F BLUEPRINT FOR PROSPERITY
THE FUTURE OF REAL ESTATE: TOP EXECS FROM CBRE, JLL, AND C&W WEIGH IN ANATOMY OF A DEAL: VILLAGE ON THE PARKWAY / THE CRANE REPORT: WHAT’S UNDERWAY, WHAT’S PLANNED
THE COMPLETE DISCUSSION WITH THE BIG THREE 1 / D A L L A S -2015 F O R T W O R T H R E A L E S TAT E G U I D E SUMMER
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.
FROM AN INITIAL TEAM OF THREE TO 46 (AND COUNTING), HALL HAS HANDLED OUR EXPANDING SPACE NEEDS GIVING US THE PEACE OF MIND TO C O N C E N T R A T E F U L LY O N G R O W I N G T H E B U S I N E S S .
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ON THE COVER: The Statler Hilton, which has sat vacant since 2001, is getting a $175 million redo. PHOTO BY MICHAEL SAMPLES
Welcome Letter . . . . . . . . . . . . . . . . . . . . . . . . . .8 Publisher’s Note . . . . . . . . . . . . . . . . . . . . . . . 10
FOUNDATIONS DFW market statistics, economic indicators, and commercial real estate news . . . . . . . . . . 12
21 THE CRANE REPORT
BLUEPRINT FOR PROSPERITY Fun facts and “Dallas 101” provide serious insight . . . . . . . . . . . . . . . . 17
THE CRANE REPORT Who’s building what, where. . . . . . . . . . . 21
SCORECARD DFW’s top office, industrial, and retail leases. . . . . . . . . . . . . . . . . . . . . . . . 29
ROUNDTABLE Leaders from “the big three” share their insights on the future of the industry. . . . . . . . . . . . . . . . . . 34
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E XC L USI V E LY P UB L ISHE D B Y D CUSTOM, A DIVISION OF D MAGAZINE PARTNERS
Redevelopment: A Downtown Revival: Real Estate investors are flocking to the urban core of Dallas, ground zero for a redevelopment boom that’s underway across North Texas. . . . . . . . . . . . . . . . . . . . . 54
Perspectives on Redevelopment . . . . . . . . . . . . . . . . . . . . . . . . . . 58
56 ANATOMY OF A DEAL
PUBLISHER Quincy Curé Preston 214.523.5215 email@example.com EDITOR-IN-CHIEF Christine Perez ART / P RODUCTION MANAGER Michael Samples MANAGING EDITOR Stephanie Davis COPY EDITOR Keri Samples CONTRIBUTING WRITERS Jeff Bounds Glenn Hunter Sean Kelly Hilary Lau Taylor Little Karen Nielsen Britt Stafford
Anatomy of a Deal: Village on the Parkway How a trio of Dallas-based partners tackled one of the largest retail adaptive reuse projects in the market.. . . . . . . . . . . . . . . 60
DIRECTOR OF SALES Kyle Moss 214.523.5247 firstname.lastname@example.org INTERNS Emily Heft Andrew Smith
TOOLBOX New Markets, Historic Opportunities Two important tax-credit programs are helping to fill a critical gap in the capital stack and generate economic growth.. . . . . . . . . . . 67
B E T T E R C O N T E N T. B E T T E R M A R K E T I N G .
PRESIDENT Paul Buckley GENERAL MANAGER Jas Robertson
CREATIVE DIRECTOR Kyle Phelps
The Real Estate Council, Impact Investors. . . . . . . . . . . . . . . . 89
The Real Estate Council, Associate Leadership Council. . . . 93
DIRECTOR OF PRODUCTION Diane Testa
Dallas Regional Chamber, Top-Level Members. . . . . . . . . . . . . 90
Calendar of Events. . . . . . . . . . . . . . 94
PRODUCTION MANAGER Pedro Armstrong
The Real Estate Council, FightNight XXVII. . . . . . . . . . . . . . . 92
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Dallas Regional Chamber, Leadership Dallas. . . . . . . . . . . . . . . 94 View from the Top: Jim Lentz. . . . 96
Dallas-Fort Worth Real Estate Review® is published for The Dallas Regional Chamber and The Real Estate Council by D Custom, a division of D Magazine Partners, 750 N. St. Paul St., Ste. 2100, Dallas, TX 75201; www.dcustom.com, 214.523.0300. ©2014 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 Custom 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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A letter from the Dallas Regional Chamber and The Real Estate Council
DALLAS-FORT WORTH: A WORLD CLASS REAL ESTATE MARKET
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
North Texas is on fire. The recent addition or expansion of 70 major companies, including State Farm, Liberty Mutual, and Toyota, to our local business landscape has added tens of thousands of new jobs to the area. The Dallas Regional Chamber saw interest from more than 100 new relocation or expansion projects in 2014 and will likely exceed that mark this year. This relocation frenzy has created a commercial DALE PETROSKEY LINDA McMAHON President and Chief President and Chief real estate building boom, which is unprecedentExecutive Oﬃcer Executive Oﬃcer ed in our region and has shined a bright light on Dallas Regional Chamber The Real Estate Council the area as a global opportunity for investment. Not only has business relocation caused a building boom, but also the recognition that this region is growing in every industry segment has attracted new development throughout the region. Nationally, commercial real estate is a $15 trillion industry—roughly the size of the U.S. stock market. In North Texas, commercial real estate generates approximately one-sixth of the economic output, employs nearly 242,000 people in the Dallas region, and has an annual payroll of $4 billion ($13 billion if you include construction), according to CBRE Econometric Advisors. State Farm, Liberty Mutual, and Toyota are in the process of building almost 4.5 million square feet of office space, which translates into $1.4 billion in construction costs alone. The ripple effect of this massive building boom benefits all areas of the industry. Commercial real estate is not just developers and construction companies. Attorneys, accountants, architects, engineers, title companies, investors and lenders are busier than ever, rounding out the team of businesses and professions benefiting from this growth. The vendors and suppliers for these large companies are opening new offices in the area. Although they may not be building corporate campuses, they are leasing space and building out new offices. Just talk to anyone in the construction business—they are enjoying robust activity in every real estate segment. For this issue of the Dallas-Fort Worth Real Estate Review, we talked with senior leaders of the top three commercial real estate companies in the world: CBRE, JLL, and Cushman and Wakefield (which is undergoing a merger with DTZ). They all confirm that investors are flocking to commercial real estate as an investment class, and that Dallas-Fort Worth is a top target for investment. Foreign investors of every type are realizing that DFW is a great place to invest. It is also no accident that some of the global leaders in commercial real estate call Dallas home. Their ability to connect with their businesses across the globe from DFW is shifting the emphasis from both coasts to the center of the U.S. The Real Estate Council and its members are excited to be working with the Dallas Regional Chamber in showing the world what a great place this region is to live and do business.
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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
UPFRONT QUINCY CURÉ PRESTON Publisher Dallas-Fort Worth Real Estate Review
A letter from the Publisher
An industry once ruled by smaller private companies, commercial real estate is now a $15 trillion economic force led by some of the brightest corporate minds around. That certainly holds true in Dallas, which is fortunate to be home to a number of national and global real estate executives. In this issue of the Dallas-Fort Worth Real Estate Review, we feature three: Mike Lafitte, global chief operating officer for CBRE; John Gates, CEO, Markets for JLL Americas; and Steve Everbach, head of U.S. agency leasing and market leader for Cushman & Wakefield. These key players at the world’s largest firms joined us for a roundtable discussion moderated by TREC President Linda McMahon. They shared their insights on competing in the global marketplace and the future of the industry, including the greatest challenges and opportunities that lie ahead. It all starts on page 34. Also in this edition, we break down the redevelopment and renovation boom that’s underway across North Texas (page 44). Many of the most ambitious projects are in the urban core of Dallas, where long-vacant office buildings are being revived and reinvented as multifamily or hotel space. We tell you about the demographic shifts and other factors driving the movement, and what it all means for the region. Carrying on with the redevelopment theme, Village on the Parkway is the topic of our signature “Anatomy of a Deal” feature, starting on page 56. The package includes a timeline of milestones and a detailed map of the 11-building complex. A guide to real estate tax credits starts on page 63, a package on DFW’s emergence as a data center powerhouse begins on page 14, and our popular Crane Report can be found on page 21. Also, don’t miss “City Profiles,” a special advertising section that starts on page 69. We’re already at work on our Fall and Winter issues. In the meantime, remember that our website (www.dfwrealestatereview.com) and Facebook feeds provide insightful content to tide you over!
Quincy Curé Preston Publisher
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Placing our clientsâ€™ needs and objectives first has been our culture since 1917. Our entrepreneurial spirit allows our professionals to deliver flexible and innovative solutions to drive meaningful value to our clients.
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Licensed Real Estate Brokers 2101 Cedar Springs Road, Suite 900 Dallas, Texas 75201 972.663.9600 www.cushwakedallas.com
A baseline for the region’s future
MAJOR TEXAS AIRPORTS SEE BIG JUMP IN PASSENGERS New passenger counts jumped by nearly 700,000 between April 2014 to April 2015 at five of the state’s largest airports. According to a new report from CBRE, Dallas Love Field (DAL) is leading the way, with a post-Wright Amendment boom. This past April saw a 56 percent increase over the previous year, with 417,000 new travelers. At DAL, Southwest dominates the field. The region is also benefitting from new carriers, such as Virgin, which arrived at Love Field the day the Wright Amendment expired last October and has carried 68,782 passengers through April 2015. Even with the big growth at Love, DFW International Airport also saw a 59,000 gain in passengers. Austin-Bergstrom International Airport is taking off, too, CBRE reports. AUS ranks as one of the top three fastest-growing airports in the nation, with new nonstop services added by six carriers, including Southwest, which
Even with brisk development, apartment occupancy for both Dallas-Plano-Irving and Fort Worth markets is at 95.5 percent, according to Axiometrics. The company defines anything over 95 percent as “full,” meaning it can absorb new supply without too much trouble, said Stephanie McCleskey, vice president of research. The Dallas and Fort Worth metros have been full since March. Annual effective rent growth came in at 6.3 percent for Dallas and 5.9 percent for Fort Worth. Renters in Dallas are paying an average of $1,038 for their units; in Fort Worth, they’re paying an average of $925 per unit. McCleskey said the rent growth for Dallas is bit of a surprise, in light of the new units being delivered to the market. “We keep going back to the fundamentals of job and population growth, both of which are very strong in DFW,” McCleskey said. “Because of that, and because we’re heading into the busy months of summer, we should likely see a stronger rent growth and absorption in the DFW area.”
PASSENGER TRAFFIC AT SELECT TEXAS AIRPORTS 450 400 350 300 250 200 150 100 50 0 (50)
Year-over-year increase from April 2014 to April 2015
recently launched direct flights to Orange County and St. Louis. In Houston, George Bush Intercontinental Airport (IAH) is adding domestic service from Spirit Airlines and just added flights between Houston and Taiwan on EVA Air (with its hard-to-miss Hello Kitty-themed Boeing 777-300ER). IAH also
saw Interjet launch its nonstop air service between Houston and Mexico in May. As the competition heats up, carriers are shuffling their routes, which explains why ridership at Houston Hobby (HOU) is down slightly since JetBlue and Southwest reduced capacity, CBRE reports.
WHAT’S AHEAD FOR UPTOWN AND DOWNTOWN DALLAS
Bank of Comerica Renaissance America Bank Tower Plaza Tower
■ DIRECT VACANT
■ FUTURE AVAILABLE
■ PARKING, UNUSABLE
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Plaza Plaza Fountain of the of the Place Americas - Americas North South
SOURCE: City of Austin, DFW International Airport, Dallas Love Field, Houston Department of Aviation, June 2015
DFW APARTMENT OCCUPANCY TOPS 95 PERCENT
TOTAL NEW PASSENGERS (in thousands)
Trammell Thanksgiving Crow Tower Center
One Arts Plaza
F FOUNDATIONS RETAIL:
DALLAS-FORT WORTH SEES STRONGEST OCCUPANCY IN 15 YEARS Retailers continue to target the fast-growing North Texas market, driving occupancy rates to 91 percent—the highest in 15 years, according to a new report from The Weitzman Group. Class A centers are running closer to 96 percent occupied, pushing up lease rates in those types of properties. It’s all prompting a new round of retail construction—to levels not seen in more than a decade. In all, the DFW market is on track to add more than 3.8 million square feet in 2015, through both new projects and expansions. This compares to the 2 million square feet that came online in 2014. Still, it’s a conservative figure for an economically thriving market with nearly 7 million people. Grocery stores continue to dominate, although power centers, mixed-use, and specialty retail centers are coming on strong, too. The largest project of the year, so far and by far, is Nebraska Furniture Mart, the 560,000-square-foot store anchoring Grandscape along State Highway 121 in The Colony. At buildout, the complex is expected to include nearly 4 million square feet of retail and entertainment space. Looking ahead to 2016, several projects are already in the works, The Weitzman Group reports. They include CityLine Market in Richardson (anchored by a Whole Foods store), A Sprouts-anchored center at Teasley Lane and Hickory Creek Road in Denton, a WinCo grocery store and new cinema at Presidio Junction in Fort Worth, a Winco at Interstate 20 and Cooper in Arlington (where a vacant Sports Authority is being demolished), a new phase of Euless’ Glade Park (which will add a cinema, a major fashion junior anchor, and more), Waterside at Bryant Irvin Road at the Trinity River in Fort Worth (which includes a Whole Foods store), and Wade Park, a $1.6 billion mixed-use development at the Dallas North Tollway and Lebanon Road in Frisco. Retailers there include Whole Foods, iPic Theaters, and a second regional location for The Rustic.
RESTAURANTS EATING UP SPACE
Building Materials & Garden Supply
Furniture & Home Furnishings
General Merchandise Stores
Apparel & Accessory Stores
Auto Dealers & Service Stations
SOURCE: Business Wise, CBRE Research, Q2 2015
The North Texas retail market is vast, made up of nearly 50,000 locations totaling about 275 million square feet of space. More than a quarter of that—27 percent—is occupied by restaurants and bars, according to statistics released by CBRE. This makes DFW a top national market for dining out, with more restaurants per 27% capita than any other U.S. Restaurants metro. & Bars Current occupancy of restaurant space is “almost 110 percent,” jokes Jack Gosnell of CBRE, adding that some failing eateries are acquired before they go out of business by restaurateurs 20% Personal who want to snap up Services the space. Submarkets seeing the most demand are Uptown, Southlake, and Frisco on the Dallas side, and the West 7th and Sundance areas of Fort Worth, Gosnell says.
Pe Even with demand and new construction driving up rents, urban Dallas continues to be a bargain compared to most major U.S. markets. For the first quarter of 2015, lease rates averaged $29.94 per square foot for trophy assets in Uptown and downtown Dallas, with non-trophy assets coming in at $21.68 per square foot. Meantime, average national rents have hit a record high of $42.30 per square foot, up 20.1 percent since bottoming in 2010. This data comes from JLL’s signature “Skyline Report,” which
analyzes conditions in urban buildings that meet the following criteria: greater than 200,000 total square feet (multitenant building), built after 1985 (or have had significant recent renovations to stay competitive), high-profile location, and recognized-tenant profile and/or architectural significance. The vacancy rate at smaller urban properties in Dallas has dropped from 18 percent to 12 percent in just two years. Larger tenants are finding the space they need in the central business district.
Examples include Santander relocating to Thanksgiving Tower and Omnitracs leasing space at the former KPMG building. The Dallas Arts District and Klyde Warren Park have helped bridge the gap between Uptown and downtown Dallas, says Jeff Eckert, managing director of JLL’s agency leasing and property management group: “It’s now seen as a seamless submarket that provides a highly desirable urban environment that meets the area’s multigenerational needs.” During the past year,
overall downtown vacancy has dropped by three percentage points, says Walt Bialas, research director for JLL. “The DFW economy is booming, and it’s creating a vibrant urban core that now stretches between the central business district and Uptown submarkets, he says.“We are predicting the area will go through a recalibrating phase where capital improvements at vintage buildings can bridge the gap between Class A and trophy assets.”
Texas Capital Bank Building
Saint Ann Court
100 Crescent Court
200 Crescent Court
300 Crescent Court
Rosewood Court One
Tower at Cityplace
KPMG Hall Arts
McKinney & Olive
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DFW IS ONE OF THE STRONGEST DATA CENTER MARKETS IN THE COUNTRY. HERE’S WHY. BY CHRISTINE PEREZ The first thing Martin Peck noticed about an acquisition opportunity along Stemmons Freeway was an electric power substation that adjoined the property to the north. For the managing director of Lincoln Rackhouse (the data center division of Lincoln Property Co.), access to power is always a big deal. Then a consultant Peck hired came back with findings that showed the property was sitting at “ground zero” for fiber optics. “It’s a double Bingo,” the consultant said. Peck connected with Pete Marin, president and CEO of T5 Data Centers, with whom he had collaborated on a big data center project in Plano. Lincoln and Atlanta-based T5 worked out a deal to acquire the building (the former Cabana Motor Hotel), and they’re now preparing to develop the first “purpose-built” urban data center in Texas on the site. 899 Stemmons will range between eight and 12 stories and be built in two phases. Peck and his team at Lincoln Rackhouse are overseeing leasing. The project is being designed by Dallas-based Corgan, a data center pioneer. Dan Drennan, principal at Corgan’s critical facilities studio, said 899 Stemmons is designed to withstand high winds and answer other “what if’s” that are asked of these types of buildings. Both Peck and T5 president Pete Marin are longtime industry leaders. Here, they weigh in on the North Texas data center market, and what makes it stand out.
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THE DATA CENTER BUSINESS AND DATA IN GENERAL ARE EXPANDING EXPONENTIALLY. A SLOWDOWN IS NOWHERE IN SIGHT. CONTINUED EXPANSION IS EASILY GOING TO TAKE PLACE FOR THE NEXT FIVE YEARS. — PETE MARIN, T5 Data Centers
PETE MARIN: Along with the central location and access, there’s the weather; you don’t have to deal with cold weather like you do in markets like Chicago. Additionally, the southern loop of the transcontinental fiber that goes across the country goes right through Dallas—right where we are talking about. That connectivity is very important. Texas also has its own separate power grid. This business is built on fear; even if the rest of the nation’s power grid goes down, Texas is still lit. Another great advantage is the cost of power, which continues to drop in Texas. We’re currently locking in rates of 4.1 cents per kilowatt hour, which equates to an all-in rate in the low 5 cents per killowatt hour. MARTIN PECK: That compares to 11 cents in northern New Jersey and 8 cents in northern Virginia. The reasons that Dallas has one of the most robust economies in the country right now are the same reasons data centers are flourishing. Add on top of that the fact that Dallas is one of the most “lit” cities from a fiber perspective in the southern United States, and of course our cost of power. That’s the main driver of expense to data center users, so they are very keen on even the most minor changes in the cost of electricity. MARIN: The data center business and data in general are expanding exponentially. A slowdown is nowhere in sight. Continued expansion is easily going to take place for the next five years.
ROSS PEROT JR. ON FACEBOOK’S NEW $1 BILLION DATA CENTER AT ALLIANCE
T5 Data Center · Dallas, Texas
As the son of EDS founder Ross Perot, Ross Perot Jr. grew up in a “data center world,” he says. “Not many people, when they’re 10 years old, were running around data centers like I did. When you think of the old data centers I was in as a boy, with the tapes and print cards, to the new data centers of today—it’s really amazing to see the evolution.” Perot made the comments at a groundbreaking celebration in July for a new $1 billion data center for Facebook off Park Vista Boulevard north of State Highway 170 in Fort Worth. The 110-acre site lies within AllianceTexas, a 18,000-acre masterplanned development owned by Hillwood, a Perot company. Initial plans call for three 250,000-square-foot facilities, with the first phase slated to open next summer. The project could get even larger—and is expected to surpass $1 billion in investment.
Winning a project from one of the world’s most influential brands bodes well for the region’s future, Perot said. “Facebook is one of the great high-tech companies of the 21st century,” he said. “The fact that we were able to go through the Facebook process, which is very rigorous and very professional, and come out on top, shows the world that this is where you want big data centers to be. Data centers are the new steel factories … they’re the engine rooms of high-tech companies.” Tom Furlong, vice president of infrastructure for Facebook, said a number of factors played into the site-selection decision; the fact that Texas sits on its own energy grid was among them, as was access to wind power, fiber, and a high-tech workforce, he said. “We found all of those things here,” Furlong said. —Christine Perez
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B BLUEPRINT FOR PROSPERITY
FUN FACTS AND “DALLAS 101” PROVIDE
SERIOUS INSIGHT BY MIKE ROSA
I enjoy speaking to groups and audiences around the region that are interested in our economy and the Dallas Regional Chamber’s economic development efforts. And although I may disappoint everyone when I’m not able to divulge sworn secrets about the “next Toyota” that might be around the corner, I still try to provide new and interesting information about the region, its geography, its economy, and how the economic development process works. At a breakfast speaking engagement in June, prior to the program getting underway, I was talking to a guest who’s a collector of fun facts. He asked if during my talk I would share a takeaway fact that he would be able to remember long after the breakfast. Not just any fact, but something that related to the size and scope and strength of our region’s economy that he could pass along to others. I told him it was his “lucky morning,” because my presentation was loaded with such material. I asked him if afterward he would come tell me which tidbit was the one he planned to remember. His favorite was that, at 9,200 square miles, it would only take about five DFW regions to fill the entire state of Pennsylvania. I can’t imagine a better region about which to build a geographic, demographic, or economic presentation than North Texas. And though they might be considered simply fun facts when sharing with a local group, our economic development team uses basic geographic and economic facts with a more serious intent when working with executives, consultants, and others who influence where headquarters and other facilities will locate.
