinth Properties

TIER REIT, Inc.

Goldman Sachs

First United Bank

Trammell Crow Company

Grant Thornton

Fischer & Company

Hart Commercial

Frost Bank

Venture Commercial Real Estate, LLC

Invesco Real Estate

Gaedeke Group LLC

Jackson Walker LLP

Gardere Wynne Sewell LLP

Compatriot Capital

Jackson-Shaw

Gensler

Crow Holdings Capital Partners, LLC

KDC

GFF

KeyBank

Haynes and Boone, LLP

Deloitte

KPMG

Hillwood Construction Services

Ernst & Young

LegacyTexas

Independent Bank

Gables Residential

Matthews Southwest

Inwood National Bank

Granite Properties

Regions Bank

Jones Day

Holt Lunsford Commercial

Stewart Title

Kane Russell Coleman & Logan PC

Hunt Realty Investments, Inc.

StreetLights Residential

Kimley-Horn and Associates, Inc.

Jones Lang LaSalle (JLL)

Trammell Crow Residential

Lincoln Property Company

BBVA Compass & BBVA Compass Foundation Bury CBRE HFF Hoblitzelle Foundation

CHAIRMAN’S CIRCLE Behringer Butler Burgher Group Chicago Title Company/ Fidelity National Financial (FNF)

WHO WE ARE 1,500 commercial real estate professionals strengthening our industry and community by connecting members, developing leaders, advocating for business, and investing financial and human resources in good works.

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PATRON’S CIRCLE* Fauxcades Hilton Anatole Hotel South Side on Lamar Lofts Texas Land Care * Donors who have provided in-kind goods and services

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

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PAID ADVERTISEMENT

Property Developer: Structured Financing Meets Structured Risk DFW Risk Management Experts - Arthur J. Gallagher & Co.

Statler Hotel and Residences Steve Pierce I know it’s cliché, but real estate is truly booming in Dallas. On your next drive downtown, look around and count the cranes. About 4,600 units announced or under construction in the 15 districts of Downtown Dallas. But we are not just looking at new building construction. Renovations, redevelopment, adaptive reuse, reconstruction and facadism are booming as well, resulting in immeasurable benefits and contributions to the innovative movement happening in our city. The Statler is emblematic of mid-century buildings in large urban areas that are less suitable for their programmatic requirements as progress, technology, politics and economics move faster than their built environment. Redevelopers can expect that a high cost investment is necessary to reconstruct and rejuvenate these structures, and most decide to completely demolish and build from scratch. For the 59 year old Hilton, however, a great team of visionaries chose to maintain the value of its iconic history for the next generations to come - at a $175 million dollar price tag. This alternative route is complicated, requiring the leverage of public and private funds necessary to increase cash, resulting in improved IRR and decreased risk. Historical building redevelopment projects, specifically, introduce unique issues and challenges that equally require the right experts, ideas and alternative sources of capital.

THE ISSUE: Unlike a colonial governor’s home or sto-

ried battlefield, structures of relatively recent vintage

have not engendered similar levels of appreciation. The cost of redevelopment simply can’t yield the returns necessary to finance the project. In an effort to protect the Statler, the development team worked to secure its inclusion in the designation of a potential historic district. Through public-private structured financing, the developer was able in find incremental cash flow from non-traditional sources of capital allowing the project to pencil out. What developers and owners will also discover is these sources of cash and alternative capital require specific needs for protection from performance, catastrophic events and inherent design, development and construction risks.

THE CHALLENGE: Years of neglect and aging, resulting in minimal

structural decline and water damage, add challenges to any renovation the size of this large real estate project. In 2013 a Dallas based developer diligently pursuing purchase of the property, indicated the deal fell through because they could not make the financials work. Centurion American, the awarded developer primarily managing the development process, had taken several years to structure the transaction. Centurian American was able to secure all the financing, which included significant equity to be generated by state and federal historic rehabilitation tax credits. Original plans called for the historic rehabilitation to provide solutions for its physical renovation including a fully modernized interior. As conversations in planning progressed, questions like, “What if construction was underway and we experience a sudden fire that ravages the building?” arose among the group. Commonly, most of the attention is focused on structuring the transaction, building the project and setting up mechanisms to ensure adequate compliance with local, state and federal financing authorities. But what happens if a disaster like a fire, hail or windstorm or damages the project during construction, or before the end of the tax credit recovery period? As important as it is to plan all aspects of a redevelopment property’s physical structure, developers must plan to have a structured risk solution to cover the investment and project stakeholders before, during and after the project is complete.


