A N AT O M Y O F A D E A L :
HEALTHCARE REAL ESTATE
DESIGN & CONSTRUCTION
THE LATEST DFW PROJECTS TO BREAK GROUND
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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. In order from left to right Toby Cotton, Toni Mayfield, Camron Harris Michael Bodwell, Elizabeth Pettijohn
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Our clients look for strategies that offer freedom, financial security and the ability to turn a business dream into reality. We have a sincere passion for offering our clients exceptional expertise and extensive industry knowledge combined with the utmost confidentiality and professional integrity.
ON THE COVER: Artist’s rendering of The Music Factory. Courtesy of Gensler
19 THE CRANE REPORT
Welcome Letter . . . . . . . . . . . . . . . . . . . . . . . . . .6 Publisher’s Note . . . . . . . . . . . . . . . . . . . . . . . . .8
FOUNDATIONS DFW Market Statistics, Economic Indicators, and Commercial Real Estate News. . . . . . . . . 10
BUILDING THE FUTURE TOGETHER The Dallas Regional Chamber is looking ahead to a successful 2017 . . . . . . . . . . . . . 15
THE CRANE REPORT Who’s Building What, Where . . . . . . . . . 19
SCORECARD DFW’s Top Office, Industrial, and Retail Leases . . . . . . . . . . . . . . . . . . . . . . 27
ROUNDTABLE The Shape of Things to Come : Design & Construction . . . . . . . . . . . . . . . . 34
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 3
E XC L USI V E LY P UB L ISHE D B Y D MAGAZINE PARTNERS
51 FEATURE Health care:
Medical-related developlents are on the rise in North Texas . . . . . . . 52
D MAGAZINE PARTNERS BUSINESS GROUP PUBLISHER Josh Schimmels
PUBLISHER Quincy Curé Preston 214-523-5215 email@example.com
MANAGING EDITOR Lance Murray
CREATIVE DIRECTOR Michael Samples
56 ANATOMY OF A DEAL
CONTRIBUTING WRITERS Jeff Bounds Kerry Curry
The Music Factory
The Irving entertainment district is back on track adjacent to the Irving Convention Center and a new hotel . . . . . . . . . . . . . . . . . . . . 58
DIRECTOR OF SALES Kyle Moss 214-523-5247 firstname.lastname@example.org
TOOLBOX Real Estate goes high tech
Savvy real estate companies are using, and some are developing, new tools to help grow their businesses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Economic Development Directory Profiles of cities around the region . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
INTERNS Catherine Durkin Ana-Maria Frampton Rachel Hawkins
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MEDIA DEVELOPMENT MANAGER
SPECIAL ADVERTISING SECTION
The Real Estate Council, Impact Investors . . . . . . . . . . . . . . . . 73 Dallas Regional Chamber, Top-Level Members . . . . . . . . . . . . . 74 Photos: The Real Estate Council’s Giving Gala 2016 . . . . . . . 76 The Real Estate Council, Associate Leadership Council . . . . 77
Calendar of Events . . . . . . . . . . . . . . 78 Dallas Regional Chamber, Leadership Dallas . . . . . . . . . . . . . . . 78 Placemakers: Terry Montesi . . . . . . . . . . . . . . . . . . . 79 View From the Top: David Pace . . . . . . . . . . . . . . . . . . . . . . 80
M Dallas-Fort Worth Real Estate Review® is published for The Dallas Regional Chamber and The Real Estate Council by D Magazine Partners, 750 N. St. Paul St., Ste. 2100, Dallas, TX 75201; www. dallaschamberpublications.com, 214.523.0300. ©2016 All rights reserved. No part of ths publication may be reproduced or reprinted without written permission. Neither the Dallas Regional Chamber nor The Real Estate Council nor D Magazine Partners is a sponsor of, or committed to, the views expressed in these articles. The publisher is not responsible for unsolicited contributions.
you mastered real estate’s potential? HaveHave you Have Have mastered you you mastered mastered your your real your your estate’s real real estate’s estate’s potential? potential? potential?