VERY QUICKLY, OUR VISITING EXECUTIVES BEGIN TO REALIZE THAT “DALLAS” IS OF COURSE THE CITY OF DALLAS BUT ALSO A LOT MORE ... The DRC staff knows that “Dallas,” as it’s usually referred to by the company teams we meet, is a very large, option-rich region that can be overwhelming to analyze—particularly over a very short evaluation and decision
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B BLUEPRINT FOR PROSPERITY
CITY OF IRVING
period. Those decision-makers, our customers, are usually doing the same sort of drill in on at least a couple of other candidate regions, compounding the layers of information they have to sift through . Plus, moving a headquarters or locating a major new campus or manufacturing plant is not something that company leaders do all the time, so it really can be chaotic and stressful for even the most seasoned executive team. Our Chamber team recognizes all this, and focuses very hard at the beginning of each engagement on making sure that we do a good job of “Dallas 101,” and that we give our guests a strong sense of place. Normally, we’ll have an hour or so at the beginning of every company visit to provide an orientation, to set an understanding for the executives on what they will see, where they will be, and whom they will meet. Fun facts become new information, learning, and an ability to better understand and connect the dots as to why the Dallas region may indeed be the best choice for their corporate move. We begin most presentations with a map of the entire Dallas-Fort Worth region, and we have a conversation with the map as a backdrop. Our region is not “built” like most others in the U.S.; and certainly is very different from the Houston, Austin, and San Antonio regions. The twin cities
LK PHOTOGRAPHY-LARA K HANSEN
aspect of our region is obvious to most, but less known is the fact that Fort Worth is one of the 20 largest U.S. cities, completely unlike St. Paul or St. Petersburg or Durham or Tacoma or other cities that pair with a larger city to form a twin-city region. The Dallas-Fort Worth metropolitan area has four cities with a population greater than 250,000, and 14 cities with a population of at least 100,000; our region has three times as many large suburban cities (12) as Houston, Austin, and San Antonio combined (4). That definitely falls under the category of fun facts, but when we invest the time up front to explain our fundamental regional architecture, it proves extremely valuable in establishing a comfort level and a great platform from which a company’s detailed investigation can launch. Very quickly, our visiting executives begin to realize that “Dallas” is of course the city of Dallas but also a lot more; a region with two major cities and large, growing suburban cities that have over time developed individual characteristics, leadership, neighborhoods, amenities, and critical mass to support corporate locations. They understand that our regional cities are large enough to function very independently and sophisticated enough to support major corporate moves. They also see that there are many small suburban cities and more rural options within the DFW region. They are able to understand our labor force patterns and our traffic patterns and proximities to the factors that are most important to their planned operation. They also begin to appreciate the inherent cooperation that must exist here at a base level for a region like ours, with two major U.S. cities and a surprising number of large suburban cities, to be so successful. The DRC team enjoys being able to work closeWANT TO LEARN MORE ly with inbound companies, and linking those ABOUT HOW TO GET INVOLVED companies to the communities, business leadIN BLUEPRINT FOR PROSPERITY? ers and others that team up to create corporate Contact Mike Rosa, wins for our region. Coordinating and cooperatSenior Vice President, ing regionally to pursue corporate locations and Economic Development, jobs is particularly important here to ensure a Dallas Regional Chamber seamless, positive, informative experience for 214.746.6735 the executives who examine us. And for us, that firstname.lastname@example.org usually starts with a map and a few fun facts.
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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THE CRANE REPORT
Population growth across the market has spurred the ongoing development boom in 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
“The available labor market continues to grow; employers can ﬁll jobs here, and it’s an outstanding place to do business. Dallas is becoming increasingly cool at an astronomical rate!”
“One big trend: In the next few quarters, we will see national coworking and shared space users come into the market—and consolidation with the current local providers.”
Vice Chairman, DTZ
Vice President, CBRE
“The big story is the 29 million square feet of spec space that has been delivered or is under construction. We have seen a return of the bigger deals, which is helping to eat into the larger spec spaces around town.”
“Urban living is becoming more appealing. There’s a growing need to provide larger units for those exiting home ownership who want a smaller place—but not a small place.”
Regional Senior Vice President, Duke Realty
Vice President of Design, O’Brien Architects
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 OFFICES AT HINKLE PARK
THE CRANE REPORT:
RAYZOR RANCH MEDICAL PARK BLDGS 1-4
CARROLL PARK PLACE PHASE II
THE PRESIDIO @ 3 EIGHTY BLDG 2
ELDO MEDICAL P
OAKMONT OFFICE CONDOS BLDG 3
WESTSIDE MARKET PHASE II - OFFICE
OLD TOWN BLVD NORTH BUILD TO SUIT PAD 1 & 2
ANNOUNCED + UNDER CONSTRUCTION
MEADOWLANDS ADDITION BLDG I
ANNOUNCED DEVELOPMENTS 1
340 YUCCA DR
4101 HIG BYPASS B
NE OF MORNINGSIDE ST AND S OAK ST
CONNECTION PARK BLDGS I & II GRANITE PLACE SOUTHLAKE THE PLAZA OFFICE 1200 N AT SOUTHLAKE EXECUTIVE CONDOMINIUMS BLDG 3 TOWN SQUARE MEDICAL CENTER CARROLL AVE 9001 CY 371 W 2720 E STATE MAIN STREET WATERS SOUTHLAKE BLVD TIMBERLAND HIGHWAY 114 COPPELL C5 & C6 BUILDING 2 & 3 PROFESSIONAL PARK I SE OF GOLDEN TRIANGLE BLVD RIVER OAKS AND OLD DENTON RD (PHASE 2) THREE HICKORY 10740 CENTRE OLD DENTON RD FAA 8821 1120 TRINITY PARK ME CORPORATE DAVIS BLVD 7 ELEVEN S MAIN ST SOUTHLAKE PA CAMPUS HEADQUARTERS HERITAGE 8821 N OFFICE PARK TARRANT THE APEX AT THE PONDS 2631 IRA E PHASE I PKWY LAS COLINAS CROSS BLDGS A & B WOODS AVE 8321 WHITLEY RD NORTH BEACH & SE OF LAVACA TRAIL 8329 WHITLEY RD HERITAGE TRACE AND PRECINCT LINE RD FREEPORT TEXAS MUSIC PHASE 7&9 COMMONS FACTORY
SIZE: 271,000 s.f. KEY PLAYERS: Stream Realty Partners (developer), BOKA Powell (architect) DETAILS: The 12-story office building is the second phase of Stream’s Platinum Park development. Construction will begin by the end of the year. Amenities include restaurants, tenant lounge, conference center, fitness center, and shuttles running between the park and Legacy West.
7105 GOLF CLUB DR PAD SITE
6340 DAVIS BLVD
6344 DAVIS BLVD
DECKER COMMONS BLDGS 400 & 500
1212 N LOOP 12
PLATINUM TOWER WILLPROVIDE UNMATCHED VISIBILITY ALONG THE DALLAS NORTH TOLLWAY.
SE OF OAKDALE RD AND MACARTHUR BLVD
911 W CANNON ST
111 BOLAND ST 3017 W 7TH ST 1000 FOREST PARK BLVD
OVERTON TOWER III VICTORY MEDICAL CENTER
NW OF W PLEASANT RD AND S BOWEN RD LOT 4 BLDG A
1715 PENNSYLVANIA AVE WATERSIDE BLDG L
3050 S CENTER ST
2337 S BELT LINE RD
320 MERCEDES ST TEXAS HEALTH SOUTHWEST MOB
— CHRIS JACKSON, REGIONAL MANAGING PARTNER, STREAM REALTY PARTNERS
PARKER RD AND OLD DENTON RD
4015 IH 20 W CHISHOLM TRAIL
MATLOCK PROFESSIONAL OFFICE PARK BLDGS 2 & 3
FOSSIL ROCK MEDICAL PLAZA
2610 MAPLE AVENUE
NE OF THE E BROAD ST AND N MILLER RD ATRIUM
BEAR MEDICAL PLAZA LOTS 1, 3, 5, 6, & 7
REGENCY STATION BLDGS A, B, & C
SIZE: 125,000 s.f. KEY PLAYERS: M. Terry Enterprises and Holt Lunsford Holdings (developers), Gensler (architect) DETAILS: The 14-story office tower in Uptown is being built on a site that currently houses the Old Warsaw restaurant. Amenities include access to the Katy Trail, a private tenant lounge, and a fine-dining restaurant.
DATA SOURCE: XCELIGENT INC., A COMMERCIAL REAL ESTATE RESEARCH FIRM IN PARTNERSHIP WITH NTCAR
RENDERING: GENSLER 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
GRANITE PLACE AT SOUTHLAKE TOWN SQUARE
SIZE: 160,733 s.f. KEY PLAYERS: Granite Properties (developer), Beck (architect) DETAILS: This seven-story office building will be the first of its kind at Southlake Town Square. Construction is scheduled to begin this fall, with occupancy slated for October 2016.
ACTIVITY IS VERY ROBUST, WITH VERY CREDIBLE CORPORATE USERS. — RAN HOLMAN, EXECUTIVE VICE PRESIDENT, VANTRUST REAL ESTATE
RENDERING: GRANITE PROPERTIES
SIZE: 250 acres KEY PLAYERS: Hillwood Properties, VanTrust Real Estate, and Rudman Partnership (developers); RTKL and HKS Inc. (architects) DETAILS: The mixed-use development, located next to the new Dallas Cowboys headquarters in Frisco, is planned to accommodate 4 million s.f. of office space, along with apartments, shops, and restaurants.
SEQ LAKE FOREST @ HIGHWAY 380 TUSCAN TOWN SQUARE WILSON CREEK MEDICAL PARK BLDG D STONEBRIDGE MEDICAL OFC CONDOS
SW OF MAIN ST AND COLEMAN BLVD
1831 HARROUN AVE
3600 ELDORADO PKWY
VICTORY AT STONEBRIAR BLDGS 1-7
NW OF STATE PARKWOOD OFFICE 121 AND CONDOMINIUMS BLDGS C & D HIGHWAY INDEPENDENCE MATEO OFFICE PARK PKWY 6340 PRESTON RD BLDGS 8, 9, & 10 THE GATE OFFICE THE STAR
LEGACY MEDICAL PARK GRANITE PARK V FEDEX HQ TOYOTA HEADQUARTERS
PARKWAY PROFESSIONAL CENTER
NW OF FM 544 AND WESTGATE WAY
VICTORY PLAZA AT CUSTER UNIT 6
FRISCO HIGHLANDS OFFICE PARK
VILLAGES OF SUNCREEK & MCDERMOTT
PRESTON ONE TOWER - PRESTON ONE, LP PRESTON PARC II LEGACY CENTER PRESTON LEGACY OFFICE CONDOMINIUMS PRESTON LEGACY CENTER
LAKES OF TENNYSON LINCOLN PROFESSIONAL R&D IN LEGACY OAK TREE OFFICE PARK
WINDHAVEN PLACE ONE WEST PLANO VILLAGE
CAMPBELL CROSSING OFFICE PARK
YPRESS S BLVD TOLLWAY CENTER
MIDTOWN MEDICAL CENTER
8424 PRESTON RD DEVELOPMENT 8111 WESTCHESTER AVE
ANGEL FIELD CENTER BLDGS 2&3
● ANNOUNCED ● UNDER CONSTRUCTION
MEADOW GREEN MEDICAL CENTER
6517 HILLCREST AVE
2727 TURTLE CREEK BLVD 3000 TURTLE 2505 TURTLE CREEK PLZ CREEK BLVD MCKINNEY & OLIVE
ALLEN PLACE I-IV
FOUR GALLERIA TOWER
CORPORATE CENTER 3 & 4 WATTERS JUNCTION
TWIN CREEKS OFFICE
5540 GRANITE PKWY LEGACY WEST
VILLAGES OF EXCHANGE PARKWAY
INDEPENDENCE MEDICAL PARK
FRISCO CORNERS FRISCO OFFICE PARK BRIDGES BLDGS 7 & 8 PLACE
QUEST RESOURCES PIZZA HUT HEADQUARTERS
RIDGEVIEW VILLAGE MEDICAL CONDOS
STEWART CREEK OFFICE CENTER I & V
NW OF CHAPEL HILL BLVD GHWAY 121 & DALLAS NORTH TOLLWAY BLVD 4120 MIDWAY RD CITYLINE STATE FARM BLDG 4
ALMA OFFICE CONDOS IN CRAIG RANCH
FRISCO SQUARE BLDGS A1, B1, B2, B5, B9, C2, C5, C8, C9, D1 & E5
9255 DALLAS PKWY
SUMMIT PARK II
STARWOOD PROFESSIONAL BUILDINGS
SW OF MAIN ST AND FRISCO ST
VIRGINIA PARKWAY MEDICAL PLAZA
6579 VIRGINIA PKWY UNIT A1 VILLAGES OF ELDORADO & INDEPENDENCE WESSEX @ ALMA ROAD
A CLOSER LOOK AT COLLIN COUNTY
8 SHALEM PARK
2 7 THE
GALLOWAY MEDICAL ARTS
DAVIS STREET MARKET
THE CRANE REPORT: INTERACTIVE VERSION
online at dfwrealestatereview.com
CORELOGIC AT CYPRESS WATERS
SIZE: 325,600 s.f. KEY PLAYERS: Billingsley Co. (developer), WDG Architects (architect), CBRE (tenant representation) DETAILS: This build-to-suit is expandable to more than 400,000 s.f., to handle the company’s future growth.
For North Texas office developments at least 10,000 s.f. in size, Xceligent shows that 70 projects totaling 10.2 million s.f. are under construction. Another 79 projects totaling 6.5 million s.f. are planned or proposed. All are represented on this map; a sampling are labeled.
SIZE: 1.35 million s.f. KEY PLAYERS: BC Station Partners (owner), Transwestern (office developer) DETAILS: BC Station Partners acquired 54 acres near CityLine in Richardson for this $500 million development, which ultimately will include 1,250 multifamily units, two hotels, 100,000 s.f. of retail, and 1.35 million s.f. of office space.
THE DFW MARKET IS IN A MAJOR EXPANSION MODE, DRIVEN BY JOB GROWTH. — REID CALDWELL, MANAGING DIRECTOR, TRANSWESTERN
HEADQUARTERS DRIVE, PHASE II
SIZE: 200,000 s.f. KEY PLAYERS: Heady Investments and Red Spur Ltd. (developers), ANPH (architect) LEASING AGENTS: Mark Lewis and Sayres Heady of Randy Heady & Co. DETAILS: This seven-story office building will be located in Legacy business park, across the tollway from Liberty Mutual’s new operations center in Plano.
ONE LEGACY WEST
SIZE: 327,856 s.f. KEY PLAYERS: Gaedeke Group (developer), Morrison Dilworth + Walls of Dallas (architect), Austin Commercial (general contractor) LEASING AGENT: Belinda Dabliz of Gaedeke Group DETAILS: This 14-story multitenant building is the first of two planned office towers within the bustling Legacy West development in Plano.
THE UNION DALLAS
SIZE: 407,000 s.f. KEY PLAYERS: RED Development (developer), HKS Inc. (architect) LEASING AGENTS: John Brownlee and Sarah Hinkley of Peloton Commercial Real Estate DETAILS: Formerly known as Akard Place, this mixed-use project near Victory Park will include an office tower and a residential tower, anchored by 145,000 s.f. of retail space, including a Tom Thumb urban supermarket.
WE’VE SEEN TREMENDOUS ACTIVITY IN UPTOWN. — SARAH HINKLEY, SENIOR VICE PRESIDENT, PELOTON
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
THE CRANE REPORT:
2834 GEESLING RD
1450-1500 N WESTERN BLVD DENTON CREEK BUSINESS PARK WESTGATE BUSINESS PARK BLDGS 1-3
MARKET STREET INDUSTRIAL PARK BLDGS 4 & 5
7400 FM 2449
ANNOUNCED + UNDER CONSTRUCTION
GATEWAY BUSINESS PARK LOTS 6-8
SPEEDWAY DISTRIBUTION CENTER BLDG C
EAGLE PARK 20/35
SE OF EAGLE PKWY & OLD DENTON RD
TRINITY PARK SOUTHLAKE
1005 CHISOLM TRL
PROLOGIS PARK 121
DFW TRADE CENTER VIII 1223 CRESTSIDE DR
HERITAGE BUSINESS PARK BLDG IX
CRAWFORD ELECTRIC SUPPLY
RAILHEAD INDUSTRIAL PARK BLDG 5
DFW EAST LOGIST BLDGS A, B & C
DFW/161 DISTRIBUTION CENTER 100, 200, 300
NORTH FORT WORTH LAND PARC NORTH BLDGS 1-4
CENTREPORT BLDG 8
COUNTY LINE RD LIBERTY PARK GSW NORTH BLDGS 1-3
RAILHEAD INDUSTRIAL PARK BLDGS 3 & 7
2909 W OAKDALE RD WILDLIFE COMMERCE PARK BLDG 3
PARK 161 DISTRIBUTION CENTER
LOGISTICS CROSSING 2
FIRST ARLINGTON COMMERCE CENTER @ I-20
SOUTH CENTRAL DISTRIBUTION CENTER II
SIZE: 670,000 s.f. DEVELOPER: Prologis DETAILS: This $18 million development in Mountain Creek business park ultimately will employ 450 workers.
THE CRANE REPORT: INTERACTIVE VERSION
online at dfwrealestatereview.com
INTERCHANGE DISTRIBUTION CENTER
SIZE: 1.6 million s.f. DEVELOPER: Prologis LEASING AGENT: Dave Anderson of CBRE DETAILS: This development was launched by KTR Capital Partners, which was acquired by Prologs in June. All site improvements have been made, which means the site is pad-ready with all utilities and entitlements in place.
A BUILDING COULD BE CONSTRUCTED WITHIN SIX MONTHS—HALF THE TIME OF MOST DEVELOPMENT SITES. — DAVE ANDERSON, EXECUTIVE VICE PRESIDENT, CBRE
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
GSA FBI BUILDING
— NATHAN ORBIN, SENIOR VICE PRESIDENT, JLL
MAJESTIC AIRPORT CENTER DFW BLDG 6 SE OF HIGHWAY 12 & S VALLEY PKWY
NE OF SE OF LAKESIDE PKWY LAKESIDE PKWY AND GERAULT TRL AND GERAULT TRL FREEPORT NORTH
1363 BRUMLOW AVE BLDGS 1-7
ACTIVITY IS TREMENDOUS. NEARLY 6 MILLION S.F. OF DEALS HAVE BEEN SIGNED OR DELIVERED THIS YEAR IN SOUTH DALLAS.
DCT WATERS RIDGE
PARKVIEW DFW AIRPORT COMMERCE NORTH DISTRIBUTION CENTERS 1-4 CENTER III DFW AIRPORT NORTH DISTRIBUTION CENTER II
● ANNOUNCED ● UNDER CONSTRUCTION
SIZE: 453,600 s.f. DEVELOPERS: Ridgeline Property Group and Stockbridge Capital Group LEASING AGENTS: Kurt Griffin and Nathan Orbin of JLL DETAILS: This facility, named for its location at the intersection of Interstates 20 and 35, is scheduled to be ready for occupancy in the first quarter of 2016.
NORTHPORT 35 BUSINESS CENTER
UNDER CONSTRUCTION 4
NORTHPORT 35 BUSINESS CENTER
SIZE: 945,035 s.f. KEY PLAYERS: Stream Realty Partners, Clarion Partners LEASING AGENTS: Cannon Green and Bob Hagewood, Stream Realty Partners DETAILS: The three-building complex, located in Northlake near the intersection of I-35W and State Highway 114, is scheduled for completion by the end of this year.
MOUNTAIN CREEK 5
SIZE: 192,260 s.f. KEY PLAYERS: Courtland Development, Trez Capital, Southwest Bank, Alliance Architects, Ratcliff Constructors LP LEASING AGENTS: Jon Napper and Lisa Brinser, Courtland Development DETAILS: This building, the latest in a series of recent additions to the 450-acre Mountain Creek business park, will open in November.
MOUNTAIN CREE BUSINESS PAR
407 INTERCHANGE ST
FRISCO CENTER II BLDG A FRISCO COMMERCE CENTER BLDG D
6220 COMMUNICATIONS PKWY HAGGARD PROPERTY GROUP
DOZIER PLACE 501 W FM 544 2910 GUILDER DR
VALWOOD CORPORATE CENTER BLDG 1-4 THREE VALWOOD
ALLEY VIEW LN & BUSH TURPIKE
MERCER BUSINESS PARK BLDG 2
3839 W MILLER RD
11070-11090 N STEMMONS FWY
JUPITER TRADE CENTER
20 Acres Retail on
55 Acres of Multi Family Sites 440 Acres Mixed Use Land 136 GLASS ST
FIRST PINNACLE PARK BLDG B FIRST INDUSTRIAL
MOUNTAIN CREEK BLDGS 1 & 2 CROW HOLDINGS
NW OF IH 20 AND JJ LEMMON RD
192,260 SF Under Construction
SOUTHFIELD PARK 35 BLDG 3
INTERSTATE COMMERCE CENTER BLDG A
STONERIDGE BUSINESS PARK BLDGS 11-13
EAGLE PARK 20/35
POINTSOUTH LOGISTICS & COMMERCE CENTER I, II, & III COMMERCE 20 BLDG 2 RIDGE LOGISTICS CENTER BLDG 6B
PROLOGIS PARK 20/35 LAND
INTERMODAL BUSINESS CENTER SUNRIDGE BUSINESS PARK BLDGS 1 & 2 SE OF PLEASANT RUN RD & SUNRIDGE BLVD DALPORT TRADE CENTER 2
I-35 INTERCHANGE I DFW INLAND PORT BLDG 2
Xceligent reports that 61 North Texas industrial projects totaling 13.6 million s.f. are underway; another 76 projects totaling 17.8 million s.f. are planned or proposed.
DATA SOURCE: XCELIGENT INC., A COMMERCIAL REAL ESTATE RESEARCH FIRM IN PARTNERSHIP WITH NTCAR
35 Acre Industrial Development Over 625K SF Frontage on
PARK 161 DISTRIBUTION CENTER
SIZE: 345,150 s.f. KEY PLAYERS: Avera Cos., Avera Construction, Powers Brown Architecture, and Pacheco Koch LEASING AGENTS: Kacy Jones and Steve Koldyke of CBRE DETAILS: The building, at the northwest corner of George Bush Tollway and January Lane in Grand Prairie, is designed to accommodate one to three users.
SIZE: 444,000 s.f. KEY PLAYERS: Jackson-Shaw, Amstar, Mycon General Contractors, GSR Andrade Architects, Comerica Bank LEASING AGENT: Seth Koschak and Blake Kendrick of Stream Realty Partners DETAILS: The 31-acre complex will consist of four buildings and sit at the southeast corner of Interstates 35 and 820.
203,193 SF Spec Industrial Construction Starts in October Now Pre-Leasing
214-370-6100 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
THE CRANE REPORT:
URBAN SQUARE AT UNICORN LAKE II
ANNOUNCED + UNDER CONSTRUCTION
ANNOUNCED DEVELOPMENTS 1
DISTRICT O HIGHLAND VIL DRY CREEK RANCH II
THE ENCLAVE AT ALLIANCE OVERLOOK RANCH
UNITS: 270 DEVELOPER: Southern Land Co. DETAILS: This 18-story, yet-to-benamed development is being built on Oliver Street in the Knox-Henderson neighborhood of Dallas. Designed by Gromatzky Dupree & Associates, construction is expected to get underway in early 2016.