PAID ADVERTISEMENT

YOU SHOULD KNOW THAT STRUCTURED RISK IS A SOLUTION PROCESS THAT HELPS TO SEAL THE DEAL.

THE SOLUTION: You should know that structured risk is a process of integrating insurance products with development risk management techniques which weave the solution into the development, construction and financing documents. Expertise in development operations, construction process, contracts and helping all the parties understand how the risks of the project will be financed and allocated requires a diverse and collaborative team of experts. Arthur J. Gallagher’s local development and construction team along with other project partners designed and implemented a multi-party integrated risk management and project insurance delivery plan. Our solution needed to protect the design, development, construction, financing and tax incentives that would support the success of the Statler’s reimaging work.

Since the property was approved as a local landmark, this allowed for financial incentives such as Federal Rehabilitation Tax Credits, as well as State Incentives to potential buyers. In addition, the visa exchange program “EB 5” introduced additional capital. The structured solution for the Statler included liability, property, environmental, historical tax credit and recapture protection. As with any property, the right solution will be a tailored program that perfectly fits the property’s planned needs, and in essence protect: • • • • • • •

Investment Capital (debt and equity) People Physical Assets Cash Flows Surrounding buildings Reputation of the project stakeholders

Property and Casualty Broker Steve Pierce 5420 Lincoln Center, Ste. 400 Dallas, TX 75240 Phone: 972.663.6157 www.AJG.com/Dallas

Several sources of capital contributing to the success of the project include: • • • • •

TIF is a form of financing (Tax Incremental Finance) Tax Districts State Historical Tax Credits Federal Historical Tax Credits HUD Guaranteed Loans

This is an exciting time for Dallas. The number of people living downtown has increased from 300 in the mid 90’s to nearly 10,000 by the end of 2015. Our development team here at Gallagher looks forward to supporting the city, local developers and the construction community at large to continue to transform and shape our urban community. Next Article:

Dallas Marriott Hotel

To learn more about how our community continues to evolve through redevelopment, adaptive reuse and the unique world of public-private structured finance and structured risk, register for the Develop Dallas Panel hosted by Arthur J. Gallagher and our partners this upcoming spring 2016. I www.AJG.com/DallasBuildersPanel


C COMMUNITY The Dallas Regional Chamber recognizes the following companies and organizations for their membership investment at one of our top levels. Bold-faced companies are represented on the DRC Board of Directors. For more information about the benefits of membership at these levels, call 214-746-6600 .

STRATEGY BKD Chase Texas Instruments Toyota Motor North America

CATALYST Active Network AT&T Baylor Scott & White Health Capital One Bank Chickasaw Nation Comerica Bank Dallas/Fort Worth Int’l Airport Hilti North America Hunt Consolidated, Inc. JC Penney Company, Inc. ONCOR Tom Thumb Food & Pharmacy Wells Fargo

ADVOCATE 7-Eleven, Inc. Akin Gump Strauss Hauer & Feld Amegy Bank of Texas American Airlines Axxess Baker Botts LLP BB&T BBVA Compass Caregiver Support Systems CBRE Group, Inc. Children’s Medical Center Citi Copart Corrigan Investments, Inc. Dallas Morning News Dal-Tile Corporation Deloitte LLP Dr Pepper Snapple Group Energy Future Holdings Exxon Mobil Corporation EY FedEx Office Fidelity Investments Fluor Corporation Forest City Texas, Inc. Frito-Lay North America Glazer’s

Golden Living Haynes and Boone, LLP HEB and Central Market Highland Capital Management LP HKS IBM Corporation Invesco Jones Day KPMG LLP Kroger Food Stores Littler Mendelson, PC Locke Lord LLP Lockheed Martin Luminant Medical City Dallas Hospital/ Medical City Children’s Hospital Methodist Health System Microsoft Corporation NEC Corporation of America Omni Dallas Hotel Omnitracs PwC Reliant Energy Rent-A-Center Sheraton – Dallas TDIndustries Tenet Healthcare Corp. Texas Central High-Speed Railway, LLC Texas Health Resources Texas Scottish Rite Hospital for Children Thomson Reuters, Tax & Accounting TM Advertising Torchmark Corporation TXU Energy UT Southwestern Medical Center LegacyTexas Bank Winstead PC