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A letter from the Dallas Regional Chamber and The Real Estate Council
DALLAS REGION IS LEARNING HOW TO WIN ‘ON THE ROAD’
2017 CHAIRMAN OF THE BOARD Hilda Galvan Partner-in-charge, Jones Day PRESIDENT & CEO Dale Petroskey CHIEF OPERATING OFFICER & CHIEF FINANCIAL OFFICER Pat Priest
Many teams play well at home, and some even have a distinct home field advantage. Think the Green Bay Packers at Lambeau Field, or the Boston Red Sox at Fenway Park. But the Packers don’t win every year, and neither do the Red Sox. Championship teams also have to win on the road. While the Dallas Region is winning at home DALE PETROSKEY LINDA McMAHON by attracting U.S. headquarters to relocate President and Chief President and Chief Executive Officer Executive Officer here – 75 have in the past 5 years – we also Dallas Regional Chamber The Real Estate Council know we must win on the road, which means internationally. So recently, a delegation from the Dallas Region made a trade mission trip to Tokyo and Hong Kong, and that trip reinforced for us the power of face-to-face meetings with our trading partners, and potential partners. The 26-person delegation was led by Dallas Mayor Mike Rawlings, Fort Worth Mayor Betsy Price, and DFW International Airport CEO Sean Donohue. Sarah Carabias-Rush, our Vice President for International Economic Development, oversaw much of the planning and implementation of the trip’s many business development objectives. Our delegation met with hundreds of industry executives and key government officials from November 7-11, developing business opportunities and strengthening our existing relationships. Productive sessions were held with Keidanren, the Japanese business federation which represents that country’s largest businesses, as well as with Gov. Hideaki Ohmura, of Aichi Prefecture – the Texas of Japan in terms of dynamic business growth and home to Toyota and the Central Japanese Railway Co. – a meeting which made the national news in Asia. As important, our trading partners and potential partners in Tokyo and Hong Kong were able to hear from us first-hand about the advantages of living, working, and doing business in the Dallas Region. And, by our making the 14-hour trip to visit them, they realized we are serious and will go the extra mile. While the East Coast and West Coast of the United States have traditionally been the target markets for foreign real estate investors, thanks to our renewed international focus Dallas-Fort Worth now is attracting its share of international capital. As our region grows and increases in international influence, the commercial real estate industry will benefit as more than 25 percent of investment comes from sources outside the U.S. Obviously, all corporate relocations to our region spur commercial real estate activity, with Toyota’s move here being the best example of that in recent years. The top 10 global commercial real estate firms have a significant presence here, and the increased focus on international trade, investment, and relocations can only be good news for them. Our Japan-Hong Kong trade mission trip reaffirmed our belief that championship teams have to win on the road – as well as at home. And we feel confident that we came home from Asia with several important victories.
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COMMUNICATIONS & MARKETING, SENIOR VICE PRESIDENT Darren Grubb RESEARCH AND INNOVATION, SENIOR VICE PRESIDENT Duane Dankesreiter RESEARCH AND INNOVATION, MANAGING DIRECTOR Eric Griffin
2017 CHAIRMAN Greg Kraus Invesco VICE CHAIR Ran Holman Cushman & Wakefield PRESIDENT & CEO Linda McMahon VICE PRESIDENT MARKETING & EVENTS Debby Hanson VICE PRESIDENT FOUNDATION Robin Minick CFO Carla Brandt
O W N E R S H I P
UPFRONT QUINCY CURÉ PRESTON Publisher Dallas-Fort Worth Real Estate Review
A letter from the Publisher
We continue to see tremendous growth in demand in all sectors of real estate, and North Texas remains a hotbed for innovation in that industry. In our winter edition, we explore what’s driving many of the trends in Dallas-Fort Worth. Our cover story takes a look at The Music Factory project in Irving that, when done, will create an entertainment district that includes live music venues, office space, retail, and restaurants. Its proximity to the Irving Convention Center and the new convention center hotel will create a major force in attracting new business to the city. You will find the story starting on Page 58. Our roundtable experts take on the topic of what’s ahead in design and construction, including how it can be used to attract and retain employees. They tackle everything from office to multifamily in their wide-ranging discussion. It begins on Page 34. Health care has become a driving force for real estate transactions throughout North Texas, and we take a look at how Collin County is seeing a boom in health-related construction and development beginning on Page 52. Many tech-savvy real estate companies are using, and some are developing, tools that help them grow their businesses. We take a look at how they’re doing it in our Toolbox feature beginning on Page 70. In our Placemakers feature, Trademark Property Co. CEO Terry Montesi explains his innovative approach to developing the “Conscious Place” at the Waterside development in Fort Worth, and Trademark’s big plans for South Victory. It’s on Page 79. Jamba Inc. CEO David Pace talks about how Jamba Juice found the right mix of ingredients in Frisco that led to a corporate move for the company. Look for View from the Top on Page 80.
Quincy Curé Preston Publisher
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SUCCESS THRIVES IN
Allen is a vibrant community of creative and talented people driven by achievement. So Allen’s success is no accident—it’s a testament to the spirit of amazing people who want to create an inclusive community for their families and neighbors. A superior quality of life and pro-business environment come together to empower Allen’s residents and businesses to achieve higher levels of success. The result? A diverse city of almost 100,000 feels like a family of 10.