MANSIONS AT TIMBERLAND
WATERFORD GLEN SAGESTONE VILLAGE PH II THE SOVEREIGN
DOLCE LIVING HOME TOWN PH 1
ELAN WEST 7TH
THE KELTON AT CLEARFOK THE BERKELEY II
● ANNOUNCED ● UNDER CONSTRUCTION
CENTER PLACE APARTMENTS PH II
THE GROVE AT WATERSIDE
TH AT M
THE CRANE REPORT: INTERACTIVE VERSION
online at dfwrealestatereview.com
PRESTON HOLLOW VILLAGE
UNITS: 512 DEVELOPER: Provident Realty Advisors DETAILS: Part of a 42-acre mixed-use development, plans call for three, sevenstory apartment buildings with groundfloor retail space. Designed by Ziegler Cooper Architects of Houston, the project sits at the northwest corner of Walnut Hill Lane and North Central Expressway.
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
UNITS: 621 DEVELOPERS: Karahan Cos. and Columbus Realty Partners DETAILS: The first phase of the $2 billion mixed-use Legacy West development is underway at the Dallas North Tollway and Legacy Drive. The $400 million urban village also will include shops, restaurants, and boutique office space.
UNITS: 262 DEVELOPER: High Street Residential DETAILS: Amenities at this 20-story project, developed by the multifamily subsidiary of Trammell Crow Co., include an elevated pool deck, rooftop terrace, two-story fitness center, and resident lounge. It was designed by GFF.
UNDER CONSTRUCTION 6
THE TOWERS BY THE PARK THE ABLON AT FRISCO SQUARE SORREL PHILLIPS CREEK RANCH
HAMPION HOMES ON THE LAKE
5 AMLI AT THE BALLPARK II
THE BOAT HOUSE
PARKSIDE AT CRAIG RANCH II
VILLAS AT CHAPEL CREEK I & II
TWIN CREEKS CROSSING I (PHASE 1)
ORIGIN AT FRISCO BRIDGES
LOFTS AT WATTERS CREEK III
AMLI WEST PLANO VILLAGE JUNCTION 15
THE AVENUES AT CARROLLTON
HEBRON 121 STATION III
CREST AT PARK CENTRAL I & II
LINCOLN WATERS EDGE II
AMLI CAMPION TRAIL
CREST AT LAS COLINAS STATION APARTMENTS
CREST AT OAK PARK LOCALE LINCOLN KNOX
BRIDGEVIEW MEDICAL CENTER APARTMENTS ALEXAN FAIRMOUNT
MANSIONS AT WOODBRIDGE
AURA PRESTONWOOD I
TRAMMELL CROW LAS COLINAS
THE STANDARD AT CITYLINE I
KELLER SPRINGS APARTMENTS
JEFFERSON LAS COLINAS
AURA ONE90 LOT A AT CITYLINE GATEWAY CROSSING
MERCER CROSSIN AT LUNA II
THE JORDAN UPTOWN
UNITS: 212 DEVELOPER: StreetLights Residential DETAILS: Designed by JDA Architects, amenities at this 23-story project include a resident bar, conference room, dining area, and parking garage with electric car charging stations, along with a large outdoor pool, fitness center, and courtyard.
FAIRFIELD AT ROSS SOUTHSIDE FLATS BY JEFFERSON ALTA WEST COMMERCE
NORTHROCK LAKE HIGHLANDS THE TEAK AT THE BRANCH CREST AT GLENCOE MILL CREEK N CENTRAL EXPY PROJECT ELAN CITY LIGHTS ONE DALLAS CENTER ALTA FARMERS MARKET
VILLAS AT VANSTON PARK
HEBRON 121 STATION
UNITS: 242 DEVELOPER: Huffines Communitities DETAILS: The third phase of Hebron 121 Station consists of three four-story buildings. The 90-acre community includes a 10,000-square-foot clubhouse, a swim-up bar, and sand beach. At full build-out, the $300 million development will have a total of 1,700 units.
MIDTOWN CEDAR HILL
HE ENCLAVE MIRA LAGOS I
DATA SOURCE: AXIOMETRICS INC.
UNITS: 2,400 DEVELOPERS: Hillwood Properties, VanTrust Real Estate, and Rudman Partnership DETAILS: The multifamily component of Frisco Station will include up to 2,400 luxury “urban living” apartment homes, surrounded by more than 6 million square feet of class A office, medical, and retail, restaurant, and entertainment uses.
UNITS: 198 DEVELOPER: Stoneleigh Cos. Waterford Residential DETAILS: Located at McKinney and Routh Street, this project is set to be delivered in the third quarter of 2016. The 20-story building will feature a 480 car underground valet parking garage, full-service fitness center, Internet cafe, and a rooftop infinity pool overlooking downtown Dallas.
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 2 7
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TOM THUMB WILL ANCHOR THE UNION, A NEW MIXED-USE PROJECT AT FIELD STREET AND CEDAR SPRINGS ROAD IN UPTOWN.
The Dallas-Fort Worth commercial real estate market is off to a strong start in 2015, across all sectors. The region continues to benefit 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-GRO U N D I N S I G H TS
“You cannot hide the fact that more than 300 people are moving here each day. There are more large companies looking at relocations or consolidations in this area than ever before.”
“Expanding tenants will continue to absorb space, and corporations will continue to evaluate and choose North Texas as a top relocation region for their real estate needs. Let the good times roll.”
“Current deal activity suggests that 2015 will be as strong as recent years. But speculative development won’t continue at the same pace, until the latest wave of new product hits the market and leases up.”
“We expect to see occupancy remain above 90 percent and rents to continue to ﬁrm up. All in all, we’re in the best retail market in recent memory!”
Executive vice president, Colliers International
Senior Vice President, The Weitzman Group
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 2 9
S SCORE CARD 3
5 1 4
70 9,372 SF 9,372 35,053 SF 35,053 82,915 SF 82,915 192,340 SF 192,340 399,788 SF
LARGEST OFFICE LEASES
SIZE: 399,788 s.f. in Lakeside Campus, 2201 Lakeside Blvd. in Richardson LANDLORD: Cawley Partners and GEM Realty Capital, represented by Bill Cawley and Addie Ludwig of Cawley Partners DETAILS: The software firm will relocate its headquarters to the four-story office building and will take occupancy in the 3rd Quarter of 2016.
SIZE: 327,183 s.f. at Cypress Waters in Dallas TENANT REPS: Jeff Ellerman, Scott Hobbs, and Mike Scimo of CBRE LANDLORD: Billingsley Co., represented in-house by Marijke Lantz DETAILS: BOKA Powell designed this four-story building, the latest project to be built at the bustling 1,000-acre Cypress Waters development. JEFF ELLERMAN
[TIE] CONFIER HEALTH
[TIE] KUBOTA TRACTOR
SIZE: 200,000 s.f. in Duke Bridges at 7460 Warren Pkwy. in Frisco. TENANT REPS: Steve Thelen, Bo Bond, Rachel Brown, Torrey Littlejohn, Vince Burt, Jeff Davis, and Angela Carrier of JLL LANDLORD: Duke Realty, represented by Dale Ray and Jeff Wood of Peloton Commercial Real Estate DETAILS: The healthcare company expanded last year by moving its headquarters into the newly constructed property.
SIZE: 200,000 s.f. TENANT REPS: Steve Berger and Ann Huntington, CBRE DETAILS: In another major DFW relocation from Torrance, California, this global maker of tractors and lawn equipment has locked down a 25-acre site in Grapevine for a new headquarters. Initial plans call for a 150,000-square-foot office building and 50,000-square-foot R&D facility.
3 0 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
SIZE: 160,000 s.f. at 3905 North Dallas Pkwy. in Plano TENANT REP: Craig Jablin of Savills Studley LANDLORD REP: Jeff Wood, Peloton Commercial Real Estate DETAILS: The insurance company is housing its customer service operations here while its new campus is being built in Legacy West.
S SCORE CARD
INDUSTRIAL LEASES 1
150 15,712 SF 15,712 45,507 SF 45,507 96,000 SF
96,000 202,000 SF
202,000 411,567 SF 411,567 1,005,398 SF
DATA SOURCE: XCELIGENT INC., A COMMERCIAL REAL ESTATE RESEARCH FIRM IN PARTNERSHIP WITH NTCAR
LARGEST INDUSTRIAL LEASES
SIZE: 1.1 million s.f. in Gateway 61 and Gateway 53 at AllianceTexas TENANT REPS: Gary Collett, Jean Russo, Lou Hall, Kathleen Nelson, and Daniel Wilkins with Cushman & Wakefield LANDLORD: Hillwood, represented by Reid Goetz and Tony Creme DETAILS: Bridgestone renewed its lease in Gateway 61 and expanded into Gateway 53 for a total of about 1.1 million s.f.
R.R. DONNELLEY & SONS CO.
SIZE: 514,992 s.f. in Trammell Crow Penn Distribution Center in Dallas TENANT REP: Nathan Lawrence with CBRE LANDLORD: Trammell Crow Co., represented by Kacy Jones and John Hendricks of CBRE DETAILS: Trammell Crow Penn Distribution Center is one of the largest warehouses in the Interstate 20 corridor.
SIZE: 653,582 s.f. in Park 20/35 at 1901 Danieldale Road in Lancaster TENANT REP: Ryan Keiser with CBRE LANDLORD: Prologis, represented by Dave Anderson of CBRE DETAILS: The family-owned company has been in business since 1932 and is based in New Jersey. It already has several locations across North Texas.
SIZE: 500,000 s.f. at the northwest corner of Interstates 45 and 20 in Dallas LANDLORDS: Trammell Crow Co. and Clarion Partners DETAILS: The distribution center will process smallerscale items, such as electronics and consumer goods. Dallas County provided $17 million in tax abatements to support the new fulfillment operation.
SIZE: 494,990 s.f. at 14900 Frye Road in Fort Worth TENANT REPS: John Lancaster and Steve Shields with NAI Robert Lynn LANDLORD: KTR Capital Partners, represented by Cannon Green and Matt Dornak with Stream Realty Partners
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 3 1
S SCORE CARD
RETAIL LEASES 1 4 3
2 50 3,928 SF 3,928 12,127 SF 12,127 26,900 SF 26,900 58960 SF
58,960 132,000 SF
DATA SOURCE: XCELIGENT INC., A COMMERCIAL REAL ESTATE RESEARCH FIRM IN PARTNERSHIP WITH NTCAR
LARGEST RETAIL LEASES
CINEPOLIS LUXURY CINEMAS
SIZE: 95,000 s.f. at Glade Parks in Euless DEVELOPER: North Rock Real Estate and Iron Point Partners LANDLORD REPS: Steve Ewing and Josh Flores with EDGE Realty Partners DETAILS: Belk will open its ninth North Texas location at the 193-acre Glade Parks development between Cheek-Sparger and Glade roads.
SIZE: 44,000 s.f. at Victory Park Lane and High Market Street in Victory Park LANDLORD: Victory Park UST Affiliate, represented by Kerby Smith and Stacy Barton of Trademark Property Co. DETAILS: The entertainment company will open an eight-screen, 700-seat luxury theatre as a part of Victory Park, a 75-acre development surrounding American Airlines Center.
SIZE: 40,000 s.f. at 1805 Airport Fwy in Bedford. TENANT REP: Maury Levy of CBRE | UCR LANDLORD: Sidelock Properties and ETB Properties LLC DETAILS: Fitness Nation will open its second DFW location in Bedford. It signed a 10-year lease with expansion options. The new center is slated to open August 2015. MAURY LEVY
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SIZE: 60,000 s.f. at the Union Dallas in Uptown TENANT REPS: Clay Smith and Mark Newman with JLL LANDLORD: RED Development, represented by CBRE | UCR DETAIL: The grocery store will anchor the Union, a project that will total approximately 800,000 square feet, at Field Street and Cedar Springs Road. Itâ€™s slated to open in 2017.
SIZE: 32,570 s.f. at Pleasant Run Towne Crossing in Cedar Hill TENANT REP: Susan Ridley of The Retail Connection LANDLORD: Retail Properties of America, recommended by Kendall Ibsen, Jack Weir, and David Levinson of TRC DETAILS: Best Buy will join other big-name retailers at the 225,028-square-foot Pleasant Run Towne Crossing, located off U.S. Hwy. 67. SUSAN RIDLEY
BUSINESS WORKS BETTER HERE Explore for facts supporting why DFWâ€™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 WWW.DALLASCHAMBER.ORG/DFWFACTS/ SUMMER 2015
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As CEO, Markets, for JLL, John Gates oversees brokerage, capital markets, project and development services, property management, and retail operations in the United States. He previously was president and COO of The Staubach Co., which was acquired by JLL in 2008.
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STEVE EVERBACH Steven Everbach oversees the U.S Agency Leasing practice group for Cushman & Wakefield. As market leader, he also runs the firmâ€™s Dallas-Fort Worth operations. During his career, he has completed more than 8 million square feet of transactions valued at $1.5 billion.
R ROUNDTABLE A wave of mega-mergers has created a triumvirate of commercial real estate power players: CBRE, JLL, and Cushman & Wakefield, which is months away from finalizing its merger with DTZ. In a roundtable discussion, Dallas-based leaders share their insights on the future of the industry. PHOTOGRAPHY BY MICHAEL SAMPLES
As home to pioneers like Trammell Crow Co., Lincoln Property Co., The Staubach Co., and others, Dallas helped create the commercial real estate industry. From those early days, the business has grown to become an economic force—a $15 trillion business that’s as big as the U.S. stock market. It has also grown in reach and sophistication. Much of the evolution has occurred in the past two decades, with mergers creating mega-firms and technology helping to support international expansion. Throughout it all, Dallas has continued to play a leadership role. Some of the world’s most influential industry executives are based here. We recently sat down with key players from the three largest firms— CBRE, JLL, and Cushman & Wakefield—to find out where the industry is headed, the biggest challenges they face, and where the greatest opportunities lie. The discussion was moderated by Linda McMahon, president of The Real Estate Council. LINDA McMAHON: Let’s begin by getting a summary of your roles within your organizations.
JOHN GATES: I’m CEO, Markets, for the Americas, which is our non-corporate solutions business. So I’m responsible for property and project management, all capital markets activities, and all leasing activities.
Mike Lafitte is the chief operating officer of CBRE, where he oversees the firm’s geographically organized service businesses and its globally organized service lines. He was previously president of CBRE Americas.
And how many people do you have working for you? GATES: Many. In all, it’s about 8,000. STEVE EVERBACH: I used to be one of them.
He’s OK to work with?
EVERBACH: Yeah, he’s OK.
Good to hear. Tell us about your current role at Cushman & Wakefield, Steve.
EVERBACH: I’m responsible for the Dallas-Fort Worth market, which includes all of our business lines. We have about 300 employees locally. I’m also responsible for our U.S. Agency
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R ROUNDTABLE Leasing group, which consists of approximately 600 professionals, including all of our offices and all the Alliance offices.
MIKE LAFITTE: I serve as the global chief operating officer for CBRE. My responsibilities include all product lines of our service business, globally, and then I support and oversee the geographies as well. GATES: So that’s got to be, like, 60,000 people. LAFITTE: We’ve got 50,000 employees today, in that group, and then we are working on an acquisition that we hope to close in the next couple of months that will take it to 70,000, the JCI and GWS business.
How do you strive to stand out when appealing to talent and clients and building a multinational team?
LAFITTE: Our approach has been to build a global company and global platform, much like the other two firms that are represented here today. We operate in a very respectful competitive world. We’re a service provider. When you think about our assets, it’s people. Our platform is our market intelligence, and it’s all the tools that we bring to bear to our people to deliver services for our clients. For us it’s about training, attracting and keeping great people, but then also investing deeply into our platform. At the end of the day, you’re serving the client. I think we’re all very client-centric firms. We’re already global, so we’ve got a great footprint to start with, so it’s just continuing to make investments to try to become a world-class company. Our industry continues to grow up. We all kind of started in a corner of the business. GATES: Whether it’s our folks working hard and trying to out-compete Steve’s or Mike’s, it’s unique solutions at the point of sale. And in our industry, it’s the breadth of the things we are doing. Our client base falls into two big categories: investors and occupiers. I’ve heard Mike say this, and I totally agree. You would think they’re not even in the same sphere or industry if you get in a room and talk to them, because they’re very different. They all have unique things they’re trying to accomplish. They have problems they’re trying to solve. They have risks they’re trying to mitigate. They have opportunities they would like to find or would capitalize. We have to understand them well enough to show up and say, “We’ve got an idea that seems unique.” Or we have a platform and systems and
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technology and processes and expertise and experience that sort of nail it for them. In some respects, it’s different almost every time. That being said, every investor client we have right now says they need to put money out. “Bring me something.” Onehundred percent of them are saying that. It’s a common element, but they’re looking for different things. We have to work very hard to understand our clients and what they’re trying to achieve. We then have to go do the work to come back and say, “This is something unique that might work for you.” That’s when we tend to get ideas. At the same time, there’s a dramatic change happening in American business. In 2010, half the U.S. workforce was comprised of baby boomers. By 2020, that will be millennials. It skips a generation. We collectively have to get better at attracting those young people and then get them up to speed pretty quickly. Historically, the industry is sort of known for not having the best training and mentoring systems in place. So it’s working hard, but not making sure they’re getting better at it, too. We’re going to have to double and triple down on the number of young folks that come into our industry over the next 10 years or so.
Do you find millennials different in the U.S. than they are in other countries?
GATES: Well, culturally you have to be prepared for at least some subtle differences in almost every different country in the world. But there are some very common elements too. There’s a wonderful sort of optimism and there’s a purity about their view of the world. They do want to have an impact, and they want to understand why this is good for the economy and why this is good for society and why it has an element that makes them feel like they’re almost part of a cause. Companies that are successful today kind of create that element. There are subsets that are highly motivated by some of the things we were when we were younger too. EVERBACH: To John’s point, we recently put out a white paper on millennials, and there were a couple of stats that astounded me. Approximately 40 percent of the
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R ROUNDTABLE workforce today is millennials, and in 10 years, it’s going to be 75 percent. All of us sitting at this table are baby boomers. Our motivations are different. Millennials are highly collaborative. They’re motivated by self-development. They look for new opportunities. They’re competitive, but they’re competitive in a different way than we are. They’re competitive with themselves. They do a benchmark of where they were a year or two ago. Their self-performance is important. At the same time, as I mentioned, they are highly collaborative. And I think you’re seeing that pervasive throughout not just our industry, but all the industries and all the companies we serve. In order to recruit the talent, we have to understand it. I’ve known these gentlemen for years and years. We’re very friendly, but it is a war for talent. And each of our companies are different, and that usually is driven by the culture of the company. Platforms are similar, but we’ve got to offer a unique and broad opportunity. We have to have a platform of services and provide those individuals that are looking at Cushman & Wakefield with a career path that’s attractive to them. If we don’t do that, we can’t recruit the best people. And if we don’t recruit the best people, we won’t be able to come up with creative, value-added solutions for clients, and we’ll lose the overall war. So we’re very focused on talent right now as a company. GATES: The trends have changed the nature of a couple of asset classes too. Office space is different in some respects than it used to be. I recently toured some WeWork space. [WeWork Cos. Inc. is a New York-based provider of shared workspace, community, and services for entrepreneurs, freelancers, startups and small businesses.] Just the nature of the space and how they use it is amazing. Multifamily has changed a lot, too. Thousands and thousands of units are 700-, 800-, or 900-square-foot open lofts. We didn’t used to build those, except in super expensive markets. LAFITTE: Another thing I think is unique to real estate—it’s certainly become a real trend in this industry—and that’s this incredible, intense specialization in everything that you do. Whether it’s office or data centers or labor analytics or workplace solutions or sustainability—you find all these niche practices and an intense focus on expertise. And that’s true across capital markets, that’s true across leasing, that’s true across corporate solutions. The days of being a generalist are gone.
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And those specializations are a lot narrower now.
GATES: Well, the good news about it, though, is it provides a much deeper level of expertise than when we were younger. LAFITTE: To the earlier point about knowing your customer, the language of the investor-client and the language of the occupier-client are very different. What drives them—their metrics, how they think about using space with real estate—is completely different. You’ve got investor clients that are looking at a way to make money, and occupiers, it’s a means to an end, in terms of establishing their corporate objectives. So if you’re Google, Apple, Microsoft or Bank of America—whoever you are—real estate is just a different thing. That specialization helps us all drive these strategies around the world and ultimately serve these clients a lot better.
But the investor is only worried about profits, and it costs a lot more to build out those spaces that are amenity-rich and create a different kind of environment than what we’re traditionally used to. So how do you match that investor return perspective with the cost of delivering the product?
GATES: It depends on what product you’re talking about. Office generally is where we gravitate. That’s where we make the most money, but it’s counter-balanced a little bit by increasing densities. The cost per employee to the occupier at the end of the day is not any higher. Maybe it’s even lower in some respects. In fact, we know it’s lower in a lot of respects, so the returns are there on the investor side right now. The fundamentals look healthy.
Commercial real estate is a $15 trillion industry, which is astounding to me. It’s as big as the entire U.S. stock market. But it seems like it doesn’t get the respect it deserves. How can we change that perspective? How do we get recognition for what we contribute to the bottom line of the global economy?
LAFITTE: From the investment community side, real estate as an asset class is getting
tremendous interest and more respect. The returns in real estate over the last 10 years compare well to fixed income and equity. So it has done its job. You’re seeing [investors] from all around the world, especially in Asia, increase their allocations to real estate. The appetite is huge for commercial real estate, because it has been a great asset. It’s funny. When you travel around the world, if you go to Australia, you go to Hong Kong, you go to London, you go to other places, property is front and center on the business page. You go to Dallas, it might be on the second or third page. There will be maybe an article a week that’s talking about real estate, because we’re in a very diversified economy. In these other places, where real estate is such a big part of the community and so expensive, it’s front and center. I would say, globally, the perception that we might have here that it’s not as big news as oil and gas might be to Houston, or banking might be to Dallas. In other parts of the world, though, it is. You pick up the paper in Hong Kong or in Sydney or in London and a third of the paper is going to be about property—both residential and commercial. EVERBACH: Historically, as an investment class, it has been fragmented and it hasn’t been as attractive as stocks and bonds, etc. But what we’re seeing is a perfect landscape right now for real estate, with low interest rates pretty much around the globe. You have nice economic growth. You have equity markets that are getting a little frothy. Investors are looking for alternatives and investing in real estate in general terms provides stability; it provides a better immediate return than stocks, and it has the potential for capital appreciation. It’s getting lot more respect, globally. We think that’s going to continue, and we’re going to see much more global volume of transactions going forward in the years ahead. GATES: I don’t view it as a problem ... not getting the recognition. The only place it might be a factor is, there are not as many young people coming out of school thinking, “I’m going to get in real estate.” At the same time, there are much bigger and better programs today. The University of Texas has a fantastic real estate program. I spoke at a University of Southern California
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R ROUNDTABLE function last week—they have a great real estate program, too. So the biggest impact on the industry, that lack of recognition, is attracting the next generation. On the investor side, we have more capital than we can deal with anyway, and I think allocations will continue to rise over time. Mike’s point is accurate. Real estate is not any riskier an investment class as some of the others. It’s less liquid, depending on how you invest in it. It’s not as easy or efficient for individuals to invest, but maybe that’s good, too. Because in the more entrepreneurial pieces where they might like to invest, you’ve got to be knowledgeable to do that. So, [the industry’s lack of recognition] feels OK to me, except for the recruiting and attraction of young people.