BOARD OF ADVISORS Abbott Labs Abilene Christian University Acadian Ambulance Accenture Aetna Airbus Helicopters, Inc. Alcatel-Lucent Alix Partners

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Americas Auto Auction Ameriflex Andrews Distributing Andrews Kurth LLP Army & Air Force Exchange Service Arthur J Gallagher & Co. Austin Industries AustinCSI Avanade Baker & McKenzie, LLP Bank of America Bank of Texas, N.A. Barnes & Thornburg BDO USA, LLP The Beck Group Blue Cross and Blue Shield of Texas Blur Group Big 12 Conference Bracewell & Giuliani LLP Breitling Energy Brierley & Partners Brinker International, Inc. Brinkmann Corporation Bury C.C. Young Cantex Continuing Care Capital Institutional Services Cassidy Turley CHRISTUS Health CIGNA Healthcare ClubCorp Inc. Coca-Cola Refreshments Colliers International Commerce Bank Consolidated Communications Cook Children’s Healthcare Corgan Associates, Inc. CP&Y, Inc. Cushman & Wakefield of Texas, Inc. Dallas County Community College District Dallas Cowboys Football Club DHD Films Dallas Marriott City Center Dallas Stars Hockey Club Dean Foods Company Dell Services

Dialog Direct E Smith Realty Partners Ebby Halliday, Realtors Edelman Public Relations Worldwide EF Johnson Technologies Emerge Education EN Consulting, Inc. Eulen America Etihad Airways The Fairmont Dallas Federal Reserve Bank of Dallas Flowserve Corporation Fossil Freeman Frost Bank Furniture Marketing Group Gardere Wynne Sewell LLP Generational Equity Gensler Global Power Equipment Goldman Sachs Grant Thornton LLP Greatbatch, Inc. Greenberg Traurig, LLP GSSW Real Estate Investments Gulfstream Aerospace Corp. Gupta & Associates HDBD Hill & Wilkinson Hilton Anatole Hilton Worldwide HNTB Corporation Holland & Knight LLP HollyFrontier Corporation Holman Boiler Works, Inc. HOLT CAT HUB International Humana Inc. IBC Bank InStaff Interceramic, Inc. Int’l Leadership of Texas Ivie & Associates Jackson Walker LLP Jacobs JE Dunn Construction JLL

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Johnson Controls Inc. LeTourneau University Life School Linked Executive Search Live Nation Lockwood, Andrews, & Newnam MHBT, Inc. Midway Press, LTD Mission Foods Montgomery Coscia Greilich Neiman Marcus Nestle Waters North America Nextt Northwood University The Novo Group NTT Data, Inc. NYLO Hotels, LLC Oliver Wyman ORIX USA Corporation Parker University Parkland Foundation PDS Technical Services People Performance Resources Pioneer Natural Resources PlainsCapital Bank Pollock Paper Distributors Point B Publicis Hawkeye Regions Bank Responsive Ed Rexel Holdings USA Rosewood Crescent Hotel Rosewood Property Co. Schneider Electric Sethi Petroleum LLC. Sidley Austin, LLP SimplexGrinnell Site Selection Group, LLC Slalom Consulting Southern Methodist University Southwest Airlines Southwest Office Systems Squire Patton Boggs (US) LLP Staffelbach, Inc. State Farm Insurance Strasburger & Price, LLP Strategic Staffing Solutions Susan G. Komen TDJ Enterprises Texas Woman’s University Thompson & Knight LLP Time Warner Cable TopGolf Town of Addison Trane Commercial Systems TravisWolff, LLP TrustPoint Management Turner Construction Company UMB Bank N.A.

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University of Texas at Arlington University of Texas at Dallas Univision UnitedHealthcare URS Corporation Verizon Wireless Village Green Holding, LLC Vinson & Elkins LLP Vorex, Inc. Walgreen’s Company Weber Shandwick Southwest WFAA-TV Whitley Penn, LLP Weil, Gotshal & Manges LLP WFF WNA Worldlink