A baseline for the region’s future BY CHRISTINE PEREZ
DFW MULTIFAMILY DEMAND KEEPING UP WITH SUPPLY underpinned the need for housing, placing downward pressure on vacancy over the previous four quarters, and pushed the average effective rent above $1,000 per month— a record high. As demand outpaces supply, builders have ramped up construction this year, with deliveries significantly exceeding the previous five-year average. In particular, the in-town Dallas submarket is seeing
several new high-rise complexes, each with a slate of amenities that will appeal to young professionals. Additionally, some older warehouse and office buildings are being renovated into multifamily housing developments in downtown Dallas, as the area experiences a resurgence. The new in construction will cause vacancy rates to rise slightly. However, the growing cost of home ownership, particularly in urban and
MONTHLY EFFECTIVE RENT
8% $1,100 MONTHLY RENT 6% $975
YEAR-OVER$850YEAR RENT CHANGE $725 $600
INDUSTRIAL VACANCY RATE AT LOWEST LEVEL SINCE 2000 The North Texas industrial market continues to see record occupier demand, driving the overall vacancy rate down to 5.8 percent, according to third-quarter statistics released by CBRE Research. Population growth has fueled the thirst for industrial space, with an average of 360 people moving to Dallas-Fort Worth every day. The growing local population, already 7 million strong, makes it an attractive market for e-commerce and third-party logistics companies seeking to reach customers with same-day or next-day service. The region’s robust transportation infrastructure and central location—more than 25 million consumers can be reached within a day’s driving time—make it an ideal national hub, too. CBRE reports that industrial tenants took down an impressive 8.9 million square feet during the third quarter of 2016, setting a 10-year record for quarterly absorption. South Dallas continues
NET ABSORPTION BY SUBMARKET MSF 6 5 4 3 2 1 0 -1 DFW AIRPORT
GREAT SW/ ARLINGTON Q1 2016
NORTH FT WORTH Q2 2016
NORTHEAST NORTHWEST DALLAS DALLAS Q3 2016
SOUTH FT WORTH
2016 YTD Total Net Absorption
SOURCE: CBRE Research, Q3 2016.
to lead the market in leasing activity, with 1.9 million square feet absorbed during the three-month period.
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Developers delivered 5.2 million square feet of new industrial space to the market in the third quarter, with about 57 percent of that space
pre-leased. Great Southwest/ Arlington is seeing the most activity in new construction, with 5.8 million square feet under way.
SOURCE: Marcus & Millichap
SOURCE: Marcus & Millichap
NUMBER OF UNITS (000s)
high-employment areas, coupled with the convenience of rentals, will continue to drive demand for apartments in North Texas. During the past 12 months, builders constructed nearly 17,200 rental units, Marcus & Millichap reports. This compares to 14,300 in the previous year. Nearly 51,000 rental units are under construction throughout the region, with delivery dates that extend through 2018.
MONTHLY EFFECTIVE RENT
Solid demographics and corporate expansions continue to have a positive impact on the multifamily sector in Dallas-Fort Worth, according to a new report from Marcus & Millichap. Strong job growth, bolstered by companies such as Charles Schwab and TD-Ameritrade expanding in the region, is driving in-migration and boosting the number of households in North Texas. These factors have
DFW’S ECONOMY ATTRACTS NEW RESIDENTS FROM ACROSS THE U.S.
DALLASFORT WORTH IN-MIGRATION ONLY 2010-2013
According to the latest American Community Survey report from the U.S. Census Bureau, which measures population statistics and shifts across the country, Dallas-Fort Worth saw a total net-migration of 200,000 people between 2000 and 2013. A sizable share of these new residents moved from within the state of Texas, but all major U.S. markets contributed toward DFW’s gains.
DALLAS-FORT WORTH SOURCE: JLL Research 2016 HIGH LOW
CORPORATE MOVERS AND SHAKERS SHAPING LEGACY
ANNOUNCEMENTS THIS CYCLE
1985 1992 1993 1998 2000 2001 2003 2003 2004 2007 2008 2009
2010 2012 2012 2012 2012 2013 2014 2015 2015 2015 2015 2016
Frito Lay JCPenney EDS/Hewlett Packard Dr Pepper Intuit Ericsson Pepsico Crossmark St. Jude Rent-A-Center Capital One Pizza Hut
Danbury Resources Capital One Ericsson MedAssets Tyler Technologies USAA Conifer Health Toyota Motor North America FedEx Office Liberty Mutual JPMorgan Chase Dallas Cowboys
SOURCE: JLL Research
The intersection of the Dallas North Tollway and State Highway 121 in Plano and Frisco has been a hotbed of office leasing activity during this most recent “up” cycle. Known as Legacy, commercial development began here in the mid-1980s. But the micro-market really didn’t begin to take off until after 2003. Since then, almost 18 million square feet of office, retail, and multifamily space has been delivered in Legacy, according to new statistics from JLL Research. This translates into an average expansion rate of 1.4 million square feet a year. These figures don’t even include massive new projects from Toyota North America, Liberty Mutual, and JPMorgan Chase, which will deliver in 2017.
EARLY CORPORATE ADOPTERS
TEXAS CAP RATE FORECAST MIXED ACROSS SECTORS, METROS Although the overall Texas market continues to motivate buyers, some isolated spots of softness have emerged. Trade volumes in Houston were well below last year, while activity in Dallas and Austin remained stable, according to a recent study from CBRE. Retail is the star product type, with cap rate compression forecasted for all major Texas metros, benefitting buyers looking for low-risk investments. Hotel assets likely will see increased cap rates across the region and the nation. Boosted by strong office and industrial tenant demand—which shows few signs of slowing—Dallas-Fort Worth captured more than half of the region’s largest trades during the first half of 2016, followed by Austin. According to data from Real Capital Analytics, demand for DFW office product is high and attracting the most buyer attention in the region; Austin sales are more varied across product types. Hindered by negative national attention from depressed oil prices, Houston has seen consistently lower than average trade volumes this year, declining by 60 percent.