We hear that there’s more global investment coming to this region. Is that what you’re seeing? Do international investors seem to understand the true opportunity here?
EVERBACH: Foreign investment, thankfully, is increasing. I got into business in 1985. Back then, it was primarily a local business, with local developers and local capital. A lot of oil and gas money was going into real estate. That came to an abrupt halt in 1987 and 1988. We just had a capital markets group go over to the Middle East, meeting with foreign investors in a number of different countries. The investor had a list of their top ten investment markets in the U.S., and Texas was one of the top 10. From their view, Dallas and Houston are somewhat interchangeable. Because of the energy influence, Houston has been a bit more attractive than Dallas-Fort Worth. That perception has changed in the last six months. We’ve seen a lot of foreign investment activity here, and we’re starting to see more foreign buyers. We think that’s going to continue. Dallas offers a very, very stable economy, whether you’re a national or international investor right now, and Texas is the epicenter of growth in the U.S. The U.S. is obviously referred to and always thought of as a very stable economic environment and political situation. We see nothing but good things for the Dallas-Fort Worth area going forward. The fundamentals here are wonderful, and we don’t see that changing anytime soon. We’re somewhat insulated and will continue to be insulated because we’re still in a nice demand-and-supply balance from an overall perspective in real estate. For all of those reasons,
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Texas—and Dallas specifically—is going to see increased investment going forward. GATES: The short answer is yes. The longer answers are: historically, in the office product sector, eight to 10 percent of trades were international capital of some magnitude. It’s 20 percent right now, and in the core markets, it’s as high as 40 percent to 45 percent. So there has been a drastic increase in capital flow. Dallas and Texas has better recognition than it used to. I would imagine a couple of years ago when Mike took a global job and started traveling, he told people what he did and his title in other parts of the world, they would say, ‘You live in New York then, right?’ It’s almost reflexive. Just like Americans don’t completely understand other countries as well as we probably think we do—no one can name the top 10 cities in China, for example. Yet, they’re all massive economies in and of themselves. Money always flows to the big core markets first: New York, Washington D.C., Boston, the West Coast. Because [foreign investors] know those names. EVERBACH: I pulled a study from our capital markets group on cross-border investment, for 2007 to 2011 and then for 2011 to 2014. There was a 67 percent increase in the last four years over the preceding four years. That speaks for itself. GATES: It’s also pushing out of the office sector, too. We’ve seen some big trades in the industrial sector, some big portfolio trades. Then there’s this phenomenon around multifamily; the marketplace that exists in other parts of the world is just starting to emerge here. LAFITTE: It used to be that nine to 10 percent of all trades in the U.S., commercially, were foreign capital. Year-to-date, it’s 14 percent. So that number is increasing. For markets like Dallas, it’s not as obvious and as apparent, because they’re not doing it in a direct way. They’re doing it through advisors and funds and they’re doing it through large transactions. Canada is at the top of the list in terms of foreign investors here, and has been, historically. We consider that, obviously, North America, so it doesn’t sound and feel as much like foreign capital. Our New York brokers, our capital markets team, would say one out of every four bidders on a transaction, if it’s
R ROUNDTABLE $100 million or greater, will be Asian capital. It’s phenomenal. Germany is extremely active. Certainly, the U.K.. But the Asian capital is coming in waves. There are some restrictions, though. There’s a thing called FIRPTA (Foreign Investment in Real Property Tax Act), where we, as a government, tax foreign investment. So they’re coming in through ventures, through advisors and/or through bigger portfolio sales. It’s not as obvious in a headline that a building is now owned by this foreign entity. You just don’t realize it. GATES: As it relates to Dallas, too, some of the newer wave of capital comes from a category of “sovereigns.” They’re looking for big trades, and there are very few. If you’re looking for a $500 million trade, there are none. It’s not going to happen here, so it has to go to New York or it has to go somewhere else first. LAFITTE: In terms of Korean money and Japanese money, industrial seems to be at the top of the list. We recently did a U.S. investment interest survey, and Dallas came in third, behind San Francisco and New York. There are third-tier cities, too, smaller markets. But the gateway markets have gotten the vast majority of the capital. The core investment yields are just incredible. EVERBACH: Dallas is a Cowboy-type market and, historically, we’ve proven that with the boom and bust cycle. But I tell you, with all of the public and private investment that’s occurred here over the last 10 to 15 years— case in point being the Arts District— when you get people here, whether it’s a company leader or an investor, the city is markedly different and improved from 15, 20, 25, 30 years ago when I moved here. I remember going downtown, thinking that’s the epicenter of every city, and there was no one down there. I go downtown now, and to the Arts District, and it is a tremendous asset for us to show off. The cultural development, along with everything else that’s occurred, puts Dallas on the map now in a big way.
So let’s switch gears and talk about your companies as global competitors. How do you determine where you’re going to put your resources? You live here, but you’re doing business everywhere. So what’s your strategy?
LAFITTE: When you look at the global footprint, you’ve got to be where your clients want you to be. You start with that. That takes you to major markets. Where are the active, transparent, viable commercial markets? Where does capital want to go? Where do occupiers want to go? Where are jobs being created and where is there business activity? Those are the places you target. And you’re either a big, global company, like the three of us are, or you’re a boutique. If you’re caught in the middle, then you’re struggling to figure out how to serve a global client. If you’re trying to place capital or serve an investor client, you’ve got that same issue. It’s great to be in the U.S., but if your vision is that you want to be a global company, you’ve got to be in all the global markets; otherwise, you’re going to be limited in terms of your services and your scale. GATES: The strategy is not that hard. Capital wants to flow to the 60 biggest economies or cities in the world. And they’re pretty easy to identify. Then you can measure growth rates, and that impacts intensity and density of what you’re trying to do there. Execution is harder because we see a lot of consolidation impacting things here, and you have a view that’s probably very U.S.-centered. There aren’t many Asian businesses to buy. The industry is new. So you can say, “Well, we need to scale in Tokyo.” But it’s not as easy to do as it would be if you’re talking about San Francisco, for example. On the occupier side, it’s fairly similar with one difference: There are enormous opportunities in emerging economies, but they’re not the developed, sophisticated city centers that we’re used to working in. Consumer product companies in the U.S. look at Africa and say, “That’s going to be massively growing, eventually middle class, and we’ll want to sell potato chips or Cokes or whatever it is.” Going and executing there is not easy, but you still have to do it. You have to do it in Brazil and you have to do
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R ROUNDTABLE R ROUNDTABLE
it in places in India and China that don’t have a depth of talent there. That part is not as easy to figure out. Strategically, we know exactly what we have to do. Getting it done is the hard part. EVERBACH: And as John said, it’s client-driven. It’s investor-, occupier-, and client-driven. It’s hard to go into a new market because it’s not mature—the fundamentals aren’t there, and it’s hard. And then in each country, compensation is different. GATES: Other than Africa, for our three firms, we’re probably in all the cities we need to be in for a long time. LAFITTE: You have currency risks. There are all sorts of things that come into play. Currency is a big issue for a global company. Listen to any quarterly earnings report, and you’ll hear about hits against the U.S. dollar in terms of impact. EVERBACH: Trade, availability of quality labor, and making sure the training is there for those employees, because real estate is specialized. It’s not just specialized in the U.S., it’s specialized globally. The global companies we are dealing with expect that consistent level of service. You have to have different practice areas serving those clients, not just domestically, but internationally. That’s the challenge. We’re all dealing with the same thing.
Is there any region or any country that you think has got the greatest long-term
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growth opportunity for you?
GATES: Clearly the Asian economies are going to merge into long-term. If Western Europe and the U.S. are the most mature economies in the world, there will still be massive opportunity here 10 years from now. That’s not going to go away. Here in the U.S., we enjoy the benefit of population growth, which is pretty important to have long-term, sustainable GDP growth. Europe’s got a challenge around that, and we’ll see what happens there. But even there, there are a lot of opportunities. The fact that things are growing faster in some of the emerging economies creates maybe bigger opportunities, but it’s a long time out. LAFITTE: The two obvious answers are India and China. After that you look at markets like Southeast Asia, which is a collection of places: Malaysia, Philippines, Thailand, those places. You’d look at Latin American, Mexico, all the way down through Brazil. GATES: Malaysia may be a place where we actually increase our presence. LAFITTE: Yeah. Then I would add Africa. But with the occupiers, you can hardly have a conversation these days, certainly in Europe, without that topic coming up. GATES: If there’s a day when you all make more money in China than you make in the United States, you and I will be out of the business. We will be fishing and golfing, because it’s going to be a long time. LAFITTE: You’re exactly right.
So when you’re growing globally and you’re moving to a market that’s not as sophisticated as the U.S., and you’ve got to hire property managers and leasing people and others that are required to support your business, how do you maintain the level of excellence in terms of delivery to your customers, both internal and external? That’s got to be a big challenge.
LAFITTE: Well, that’s true. You start with rules of the road and how you operate your company. It’s culture and it’s commitment to compliance. If you’re operating in places where there’s not transparency, where the rule of law may be questionable, there are no shortcuts for a public company. There’s just no room for anything other than playing by the rules and keeping everything in the fairway, and this is how
R ROUNDTABLE we’re going to do it. That may limit your ability to grow, because there may be other companies in some of these countries that aren’t going to follow those same rules, where there may be kickbacks or other things that are just no-no’s. We’re not going to do it. These violations that happen are extremely costly, if and when they happen. So you start there. Then, I think for all of us, you have a global practice leader that for everything you do, whether it’s corporate services, evaluations, or brokerage, they’re driving strategy across those lines of business with a deep compliance component to it. So globalizing IT, globalizing HR and all these things, so you’ve got a real core. It’s just what any large, multi-national company would do. These companies—the Fortune 100 and 500 that we all serve—they deal with those same challenges. You’re dealing with a global service provider that we live and breathe by the same rules that they have to comply with. GATES: We put different people in charge of emerging markets and mature markets. They require a different skill set and a different experience set. There are folks who know how to operate in that environment, one. Two, we have experienced people you can send over there who want to do that from other parts of the world. And, three, there’s a silver lining. If you have not had the opportunity to travel to China or to India, it’s a real eye opener. These are bright, seriously motivated people, and they’re working harder than Americans are. They get off the curve pretty quickly and they are ambitious. Getting them going—that does take some time. But it’s unbelievable how impressive they are and the great things they do for our clients over there. And they’re just as passionate about doing it. LAFITTE: They’re exciting markets. There’s 200 million square feet of office space under construction in China. Cities are coming out of the ground and it’s just incredible. Labor is available, and there’s new capital in a lot of these places. It’s an exciting place to be. GATES: And they’re hustling. You go into any of our offices in China on Saturday, and it’s full. EVERBACH: But the decisions to open new offices are generally economically driven. You look at GDP growth, look at employment growth, and usually the companies that lead us there, or the investors that lead us there, have gone through the analysis. And there has to be a quality of available labor. If you can’t find it, you import it. And you have multiple quality people within the organization, hopefully, to import it and lead the business. LAFITTE: I think when you look at the global consolidations that have occurred, and we’ve all been participants in that. If you can’t go build it organically, these acquisitions happen for good reason, to get you to that scale.
What are the two or three benchmarks that you track that provide your firm with the best insight into the growth opportunities, both domestic and global?
GATES: In the new markets, it’s GDP growth with employment growth, and quality available labor. Generally, our footprints are broad around the globe. You have to have a stable political environment as well, and that’s becoming more of a factor for consideration with all the flare-ups we’re seeing internationally. I think there will be expansion, but maybe not expansion in mass numbers into smaller cities or countries. You look at the fundamental metrics that Steve’s talking about, and base-level economics, certainly pay attention to job creation, as he said, and then population growth is a big deal, too. Even in the mature U.S. markets, there’s a different paradigm. Jobs now go where people are. In the old days, you went where the job was, right? So it’s a little bit of a different paradigm, but it’s still the very traditional metrics you would think of. We’re probably in most of the places we need to be for the next five years at least; it’s about
scaling new businesses to help new clients get done what they need to get done. So doing business globally, John, what is the thing that scares you the most? What concerns you the most? Is there any trend you’re seeing, other than a little unrest here and there? GATES: Well, whether it was us or people who came before us, there was foresight to say, “Let’s be a pioneer and be a global company and create tremendous capability globally and make sure it’s well-connected and works seamlessly. We can work country to country just like we do market to market here.” That’s not scary for a firm like us. That’s a good thing. It’s an opportunity.
Mike, do you have a different perspective?
LAFITTE: I certainly agree with what John said. The challenges or the things you worry about are, obviously, compliance. And consistency. How do we deliver the same quality of service in India as we do in the United States? Driving those things can be challenging. Getting skilled labor in some of these places—there aren’t brokers that have been in the business for 20 years, or leaders. The whole expat leadership model is, I think, kind of fading away, because more talent is emerging in these countries. But I think John said it well. You built these global companies. It’s then a matter of providing consistent service. GATES: It shrinks the competitive set, right? So it’s good. And thanks to Colonial England for making English the world’s business language, we don’t have to worry about that. LAFITTE: You have currency risks. There are all sorts of things that come into play. Currency is a big issue for a global company. Listen to any quarterly earnings report, and you’ll hear about hits against the U.S. dollar in terms of impact. There’s some of those things that are controlled, some that aren’t.
Anything you’d like to add, Steve?
EVERBACH: Well, you’ve heard it before: Trade, availability of quality labor, and making sure the training is there for those employees, because real estate is specialized. It’s not just specialized in the U.S., it’s specialized globally. The global companies we are dealing with expect that consistent level of service. You have to have different practice areas serving those clients, not just domestic, but internationally. That’s the challenge. We’re all dealing with the same thing.
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R ROUNDTABLE Steve, your firm is going through a transformational change with the upcoming merger with DTZ. Do you see that this may be the last big merger for a while? Or are there more in the future?
EVERBACH: I’m very pleased to say everyone’s excited. The firm, when merged—assuming we get through all the regulatory issues, which we anticipate will be fourth quarter this year—is going to be a much stronger company, financially, from a resource standpoint, and from a footprint standpoint, from which to serve clients. We have some deep-pocketed owners that have committed to invest further in the business for the platform technology, etc., so we can continue to come up with very creative value-add solutions for clients.
And do you think this trend is going to continue, Mike? How many big firms can be created? Who is left?
LAFITTE: The windows open and close on consolidations, and this has been a very active window. When I think of CBRE, I think of larger transformational deals, and then there’s always these smaller, infield deals. For us the string of larger transformational deals started with the Coldwell company, and then Insignia, then the Trammell Crow Co., and then we bought ING’s Investment Management business, and then we bought a company in the U.K. called Norland, and now we’ve got the big, $1.5 billion deal with JCI’s [Johnson Controls Inc.] Global Workplace Solutions, their corporate facilities management business. Each one of those had a strategy, and they were large. About every three or four or five years we can find one of those that’s a fit. It has to be a cultural fit. There’s got to be retention, there’s got to be stickiness, and there’s got to be a strategy. Along with that, there are always kind of niche, infield deals, like recent acquisition of UCR in Dallas. .. You’re either a big global company or you’re a niche boutique player. Those in the middle find themselves challenged with serving global clients and growing. We’ve seen a lot of those, and we have been a part of these consolidations over the last few decades. I think the model has clearly proven itself to work. We love our position where we sit today. We’ll be a $13 billion revenue company after we close this deal. The idea that we’d have companies our size with 5 billion square feet under management—when I started in the business in 1984, it wasn’t
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anything that looked like this. But look at market share for any of us. It’s single digits, for the most part. It’s still a very decentralized business. I think the industry is positioned very well, and not unlike a lot of big other services companies. You’ve certainly got the big three or four accounting firms. EVERBACH: There used to be eight. LAFITTE: And again, what market share do they have? So it’s still a very decentralized industry. EVERBACH: This whole thing is client-driven. Clients are expecting more for less, and you have to scale to do that, if you’re going to serve the global clients.
So who is going to be No. 1 in five years?
GATES: That depends how you’re measuring it. Once you get to enough scale, I don’t think that’s a terribly meaningful question. Of the big four accounting firms, who is the biggest, and would that be a criteria? I bet no one in the room can answer that question. I cannot. But it wouldn’t matter to me. They’re plenty big enough. So then the discussion shifts to best in capability and what can you get done. This industry is consolidated enough, and when organizations get large, that’s just not a qualifying criteria. LAFITTE: The competition makes us all better. We’ve made each other better as firms, and our clients have expected us all to get better. Over the last decade or two, we all have. EVERBACH: I’ve had the opportunity in the last couple of years to go around to different U.S. real estate markets and get a real feel for the talent in those markets. To Mike’s point, the competition makes us better. The quality of real estate professionals in Dallas I’d put up against any city in the world. Each time we’re competing against these two gentlemen and their companies, whether it’s occupier or investor, we have to be on our A-game all the time. It’s about quality, as John said. It doesn’t matter on the scale. What matters is what solution you’re going to provide.
So is talent the differentiator for Dallas? Why is it that it has become such a center for the industry, for you all to be able to live here and work all over the globe?
LAFITTE: One factor is technology, which has allowed everybody to be mobile. Our leadership for our company, and just like everybody else, we’re all over the place. It’s in London. It’s in Hong Kong. It’s in Chicago. It’s in New York. It’s in L.A. GATES: Dallas is unique in that it has a phenomenal history in the real estate space, the impact it has had, at least in the United States. You go back to Mr. Crow and Mr. Miller and other people, that’s pretty neat. From a pure business standpoint, is has everything you’d want. It has got a great airport and it’s centrally located, so it’s so easy to get in. Texas is positioned incredibly well today.
Let’s get your final comments on what you think the future holds for your firm locally and globally? I’ll start with you, Steve.
EVERBACH: Locally, we want to continue to grow. We’ve almost doubled our presence in three years, since I came back to C&W. We want to grow, but we want it to be controlled growth. In our DFW office, like other offices around the country, it’s about the quality of our professionals. It’s about preserving our culture. We have a very unique culture. It attracts a very high-quality individual, and it attracts an individual who is very team-oriented, who’s collaborative, who wants to retain a little bit of an entrepreneurial spirit, as we structure our teams around the clients. We’re not going to grow just to grow; we’re going to grow methodically, where we can preserve the culture.
How would you define that culture?
EVERBACH: Teamwork, pride, character, respect, and work ethic.
OK. John? What’s ahead for JLL?
GATES: I’ll answer the last question first. Culture is so important, and it needs to be in the DNA of the individuals. We try to describe it and you’ve got 37 words on a page and that’s too many, right? So we have whittled it down to teamwork, integrity, and excellence. I grew up working for a guy who used to say, “Win, and do the right thing. And by the way, the second one is more important than the first.” He said it a thousand times, and it just becomes part of who you are and what you stand for as an organization. So culture goes deep and it matters to us a lot. And I promise you, Mike is going to say the same thing. In terms of the future of the business, Dallas-Fort Worth is going to be a tremendous place to live over the next generation; the young people here are very lucky. Our firm has a rich history here. The Staubach Co. was here—Roger is still here. Dallas is big business for us, and it’s going to continue to grow. The market has visibility nationally and globally with the firm, and that’s a good thing. I feel good about our business over the next decade. The one thing we have not talked about, and it’s the single biggest thing I think we probably all are kind of watching and wanting to figure out, is technology, which will inevitably change our business. In some ways, we’ll be real beneficiaries of it, because it drives productivity, it drives innovation, it allows us to do fantastic things for our clients, and we can get better at that every year. There’s a lot of money being invested around things that might sound like disintermediation to us. And when transactions are a big part of all our businesses—and they are, and we need them to continue to be—then that part of it, you kind of watch. Candidly, we are all pretty good at innovating, for real estate firms, but to compare what we do to real technology that’s transformative, it’s different. The dollars
and capital that are dedicated to that, the size of engineering teams, the feedback and iteration loops—we know it’s going to happen. This is fantastic, right? But there are countless development hours that went into that, that had that feedback loop, that had massive amounts of money behind that. And as big as we are, as much money as we have, we don’t have that. We’re watching that stuff closely, and I’m certain the other folks are, too.
So you want to be the Google of commercial real estate?
GATES: You don’t want to get hit by a bunch of numbers; you need to be a part of transformation, not a victim of it. That’s the way I would think of it. And we’re figuring out how to do that, right? EVERBACH: From a technology standpoint, we’re dealing with static documents from a reporting and analytical standpoint, and we need to have active documents for reporting and analytics going forward. That’s a great point. GATES: We create the data though. The data in and of itself would not be a holy grail; the ability
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to interpret or do something with it should be the value add that we always provide as firms. But the industry is rapidly going through a transformation where data is going to be aggregated—I’ll use the term “sanitized.” So it’s sort of consistent and not redundant that’s in the databases and available for use in ways that it never has been. It used to be in Steve’s head when he was a broker, Mike’s when he was leasing buildings downtown years ago—and now it’s much more accessible. So you still have to be artful at doing something with it. But that is the bigtime change that’s happening right now. There are things we would look at five years ago and almost laugh at them, and we’re going to go through that phase, I think, right now, in the next few years. LAFITTE: Our core values are very similar to those mentioned. We refer to it as RISE, which stands for respect, integrity, service, and excellence. We work hard to run our firm with all of those values at the core. We’re aspirational by becoming world class. We’re already global. We’ve got the footprint and all those things, but it’s about people and taking an entrepreneurial company in an industry and turning it into a world-class company. That’s our aspiration. It’s a very different mix of business. It’s diversifying globally, but it’s also diversified by line of business. So this outsourcing business, this
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corporate solutions business and healthcare business, today half of our revenue is contractual revenue. Twenty years ago, for most of the brokerage firms, 90 percent of our revenue was one-off transactions. I think it will make firms like us less cyclical in the next downturn, whenever that happens. So we’ve been very intentional in terms of building a firm that has good diversification. The occupier business—it’s only 25 years old, as a specialty. The other activities we’ve been doing, we’ve been doing for 100 years. Leasing is not new, selling buildings is not new, doing evaluations is not new, but for the last 25 years, this occupier business, people don’t quite yet understand and appreciate. We talked about, in some markets, real estate is maybe not as front center on the business page. This outsourcing and services business that the industry has built has become a big thing. And I think growth trajectory for that is good. GATES: The U.S. companies are leading the pack, and they’re not mature at all. LAFITTE: Right. It’s opening up in Europe, opening up in Asia, opening up in Japan. GATES: All of our healthcare businesses, that industry is going to consolidate. Outsourcing will be part of that.