LEAD AAA Texas, Inc. Ackerman McQueen Acme Brick Company Adolfson & Peterson Construction Adolphus Hotel Advocare International, L.P. Alcuin School Alliance Data Allsteel Wilson Alston & Bird, LLP Ameriflex APAC - Texas, Inc. Ash Grove Cement Company Automatic Data Processing Aviall, A Boeing Company Bain & Company, Inc. Balfour Beatty Construction Beasley, Hightower & Harris, PC Berger Engineering Co. Beshear Group Boka Powell, LLC Boston Consulting Group Brunswick Group, LLP BullsEye Telecom Business Jet Center Callison LLC Carrington, Coleman, Sloman & Blumenthal, LLP Carter Financial Management Cawley Partners Champion Partners Chandler Signs LLP CityDoc Urgent Care CLEAR Commercial Metals Company Community Coffee Consumer Credit Counseling Service of Greater Dallas, Inc. Crowe Horwath LLP CyrusOne D&M Leasing Dallas Foundation

Dallas Mavericks Dalworth Restoration Databank, Ltd. Dave and Busters DeGolyer and MacNaughton EnLink Midstream LLC Essilor of America, Inc. Estrada, Hinojosa & Company, Inc. FC Dallas FPL Fibernet, LLC Gables Residential Trust George W. Bush Foundation Guardian Mortgage Co. Gibson, Dunn & Crutcher LLP Halff Associates, Inc. Hampton Inn & Suites Hart Group, Inc. Hazel’s Hot Shot, Inc. Hill + Knowlton Strategies Holmes Murphy and Associates Huawei Technologies Hunt Construction Group Hunton & Williams LLP Huselton, Morgan & Maultsby, PC Hyatt Regency Dallas Hyatt Regency DFW Imaginuity Interactive, Inc. In-N-Out Burger Jefferson Tower Events Joule, A Luxury Collection Hotel KidsCare Therapy Kimberly-Clark Corporation LBJ Infrastructure Group LLC Linebarger Goggan Blair & Sampson, LLP Linkex, Inc. Lucas Group Marsh USA, Inc. Martin Marrietta Mary Kay Inc. McAlister’s Deli – Dallas McKinsey & Company, Inc. Mend Metl-Span, LLC Metrocare Services Monitronics International, Inc. Monogram Apartment Collection MW Logistics, LLC MWH Americas, Inc. Munsch Hardt Kopf & Harr, PC Networking Results, Inc. New York Life Regional Headquarters North Central Surgical Hospital North Texas Endoscopy Centers Ocean Prime Restaurant Office Depot Business Solutions OHL PdvWireless Pegasus Community Credit Union Peter O’Donnell, Jr.

Polsinelli PC Post Properties, Inc. ProBuild Prudential Asset Resources Questcare Medical Services RISE The Ritz-Carlton, Dallas Rehab Synergies Republic Title of Texas Ruth’s Chris Steak House Russell Reynolds Associates, Inc. Securadyne Sewell Automotive Companies Shepard Agency Stream Realty Smart City Networks LP Southwest International Trucks Sparks Agency Spine Physicians Institute Staff One HR State Fair of Texas Stream Realty Partners Structure Tone Southwest Sun Holdings, LLC Summit Financial Group Supreme Lending Texas A&M University Commerce Texas Brand Bank Texas Capital Bank Texas Oncology Texas Rangers Baseball Club The Westin Dallas Downtown Tiger Media Towers Watson Tradition Senior Living Trinity Basin Preparatory Triumph Learning Union Pacific Railroad United Surgical Partners International University of Phoenix University of South Carolina Career Center USAA U.S. Memory Care VeepWorks Virgin America Airlines VOX Global W Dallas – Victory Hotel Walton Development and Management Weaver Westin Galleria Dallas Winston School Woodbine Development Corporation Worldwide Express XO Communications Yates Construction Zale Corporation

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C COMMUNITY THE REAL ESTATE COUNCIL’S 25th ANNIVERSARY LUNCHEON

The Real Estate Council celebrated its 25th anniversary with a luncheon at Dallas City Hall’s Flag Room on October 14. Attendees gathered at noon to recognize the council’s impact on policy and community for more than two decades. Special guests included Mayor Mike Rawlings, Dallas City Council members Lee Kleinman and Jennifer Gates, Sue Ansel, Diane Butler, John Scovell, Jeff Swope, Karl Zavitkovsky, and the council’s own Linda McMahon. JEFF SWOPE, MAYOR MIKE RAWLINGS, DAVID DENIGER