Here’s a breakdown of Texas capital markets activity and outlook, by sector, from CBRE: RETAIL: Continues to be one of the strongest product types both in leasing and capital markets. DFW saw notable cap rate compression in stabilized assets throughout the first half of the year. Houston retail cap rates are expected to increase in the coming months. INDUSTRIAL: The sector is stable in Austin and San Antonio, which saw declining cap rates below the national average in the first half of
2016. Houston could see a slight increase, while DFW should see stable rates. OFFICE: Much like office leasing throughout the region, office sales outlooks are divided. Dwindling demand resulted in cap rate increases in Houston of 100 basis points in Class A properties in the central business district. Cap rates throughout the rest of the state saw increases of less than 15 bps, except for Dallas-Fort Worth, which is forecasted to see a continuing decline.
MULTIFAMILY: After several years of strong rent growth and active construction, multifamily remains an attractive property type for buyers. Most state metros are forecasting stable cap rates through the end of the year, except for Class B assets in Austin, which could decline. HOTEL: The weakest commercial property type in Texas is hotels, which had cap rate appreciation in almost every market except Dallas. This national trend presented itself across various hotel asset classes.
URBAN CLASS A FORECAST TRENDS OFFICE
DALLAS/FORT WORTH HOUSTON AUSTIN
SAN ANTONIO OKLAHOMA CITY EL PASO
REMAIN FLAT SOURCE: CBRE Research, 2016
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RETAIL EXPERTS OFFER INDUSTRY INSIGHTS
PHOTO: MICHAEL SAMPLES
BY HE ATHER NOEL
The Real Estate Council and Real Estate Deal Sheet wrapped up their five-part “Industry Insights” event series by inviting expert real estate developers and investors to discuss trends and what’s on the horizon for retail. The event, held Nov. 16 at the Dallas Country Club, kicked off with keynote speaker, Amanda Buckley, director of marketing and business development at OMNIPLAN. Following her presentation, Jack Gosnell, a senior vice president with CBRE, moderated two panel discussions. Here are the excerpts: AMANDA BUCKLEY, OMNIPLAN: “What does the future really hold? It’s very integrative. We’re seeing every different product type you could possibly think of being squished into one mixed-used development. So, office, multi-family, hotel — pretty much everything you could think of. … That looks a lot like what we are seeing here locally at CityLine and even Legacy West, where you have multifamily, you have office, [and] you’ve got the retail glue holding everything together at the ground level.” COURTNEY LINDLEY, SLIM CHICKENS: “You’ll see a very competitive market in the fast casual world, so you got to make sure you’ve got great real estate and you got to be selective in how [you] grow. Over the next three years, we’ll see how the guys who created a great customer experience and have great product are the ones that will make it.” ROBERT DORAZIL, UNITED COMMERCIAL DEVELOPMENT: “When we started coming out of 2008, we did the first Kroger Marketplace in DFW at Preston and Eldorado, which is a great intersection, But, we did that store and then we stopped. We didn’t build any retail. After about a year and a half, we went and built one building that could have leased whether there was a Kroger there or not. Then things started happening again, so we built another building … and we built another building and we just recently built two more buildings. We don’t build a building unless we think we are going to lease it 100 percent.” WILL TOLLIVER, LEON CAPITAL GROUP: “Our philosophy on the real estate side for retail has really been finding great fundamental sites and understanding that if you got the right site and the right basis, then the tenants find you.”
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STEPHEN PRESTON, NORTH AMERICAN DEVELOPMENT GROUP: “I think we all have to be very concerned with internet, which is causing downsizing with tenants, but use that as an advantage. There are several big box concepts that are looking at smaller locations now. … They’re trying to adjust to where the internet is and what the shopper wants. They’re realizing, these retailers, that they can get just the same out of a smaller concept, from the standpoint of sales, as they can out of a bigger concept. I think that’s something we all need to be aware of.” COURTNEY NAUDO, DELOITTE: “For the next year, I think you’ll see a little bit of hesitation in the marketplace from the retailer perspective. They know they need to do something with their real estate, clearly, but I don’t see there being massive swings. To that point, retail is still very strong, it just may look and feel a little bit different. I think you’ll see, from a retailer perspective, that increased flexibility, wanting to be able to try out different formats, and being able to get in and out of that.” RON MILLER, INVESCO REAL ESTATE: “You better buy good real estate and be able to hold it for the long term because based on what’s going on in this country right now by default it’s going to appreciate over time.” FRANK MIHALOPOLOUS, CORINTH PROPERTIES: “I like to do projects that matter, so fulfilling needs and making a difference. There’s nothing more [fulfilling] than when you take a dead mall or go to South Dallas and put something there where people appreciate it. It’s not all about the numbers and making money.” BILL HUTCHINSON, DUNHILL PARTNERS: “My opinion is go where the people are, go where the money is. Don’t knock yourself up, don’t beat your head against a brick wall. This is really simple business what we are doing.” JOHN CARL III, SAROFIM REALTY ADVISORS: “It’s interesting. Soft goods is a four-letter word right now. I think people are struggling with apparel sales. That is probably one of the areas where the internet has clipped some sales from poor locations. What we’re seeing is if you have a great location, we have no shortage of tenants coming to us.”