And all these operating companies are spinning off their real estate assets because they don’t want to manage real estate anymore, and that has to be a big opportunity for you as well.
AFITTE: That’s exactly right. It creates a huge amount of jobs in our sector. So if you’re down at UT and talking about all the opportunities in the past, to get into real estate, when we got in, there were just a few paths. You could go into property management or development or brokerage. The specialty practice groups have opened up many more job and career opportunities for young people coming in. And, getting back to the technology thing, the workplace is changing. It’s densification. It’s urbanization. The facilities are being run by technology—if you’ve got a Nest thermostat at your home, you don’t have to get up and get out of bed; you just pull out your iPhone, if you’re lazy, and change the temperature. So it will be more efficient. Technology is an enabler for more productivity in terms of kind of the workplace. But what’s going on within the footprint of the workplace, we also see big changes there.
GREAT MINDS OF COMMERCIAL REAL ESTATE GATHER The discussion continued as the top makers in Dallas came together to socialize, and maybe birth a few deals on the side at the post-roundtable reception
PAT PRIEST OF THE REAL ESTATE COUNCIL AND ANDRE STAFFELBACH.
ALLISON THOMPSON OF CEDARY HILL, CAROL ROEHRIG OF BKM, AND CALEE DILLON OF STAFFELBACH.
DALLAS REGIONAL CHAMBER PRESIDENT & CEO DALE PETROSKEY WITH ROUNDTABLE PANELIST MIKE LAFITTE OF CBRE.
FRANK MIHALOPOULOS OF CORINTH PROPERTIES, AND ALLISON THOMPSON OF CEDAR HILL ECONOMIC DEVELOPMENT CORPORATION
SHALISSA COLWELL AND KOURTNEY GARRETT OF DOWNTOWN DALLAS, INC.
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A DOWNTOWN REVIVAL
REAL ESTATE INVESTORS ARE FLOCKING TO THE URBAN CORE OF DALLAS, GROUND ZERO FOR A REDEVELOPMENT BOOM THAT’S UNDERWAY ACROSS NORTH TEXAS.
BY KAREN NIELSEN | SEAN KELLY | TAYLOR LITTLE | BRITT STAFFORD
An overnight success rarely happens overnight. For years, a small group of passionate business and civic leaders has been touting the virtues of the core of downtown Dallas. Now suddenly, it seems, the world has taken notice. Suburbanites are driving in to catch a show or enjoy a meal at a hot new restaurant. New residents are snapping up apartments and lofts. Downtown hotels such as the NYLO Dallas and Omni Dallas are bustling. “It’s stunning to see,” says Jack Gosnell, senior vice president with CBRE | UCR in Dallas, whose brokerage firm is involved in leasing retail space in projects such as The
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Olympic at 1401 Elm St., McKinney & Olive in Uptown, and the Dallas Farmers Market. “People are starting to look at Dallas differently now.” Real estate investors have taken notice, too. Buildings that have sat vacant for decades are being acquired by buyers from around the globe, sparking an unprecedented revitalization and adaptive reuse boom. It’s a far cry from where things stood in the late 1990s, when Ted Hamilton bought the Davis Building, a 1926 landmark on Main Street. Back then, there were fewer than 400 residential units in the central business
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CURRENT REDEVELOPMENT PROJECTS 1
1610 S. ERVAY
Olympic Property Partners is redeveloping this 52-story tower at 1401 Elm St. into 480 luxury apartments and 13,000 square feet of retail space.
HRI Properties’ $70 million renovation will transform this 32-story tower into a mix of residential units and a hotel carrying the Hilton brand.
Investor Zad Roumaya has acquired this former Yellow Cab building and plans to repurpose it into office space for small companies and entrepreneurs.
An adaptive reuse by new owner NewcrestImage will transform this 18-story tower, built in 1923, into a 176-room Hampton Inn & Suites hotel.
Olymbec Corporate Group is doing an extensive renovation of the building’s main lobby and food concourse, expected to be complete by Spring 2016.
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R REDEVELOPMENT Street, a 75-unit condominium development called The Beat, The Cedar’s Social restaurant, a 45-lot urban housing project with David Weekly Homes, a 290-unit residential complex at 1210 S. Lamar St., and the Alamo Drafthouse, which is set to open later this year. “What we’ve learned is the less you do, the more people like it,” Matthews says. “They like things like exposed brick.” Matthews’ newest target is the former Dallas High School. Built in 1907 on the eastern edge of downtown at Pearl and Bryan streets, it has been unoccupied since the 1990s. Matthews and developer Mitch Paradise initially plan to convert the property into office space. The building sits on 5.2 acres of land. “We loved the history of the old building,” Matthews says. “We wanted to bring that back to life and improve the whole area.” Centurion Development Group is busy with two big projects. The company is giving the 670,000-square-foot Statler Hilton Hotel on Commerce Street a $175 million transformation. It’s also converting the adjacent former Dallas Central Library at Commerce and Harwood streets into mixed-use space. Over at 1401 Elm St., the former First National Bank tower, which takes up an entire city block, is being converted into 480 luxury residential rental apartments and 150,000 square feet of destination-style retail space. It’s slated to open in 2017. The project, a $250 million joint venture between Olympic Property Partners and BDRC Partners, revitalizes the 1.5 million-square-foot, 52-story tower, which has sat empty since 2010. Retailers are showing strong interest in the space, says Gosnell, who has secured early commitments from a number of tenants.
district. When the Davis Building reopened a few years later with 183 units of loft apartments, a large parking garage, and 52,000 square feet of retail space, there were still only about 900 residential units downtown, says Hamilton, president of Dallas-based Hamilton Properties Corp. The success of the Davis Building led Hamilton to tackle a number of other redevelopment projects, including Aloft Dallas Downtown, DPL Flats, Lone Star Gas Lofts, and Mosaic. His latest effort involves turning a 12-story building just south of City Hall into a 237-room Lorenzo Ascend Hotel. “Redevelopment is a lot harder than new construction, so most large developers don’t want to mess with it,” Hamilton says. “It takes so much more time, energy, and effort that there’s only mostly entrepreneurial guys interested in doing it in the first place.”
SOUTH SIDE STAR Another urban trailblazer is Jack Matthews of Matthews Southwest. His redevelopment of a former Sears warehouse into the wildly successful South Side on Lamar helped spark the creation of a new submarket just south of downtown Dallas. Matthews has gone on to develop nearly 2 million square feet of space in the neighborhood, with projects such as a 164-unit apartment community on Belleview
A HOME RUN
Thirteen new apartment and loft projects are underway in Dallas’ urban core. PROJECT
2015 2015 2015 2015 2016 2016 2016 2017 2017 2017 2017 2017 2018
24 108 186 313 215 278 340 60 238 240 409 520 219
Mid-Elm Lofts Farmers Market Square LTV Tower Alta Farmers Market 411 N. Akard Fairfield at Ross Broadstone Farmers Market FM Taylor Lofts 500 S. Ervay FM Harvest Lofts Atelier Flora Lofts 1401 Elm Statler Hotel & Residences TOTAL
TYPE Conversion New Development Conversion New Development Conversion New Development New Development New Development Conversion New Development New Development Conversion Conversion
3150 SOURCE: Dallas Department of Economic Development
CURRENT REDEVELOPMENT PROJECTS 6
THANKSGIVING TOWER DOWNTOWN
Woods Capital selected Gensler to head up a $100 million renovation of this 50-story icon in the heart of downtown Dallas at 1401 Elm St.
A Gensler-designed renovation will give this Uptown office building a new entry, lobby, fitness center—and a new name: Parkside Tower at 3500 Maple.
Restaurateur Mike Hoque has acquired this downtown icon, with plans to add restaurants and retail on the ground floor and renovate office space above.
This 18-story aquamarine tower at 211 N. Ervay is being reinvented as a “tech mecca” for technology startups and other entrepreneurs.
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BUTLER BROS. BUILDING DOWNTOWN
Alto Partners is transforming this ninestory building across from Dallas’ City Hall into residential units, a Marriott hotel, and two restaurants. SUMMER 2015
REDEVELOPMENT IS A LOT HARDER THAN NEW CONSTRUCTION, SO MOST LARGE DEVELOPERS DON’T WANT TO MESS WITH IT. — TED HAMILTON, Hamilton Properties Corp.
“It’s a large space to deliver and it’s the first project in downtown that I’ve been able to get that kind of front-end stimulation on,” he says.
MAIN STREET MOGUL About 8,200 people now live in the core of downtown Dallas. (The city’s 15 downtown districts, which include Uptown, are home to a total of about 40,000 people.) Occupancy of residential space in the core is at 93 percent. That has lured multifamily developers, which have a total of 3,150 apartments and lofts under construction. In turn, the higher residential density is attracting much-needed retailers. Capitalizing on and helping to drive the trend has been Headington Cos., which has redeveloped a number of properties along Main Street. Led by the elusive Tim Headington, who has had tremendous success in the oil and gas and
SUBURBAN PLAYS TO WATCH Dallas is a newer U.S. city, with most of its older buildings located in the urban core. So, that’s where most of the redevelopment activity is taking place. Industry observers expect to see more projects spring up in the West End of downtown and the Design District. But a couple of big projects are percolating in the suburbs, too: DALLAS MIDTOWN: Scott Beck has ambitious plans for a $4 billion redevelopment on a 430acre site anchored by Valley View mall, which he acquired in 2012. The venture will ultimately add millions of square feet of retail, residential, hotel, and office space. The 430-acre Midtown district is bounded by Interstate 635, Preston Road, Alpha Road, and the Dallas North Tollway. TEXAS STADIUM: The 78-acre site in Irving is within a triangle created by State Highways 114, 183, and Loop 12. It has sat vacant since the former home to the Dallas Cowboys was razed in 2010. San Diego-based OliverMcMillan was granted a memo of understanding concerning development of the Irving property, but that agreement has since expired. American Airlines was bandied about as a potential headquarters tenant, but those discussions have died down, too. Irving officials are eager to secure a project similar to CityLine on the site. The massive mixed-use development in Richardson is anchored by major operations for State Farm and Raytheon.
entertainment industries, Headington Cos.’ transformative projects include The Joule, a 164-room luxury hotel at 1530 Main Street. The Gothic building was initially developed in 1927 as office space for Dallas National Bank. Headington is now at work on the new Forty Five Ten boutique across the street. Gosnell calls the project a “game-changer.” The broker has been peddling downtown space for years, and for most of that time, he says few retailers were interested. Now, though, “every retailer you can imagine has been in the car trying to figure it out—big boxes, fashion, clothing, groceries—we’ve had them all touring trying to figure out where the play is,” he says. With the swarm of redevelopment projects underway, the inventory of old Class B and C office buildings is pretty much depleted in the core. For Gosnell and other longtime urban boosters, it’s a great problem to have. “What’s wonderful is a lot of them were terrific buildings,” Gosnell says. “They had some redeeming characteristics and because of TIF and federal money in the form of investment tax credit money those got redeveloped and saved. The historic fabric has been saved.” AS PART OF OUR PACKAGE ON REDEVELOPMENT AND RENOVATIONS, WE’RE TAKING A DEEPER LOOK AT SIX PROJECTS ACROSS NORTH TEXAS THAT STAND OUT.
ONE MAIN PLACE
DALLAS HIGH SCHOOL
NewcrestImage also bought this adjacent 22-story tower, and is bringing in dual brands: AC Hotel by Marriott and Residence Inn by Marriott.
Olympic Property Partners has acquired this 14-story property at Harwood and Bryan streets and plans to significantly upgrade its office space.
Harlan Crow is nearly finished with his redevelopment of a rundown historic hospital into an über-exclusive, Jeffersonian-style office park.
Along with a 323-room Westin hotel, this massive building, which occupies an entire city block, also will feature office and retail space.
Matthews Southwest plans to convert this former school at Pearl and Bryan streets into office space. Built in 1907, it has sat vacant since the 1990s.
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When it was first built 30 years ago, the 17-story former Belo Building gained quick renown, both for the media company that occupied its 253,000 square feet and for its geometric shape. The building was put up for sale last year, after Gannett Co. bought Belo. City Electric Supply, led by Thomas Hartland-Mackie, emerged with the winning bid, and is now giving the property a major overhaul. “The building [Belo] built had fantastic bones, and it was built to a beautiful standard,” Hartland-Mackie says. “We want to respect that history, but just put a modern refresh to it.” Designed by Gensler, the renovation includes a “sky garden” on the top floor. A new two-level lobby will be enclosed in glass and a custom-designed metal canopy will be added to the entrance. A stunning new mezzanine restaurant and bar will be covered in bronze metal panels, and have the appearance of “floating in space.” Hartland-Mackie also plans to display pieces from his family’s private art collection in the redesigned space. City Electric Supply will occupy five floors of the building, which has been rebranded as 400 Record. Hartland-Mackie says the improvements will open up the building to the surrounding streets and neighborhood, with transparent glass and a larger, more inviting entrance. It’s another win for the southwest area of downtown Dallas, which also is being boosted by an amenity expansion at the nearby Omni Dallas Convention Center hotel. Matt Schendle, JJ Leonard, and Rena Chappell of Cushman & Wakefield are handling leasing for 400 Record. City Electric Supply Co. expects to begin moving in sometime this year.
CRESCENT REAL ESTATE EQUITIES LLC
It’s hard to believe that just 30 years ago, Uptown Dallas was a sleepy neighborhood that existed in the shadow of its downtown neighbor. Today, it’s one of the most successful commercial districts in the country. Uptown is anchored by The Crescent, an iconic, three-tower complex developed in 1986. To keep up with the shiny new towers that have sprung up around it, the iconic development and the adjacent Rosewood Crescent Hotel are getting a major overhaul—to the tune of about $65 million. The improvement will help ensure that The Crescent remains as one of the best assets in the market for the next 30 years, says Crescent Real Estate Equities LLC’s John Zogg, who oversees office leasing. The renovation will focus on creating a “great pedestrian experience” for tenants and visitors. This includes rethinking everything from signage to landscaping throughout the 11-acre, mixed-use project. A new “front door” will be created at McKinney and Pearl. And the development’s extensive retail component, which includes upscale shops like Stanley Korshak, will be showcased. “It will be like a jewelry box; it will really pop, especially at night,” Zogg says. The interior retail court will be reshaped to create a continuous flow, highlighted by a reflecting pool and surrounded by outdoor restaurant seating. New lighting will enhance the project’s unique features, and the current motor court will be replaced by a pedestrian-friendly piazza. A success since its initial development, office occupancy at The Crescent stands at about 95 percent, with more than 80 financial firms calling the project home. Lease rates for the remaining space starts at $31 per square foot, triple net. Key players involved in the renovation include Staffelbach, The Office of James Burnett (the landscape architect behind Klyde Warren Park), Gromatzky Dupree & Associates, Thornton Tomasetti, Brockette Davis Drake, Schmidt & Stacy, CBRE|UCR, and The Beck Group.
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RR REDEVELOPMENT REDEVELOPMENT
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CENTURION AMERICAN DEVELOPMENT GROUP
The former Statler Hilton hotel on 1914 Commerce Street downtown is one of the largest projects to ever undergo a transformation in Dallas. Investor and developer Mehrdad Moayedi, president and CEO of Dallas-based Centurion American Development Group, is overseeing a $175 million revitalization. “It is a great opportunity to rebuild the most iconic building in downtown Dallas and do it in a public-private partnership with the City of Dallas where we can create jobs and economic development and aid in the resurgence of downtown Dallas,” he says. The 19-story hotel first opened in 1956. Moayedi’s mission is to restore the historic property’s architecture, design, and entertainment roots. Known as one of the “most glamorous hotels in the world,” the original Statler Hilton claimed many firsts for the hotel industry, including elevator music and custom 21-inch Westinghouse TVs in every room. It also was one of the first hotels to offer conference and ballrooms on the lower levels. The Statler Hilton changed hands in 1998, becoming the Dallas Grand Hotel. Within three years, the property fell into vacancy, a victim of the Great Recession. Moayedi bought the 670,000-square-foot hotel and the adjacent former Dallas Public Library in 2014, after securing $46.5 million in tax increment financing from the city of Dallas. Set to open in October 2016, the new Statler Hotel & Residences will be part of Hilton’s luxury Curio collection, with 161 hotel rooms, 219 residences, four restaurants, a new music venue in a 14,500-square-foot ballroom, and boutique shopping, meeting, and office space. “The Statler Hotel & Residence ... will create new culture and class for Dallas,” Moayedi says. “It will bring something to the city that has never been experienced.” Merriman Associates Architects is the project architect. Lincoln Property Co. will lease and manage the residential component.
EQUITY OFFICE PROPERTIES
In 1989, Mexican architect Ricardo Legorreta came up with a design he hoped would change the way people view office space. His goal was for Solana to engage the business park’s natural surroundings, allowing tenants to feel connected to the environment. The 14-building development, built in the late 1980s, also stands out for its brightly-colored, 100-foot pylons. Within time, though, the property fell victim to a tough economy and became trapped in a period of special servicing, where very little capital was expended. Things changed in August 2014, when Equity Office Properties, an affiliate of the Blackstone Group, paid $180 million to buy the 230-acre complex out of foreclosure. Now, the new owner is shelling out more than $50 million for renovations, with the goal of helping Solana once again become one of the premier office developments in Dallas-Fort Worth. “Our job is to essentially come in and update the existing architecture that we have so that it appeals to modern-day corporations, and ultimately helps them attract and retain employees,” says Brian Driesse, director of asset management for Equity Office. “The bones are outstanding; it’s just the matter of spending the capital.” Equity Office selected Dallas-based architecture firm 5G Studio to come up with a repositioning plan that still maintained the integrity of the original Solana. It even involves undoing some of the minor remodels the park has experienced over the last 30 years, to bring back the project’s “ranch cool” feel. “I think what Legorreta did so masterfully initially with the design was to really understand the context that he was working in, and understand that the buildings are simply a functional necessity to the bigger picture, which is really the landscape, the prairie, the sky, the wildflowers—those type of things,” says Scott Lowe, partner at 5G who serves as the lead architect on the Solana project. Amenities at the 1.8-million-square-foot development include The Plaza at Solana, a retail center with restaurants, childcare, and a Marriott hotel with a fitness center operated by Larry North. With its place along State Highway 114, the project also offers easy access to major roadways and Dallas-Fort Worth International Airport. Chris Taylor with DTZ oversees leasing of office space at Solana. “When you have a growing employee base, you’re close to the airport, roadway access becomes that much better with a completion of a major construction project—a project like Solana is going to benefit,” he says. Renovations at Solana are set to be complete by mid-2016.
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ONE DALLAS CENTER HKS Inc., one of the world’s largest architecture firms, has helped many clients as they’ve moved into new corporate homes. The Dallas-based company got to experience things from the user side a few years ago, when its headquarters lease in Uptown was approaching expiration. An employee survey revealed that access to public transportation and walkable amenities were important considerations for new space; workers also expressed a desire to work in a “sustainable” building. The company was especially interested in HKS-designed projects, or a building it could substantially renovate, says Chairman Ralph Hawkins. After considering 20 different buildings, HKS became very interested in a building formerly known as Patriot Tower. The 30-story tower, designed by I.M. Pei & Partners, sits at 350 St. Paul Street, adjacent to a DART light rail stop. HKS teamed up with developer Todd Interests to create a plan that would give the property a major transformation. The lower 14 floors have since been renovated into modern office space. Along with HKS, Greyhound Inc. houses its headquarters at One Dallas Center. The top 16 floors are being redeveloped into downtown apartments,
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a collaboration between Todd Interests and Streetlights Residential. A restaurant and bar occupy the first floor; a fitness club and community center are on floor 30. “We’re the antithesis of a standard apartment development,” says Shawn Todd, CEO of Todd Interests. “When you buy properties that no one else wanted to own, you’re able to do that.” One Dallas Center, a building he bought out of foreclosure for about $6 million, is now worth about $100 million, Todd says. Beyond the project’s financial success, the adaptive reuse has brought new life to a key block in the core of downtown Dallas.
MICHAEL SA MPLES EQUITY OFFICE PROPERTIES
World Class Capital Group knew it had a good repositioning opportunity when it acquired a tired, 1980s office building at 717 N. Harwood in Dallas. Formerly known as KPMG Centre, the 34-story building sported a dark-wood and brass interior decor that was all the rage back in the 1980s but a big turnoff to today’s office tenants. The Austin-based company brought in experts at Gensler to come up with a repositioning plan. The goal was to support the concept that “organic interactions are what lead to new ideas, new relationships, and new business,” says Sheena Paul, vice president of WCC. Gensler Senior Designer Mark Harder and Designer Stephen Walsh worked on the project. The end result is a fresh and bright look, enhanced by LED lighting throughout the tower. A Wi-Fi lounge has been added, as have board rooms and conference rooms. The building’s lobby has been transformed, with the exception of installing artwork from emerging artists who have Texas connections. “The furniture, the reception desk, the lighting—it was really all about tying into the Dallas Arts District and helping to create street presence,” Walsh says. The updates have helped lure two big tenants to 717 Harwood. Both Active Network and Omnitracs relocated their global headquarters from California, bringing thousands of jobs with them. The 850,000-squarefoot building has about 200,000 square feet available for lease. WCC and Gensler will be working over the next year to perfect the project’s street presence and make it an even more vibrant part of an ever-evolving downtown.
EQUITY OFFICE PROPERTIES
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PERSPECTIVES ON REDEVELOPMENT LIVE-WORK-PLAY “Millions of dollars are being spent to convert old and vacant office towers to multifamily residential or hotels. In the first quarter of 2015, CBRE deleted approximately 3 million square feet from its downtown office inventory due to redevelopment. For the first time in my career, downtown truly is becoming a live-work-play environment.” — PHIL PUCKETT, Executive Vice President, CBRE
DRIVEN BY COMPETITION “Properties that have been successful in the past are seeing new competition, and they realize that the new developments are different. They focus on providing different types of [work] spaces, a higher level of hospitality, and more amenities. ... To compete, properties must convey a high level of energy and vitality, as well as up-to-date amenities. They must also demonstrate their sensitivity to energy efficiency and sustainability. — JO STAFFELBACH HEINZ, president and CEO, Staffelbach
A STRONG CORE “A healthy city or region is dependent on a strong core. Downtown remains the largest employment center in North Texas, and has the highest population growth rate of anywhere in the city of Dallas. As we continue to build, this will only grow stronger and reverberate success throughout the greater area.” — JOHN CRAWFORD, president, Downtown Dallas Inc.