WILL ADAMS, CLARK PULLIAM, NATHAN GOLIK

KATE CAVANAUGH, NEAL SLEEPER, MELISSA EASTMAN

DIANE BUTLER, COUNCILWOMAN JENNIFER GATES, SUE ANSEL, LINDA MCMAHON

JOSH A. HEDDERICH, JOHN BIELAMOWICZ, JUSTIN GOERTZ

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L LEADERSHIP

INVESTING IN THE REGION HELPS LEADERS GIVE BACK Jackson-Shaw’s Michele Wheeler has discovered that leadership is about learning from others. BY JUSTIN POLLARD

CHAD SCHIEBER, BRIAN SMITH

JOHN SCOVELL, WILL MUNDINGER

As a frontrunner in the world of Dallas real estate, Michele Wheeler has always had an eye for development. Mentored by her real estate/broker mother, Wheeler learned the ropes at a young age. Today, she is president and COO of Jackson-Shaw, a national real estate development company. But the graduate of The Real Estate Council’s 2000 Associate Leadership Council (ALC) program credits her experience with ALC for helping develop interpersonal communication skills—specifically, putting time into building strong relationships. “I learned about making an investment in the city and paying it back to the place we all live, work, and love,” she says. “I invested more time into the program, so I received more reward from it.” Many of the relationships Wheeler formed during ALC led to other opportunities. Since graduating from the program, she has served on the Boys and Girls Club of Greater Dallas board and participated in education initiatives in Oak Cliff. Wheeler felt called to further devote herself to the ALC program, donating her time as chairman and now serving on the advisory board for The Real Estate Council. She says she’s always looking for ways to make ALC better and “constantly looking for people who would benefit from the program.” “ALC gives young leaders valuable insight into what really makes Dallas a great city, and how they have a social and moral obligation to pay it back and pay it forward,” Wheeler says. “It was the most meaningful volunteer activity that I’ve ever been

“I LEARNED ABOUT MAKING AN INVESTMENT IN THE CITY AND PAYING IT BACK TO THE PLACE WE ALL LIVE, WORK, AND LOVE.” — MICHELE WHEELER, JACKSON-SHAW

involved with, and I’ve done a lot of charitable endeavors. From a professional standpoint, ALC was the one program that has been instrumental to me.”

ASSOCIATE LEADERSHIP COUNCIL

SUE ANSEL, COUNCILMAN LEE KLEINMAN, DIANE BUTLER

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The Real Estate Council’s Associate Leadership Council (ALC) is a 10-month leadership development program for 27- to 37-year-old commercial real estate professionals designed to inspire and educate future leaders. For more details, visit recouncil.com.

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CALENDAR OF EVENTS

L LEADERSHIP “YOU LEARN A LOT ABOUT YOURSELF BY DEVOTING YOUR TIME TO GIVE BACK TO THE COMMUNITY.”

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.

— IGNACIO HERRERA, KDC

OCTOBER.. OCTOBER 26 Rising to the Top. 6 p.m., Tacos and Tequila. Learn what it takes to be successful from a panel of leading commercial real estate executives as they discuss current industry trends, career history, and tips for advancement. [The Real Estate Council]

OCTOBER 29 Power Hour. 5 p.m., Gables McKinney Avenue. Get an exclusive look at Uptown’s present and future from the market’s leading professionals and learn how the area is shaping urban planning in Dallas. [The Real Estate Council]

NOVEMBER.. NOVEMBER 4 Economic Outlook Summit. 7:30 a.m., Adolphus Hotel. Dr. Ray Perryman gives a report on the state of the economy. Speakers also include Texas Comptroller Glenn Hegar and former Secretary of Energy Spencer Abraham. [DRC]

NOVEMBER 12 Giving Gala. 6:30 p.m., Gilley’s Dallas. Annual event raising funds to help fulfill The Real Estate Council Foundation’s mission to make tangible, positive difference in Dallas’ neediest neighborhoods. [The Real Estate Council]

NOVEMBER 18 Leads Over Lunch. noon, Truluck’s. Lunchtime networking series designed to help you expand your business network. Roundtable setup features the opportunity to meet as many as 100 quality business professionals. [DRC]

DECEMBER.. DECEMBER 1 State of the City. noon, Hilton Anatole. Annual luncheon featuring Mayor Mike Rawlings with a discussion on current issues important to Dallas and the local business community. [DRC]

DECEMBER 3 Bank of Texas Speaker Series, presented by The Dallas Morning News. 7:30 a.m. Featuring Casey Gerald, founder of MBAxAmerica, Presidential Leadership Scholar, and Dallas native. [The Real Estate Council]