F FOUNDATIONS To better understand how Dallas may be viewed by international companies, talent, and investors, The Dallas Regional Chamber compiled a scorecard of world-renowned global rankings and indexes.
(A ranking of 1 is considered the best in all lists)
DELL - FUTURE-READY CITIES Focuses on a city’s ability to attract lifelong learners who drive innovation; businesses that thrive in collaborative environments; and infrastructure that provides platforms for people to engage. 50 cities were considered.
THE ECONOMIST - HOT SPOTS FOR 2025 Benchmarks a city’s competitiveness and ability to attract capital, businesses, talent, and visitors. 120 cities across the world were evaluated based on today’s economy and projections for 2025.
ATKEARNEY - GLOBAL CITIES INDEX 2016 Examines a city’s current performance based on 27 metrics across five dimensions: business activity, human capital, information exchange, cultural experience, and political engagement. 125 cities were considered.
ANHOLT-GFK - CITY BRANDS INDEX Measures the image of 50 cities with respect to Presence, Place, Prerequisite, People, Pulse, and Potential. 5,166 interviews were conducted, across Australia, Brazil, China, France, Germany, India, Russia, South Korea, the United Kingdom, and the U.S.
IESE CENTER FOR GLOBALIZATION AND STRATEGY - CITIES IN MOTION INDEX Measures the quality of life, future sustainability, and a city’s overall performance through 10 fundamental dimensions: governance, urban planning, public management, technology, the environment, international outreach, social cohesion, mobility and transportation, human capital, and the economy.
2THINKNOW - INNOVATION CITIES INDEX 2015 World’s largest city classification and global ranking with 500 benchmark cities classified. Measures a city’s potential as an innovation economy based on 162 city indicators.
MERCER - QUALITY OF LIVING RANKINGS Assesses quality of life to help multinational companies and other employers fairly compensate employees when placing them on international assignments. 230 cities were considered.
SAFFRON - THE WORLD CITY BUSINESS BRAND BAROMETER Explores which cities around the world best use their business assets and resources in generating a strong business brand. Cities in this category have an above average asset score, but an average or low buzz score. 42 cities were considered.
PWC – CITIES OF OPPORTUNITIES 7 Evaluates cities that embody the energy, opportunity, and hope that draw new people every day to city life. Contains 10 indicator categories organized into three families that reflect the balance of urban life: tools for a changing world, quality of life, and economics.
THE MORI MEMORIAL FOUNDATION THE GLOBAL POWER CITY INDEX 2015 Evaluates and ranks 40 major cities according to their ability to attract creative individuals and business enterprises from every continent and to mobilize their assets in securing economic, social, and environmental development. Based on six functions: Economy, Research and Development, Cultural Interaction, Livability, Environment, and Accessibility.
GLOBAL CITY RANKINGS
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GOOD THINGS COME TO THOSE WHO WAIT. RENOVATIONS COMING SOON!
WOOD AND ROSS ENTRY
FOR MORE INFORMATION, CONTACT: Ramsey March, Sara Terry, or Scott Sowanick at 214.267.0400
B BUILDING TOMORROW TOGETHER
ROLLING INTO 2017 BY MIKE ROSA
2016 was a great economic development year for the region, its cities and the Dallas Regional Chamber. More than 122,000 new jobs were added in Dallas-Fort Worth; only the much-larger New York metro area added more, and our region was far and away the leader in percentage job growth. The region is rolling, and so is the Dallas Regional Chamber, which is privileged to support great companies moving and expanding here. Numbers aside, combine the relocation announcements of Jacobs Engineering, Charles Schwab, Jamba Juice, Thomson Reuters, McKesson, BlueCross BlueShield and OKI Data, and it’s self-evident that 2016 was a tremendous year for Chamber-involved deals. But there’s more to come: About 7,000 direct jobs are in the pipeline for 2017 and beyond. We’re hustling. Last year, the Chamber attended face-to-face meetings with 130 companies or site consultants, hosted 34 corporate projects, and led 19 marketing missions or events. We closed the year with 40 active projects, which included those about to announce,
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B BUILDING TOMORROW TOGETHER as well as projects just beginning to get serious. Company executives we met in 2016 had consistent, positive impressions of the growth, optimism and energy they observed and sensed while here. This is particularly true of those who have either not been here before, or in a while. Many of those executives represent international companies. They visited on serious business, and asked questions to figure out how their companies might fit, in a place that’s been so successful. They asked about our infrastructure and specifically, how we plan to keep up with all the growth. They asked about our costs, having already researched the region and noticed labor costs and housing costs creeping up. They asked about incentives, and whether our success and our great list of new and expanding companies diminishes our appetite to have the next company come here. They asked about our labor force, and whether or not there will be talent to fuel their short and long-term workforce needs. And, they are extremely keen to know whether Dallas is a place their current and future employees will move to. A central, recurring question is, “Can we find and attract talent”? Often, the entire purpose of a trip to Dallas by a corporate team revolves around the talent question. They’ve got questions, and we’ve got answers. This region also has an incredible array of undeniable fundamentals, including our location, transportation assets, critical mass of great companies, and an overall positive business climate.