REDISCOVERING THE PAST “I hope [the redevelopments] raise consciousness about how we treat our heritage. The millennials are all over it. Young people want to live in a vibrant urban core, near the arts, with lots of other like-minded folks. (Hell, it sounds good to me, too!) Rediscovering and repurposing these great buildings teaches us about a past that we may have forgotten or perhaps never knew.” — JACK GOSNELL, Senior Vice President, CBRE|UCR
WHAT’S DRIVING THE REDEVELOPMENT BOOM UNDERWAY IN NORTH TEXAS? WHAT ARE SOME OF THE KEY INGREDIENTS FOR SUCCESS? Expanded thoughts from area experts are online. DFWREALESTATEREVIEW.COM
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REBUILDING A VILLAGE
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A ANATOMY OF A DEAL BY HILARY LAU
Dallas-Forth Worth is often hailed for its encouraging business climate and entrepreneurial spirit, but sometimes real estate developments have to go through a few iterations before they can get it just right. Such was the case with Village on the Parkway, a once functionally obsolete shopping center at the Dallas North Tollway and Belt Line Road in Addison. After a nearly $40 million redevelopment, the center has found new life, thanks to a partnership of three Dallas-based partners: Lincoln Property Co., The Retail Connection, and Long Wharf Real Estate Partners (formerly Fidelity Real Estate Group).
How a trio of Dallas-based partners tackled one of the largest retail adaptive reuse projects in the market.
PHOTOS COURTESY OF THE RETAIL CONNECTION
One of the first lifestyle centers built in the area, the development got underway in 1979. Back then, it was called Sakowitz Village and housed the 127,441-squarefoot Dallas outpost of Sakowitz department stores, which for nearly a decade had been looking to go head-to-head against Neiman Marcus in Dallas. The project was nestled between the Galleria, which was enjoying great success, and Prestonwood Town Center, one of the hottest retail developments in North Dallas. Sakowitz Village reached nearly full occupancy soon after opening in 1981, touting a healthy mix of high-end retailers and restaurants. A short five years later, though, Houstonbased Sakowitz went bankrupt and shuttered its Dallas store. In the midst of an economic downturn and without an anchor tenant, Sakowitz Village also lost its main entrance, due to construction along the Dallas North Tollway. In 1989, MetLife foreclosed on the property. It wasnâ€™t until 1994 that a new tenant leased the former Sakowitz space: national housewares retailer Bed Bath & Beyond, which operated there for more than 15 years. A rezoning effort in the mid-1990s opened Village on the Parkway for future hotel and office
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A ANATOMY OF A DEAL
THE RETAIL CONNECTION
development, and Southwest Properties purchased the 375,000-square-foot complex from MetLife in 1995. Village on the Parkway changed hands again in 2004, when it was acquired by The Retail Connection and Colonial Properties Trust. That group held the development until 2007, when it sold to DRA Realty Advisors. September 2010 brought another shift; special servicer JER foreclosed on DRA’s interest in the property after Bed Bath & Beyond vacated its space there. Village on the Parkway hit the market as one of the most sought-after commercial properties in DFW, thanks to its positioning and location. Out of a huge pile of contracts vying for the deal, the winning bid came from the partnership formed by Lincoln, The Retail Connection, and Long Wharf in April 2011. At that time, Village on the Parkway was at 43 percent occupancy and declining daily. But readied with new capital, strong tenant relationships, and a team with years of experience, the combined forces set to work on a plan that would successfully redevelop Village on the Parkway into the retail and restaurant mecca it is today. “I was walking back to my office one day and Steve Lieberman was sitting outside at Perry’s restaurant, and he asked if I was bidding on Village on the Parkway,” says Robert Dozier, executive vice president of Lincoln’s retail division. “He said we ought to partner, and that was
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STEVE LIEBERMAN THE RETAIL CONNECTION
ALAN SHOR THE RETAIL CONNECTION
ROBERT DOZIER LINCOLN PROPERTY CO.
the start of us collaborating. The real estate was at ground zero, but it was functionally obsolete in the way it was laid out.” Among other challenges, Village on the Parkway’s layout had to be completely reimagined and overhauled to maximize the potential of the redevelopment. The bold strategy included demolishing nearly 150,000 square feet of space—almost half of the total square footage. The partners then rebuilt 128,000 square feet to meet the specifications of tenants 24 Hour Fitness, AMC, and Whole Foods, bringing Village on the Parkway to 11 buildings totaling 351,385 square feet. “We broke the property up into three phases,” says Lieberman, co-founder and CEO of The Retail Connection. “We had a north phase, which was the grocery anchor phase; we had a south phase, which was the entertainment phase; and then the assets in the middle were to be the lifestyle aspect of the property. Whole Foods became the anchor to the north phase of the property; AMC became the anchor to the south, and then we populated the axis with great restaurants and retailers to connect that daily vibrancy throughout. The partnership got much-needed help from the Town of Addison in obtaining
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A ANATOMY OF A DEAL
LAY OF THE LAND: VILLAGE ON THE PARKWAY BELT LINE RD.
Today, Village on the Parkway is comprised of 11 buildings totaling 351,385 square feet.
The partners were supported in their redevelopment efforts by $21 million in incentives from the Town of Addison.
Whole Foods AT&T Sleep Experts Zoes Kitchen Gloria’s Boardroom Salon Beauty Brands Relax the Back Tutti Frutti Frozen Yogurt Diamontrigue Soma Intimates Chico’s La Comida
To pave the way for 128,000 square feet in new development, 148,441 square feet of the original center was demolished.
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Sherlock’s Baker Street Kenny’s Italian Kitchen Neighborhood Services Gem Classics Sebastian’s Closet Boeau Belle Salon & Spa Desert Design Knits Saffron House Facial Spa Dream Cafe Hand & Stone Subway Flying Fish
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TF O R T D R .
Multiple entry points include three entrances along Dallas Parkway, one along Belt Line Road, one off Sakowitz Drive and three along Montfort Drive.
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Village on the Parkway is located at the Dallas North Tollway and Belt Line Road, within one of the most vibrant shopping and entertainment corridors in the region.
The partners realized the highest and best use for the property was to turn it into a “lifestyle center” with a grocery anchor.
Three primary zones were created as part of the redevelopment: specialty retail on the north, entertainment on the south, and walkable lifestyle retail as the connector.
Grand Spa 24 Hour Fitness MallaSadi Men’s Boutique Lazy Dog Mercy Wine Bar Luxx Lash Pluckers Kittrell/Riffkind Art Glass Pluckers Social House Metrocrest Chamber of Commerce Nails Now Titan Salon
The project will be one of the market’s largest adaptive reuse projects involving retail space for decades to come.
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Travelex Canary By Gorgi Craft Guild Of Dallas Visit Addison Mattison Ave Ideal Dental Timber Creek Capital 100% Chiropractic RA Sushi AMC Theaters Yardhouse
A ANATOMY OF A DEAL
THE VISION FOR THE REDEVELOPMENT AIMED TO LEVERAGE ITS STRENGTHS: LOCATION, HIGH TRAFFIC, LARGE DAYTIME AND NIGHTTIME POPULATIONS, HIGH-INCOME VISITORS, AND A LARGE TRADE AREA.
VILLAGE ON THE PARKWAY: A HISTORY 1979 Ground breaks for Sakowitz Village, a 375,000-square-foot retail center anchored by a Sakowitz department store.
1981 The center opens to great fanfare and quickly fills up, boosted by the success of the nearby Galleria and Prestonwood Town Center.
zoning and plan approvals, and won a $21 million incentive package in early 2012. Orlando Campos, director of economic development and tourism for the Town of Addison, says the revitalization of Village on the Parkway has already had a positive impact. “There have been several attempts by previous owners to revitalize Village on the Parkway, but they were never successful,” Campos says. “Then The Retail Connection and Lincoln Property Co. came in and purchased it, and the town sort of started giving some feedback in terms of things we would like to see for the center. Now, you go there on any given weekend, and it’s basically the happening place.”
WORKING THE PLAN
The former Sakowitz space finally gets a new tenant: Bed Bath & Beyond.
Once the formal agreement between the Town of Addison and the partnership was finalized, developers quickly put together differing layouts and plans to see which concepts worked best. They also turned the project over to the University of Texas’ real estate program, which enlists MBA students to evaluate different development projects and share thoughts on how to maximize their potential. “We had come up with our solution with architects and the team, then we also put it out there in a competition, which was fun and exciting,” Dozier says. “Their ideas kind of confirmed what our thoughts were. We used some of their thoughts as well.” The vision for the redevelopment aimed to leverage its strengths: location, high traffic, large daytime and nighttime populations, high-income visitors, and a large trade area. New plans repositioned anchor tenants to face south into the center, which opened up the flow of the property. By May 2015, with their work complete, the partners sold the property to an institutional investor, UBS Financial Services Inc. The company had owned The Galleria since 2002 and was looking for a lifestyle component to add to its DallasFort Worth portfolio. As it turns out, Village on the Parkway was a perfect match. “It sold for quite a bit more than Highland Park Village, which is considered the gold standard,” says Steve Lieberman, co-founder and CEO of The Retail Connection. “To have Village on the Parkway be in that same league is a tremendous accomplishment.” Far from having maximized its full potential, Village on the Parkway still presents some promising opportunities for further development, namely at its southeast corner adjacent to the AMC theater. Dozier says the partnership looked at building multifamily or condos there, but ultimately left that decision to its new owner, UBS. “We had a great piece of real estate, a very challenged asset sitting on that real estate, and we put together a great team where everybody played their position very well,” says Alan Shor, co-founder and president of The Retail Connection. “The strategy was almost flawlessly executed, and the end result was one of the best we’ve seen in this market.”
Sakowitz goes bankrupt and abandons its 127,441-square-foot store. Meanwhile, the development loses its main entrance due to construction along the Dallas North Tollway.
1989 Metropolitan Life Insurance Co. forecloses on the property, which is rezoned to include hotel and office space.
Southwest Properties acquires the complex from MetLife.
2004 The Retail Connection and Colonial Properties Trust buy Village on the Parkway in 2004, selling it in 2007 to DRA Realty Advisors.
2009 Bed Bath & Beyond leaves the development and moves to a new location along the Dallas North Tollway.
2010 Special servicer JER forecloses on DRA’s interest in the development and puts the project up for sale.
2011 A partnership between The Retail Connection, Lincoln Property Co., and Fidelity Real Estate Group (now Long Wharf) beats out 16 other bidders to win the prized center. Rezoning approvals are secured, as is $21 million in economic development support, from the Town of Addison.
2013 Whole Foods takes occupancy as a new anchor.
2015 After an extensive and successful revitalization, the partners at Village on the Parkway sell the property to UBS Financial Advisors.
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LANCASTER URBAN VILLAGE COURTESY OF CITYWIDE CDC
NEW MARKETS, HISTORIC OPPORTUNITIES HOW TWO IMPORTANT TAX-CREDIT PROGRAMS HELP FILL A CRITICAL GAP IN THE CAPITAL STACK AND GENERATE ECONOMIC GROWTH. BY JEFF BOUNDS
A variety of economic development tools help support new projects and the redevelopment of existing buildings. But one initiative, the New Markets Tax Credit Program, has been used to improve the very health of those who live in a community. That has been the case with a new 44,378-square-foot health clinic that sits next to DART’s Hatcher Station in the Frazier Courts area of South Dallas. Rates of health issues in the neighborhood—for things such as cardiovascular disease, cancer, stroke, and diabetes—had become the highest in the city, according to the Baylor Health Care System. The Hatcher Station clinic, which opened in May and is run by Parkland Health & Hospital System, is expected to handle more than 60,000 patient visits a year. A range of for-profit and nonprofit organizations worked with Dallas’ Office of Economic Development to make Hatcher Station a reality, according to Dorothy Hopkins, president and CEO of Frazier Revitalization Inc. But the $19.8 million clinic would not have happened without key financing from JPMorgan Chase, for which the banking giant received a $5.85 million New Markets Tax Credit that it will claim
on its federal income taxes over a seven-year period, Hopkins says. “Conventional financing for projects like these is nonexistent in low-income areas such as Frazier,” she says. “The rents aren’t there. The demand is not there. Lenders will not lend. The projects can’t be underwritten.” Created by the U.S. Congress in 2000, New Markets Tax Credits create “a very attractive layer of the capital stack for developments in unproven markets,” says R. Rhys Heinsch, principal at Dallas-based Catalyst Urban Development. The credits were used to help fund his company’s Lancaster Urban Village, a $30 million mixed-use, transit-oriented development.
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211 N. ERVAY
IN EARLY JUNE, THE DALLAS DEVELOPMENT FUND WAS AWARDED THE EQUIVALENT OF $45 MILLION IN NEW MARKETS TAX CREDITS. HISTORIC TAX CREDITS
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CRAIG D. BLACKMON, FAIA
Another notable incentive is a pair of tax credits—one federal, one state—for preserving and rehabilitating historic structures and properties. The Texas Historical Commission often serves as the first stop for inquiries about those credits on historic properties. That is partly because it serves as the liaison for applicants with the National Park Service, which makes final determination and approvals, according to a commission spokesperson. The federal program provides a 20 percent income tax credit for rehabs of historic, income-producing buildings. The commission also provides an initial application process for state credits, while the Texas Office of the Comptroller has final say on the use and transfers of those credits. The Texas Historic Preservation Tax Credit, which applies to franchise taxes, will cover up to 33 percent of eligible costs through low-cost equity and/or sale proceeds, according to Phillip Geheb, a real estate attorney in the Dallas office of Munsch Hardt Kopf Harr. That 25 percent tax credit program from the state became effective in January. Yet it has already been used, in combination with the Federal Rehabilitation Tax Credit Program, on a number of notable projects in downtown Dallas, including the Hilton Statler, One Main Place, 1700-1712 Commerce, 211 North Ervay, and the Butler Building, Geheb says. “The policies behind these tax credit programs are to encourage the private market to invest in projects that otherwise would not be constructed or preserved,” he says. “The net benefit generated through participation in these programs fills a critical gap in the capital stack for these projects and helps generate economic growth in areas of North Texas that would otherwise lag behind.”
ONE MAIN PLACE
DALLAS DEVELOPMENT FUND The city of Dallas is a significant player in the new markets program in particular. That’s partly because a nonprofit the city created in 2009, called the Dallas Development Fund, serves as an authority in this area for allocating tax credits under the program. The fund is one of at least 263 “Community Development Entities” that compete each year for what amounts to the right to help allocate a basket of tax credits. Other North Texas operations that serve
T TOOLBOX EARNING CREDIT
THE HATCHER STATION CLINIC
Securing tax credits on a development, though sometimes labor intensive, can enhance returns and make projects viable that otherwise would never see the light of day. Here’s a look at some things to keep in mind when seeking new markets tax credits, which go for investment in low-income areas, and historic credits, which apply to renovations of historic properties.
NEW MARKETS TAX CREDITS ERIKA BROWN EDWARDS / BOKA POWELL
as Community Development Entities include the Dallas-based Texas Mezzanine Fund, a for-profit lender that deploys new markets tax credits into projects statewide, both real estate and non-real estate based. In early June, an arm of the U.S. Treasury Department announced that it had awarded the Dallas Development Fund the equivalent of a total of $45 million in new markets tax credits. (Each dollar that a given development project uses from the allocation works out to 39 cents of actual federal income tax credit for an investor in a project.) This is a significant amount and the third such award—which are usually good for three years from the date when they’re handed out—that the Development Fund has received since 2009. It received a $55 million allocation in 2010 and one for $30 million in 2012. The funds have helped support numerous projects in the area, including the NYLO Hotel and Lancaster Urban Village. “We have a separate board that approves each transaction, and then they’re recommended to the city council, which makes final approval for each deal,” says Karl Zavitkovsky, director of Dallas’ Office of Economic Development. The Texas Mezzanine Fund received allocation awards totaling $213 million between 2008 and 2013. An issue for both the Dallas Development Fund and the Texas Mezzanine Fund is that the federal law authorizing the new markets credit program expired on Dec. 31 of last year. A pair of identical, bipartisan bills are pending in Congress— one in the House, the other in the Senate—that would provide permanent authorization for the program, along with nearly $5 billion in annual credit authority that is indexed to inflation and an exemption from the Alternative Minimum Tax. President Barack Obama included a similar proposal in his 2016 fiscal year budget, according to Bob Rapoza, spokesman for the Washington, D.C.-based New Markets Tax Credit Coalition, an advocacy group. Congress limits how much in total new market tax allocations that the Treasury Dept. arm can hand out to Community Development Entities like the Dallas Development Fund, Rapoza said. The cap for fiscal 2014, for instance, was $3.5 billion. Generally, only 70 to 80 community development entities get allocations in a fiscal year, he added. “There are easily two to three times that number that have qualified applications and records of success.”
> Transactions can be complicated: When working with the Dallas Development Fund, for instance, applicants must raise cash, such as loans or grants, and channel that cash via a pass-through entity to a subsidiary of the Fund. The closing checklist typically contains 100 items or more. The earlier applicants can get up to speed on the process, the better. > Who gets the credits: New Markets credits go to investors who have qualifying “passive activity” income. This has been defined as activity in which the taxpayer did not materially participate during a given tax year. The passive activity requirement tends to limit New Markets credits to banks (such as Bank of America or PNC], insurance companies (AIG) and some Fortune 500 companies (AT&T). > Value of the credits: In return for providing financing with lower borrowing costs and more lenient terms, banks, insurers and large companies get a New Markets allocation, with every dollar of allocation turning into 39 cents of tax credits for which they can take a given portion over seven years. Although numbers in the real world vary, a rule of thumb is that this 39 percent credit translates into a return of four to five percent, possibly lower.
HISTORIC TAX CREDITS > What’s available: The Texas Historical Commission is the primary conduit for two significant tax credits—the Federal Rehabilitation Tax Credit Program, which is worth 20 percent on income of historic, income-producing buildings, and the Texas Historic Preservation Tax Credit, worth 25 percent on renovations of historic buildings. On top of that, Texas offers a sales tax exemption on labor for repairs, restoring or remodeling of certain historic buildings, and local authorities sometimes offer property tax incentives on given landmarks. > Value of the tax credits: The federal credit generally translates roughly into a seven percent annualized return over the life of the credit, although that varies based on the deal and how much cash flow the investor will receive based on their ownership interest. The state tax credit will typically cover 30 percent to 33 percent of eligible costs through lowcost equity and/or sales proceeds. > Hurdles to consider: For federal tax credits, it’s best to engage a historic consultant early in the process, as some negotiation and work may be necessary with both the National Park Service (which makes final determination and approvals) and the Historic Commission. The owner of the state credit can take that credit on their state taxes, but that would lower the deduction they otherwise would get on their federal income taxes. There again, it’s important to consult with outside attorneys and accountants on how best to handle that. SOURCES: Dallas Development Fund, Texas Historical Commission, and Phillip Geheb, real estate attorney at Munsch Hardt Kopf & Harr.
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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.
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
Whygive? give?Because Because we we leverage leverage each ourour expertise. Why eachdollar dollaryou yougive givewith with expertise. Since1994 1994The TheReal Real Estate Estate Council Council Foundation nearly $10 million in in Since Foundationhas hasinvested invested nearly $10 million morethan than90 90nonprofit nonprofit organizations organizations supported hours valued at at more supportedbybyvolunteer volunteer hours valued $750,000 $750,000annually. annually.
SAY II GIVE GIVE AT SAY AT RECOUNCIL.COM/IGIVE RECOUNCIL.COM/IGIVE
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CITY PROFILES Looking for the best city in which to headquarter your business? Consider this the start to your search. When deciding to relocate your business, there are infinite factors to take into consideration. You already know that the DFW area is a great place to do business, with its attractive quality of life, strong regional and state economy, low cost of living, young and skilled labor force, and absence of corporate and personal income taxes. Did you also know that DFW ranks among the top three U.S. metropolitan areas for business expansions, relocations, and employment growth? So really, the question is, â€œWhich DFW city is best for my company?â€? Let this compilation of some of the best and most rapidly-growing cities in DFW be your guide to helping you to make that all-important decision.
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369,592 MILES FROM DFW AIRPORT
8 VISITORS PER YEAR
6.5 MILLION A TOP 20 LEADING LOCATION 2015 AREA DEVELOPMENT MAGAZINE
CONTACT ARLINGTON OFFICE OF ECONOMIC DEVELOPMENT 101 W ABRAM ST, ARLINGTON, TX 76010 (817) 459-6155
ARLINGTON, TX – THE AMERICAN DREAM CITY Perfectly situated in the heart of North Texas and only 8 miles from DFW International Airport, Arlington enjoys unparalleled access to the Metroplex. Its convenient location, combined with a strong economy, business-friendly environment, and a skilled, diverse workforce continues to attract high-profile investments to the city. Built on a legacy of bold choices and a can-do spirit that have put the city on the world stage, 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 and several state of the art facilities, including the Texas Rangers’ Globe Life Park, Six Flags Over Texas, and the Dallas Cowboys’ $1.2 billion AT&T Stadium (the most technologically advanced stadium in the world). Long-known as the region’s entertainment hub, attracting over 6.5 million visitors each year, Arlington is increasingly becoming known as a hub for engineering, advanced manufacturing, technology and medical sciences. Texas Health Resources, one of the largest healthcare systems in Texas, L-3 Communications, a leader in the aircraft simulation and training industry, and Progressive, a global player in
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the aerospace industry, represent just a few of the key investments being made in Arlington. This emerging innovation center is fueled in part by Arlington’s skilled, educated workforce. Arlington provides quality education programs at all levels, where a student can excel from kindergarten to PhD without ever leaving the city. The University of Texas at Arlington, the second largest institution in the UT system, is a growing research powerhouse that provides businesses with a steady supply of talent. Recently branded “The American Dream City,” Arlington takes pride in its business community and works to ensure that businesses from across the globe have the space, resources and assistance needed to help them realize their dream. The city is equipped with the necessary tools to respond to global opportunities, offering a tailored approach to meet each need. “We want to help you make your business case to invest in Arlington,” says Bruce Payne, Arlington’s Economic Development Manager. “The City of Arlington is dedicated to attracting, retaining and expanding businesses that are committed to bringing quality employment and capital investment to Arlington.” In Arlington, the possibilities are endless. It’s a place where aspiration, collaboration and hard work get dreams done.
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Rediscover Arlington: 99 square miles of opportunity.