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BUILDING CONNECTIONS FOR A BETTER DALLAS-FORT WORTH For KDC’s Ignacio Herrera, getting involved in the community is what it’s all about. BY JUSTIN POLLARD

A native of Mexico with engineering in his blood, Ignacio Herrera never felt like he had a foothold in the Dallas community until his involvement with Leadership Dallas in 2011 gave him the experience he needed. Now a project manager at KDC, Herrera helps manage the development of Toyota’s North American headquarters in Plano, but he’s just as focused on giving back to the community. Leadership Dallas “focuses on things from education to politics to healthcare to the home office,” he says. “You get to learn about several dynamics of the city, which can easily be compared to the vastness of a real estate project.” During Herrera’s time in Leadership Dallas, his project focused on the renovation of Turtle Creek Recovery Center, one of the longest-existing mental health institution in North Texas. Herrera is now on the board of directors for the nonprofit. “The community that matters the most is yours, wherever you are,” he says. “You learn a lot about yourself by devoting your time to give back to the community.” Herrera still frequently meets with classmates, as well as those from 2012, for whom he was class adviser. He also participates in the annual alumni day of service, which keeps him connected to the program and the community. “Anybody who is willing to invest the time into a program like Leadership Dallas can certainly become part of a strong leadership force in the city,” he says. “It will not only change your life, but it will also empower you to make a positive impact in the community.”

Leadership Dallas, the flagship program of the Dallas Regional Chamber for leadership development, is aimed at increasing the leadership pool for community activities in the Dallas area. Visit dallaschamber.org for more information.

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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/


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.

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 highprofile investments to the city. Arlington has an extensive track record of recruiting globally recognized corporations and developing large-scale projects. Arlington is home to the only General Motors assembly plant that builds GM’s award-winning, full-size SUVs. It is also home to the University of Texas at Arlington, Texas Rangers’ Globe Life Park, Six Flags Over Texas, and the Dallas Cowboys’ $1.2 billion AT&T Stadium. Arlington is increasingly becoming known as a hub for engineering, advanced manufacturing, technology and medical sciences. This emerging innovation center is fueled in part by Arlington’s skilled, educated workforce.

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

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

BRUCE PAYNE, Economic Development Manager CITY OF ARLINGTON OFFICE OF ECONOMIC DEVELOPMENT 101 West Abram Street PO Box 90231 MS 01-0300 Arlington, Texas 76004-3231 bruce.payne@arlingtontx.gov arlingtontx.gov

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SPECIAL ADVERTISING SECTION

Frisco is DFW’s boomtown. It’s hard to believe the area was a stretch of farmland a decade ago; now, it’s exploding with urban growth, and its population and skyline continue to reach new heights. The city is located across Collin and Denton counties, and boasts an easy 25-mile commute to downtown Dallas. Frisco’s residents have pride, and they’ve created a close-knit community atmosphere. They gather for Christmas parades on Main Street, and catch games at Dr Pepper Ballpark. Locals love Stonebriar Centre and Frisco Square, both filled with upscale stores, tiny restaurants, and street musicians. Kids adore Frisco’s abundance of playgrounds, such as the special-needsfriendly Hope Park, and with some of the best schools in North Texas, Frisco is a family’s dream. Luxe mixed-use communities, a pedestrianfriendly atmosphere, and the laid-back bar scene draw young professionals, too. Frisco has unbounded potential, and today is just the beginning. JAMES L. GANDY, CECD, CCIM, President FRISCO ECONOMIC DEVELOPMENT CORPORATION 6801 Gaylord Parkway, Suite 400 Frisco, Texas 75034 972-292-5150 JGandy@FriscoEDC.com www.friscoedc.com

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The McKinney Economic Development Corporation (MEDC) was created in 1993 to support the development, expansion, and relocation of new and existing companies. The MEDC is an organization with a mission to work to create an environment in which community-oriented businesses can thrive. JIM WEHMEIER, President and CEO MCKINNEY ECONOMIC DEVELOPMENT CORPORATION / CITY OF MCKINNEY 5900 S. Lake Forest Dr., Ste. 110 McKinney, TX 75070 info@mckinneyedc.com 972.547.7651 mckinneyedc.com