WE’RE HUSTLING. LAST YEAR, THE CHAMBER ATTENDED FACE-TO-FACE MEETINGS WITH 130 COMPANIES OR SITE CONSULTANTS, HOSTED 34 CORPORATE PROJECTS, AND LED 19 MARKETING MISSIONS OR EVENTS. I expect 2017 to be another busy and strong year for corporate recruitment, and our work started right away. Our first corporate visit was slated for early January. This interest is from a Fortune Global 500 company that is considering Dallas-Fort Worth and three other U.S. locations for its U.S. headquarters. We’re beginning the year with a great mix of projects. The 40 active projects we carry into the new year include 9 headquarters, 8 corporate offices, 12 manufacturing deals (6 of which are food- and beverage-related), 5 information technology projects, 3 distribution centers, and 3 other deals. And the potential relocations within those clusters vary in size, geographic origin, where the projects are looking within our region, and in the variety of international companies. It’s as well-mixed a group of projects as I’ve seen during my 12 years at the Chamber. That terrific variety is a strong indicator of our future economic development success, if we keep working hard as a region, pushing to keep Texas wide open for business.
WANT TO LEARN MORE ABOUT HOW TO GET INVOLVED IN BUILDING TOMORROW TOGETHER?
Contact Mike Rosa, Senior Vice President, Economic Development, Dallas Regional Chamber 214-746-6735 | email@example.com
BUILDING TOMORROW TOGETHER The Dallas Regional Chamber’s economic development program, Building Tomorrow Together, provides organizations in Dallas-Fort Worth with an accelerated investment opportunity that helps advance our region’s success. This additional investment made by more than 130 organizations in addition to annual chamber membership dues allows organizations to increase their support of our efforts to further economic prosperity throughout the region. This initiative funds efforts related to direct contact with corporations and location consultants examining the DFW region.
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VIEWF R O M
WE’VE SAVED THE BEST FLOORS FOR LAST. COME TOUR OUR PENTHOUSE FLOORS TODAY.
HALL Arts is a mixed-use, amenity-rich destination surrounded by the vibrancy of the world-renowned Dallas Arts District. Phase I includes KPMG Plaza at HALL Arts, the half-acre Texas Sculpture Walk and Stephan Pyles Flora Street Café. Plans for Phase II include a full-service boutique hotel and luxury residential high-rise. WINTER 2016
FOR LEASING INFORMATION KIM BUTLER, DIRECTOR OF LEASING 214.269.9550 | KBUTLER@HALLGROUP.COM
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 1 7
OFFICE/FLEX • INDUSTRIAL • RETAIL • RESIDENTIAL AWARD-WINNING COMMERCIAL DEVELOPMENTS BUILDING FOR THE FUTURE UPSCALE LIVING & RECREATION IN THE HEART OF D/FW METROPLEX
Keri Samford, Economic Development Director 972.624.3127 • firstname.lastname@example.org • www.TheColonyEDC.org
3400 @ CITYLINE
THE CRANE REPORT
In-migration by companies and residents continues in North Texas, where development across all sectors goes on, at a strong but disciplined rate. 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
Managing Director, Cushman & Wakefield
“Because of all of the continued success, there’s a tendency to think we’re in the final innings of this cycle. But I see at least another year of growth. A lot of large companies are looking at Dallas. There’s not a spec development I can think of that’s at risk.”
Executive Vice President, Colliers International
Principal, Peloton Commercial Real Estate
“North Texas tends to overbuild, but more than 60 percent of the nearly 12 million square feet of office space now under construction is preleased. As relocations continue, new development space will be absorbed at premium rates.”
“Activity has been strong in nearly all submarkets, and absorption is still outpacing new construction. At this point, developers are challenged with finding good sites. Southern Dallas County seems to have the best supply of land that remains available.”
“Uptown and Victory Park continue to be major players in the multifamily scene. Victory Park has made major strides with retail, nightlife, and residential space comparable to Uptown, creating a more seamless divide between the two areas.”