ARLINGTON: WHERE DREAMS GET DONE Office of Economic Development ArlingtonTX.gov/ecodev | email@example.com | 817-459-6155 SPECIAL ADVERTISING SECTION
WAGNER-SMITH EQUIPMENT COMPANY
CONSTRUCTION OF HIGHPOINT BUSINESS PARK
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BURLESON POPULATION SIZE
41,230 MEDIAN AGE
32 BACHELOR’S DEGREE OR HIGHER:
30% 2014 AVERAGE HOUSEHOLD INCOME:
$76,000 CONTACT BURLESON ECONOMIC DEVELOPMENT 141 W RENFRO ST. BURLESON, TX 76028 (817) 426-9684 ECODEV@ BURLESONTX.COM
BURLESON: SOUTH OF FORT WORTH, DIFFERENT THAN YOU REMEMBER Businesses are growing in Burleson with the support of quick process, affordable land and a quality community. In 2015, the number of people who call Burleson home surpassed 41,000. Burleson is appealing to many because of its proximity to Fort Worth and Dallas, low taxes, a family-oriented environment, an outstanding school system, plentiful affordable land, and more than 26 square miles of shops, homes, rolling hills and parks. Burleson is one of the fastest growing and desirable communities in the Metroplex. Quality growth is occurring in Burleson in part because the city has responded to the needs of the development community. From start to finish, new companies to Burleson experience personal attention to the project.
CHICKEN E – THE FIRST TENANT IN HIGHPOINT BUSINESS PARK It took only 12 months for Chicken E Food Service to move from concept to certificate of occupancy in its new 90,000 square feet corporate headquarters and distribution facility. Many Texans know about the sweet tea and tenders offered by this restaurant favorite – but most don’t recognize that Chicken Express has grown to nearly 200 restaurants in five states. “The Burleson Economic Development team was very helpful during the decision making process for the Chicken E project,” said Jay Hedges of Bob Moore Construction, the builder for Chicken E. “We highly recommend the City of Burleson to any business that is considering a new building project.” Following the Chicken E development, HighPoint Business Park added three additional buildings and
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over 100 jobs. Burleson has proven it is a community for businesses to build and grow.
AXOGEN – CHANGING LIVES THROUGH NERVE REPAIR Technology now exists to repair a severed nerve and give feeling back to a wounded limb. AxoGen is leading the way in this biomedical field, healing everyone from children to veterans. As AxoGen grows, it is placing more resources at its newlyestablished worldwide distribution facility in Burleson. “In the medical field, you can’t make mistakes,” says Karen Zaderej, Chief Executive Officer of AxoGen. “So having a well-educated workforce capable of doing the kind of work we need them to do is vital. When we came to Burleson and started looking, we found the town to be very welcoming, and the city staff here was great to work with. That’s what really swung it for us.”
HOMETOWN, DONE RIGHT From industrial growth to continuing investment in Old Town historical buildings to training an abundant workforce with Hill College and Texas Wesleyan University, Burleson is living up to its reputation as “Hometown, Done Right.” For more information about locating a business in this community, contact the Development Services team at 817-426-9684 or learn more online at http://www. burlesontxedc.com.
Class ClassA AOffice Office& &Retail RetailSpace Space
230-acre 230-acreHighPoint HighPointBusiness BusinessPark Park
http://www.burlesontxedc.com http://www.burlesontxedc.com 817-426-9684 817-426-9684 Nine Ninemiles milesfrontage frontageononI-35W I-35W
650,000 650,000workers workerswithin within2525minute minutedrive drive
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DALLAS POPULATION SIZE
1,241,162 WORKFORCE WITH BACHELOR DEGREE OR HIGHER
29.0% MEDIAN AGE
32.4 AVERAGE HOUSEHOLD INCOME:
$41,354 CONTACT J. HAMMOND PEROT 214.670.1685 JOSEPH.PEROT@ DALLASCITYHALL.COM 1500 MARILLA STREET, 5CS DALLAS, TEXAS 75201
CITY OF DALLAS OFFICE OF ECONOMIC DEVELOPMENT Dallas is all ways connected — from business to geography, talent to culture, technology to infrastructure. With a rich history of success, entrepreneurship, art, and family, Dallas is a perfect reflection of an increasingly connected world. To The World. Centrally located in the continental U.S., Dallas’ strategic location achieves worldwide market access through international logistics and transportation. Dallas’ two commercial airports, DFW International Airport (DFW) and Dallas Love Field (DAL), combine for 7,067 weekly non-stop flights to 187 global destinations. Dallas is less than 3.5 hours from North America’s business centers by air and 98% of the U.S. is within 48 hours by ground. Dallas’ cargo airports, intermodal rail yards and five major highways provide easy product delivery to the east and west coasts of the U.S. as well as to Mexico and Canada. To Talent. Dallas is the 9th largest city in the U.S. with a population of over 1.2 million. Dallas is the cultural and economic core of the internationally important Dallas/ Fort Worth (DFW) Metropolitan area with access to over 6.8 million people. Educational opportunities abound in the Dallas area; more than 25 colleges and universities provide a trained and ample workforce. To Business. Dallas has over 65,000 businesses and 269 corporate headquarters that each employs more than 1,000 globally, and those numbers continue to grow. Leading Dallas headquarters include AT&T,
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MoneyGram, Southwest Airlines, Comerica, Tenet Healthcare, Brinker International, Texas Instruments, Neiman Marcus and Dean Foods. Other industry clusters are high-tech manufacturing, food processing, construction, healthcare, entertainment, energy, and transportation, providing a diversified Dallas economy. To Affordability. The ACCRA Cost of Living index consistently reports that it is less expensive to live in Dallas than in other large U.S. Metro areas. In 2010, Forbes magazine ranked Dallas the 14th most affordable city in America. Dallas offers a combination of low taxes, reasonable housing prices and low costs of living and doing business providing the environment and support your company needs to succeed and grow. To Lifestyle. From world-class sporting events to a bustling nightlife and music scene, some of the best food and shopping in the U.S. to exquisite museums, parks, architecture, and art — Dallas offers a truly diverse mix of culture and lifestyle. The Dallas Arts District is the largest urban cultural district in the nation. The Dallas parks and recreation system covers 21,000 acres and includes lakes; jogging and bike trails; recreation centers; sports complexes; playgrounds and picnic areas; pools; golf courses; driving ranges, and the Dallas Zoo. Dallas is a pro-business city that has many advantages to offer any company. For more information on Dallas, please visit www.dallas-ecodev.org.
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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
Concept and Design: Dennard, Lacey & Associates
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DALLAS ROCKWALL POPULATION SIZE
43,112 MEDIAN AGE
37 HIGH SCHOOL COMPLETION RATE
99% 2014 MEDIAN HOUSEHOLD INCOME:
$87,004 CONTACT ROCKWALL ECONOMIC DEVELOPMENT CORPORATION 2610 OBSERVATION TRAIL ROCKWALL, TEXAS 75032 (972) 772-0025 SFRANZA@ ROCKWALLEDC.COM
EXPERIENCE THE BEST Located on Interstate 30 just east of Dallas and nestled on the shores of Lake Ray Hubbard, the City of Rockwall has incorporated two very dynamic aspects of living; the amenities of a big city with the hometown charm. The community has grown to become prosperous and famous for their outstanding schools, expanding businesses, affordable housing, and thrill seeking recreational activities. Rockwall has many exciting districts, and one that shines considerably would be the Harbor. Bordering Lake Ray Hubbard, the Harbor has grown into an exciting location that attracts locals and staycationers alike. This district delivers a range of preferences for any occasion from fine dining, weekly concerts during the summer, and the beautiful lake side view. The Harbor also appeals to many businesses with the new TrendHR tower that provides exclusive Class A office spaces. While less than a minute away is the luxurious Hilton Dallas Rockwall Lakefront hotel with an abundance conference space to accommodate any business gathering or large event. Though the Harbor is thriving, Rockwall also has a smaller district that encompasses all the history it has accumulated. The Downtown Historic Square represents hometown businesses and history of Rockwall. Shop at Rockwall’s chic boutiques that offer items from across the globe, experience fine dining, and enjoy organic local produce at the weekly farmer’s market. As Rockwall continues to grow, the quality of life speaks for itself. According to the Family Circle
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Magazine, Rockwall was named “Best Town for Families”. With that in mind, Rockwall was also named as #1 for job creation in the United States by CNN Money Magazine. Being recognized for these titles is no coincidence. Rockwall has integrated great options for their community. Texas A&M Commerce at Rockwall and Collin College have recently made Rockwall their home. These institutions have allowed many to continue their education while being close to home. The Rockwall Technology Park encompasses over 400 acres of land. This unique park has flourished immensely with corporations such as SPM manufacturing, L-3, Bimbo Bakeries USA, Colmet, and many others. The Rockwall Economic Development Corporation was founded in 1996 and collaborates with developing and existing companies to help their business thrive and have continued success. The Rockwall Economic Development Corporation is completely dedicated to ensure the growth of Rockwall by attracting and expanding businesses by offering land incentives and site development grants. Another great thing about Rockwall is you are far enough from the big cities, but close enough if you want to get there. That is why businesses are choosing to relocate and expand in Rockwall. Businesses want our convenient location and everything else we have to offer. Rockwall EDC is actively recruiting businesses and businesses are growing and prospering here. Come see for yourself!
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WAXAHACHIE POPULATION SIZE IN CITY LIMITS
32,500 POPULATION IN PRIMARY TRADE AREA
75,059 WORK FORCE WITHIN A 30 MINUTE DRIVE TIME
425,930 AVERAGE HOUSEHOLD INCOME:
$80,716 CONTACT DOUG BARNES 469-309-4121 DBARNES@ WAXAHACHIE.COM 401 S. ROGERS ST. WAXAHACHIE, TEXAS 75165
WAXAHACHIE, TEXAS – CROSSROADS OF TEXAS Nowhere in Texas can you be so close to so much for so little. Waxahachie is located at The Crossroads of Texas. Conveniently located at the intersection of Interstate 35E and U. S. Highway 287, this prime location is 35 minutes to Downtown Dallas to the north, an hour to Waco and the Texas Hill Country to the south, 18 miles to Interstate 45 and the Piney Woods to the East, and 45 minutes to Downtown Fort Worth to the west. Over 80,000 vehicles travel through this intersection every day, making Waxahachie an ideal location for a variety of business and industry.
A REGIONAL CENTER FOR COMMERCE Waxahachie is the Ellis County seat which also makes the community a regional center for commerce. Retailers in Waxahachie have enjoyed success for decades and continue to prosper today. New retail developments such as the Waxahachie Marketplace have recently started construction and will be home to numerous nationally recognized retailers. Some of Waxahachie’s largest industrial companies include Walgreens Distribution Center, Dart Container Corp., Owens-Corning, C. R. Laurence, and Rock-Tenn. These companies have made Waxahachie home for the obvious reasons: excellent transportation corridors, quality workforce and training, cost-effective development, a business-friendly environment, and a wonderful quality of life.
RESIDENTIAL, EDUCATION AND MEDICAL OPTIONS The community’s quality of life is bar-none with
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progressive medical care, an excellent education system, a variety of residential options, convenient shopping and dining, as well as easy access to all of the amenities of the DFW Metroplex. Medical services in Waxahachie from Baylor Scott & White Medical System have been made even better with the construction of a new 120 bed regional hospital and medical offices. The $200 million medical complex opened last year and will only improve the quality of healthcare residents already enjoy. Waxahachie’s exceptional education opportunities consist of an award winning 4A public school system, Navarro College and Southwestern Assemblies of God University. A number of private and charter schools are also available. Waxahachie’s residents have a number of options when it comes to choosing a home. From Victorian homes in the Historic District to executive estates on the lake to condos and apartments near higher education, shopping and the interstate, Waxahachie has the perfect neighborhood in which to live.
A PROVEN TRACK RECORD FOR SUCCESS Located at the intersection of I- 35E and US Hwy. 287, Waxahachie is an excellent location for a wide variety of businesses. The community has a proven track record for success that will continue into the future. You are invited to experience that same success for your business by making Waxahachie your company’s home.
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CEDAR HILL: WHERE OPPORTUNITIES GROW NATURALLY Opportunities grow naturally in Cedar Hill with easy connections in the North Texas region. Located 20 minutes from downtown Dallas and 40 minutes from downtown Fort Worth with multiple connections to the rest of the DFW Metroplex; a 30 minute drive will take you to DFW International Airport or Dallas Love Field. For executive air travel, Dallas Executive Airport is only 15minutes away. BNSF rail serves the Cedar Hill Business Park as well as other available sites in the City. With the prime location for retail, recreational, residential, commercial and industrial opportunities, locating and growing a business in Cedar Hill is easy. Educational opportunities abound with a satellite campus of Cedar Valley College, part of the Dallas County Community College District co-located with the Best Southwest SBDC, and Strayer University. Combined with an active business community, a ready workforce, and a City that seeks growth, businesses naturally thrive here. In addition to the prospering business climate, Cedar Hill has natural beauty. Cedar Hill State Park is nearly 2,000 acres and located on 7,500 acre Joe Pool Lake. The ruggedness and scenic beauty of the area combined with over 100 miles of shoreline and water based recreation activities make the one of the most visited state parks in Texas. Dogwood 8 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
DALLAS CEDAR HILL
CEDAR HILL TRAVEL TIME TO DOWNTOWN DALLAS
20 MINUTES US 67/RAIL-SERVED BUSINESS PARK WORK FORCE WITHIN A 30 MINUTE DRIVE TIME
OVER 1 MILLION Canyon Audubon Center at Cedar Hill is situated on 205 acres of Dogwood Canyon, which contains the widest variety of rare species in North Texas as plants and animals from east, west, and central Texas converge there. Add this to an extensive city park system, and recreational opportunities abound. For more information about Cedar Hill, visit www.cedarhilledc.com or call the Cedar Hill Economic Development team at 972.291.5132. SPECIAL ADVERTISING SECTION
OVER 3 MILLION SF OF RETAIL, AND CLASS A OFFICE SPACE
CONTACT ALLISON J. H. THOMPSON CEcD, EDFP - DIRECTOR 972-291-5132 EXT. 5 ALLISON.THOMPSON@ CEDARHILLTX.COM
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OPPORTUNITIES AWAIT IN MCKINNEY McKinney has a long list of national accolades, including Money Magazine’s No. 1 Best Place to Live in America in 2014. Consistently ranked as one of America’s fastest-growing cities, McKinney retains its hometown charm and incomparable quality of life. This city is set apart from surrounding North Texas suburbs with a charming historic district, thriving business community, McKinney National Airport and affordable, diverse housing options. McKinney National Airport boasts McKinney Air Center, a nationally recognized fixed-base operator that consistently tops FltPlan.com’s Pilots’ Choice Awards. With a new longer and wider runway, McKinney National Airport accommodates all types and sizes of business aircraft. McKinney and Craig Ranch are partnering in marketing 185 acres in Craig Ranch as the McKinney Corporate Center. Craig Ranch has a highly visible, accessible location along Sam Rayburn Tollway with infrastructure in place to attract new corporations. McKinney leaders place high priority on business development, leveraging partnerships and investing
VALLIANCE BANK IN MCKINNEY
#1 BEST PLACE TO LIVE IN AMERICA BY MONEY MAGAZINE IN 2014 GROWTH RATE (2000-2014)
in the local business community. If you want to be in a community where your business will thrive and your employees want to call home, opportunities await in McKinney.
McKinney: Close to Dallas, Far From Ordinary OPPORTUNITY AWAITS •
#1 Best Place to Live in America by Money Magazine in 2014
Rapidly growing educated community
Strong success in target industries of aerospace/aviation/defense, corporate HQ/office, high tech, healthcare medical manufacturing and clean manufacturing
Aggressive incentives for targeted projects
Home to top corporate aviation airport, McKinney National Airport
McKINNEY ECONOMIC DEVELOPMENT CORPORATION
www.McKinneyEDC.com • firstname.lastname@example.org Toll Free: 800-839-6259 • 972-547-7651 SUMMER 2015
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CITY OF BENBROOK ECONOMIC DEVELOPMENT Benbrook, Texas is open for business! The Benbrook Economic Development Corporation (BEDC) invites new businesses to join, and is preparing the community for quality commercial growth. Several major infrastructure projects, either underway or now complete, are laying the groundwork for enhanced business development in Benbrook. Transportation projects that include the completion of the Chisholm Trail Parkway, skirting the eastern border, and the much-anticipated work to expand the main business corridor, Benbrook Boulevard/US 377, promise enhanced regional access and exceptional business opportunity! The BEDC recently completed infrastructure work in the Benbrook Industrial Park to facilitate commercial growth along prime I-20 frontage road. Benbrook City Council, the BEDC, the Benbrook Area Chamber of Commerce, and landowners gathered to celebrate the completion of a project believed to open doors for
FORT WORTH BENBROOK
22,419 quality retail and industrial development. The project supplies water and electricity to the nearly 65 acres of raw land, and connects major thoroughfares within the Industrial Park. This and similar projects help to reach the goal to Build a Better Benbrook. Benbrook’s regional accessibility and vast retail trade area offer an ideal location for the success of the business.
BENBROOK SMALL TOWN BIG BACKYARD
OWNER OCCUPIED HOUSING
69% MEDIAN FAMILY INCOME
(15.3 % HIGHER THAN TARRANT COUNTY)
An ideal location adjacent to Fort Worth and centrally located in North Texas, Benbrook is part of one of the nation’s fastest growing regions. Benbrook offers great sites and sound infrastructure essential to growth and success and is easily accessible by IH–20 and US 377. Benbrook is open for business, and looking to help you develop commercial, residential and industrial properties.
Economic growth and opportunity awaits you in Benbrook.
Contact: Cathy Morris | Benbrook EDC | 817.249.6990
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BRING YOUR DREAMS TO FRISCO, TEXAS Frisco is a magnet for highly educated individuals. Exemplary public schools, top-notch public safety, pristine parks, sports venues, destination dining and retail all make Frisco a sought after place to live and to work. Cornerstone Automation Systems, Inc. found the highly-skilled engineers needed to fill a growing workforce when the company opened its new corporate office and clean manufacturing warehouse in Frisco in 2014. “Frisco does a good job of attracting a quality workforce,” said Tom Karol, CEO of CASI. “The kind of talented professionals we want to hire are attracted to living here.” Gearbox Software opens a corporate headquarters and gaming studio in the new Tower at Frisco Square in 2015. The move allows the company to grow to 370 jobs. Gearbox president, Randy Pitchford explains his decision to relocate his company and his family to Frisco. “We could be located anywhere in the world. But when I learned about the vision of Frisco, and I learned what’s going on here; I was excited to become a part of it.” The next chapter in Frisco’s success story is the $5 Billion Mile. Frisco now claims one of the most dynam-
FRISCO RESIDENTS WITH BACHELOR’S DEGREE OR HIGHER
THE STAR IN FRISCO
ic mixed-use development concentrations planned in America with $5.4 billion in capital investment announced along a one mile stretch of the Dallas North Tollway. One of four developments planned, The Star in Frisco, is the future corporate headquarters and training facility of the Dallas Cowboys. Discover more at FriscoEDC.com/5BMILE
59% POPULATION AS OF 7/1/2015
149,140 POPULATION GROWTH SINCE 2000
Approx. 4,000 acres available for commercial development Skilled, highly-educated workforce of 70,000+ 25 minutes from DFW International Airport NTEC facility for highly-scalable entrepreneurial ventures Home to America’s only $5 Billion Mile #5BMILE
Frisco Economic Development Corporation | 6801 Gaylord Pkwy., Ste. 400 | Frisco, TX 75034 | 972.292.5150 | FriscoEDC.com SUMMER 2015
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RETAIL DEVELOPMENT IN HALTOM CITY Approximately 300 acres of land is available for development on both sides of IH 820 in Haltom City. The town has better accessibility than ever before. To further enhance development opportunities, the city constructed north and south backage roads. Although the leading development expected will be commercial, a residential developer will be building new homes in the area as well. Tax Increment Finance (TIF’s) Zones will add to incentives for sustainable economic development along the corridor. In addition to the emerging, new commercial growth, revitalization is occurring in older commercial sectors. East Belknap, the road that originally helped spur business growth in Haltom City, is experiencing a new surge of businesses. A variety of unique Asian restaurants and businesses make East Belknap their home, and the area will continue to grow into a destination for diners and shoppers. Another distinctive commercial corridor in Haltom City is Highway 121 Airport Freeway. This stretch of highway is home to more than 20 flooring and building supply businesses. The clustering of these
stores makes it convenient when shopping for matematerials for new construction and remodeling projects. In addition to the TIF’s along the IH 820 corridor, Haltom City offers many types of incentives to encourage business development throughout the city. Two cash grants are offered to help assist businesses and include a $50,000 economic development assistance grant and a $10,000 property enhancement grant. Foreign trade zones, enterprise zones and triple freeport are examples of other incentives that are available.
HALTOM CITY TRAFFIC COUNT AT IH 820 AND HALTOM RD.
114,570 TOTAL POPULATION AT A 5 MILE RADIUS
246,136 AVERAGE HOUSE VALUE AT A 5 MILE RADIUS
$146,000 Be on the lookout...Big things are coming our way! Haltom City presents opportunities for commercial growth with easy access.
Haltom City Offers Over 300 Acres of Land for Retail Development
• Major retail development opportunities along Interstate 820 • Great highway frontage and close approximation to Interstate 35W, downtown Fort Worth and adjacent residential growth • Tax Increment Finance Zones Haltom City Economic Development | 817-222-7723 | HaltomCityTX.com 8 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
Haltom City has better accessibility than ever before. The aerial photo to the left is looking west toward the Buffalo Water Tower at IH 820 and Haltom Road and displays the expanded highway, new backage roads and available land for commercial development. Tax Increment Finance (TIF’s) Zones will add to incentives for sustainable economic development along the corridor. To encourage business development throughout the city, two cash grants are offered and include a $50,000 economic development assistance grant and a $10,000 property enhancement grant. Foreign trade zones, enterprise zones and triple freeport are examples of other incentives that are available.
SPECIAL ADVERTISING SECTION
Sue Ansel, 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 Balfour Beatty Bank of America Foundation BBVA Compass Foundation Bank of Texas CBRE
CHAIRMAN’S CIRCLE BURY Chicago Title Company/ Fidelity National Financial (FNF) Granite Properties HFF JLL Munsch Hardt Kopf & Harr P.C. NorthMarq Capital Republic Title of Texas, Inc.
PRESIDENT’S CIRCLE Bank of America Merrill Lynch Behringer Breitling Royalties Corporation Butler Burgher Group Corgan Associates Inc Crow Holdings Capital Partners, L.L.C. Deloitte DTZ Gables Residential Grant Thornton Goldman Sachs Hunt Realty Investments, Inc.
Invesco Real Estate JP Morgan KPMG Legacy Texas Regions Bank Stewart Title US Bank Winstead PC
BENEFACTOR’S CIRCLE Amegy Bank American National Bank of Texas BBVA Compass Beck Group Berkadia Commercial Mortgage Bradford Companies Capital One Bank Chief Partners LP Comerica Bank Compatriot Capital Corinth Properties EY First United Bank Fischer & Company Frost Bank Gaedeke Group LLC Gardere Wynne Sewell LLP Good Fulton & Farrell Haynes and Boone, LLP Holt Lunsford Commercial Independent Bank
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.