Rockwall Economic Development Corporation assists new and existing companies, both large and small, in the development, modernization, and expansion of business in a booming global economy. We are dedicated to your company’s growth through incentive programs, financial assistance, comprehensive sites, and resource collaboration. While collaborating with city leaders, we have secured the necessary infrastructure, services, and high-tech amenities to maintain thriving, profitable businesses. Rockwall has big-city conveniences yet maintains a small-town atmosphere. Rockwall offers quality of place and peace of mind.  SHERI FRANZA, President and CEO ROCKWALL ECONOMIC DEVELOPMENT CORPORATION 2610 Observation Trl. Rockwall, TX 75032 972.772.0025 sfranza@rockwalledc.com rockwalledc.com

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

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VIEW FROM THE TOP

BY SARAH BENNETT

CARY EVERT

Liechtenstein-based Hilti is coming up on its 75th birthday next year. With operations in more than 120 countries, the company focuses on construction and technology. The North American headquarters, home to $1 billion of the $4.7 billion organization, had been housed in Tulsa, Oklahoma, since 1979. But last May, Hilti picked up and moved to Dallas. CEO Cary Evert talks about the transition—in which a whopping 76 percent of Tulsa team members chose to relocate with the company.

WHAT INSPIRED THE MOVE FROM TULSA TO DALLAS?

We were really struggling to recruit millennials from all over North America, because we weren’t really recruiting in Oklahoma—we were recruiting all ages, all over. Second, Tulsa is a great city—no complaints, great place to raise a family— but we’re in the construction business, and there’s not much construction there. So we wanted to be in a major construction marketplace, because that’s what we do. Third, we wanted to be in a major travel hub, because we travel all over the world and North America.

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PHOTO: COURTESY OF HILTI NORTH AMERICA

President and CEO, Hilti North America

YOUR OFFICE IS IN PLANO. WHY WAS THAT THE RIGHT CHOICE WITHIN DALLAS–FORT WORTH?

We actually have three facilities. Plano is the corporate office; we have a testing, development, and service center in Irving; and we have a brand-new warehouse facility in Dallas. We evaluated 22 cities in the United States, including Tulsa, and when we finally decided on Dallas–Fort Worth, the next step was to find a quality place for our people to live. We were looking for a location where we could have quality of life, good schools, good access to housing, and still be within North Texas.

TULSA AND DALLAS ARE RELATIVELY CLOSE, GEOGRAPHICALLY SPEAKING. WHAT ARE THE BIGGEST CHANGES YOU’VE SEEN, CULTURALLY OR OTHERWISE?

Tulsa’s a great small city in the United States, but the fundamental difference is access to choice. I’ve lived in a lot of big cities around the world. It’s the access to multiple things and the level of choice. There’s a vibrancy. Tulsa’s historical bedrock is the oil industry, and most of the oil industry is moving to Houston or Dallas. And Dallas, on the other side of the coin, is a growing, vibrant, business-friendly environment.

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DALLAS IS BIG... BUILDINGS, BUSINESS, ARTS, CULTURE, STEAKS, SPORTS, FUN, IMAGINATION & MORE!

City of Dallas Office of Economic Development Dallas-EcoDev.org \ 1500 Marilla Street, Room 5CS \ Dallas, Texas 75201 \ 214.670.1685 Photography: Iwan Baan, Winspear Opera House; Brian Birzer Photography, The Traveling Man

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Concept and Design: Dennard, Lacey & Associates


610 Uptown Class A Office

Build-to-suit Sites Available

THIS is Cedar Hill

L A N D OF OP P OR T U N I T I E S Cedar Hill’s robust development has made it a prime location for commercial, industrial, residential, retail and recreational opportunities. Located in the beautiful hill country environment of Joe Pool Lake and

° Pro-business environment with a workforce of over 1 million within a 30-minute drive time

° Low taxes, low cost of living, quality education,

over 3 million sf of retail, and Class A office space

° To facilitate and energize relocation and

expansion, Cedar Hill offers aggressive economic development incentives

the Cedar Hill State Park, Cedar Hill is the natural choice for those who want big-city amenities with a small-town ambience.

° 20 minutes from Downtown Dallas ° US 67/Rail-served Business Park 285 Uptown Boulevard • Bldg 100 • Cedar Hill, Texas 75104

Allison J. H. Thompson, CEcD, EDFP - Director ° allison.thompson@cedarhilltx.com ° 972.291.5132 ext.5 ° cedarhilledc.com Rolling Hills and Panoramic Vistas

Uptown Village at Cedar Hill

Visit our website

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Dallas-Fort Worth Real Estate Review - Fall 2015  

Art in Real Estate; Victory Park; Office Space Roundtable

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