Chief Development Officer, Monogram Residential Trust
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 1 9
THE CRANE REPORT:
1100 N BONNIE BRAE ST BLDG 2
● ANNOUNCED ● UNDER CONSTRUCTION
35 MEDICAL CENTRE
GARDENIA VILL OFFICE PAR CYPRESS OFFICE
SE OF SMOT & FM 42
OAKMONT OFFICE CONDOS BLDG 4
ANNOUNCED + UNDER CONSTRUCTION
STO COMMONS ON ONE CENTRE AT THE COLONY - PHASE II PARKER ROAD PROFESSIONAL OFFICES
ANNOUNCED DEVELOPMENTS 1
VISTA RIDGE ROCKBROOK GRANITE PLACE AT SOUTHLAKE TOWN SQUARE CARROLLTON T CHAPEL CENTER PHAS CROSSING RED HAWK OFFICE VILLAGE 2 1230 N KIMBALL AVE TOWER PLAZA CONNECTION PARK GOLDEN TRIANGLE PARK BLDG II WEST MEDICAL CENTER 1627 9111 CYPRESS PLAZA MIRON GROVE KELLER PKWY WATERS BLVD OFFICE PARK PHASE II 8821 FREEPORT 600 RANCHVIEW HERITAGE DAVIS BLVD COMMONS TRACE PKWY 9000 BEACH ST SW OF LONGHORN DR BRENTWOOD SE OF LAVACA TRL AND STATE HIGHWAY 161 ESTATES ROYAL TOWER PHA AND PRECINCT LINE RD PINNACLE TOWE NE OF N TARRANT PKWY AND ROCK VALLEY DR 1501 HUGHES RD BENTRIDGE OFFICE PARK HIDDEN RIDGE
3400 @ CITYLINE
3665 WESTERN CENTER BLVD
AIRPORT 161 HQ CENTER
7114 MID CITIES BLVD
BAYLOR SCOTT & WHITE IRVING MOB III
PEDERSEN OFFICE PARK VIRIDIAN MEDICAL DEVELOPMENT THE OFFICES AT HAMPDEN WOODS EXPEDITION PLAZA
2901 WINGATE ST
CLEARFORK PHASE I
1201 8TH AVE
FROST TOWER FORT WORTH OVERTON TOWER III
701 SECRETARY DR WATERSIDE
2715 MATLOCK RD
THE GARDENS AT TOWN CENTER I 4015 W I-20
CHISHOLM TRAIL DEVELOPMENT LAND
BAYLOR EMERGENCY MEDICAL CENTER
SUMMER CREEK STATION GARDEN
CHISHOLM TRAIL PROFESSIONAL CENTER
SIZE: 228,000 square feet DEVELOPERS: Hillwood, Rudman Partnership, and Van Tuyl Cos. LEASING AGENTS: Clint Madison and Johnny Johnson of Cushman & Wakefield DETAILS: This seven-story, speculative office building kicks off a 242-acre, $1.5 billion mixed-use project adjacent to The Star in Frisco. The development will place a heavy emphasis on health and worker wellness features, along with robust technology amenities.
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CROWN CENTRE INT BLDG 1 BU
100 & 104 COUNTRY VIEW DR
SIZE: 310,000 square feet DEVELOPERS: Transwestern Development Co., UBS Asset Management, and Malouf Interests LEASING AGENTS: Duane Henley and Nathan Durham of Transwestern DETAILS: This five-story multitenant project will sit at 3400 North Central Expressway, adjacent to the CityLine development in Richardson. Designed by BOKA Powell, it’s scheduled for completion sometime in 2017.
BEAR MEDICAL PLAZA REGENCY STATION
BROAD STREET PLAZA
DATA SOURCE: XCELIGENT INC., A COMMERCIAL REAL ESTATE RESEARCH FIRM IN PARTNERSHIP WITH NTCAR
SIZE: 480,000 square feet DEVELOPER: Cawley Partners LEASING AGENTS: Bill Cawley, Jeremy Duggins, and Addie Ludwig of Cawley Partners DETAILS: This two-building campus will sit off the Dallas North Tollway between Belt Line and Spring Valley roads. The six-story buildings will be linked by an amenity complex called “The Hub,” which will include a full-service restaurant, fitness center, and open-air terrace.
WHISPERING FARMS COMMERCIAL CENTER THE FORUM AT PROSPER WEST
CONLEY COMMONS PHASE II
VICTORY SHOPS AT STONEBRIDGE
CRESCENT MCKINNEY PARC BLDG 17 PLAZA BLDG C
VIRGINIA PARKWAY PLAZA
CUSTER CREEK MEDICAL BLDG 2
THERMAN RD 23 BLDG 2
4645 WYNDHAM LN SW OF MAIN ST & FRISCO ST TEWART CREEK OFFICE CENTER STONEBROOK PARK I
1015 SAM RAYBURN TOLLWAY 940 W STACY RD
PRESTON @ WADE CROSSING
THE FORUM AT WADE PARK ONEBRIAR N LEGACY
2 LEGACY WEST 7 LEGACY WEST
PLATINUM TOWER LEGACY III
THE ROLEX BUILDING
ONE LEGACY WEST
SIZE: 56,400 square feet DEVELOPER: Harwood International DETAILS: This stunning new American headquarters for Rolex in Uptown was designed by Tokyo-based Kengo Kuma & Associates, in collaboration with Harwood’s in-house group, HDF.