Diane Butler, Vice Chairman
Inwood National Bank Jackson Walker L.L.P. Jones Day KDC KeyBank Lincoln Property Company Lowery Property Advisors Matthews Southwest Mill Creek Residential Trust LLC Stonelake Capital Partners Strasburger & Price, LLP Stream Realty StreetLights Residential Thackeray Partners The Howard Hughes Corporation The Retail Connection Trammell Crow Residential Wells Fargo Bank
PATRON’S CIRCLE* Fauxcades Hilton Anatole * Donors who have provided in-kind goods and services
Learn more at recouncil.com or by calling 214.692.3600.
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C COMMUNITY The Dallas Regional Chamber recognizes the following companies and organizations for their membership investment at one of our top levels. 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 .
Dallas Stars Hockey Club
Dean Foods Company
Forest City Texas, Inc.
Airbus Helicopters, Inc.
Frito-Lay North America
Toyota Motor North America
E Smith Realty Partners
Andrews Distributing Company
Ebby Halliday, Realtors
Haynes and Boone, LLP
Andrews Kurth LLP
Highland Capital Management LP
Army & Air Force Exchange Service
Edelman Public Relations Worldwide
Arthur J Gallagher & Co.
Baylor Scott & White Health
Capital One Bank
Baker & McKenzie, LLP
Bank of America
Dallas/Fort Worth Int’l Airport
Kroger Food Stores
Bank of Texas, N.A.
Littler Mendelson, P.C.
BDO USA, LLP
JC Penney Company, Inc.
Locke Lord LLP
The Beck Group
Blue Cross and Blue Shield of Texas
Medical City Dallas Hospital/
Big 12 Conference
Medical City Children’s Hospital
Bracewell & Giuliani LLP
Methodist Health System
Breitling Energy Brierley & Partners
Brinker International, Inc.
NEC Corporation of America
Omni Dallas Hotel Omnitracs
Cantex Continuing Care
Capital Institutional Services
Sheraton – Dallas
Tenet Healthcare Corp.
Texas Central High-Speed
City Credit Union
Hunt Consolidated, Inc.
Tom Thumb Food & Pharmacy
7-Eleven, Inc. Akin Gump Strauss Hauer & Feld Amegy Bank of Texas Atmos Energy Corporation American Airlines Axxess Baker Botts L.L.P. BB&T BBVA Compass Caregiver Support Systems CBRE Group, Inc. Children’s Medical Center Citi
Civitas Capital Group
EF Johnson Technologies 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 Hill & Wilkinson Hilton Anatole Hilton Worldwide
Texas Health Resources
Texas Scottish Rite Hospital for Children
Colliers International Commerce Bank
Holland & Knight LLP HollyFrontier Corporation
Holman Boiler Works, Inc.
Cook Children’s Healthcare
Corgan Associates, Inc.
Cushman & Wakefield of Texas, Inc.
Dallas County Community College District
Thomson Reuters, Tax & Accounting
Corrigan Investments, Inc.
Dallas Morning News
UT Southwestern Medical Center
Dr Pepper Snapple Group
Energy Future Holdings Exxon Mobil Corporation
BOARD OF ADVISORS
Dallas Cowboys Football Club
Int’l Leadership of Texas Ivie & Associates
Abbott Labs Acadian Ambulance
Jackson Walker L.L.P.
Dallas Marriott City Center
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JE Dunn Construction JLL Johnson Controls Inc. LegacyTexas Bank LeTourneau University Lincoln Property Company Live Nation MHBT, Inc. Midway Press, LTD Mission Foods Montgomery Coscia Greilich LLP Most Valuable Personnel Neiman Marcus Nestle Waters North America Norton Rose Fulbright 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, LLC PlainsCapital Bank Pollock Paper Distributors Point B Publicis Hawkeye Regions Bank Rexel Holdings USA Rosewood Crescent Hotel Rosewood Property Co. Schneider Electric Sethi Petroleum, LLC SimplexGrinnell Site Selection Group, LLC Slalom Consulting Southern Methodist University Southwest Airlines Southwest Office Systems, Inc. Squire Patton Boggs (US) LLP Staffelbach, Inc. State Farm Insurance Companies Strasburger & Price, LLP Strategic Staffing Solutions STRAVIS Consulting Symantec Corporation TDJ Enterprises Texas Woman’s University Thompson & Knight LLP Time Warner Cable TopGolf Town of Addison Trane Commercial Systems TrustPoint Management Turner Construction Company UMB Bank N.A. University of Texas at Arlington SUMMER 2015
University of Texas at Dallas Univision UnitedHealthcare URS Corporation Verizon Wireless Village Green Holding, LLC Vinson & Elkins L.L.P. Vorex, Inc. Walgreen’s Company Weber Shandwick Southwest WFAA-TV Whitley Penn, LLP WFF
LEAD AAA Texas, Inc. Ackerman McQueen Acme Brick Company Adolfson & Peterson Construction Adolphus Hotel Advocare International, L.P. Allegro Development Alliance Data Allsteel Wilson Alston & Bird, LLP APAC - Texas, Inc. Ash Grove Cement Company ATOS IT Solutions and Services Automatic Data Processing Aviall, A Boeing Company Bain & Company, Inc. Balfour Beatty Construction Beasley, Hightower & Harris, P.C. 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, L.L.P. Carter Financial Management Cawley Partners Champion Partners Chandler Signs L.L.P. CityDoc Urgent Care CLEAR Commercial Metals Company Consumer Credit Counseling Service of Greater Dallas, Inc. Crowe Horwath LLP CyrusOne Dallas Foundation Dallas Lighthouse for the Blind 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 Fresh Point Gables Residential Trust George W. Bush Foundation Guardian Mortgage Co. Gibson, Dunn & Crutcher LLP Halff Associates, Inc. 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 Marietta Mary Kay Inc. McAlister’s Deli – Dallas McKinsey & Company, Inc. Metl-Span, LLC Metrocare Services Monitronics International, Inc. Monogram Apartment Collection MW Logistics, LLC MWH Americas, Inc. Munsch Hardt Kopf & Harr, P.C. Networking Results, Inc. New York Life Regional Headquarters North Central Surgical Hospital North Texas Endoscopy Centers Ocean Prime Restaurant Office Depot Business Solutions OHL 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 Republic Title of Texas Russell Reynolds Associates, Inc. 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 Palm Restaurant The Westin Dallas Downtown Tiger Media Towers Watson Trinity Basin Preparatory Triumph Learning Union Bank Union Pacific Railroad United Surgical Partners International University of Phoenix University of South Carolina Career Center USAA U.S. Memory Care Virgin America Airlines Vision33 VOX Global W Dallas – Victory Hotel Walnut Hill Medical Center Walton Development and Management Weaver West End Events, LLC Westin Galleria Dallas Winston School Woodbine Development Corporation Worldwide Express XO Communications Yates Construction Zale Corporation
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FIGHTNIGHT XXVII PHOTOGRAPHY BY JAMES EDWARD
THE REAL ESTATE COUNCIL HELD ITS 27TH ANNUAL FIGHTNIGHT EXTRAVAGANZA IN APRIL AT THE HILTON ANATOLE HOTEL IN DALLAS. More than 1,300 attended the sold-out event, which began with a special VIP reception featuring World Heavyweight Champion boxer George Foreman. FightNight XXVII raised $1.3 million for The Real Estate Council’s foundation, which fosters community development in four target areas: education, housing, job creation, and the environment. Sponsors this year included CBRE, Chicago Title, BURY, Gables Residential, Granite Properties, Republic Title, HFF, LegacyTexas, Breitling Energy, Goldman Sachs, JLL, Munsch Hardt Kopf & Harr PC, BBG, Chief Partners LP, DTZ, Gaedeke Group/Normandy Homes, Harwood International, The Howard Hughes Corporation, Hunt Realty Investments, J.P. Morgan, KDC, KPMG, Lincoln Property Company, Northmarq Capital, and Regions.
DIANE BUTLER, THE REAL ESTATE COUNCIL VICE CHAIRMAN; CHAIRMAN BILL VANDERSTRAATEN, FIGHTNIGHT XXVII; AND SUE ANSEL, THE REAL ESTATE COUNCIL CHAIRMAN.
ANTHONY STRAUSER, RICK KOPF, JASON HALL
PRESTON LYNN, LAYNE MAYFIELD, TRAVIS SAPAUGH, TREY SMITH
MISTY LEWIS, MARK WILSON, BOXER GEORGE FOREMAN, BRE SPARKMAN, CHARLES ROSCOPF
BRENT YOST, AARON BIDNE, AARICA MIMS, ALLYSON GUMP, MICHAEL DARDICK, PAUL BENNETT
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STEVE ALDRICH LOOKS DOWN ON HILLWOOD’S MIXED-USE DEVELOPMENT, ALLIANCE TOWN CENTER.
SURVEYING DFW’S REAL ESTATE LANDSCAPE HUNTER LEE, CHRIS HIPPS
The Real Estate Council’s Associate Leadership Council gives young professionals a bird’s-eye view. BY TAYLOR LITTLE
GLENN CALLISON, SUE ANSEL
Growing up in a real estate family, Steve Aldrich was always attracted to the entrepreneurial nature of the business. He has certainly experienced that as a longtime executive at Hillwood Properties, where he has been able to help grow AllianceTexas into a powerful force and one of the most respected masterplanned projects in the world. Since development kicked off in 1989, the sprawling 18,000-acre Alliance has generated more than $55 billion in economic impact. Aldrich’s career has flourished, too. In 2005, he became a member of The Real Estate Council’s Associate Leadership Council, which helped him combine his passion for real estate development with giving back to the community. That year, he and other ALC members renovated a Girls Inc. facility in Oak Cliff. “We came together on a project like this to provide something that was better than when we started,” Aldrich says. “The Real Estate Council as a whole has that attitude for the
entire community, and it’s great to see.” Aldrich continues to serve the program as an alumnus, most notably by setting up helicopter tours of the region, including Alliance. The tours allow “future leaders of the industry” to get a better understanding of the market and of Hillwood. “The helicopter tours have been a great way to show people the whole Alliance transportation program and really get people up to see what, I think, is one of the biggest economic drivers in the region,” he says. Aldrich says his involvement in the ALC helped him understand the dynamic role real estate plays in the functioning of the entire region—an appreciation he still carries with him today. “In our business, we can get stuck thinking about issues from a perspective of our specialty, whether it’s development, brokerage, planning, legal, etc.,” he says. “But this program enables a perspective that is all-encompassing.”
ASSOCIATE LEADERSHIP COUNCIL
PATRICK RAMSIER, MARK HORD SUMMER 2015
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 our future leaders. For more details, visit www.recouncil.com.
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CALENDAR OF EVENTS
L LEADERSHIP JEFF FORBES
THE BECK GROUP
Make plans now to attend these upcoming real estate and business events. For information on programs hosted by The Real Estate Council, visit www.recouncil.com. For details on events presented by the Dallas Regional Chamber, visit www.dallaschamber.org.
AUGUST.. AUGUST 6 Associate Leadership Council Open House. 5:00pm [The Real Estate Council]
AUGUST 12 Congressional Forum. 12 noon. This annual luncheon features a panel discussion with federal congressional leaders who focus on current and anticipated federal legislation and the impact on the Dallas business community. [DRC]
AUGUST 25 State of Technology. 12 noon. Join us for our annual State of Technology luncheon to hear from Oracle Chief Executive Officer Mark Hurd, who will dive into the evolving tech industry and share his insight into what’s coming up next. Hear about Oracle’s vision, strategy, and innovation initiatives, and get a first-hand look at Mr. Hurd’s journey to becoming a Fortune 500 CEO. [DRC]
SEPTEMBER.. SEPTEMBER 14 Associate Leadership Council Chairman’s Reception. 5:00 pm. [The Real Estate Council]
OCTOBER.. OCTOBER 9 Women’s Business Conference. 7:30 a.m. – 3:00 p.m, Omni Dallas Hotel. Annual women’s conference featuring keynotes with development-focused breakout sessions in between. [DRC]
NOVEMBER.. NOVEMBER 4 Economic Outlook Summit. 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]
CULTIVATING THE NEXT GENERATION OF LEADERS The Dallas Regional Chamber’s Leadership Dallas program offers a meaningful professional development opportunity for both acknowledged and aspiring leaders. BY BRITT STAFFORD
Soon after graduating from Iowa State University in 1982, Jeff Forbes moved to North Texas to begin his career with The Beck Group. More than three decades later, he now serves as regional director of the firm’s Dallas office, where he oversees design and construction operations. “My wife says that I married her, and then six months later I married Beck,” Forbes jokes. Throughout his career he has sought out ways to get involved in the community. After participating in about 20 different organizations and programs, including the Mayor’s Back to School Fair and Adopt a School, Forbes pursued membership in the Dallas Regional Chamber’s Leadership Dallas program— and was selected as a member of the Class of 2015. One of his goals was to help understand everything Dallas has to offer, he says. Launched in 1975, the 10-month Leadership Dallas program is a professional development opportunity for men and women who are both acknowledged and aspiring leaders. Through lectures, discussion groups, site visits, class projects, and other leadership development activities, participants receive in-depth exposure to critical issues facing the community—and are challenged to apply their talents toward these issues for years to come. The Leadership Dallas Class of 2015 selected Vogel Alcove’s Childcare Center for the Homeless as its class project. Improvements were revealed in June. They included a new shade structure for the basketball court, colorful murals inside the facility, and a storage structure for outdoor play equipment. It all added up to about $250,000 in upgrades. “The project kind of morphed and got bigger and bigger,” Forbes says. Forbes says he will continue to seek out ways to get involved, including serving on committees or boards. He’s especially interested in helping to cultivate the next generation. Leadership Dallas taught him “to just stay curious ... and keep my mind open,” he says. “It’s a great way to network and really get to know some of the other future leaders.”
NOVEMBER 12 Giving Gala. 6:30 pm, Gilley’s Dallas. Annual event raising funds to help fulfill The Real Estate Council’s mission to make a tangible positive difference in Dallas’ neediest neighborhoods. [The Real Estate Council]
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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.
SPARKMAN E S TAT E S E S T A T E S C L U B PRESTON BROOKSHIRE P A R K LOBELLO E S T A T E S WALNUT ROYALWOOD KELSEY HOLLOW CHAPEL JOE’S CREEK- H I L L E S T A T E SQUARE N O R T HTHE MEADOWS DOWNS W A L N U T
GOING WITH SMALL STEPS:
BRADFORD G A R D E N E S TAT E S
VICKERYMERRIMAN L A MEADOWPE S AT A RT E KS RESTAI D MERRIMAN WHITE NL OAR THE VILLAGE P A R K / ID UNIVERSITY R O C K RESTA CARUTH M A N O R HILLS VALLEY OLD HIGH
MIDWAY PRESTON HOLLOW HOLLOW
ENHANCING AND CONNECTING NEIGHBORHOODS Registration and details at aiadallas.org
WINDSOR P A R K GLEN LAKES
DEVONSHIRE SHORECREST BLUFFVIEW E S TAT E S E L M GREENWAY THICKET C R E S T (NORTH SHANNON GREENWAY E S TAT E S P ARKS PA R K )
LOVE FIELD SOUTHWESTERN September 17-18, 2015 MEDICAL DISTRICT
UNIVERSITY UNIVERSITY RIDGEWOOD T E R R A C E MEADOWS P A R K STONEWALL CARUTH H I L L S I D E T E R R A C E TERRACE WHITE
GLENCOE WILSHIRE P A R K HEIGHTS M STREETS/ L O W E R GREENLAND H I L L S GREENVILLE
NORTH O A K L AW N
O A K LAWN MAPLE LAWN
C R E E K HIGHLANDS HIGHLANDS ALEXANDER’S W E S T L A K E V I L L A G E MERRIMAN HIGHLANDS P A R K N O R T HN O R T H
VICKERY LAKEWOOD PLACE HEIGHTS
COCHRAN HENDERSON HEIGHTS L O W E S TSWISS AVENUE W E S T FITZHUGH GREENVILLE VILLAGE / CAPITOL W E S TJ U N I U S
LAKEWOOD H I L L S
HOLLYWOOD HEIGHTS H E I G H T S / TURTLE CITYPLACE CREEK MUNGER MOUNT S A N T A P L A C E AUBURN M O N I C A DESIGN UPTOWN S T AT E - BRYAN B AY LO R / MILL CREEK DISTRICT Hosted by: LEDBETTER THOMAS PLACE G A R D E N S GREENLEAF A R TS MEADOWS JUBILEE AIA Dallas VICTORY DISTRICT V I L L A G E WESTMORELAND PARK P A R K OWENWOOD D E E P EXPOSITION bc_WORKSHOP LOS ALTOS H E I G H T S WEST END ELLUM P A R K MILL DOLPHIN HISTORIC M A I N HEIGHTS LA BAJADA DISTRICT STREET FARMERS GRAND Dallas Center for CIT Y MARKET MUNCIE C I V I C PA R K REUNION Architecture PARKDAL LA LOMA LA L’ACEATE DISTRICT CENTER SOUTHWHEATLEY WESTERN E A S T Downtown Dallas, Inc. CEDARS P L A C E BERTRAND DIXON HEIGHTS KESSLER CIRCLE STEVENS Greater Dallas Planning EDGEWOOD PARK P A R K STEVENS SUNNY EXLINE/ P L A C E VILLAGE P A R K KESSLER Council COLONIAL CHARLES KIDD ESTATES ACRES H I L L P A R K SPRINGS LAKE CLIFF The Real Estate Council R I C E THE BOTTOMS EL TIVOLI KINGS FOREST PLACE HIGHWAY TENTH HEIGHTS I D E A L University of Texas at BEVERLY L.O. DANIEL STREET SKYLINE WEST AMERICAN H I L L S D A L L A S WINNETKA KESSLER RIDGE Arlington School of H E I G H T S LAND & LOAN T H E HEIGHTS PA R K M O U N T RAVINIA B O N TO N HEIGHTS P L A Z A CADILLAC HEIGHTS Architecture, Urban & NORTH SUNSET RUTHMEADE HEIGHTS C E DA R THE DELLS C L I F F H I L L S P L A C E CEDARHAVEN CEDAR CREST DISTRICT Public Affairs HAMPTON WYNNEWOOD MERRIFIELD OAKS TRINITY HILLS Urban Land Institute MANOR HEIGHTS N O R T H VISTA LAS HACIENDAS REAL ROLAND LOUPOT ELMWOOD WESTERN H I L L S HEIGHTS P A R K BECKLEY CLEARVIEW SUMMIT JOPPA CEDAR CREST LAWN TERRACE Map by bc_WORKSHOP BECKLEY V I L L A G E WESTHAVEN WYNNEWOOD - SANER KIEST VALLEY HEIGHTS ESTATES LIBERTY I E often S T KIESTWOOD KIEST- projects Dallas thinks BIG. But it isKFOREST in DRUID our small accomplishments that we HEIGHTS and OAK CLIFF HILLS P O L K KIMBALL GARDENS build our city. ForCOUNTRY every Klyde Warren areGLENDALE a dozen Bishop Arts Districts. For MARSALIS KIMBALL OAKPark, PARK there P A R K HEIGHTS SQUARE Abike R D E N lanes. For every SOUTHERN HORIZON E S TAT E S HUNTER’S F I V stops E C R E E Hill K Bridge, a score of trails, everyB Margaret SUMMIT Hunt H I L L S trolley E N D E Sand TAT E TERRACE FOX HOLLOW PARC C L U B M I L E A K Sa shelf, G L E Nmany neighborhood top-down master plan that ends up Oon initiatives and indiCREEK OAKS GLENVIE W WOODSTWIN CEDAR vidual interventions thrive and make OAKS a positive urban impact. Join us for a day of emV I SSUGARBERRY TA powerment and education with yourGLEN fellow BECKLEY citizens as we explore how to rediscover HEIGHTS HILLS CIGARETTE and incubate the WOODLAND and implement the “true” nature of HDallas. do we celebrate C A N YHow ON ELDERWOOD WYNNEWOOD H I L L I L L S
LAKE WEST LEDBETTER
ARCADIA PA R K
CEDAR CREST COUNTRY C L U B E S TAT E S FRUITDALE
PEMBE H I
HIDDEN RUNYON uniqueness of our neighborhoods? How do we develop VALLE Y SPRINGS connections between those WISDOM unique nodes and seam together the diverse patchwork quilt we callCEDAR our city? And how WHEATLAND TERRACE UNITY MEADOWS ESTATES CREEK do we reconnect with the natural infrastructures that first drew Dallas’ RANCHfounders to this plot of blackland prairie? With informative talks and panel discussions with planners, architects, neighborhood leaders, elected officials, educators, and community members, the 2015 Connectivity Summit will give you the inspiration and tactical tool kit to participate in the place-making that truly leads to big things. Registration and details at aiadallas.org.
VIEW FROM THE TOP
BY GLENN HUNTER
JIM LENTZ Last year, Toyota North America announced that it would consolidate its farflung operations in California, Kentucky, and New York at a new North American headquarters facility in west Plano. The $350 million, 2.1 million-square-foot campus, located in the Legacy West development south of State Highway 121, is scheduled to be completed by early 2017. The eco-friendly, glass-and-Texaslimestone complex on 100 acres eventually will house at least 4,000 employees. Here, CEO Jim Lentz talks about the move.
HOW DID YOU COME TO PICK NORTH TEXAS?
We started with a list of criteria that was half business-related, half team-memberrelated. On the business side, we wanted something close to our manufacturing footprint. We did not want to be in a highrise, so we needed about 100 acres. And we wanted a good airport that was in close proximity to all our plants and [would enable us] to get to Japan. On the teammember side, we wanted good schools, a reasonable cost of living and housing, and less stressful commutes. North Dallas really stood out.
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PHOTO: RICHARD W. RODRIGUEZ / AP IMAGES
CEO, Toyota North America
Lentz drove out in a Toyota iRoad car at an event revealing new details of the new North American headquarters in Plano.
WHERE IN DALLAS-FORT WORTH HAVE THE EMPLOYEES CHOSEN TO LIVE SO FAR?
What is interesting, and what I had hoped for, is that people are finding different places to live as they come here. We’ve got people in Prosper, in McKinney, in Frisco, in Plano, out in Southlake. I’m in Westlake. To me, that’s the true test that we chose the right place: the people have options. I think once we have all 4,000 people here, we’re going to see the same kind of “scatter” take place.
HAS ANYTHING SURPRISED YOU ABOUT NORTH TEXAS?
I don’t know if surprised is the right word, but the genuine friendship from people here has been fantastic. The other part is that, even when you talk to politicians here … they are all on the same page about what’s best for Texas. It’s always, ‘Do what’s best for Texas.’ I didn’t have that experience in California, where there were truly two sides on most issues, and it wasn’t necessarily about what’s best for California. Here you guys have the formula down.
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