CORPORATE CENTER FOUR HIGHPOINTE PROFESSIONAL CENTRE ALLEN PLACE PARKWOOD 788 S 121 VILLAGE ONE BETHANY WATTERS RD AT WATTERS CREEK PLAZA AT LEGACY PHASE II WATTERS CREEK LEGACY BUSINESS PARK OFFICE PARK
SPRING CREEK COMMONS BLDG C
WINDHAVEN PLACE ONE
PARKER PRESTON PROFESSIONAL BUILDING
TERNATIONAL USINESS PARK STAR MEDICAL CENTER II
NORTH DALLAS MEDICAL CENTER II
3400 @ CITYLINE
MAPLEPLEX OFFICE CENTRE PALISADES CENTRAL
CAMPBELL CROSSING OFFICE PARK
TOWN SE II
SPRINGFIELD PROFESSIONAL CONDOS
PARK TOWER AT DALLAS MIDTOWN
BAYLOR LAKE POINTE
W DR LAKEVIEW MEDICAL COMMONS
PRESTON HOLLOW VILLAGE PHASE IV
THE TERRACES PARK CITIES PLAZA FORMER CHASE BANK BUILDING
TEXAS HEALTH PRESBYTERIAN HOSPITAL FOUR ENERGY SQUARE
3001 TURTLE CREEK BLVD 2727 TURTLE CREEK BLVD TWO ARTS PLAZA NO. 10 VICTORY CENTER THE UNION THE SPIRE SOLA ON LAMAR
910 N BRYAN BELT LINE RD SUNNYVALE PROFESSIONAL PLAZA
DAVIS STREET MARKET
THE CRANE REPORT: INTERACTIVE VERSION
SIZE: 100,000 square feet DEVELOPERS: Cawley Partners and Trademark Property Co. LEASING AGENTS: Bill Cawley, Jeremy Duggins, and Addie Ludwig of Cawley Partners DETAILS: Designed by GFF, this three-story building will sit on about 8 acres of land between Legacy and Bethany drives off North Central Expressway.
online at dfwrealestatereview.com
UNDER CONSTRUCTION 4 THE TERRACES AT DOUGLAS CENTER SIZE: 171,583 square feet DEVELOPERS: Lionstone Investments and PegasusAblon DETAILS: Designed by HKS Inc., this 171,583-square-foot Class A office tower will have floor plates of about 14,300 square feet and sit at 5960 Berkshire Lane in the heart of Preston Center in Dallas. Amenities include balconies on the building’s upper floors.
SIZE: 307,824 square feet DEVELOPER: Gaedeke Group LEASING AGENT: Belinda Dabliz, Gaedeke Group DETAILS: This 14-story building will bring multitenant space to the new Legacy West in Plano. Amenities include a courtesy shuttle service to Legacy area restaurants, shops, and hotels.
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WESTGATE BUSINESS PARK
US 380 BUSINESS PARK
THE CRANE REPORT:
DENTON CREEK BUSINESS PARK
5075 TIM DONALD RD
ANNOUNCED + UNDER CONSTRUCTION
GATEWAY BUSINESS PARK
SPEEDWAY DISTRIBUTION CENTER BLDG C PARKVIEW COMMERCE CENTER
CEDARDALE INDUSTRIAL PARK
ALLIANCE 12500 WILLOW WESTPORT 19 SPRINGS RD
SIZE: 1.5 million square feet DEVELOPER: Trammell Crow Co. DETAILS: This two-building warehouse project will consist of two phases, with the initial building totaling 600,000 square feet, according to a Dallas Morning News report. The $27 million project will sit south of Interstate 20 near Bonnie View Road in South Dallas.
ALLIANCE CENTER NORTH 15
PROLOGIS PARK 121 LOGISTICS CENTER II PARK WEST CROSSING LOGISTICS CENTER V
12801 HARMON RD
PHASE I - BLDGS I & II @ COLLEYVILLE BLVD
ROYAL TECH 18
DFW EAST LOGISTICS CENTER DFW/161 DISTRIBUTION CENTER
1001 KENNEDY LN NW OF NE LOOP 820 AND IH 35 W
LOGISTICENTER AT DALLAS
SIZE: 1.1 million square feet DEVELOPER: Dermody Properties DETAILS: The first building in this twophase development will total 622,440 square feet. Located less than a mile from Interstate 20 at Bonnie View Road, it will target local, regional, and national distributors. Among other amenities, the park has easy access to the nearby FedEx ground hub and Union Pacific Intermodal facility.
MAJESTIC AIRPORT CENTER DFW
LAKESIDE RANCH - BLDG 21
RAILHEAD INDUSTRIAL PARK
LIBERTY PARK GSW NORTH
GSW GATEWAY II
TRINITY CROSSING 1460 AVENUE S
2809 SHAMROCK AVE
360 GLOBAL LOGISTICS PARK
2317 W ARKANSAS LN
● ANNOUNCED ● UNDER CONSTRUCTION
4900 SUN VALLEY DR SOUTH CENTRAL DISTRIBUTION CENTER II
LIBERTY P MOUNTAIN PARK 20/360
THE CRANE REPORT: INTERACTIVE VERSION
online at dfwrealestatereview.com
PORT LOGISTICS GREAT SOUTHWEST
SIZE: 83,125 square feet DEVELOPER: Port Logistics Realty DETAILS: Work has begun on this smaller infill facility at Great Southwest Industrial Park in Grand Prairie. The speculative project, which is designed to meet the needs of e-commerce users, is scheduled for completion in the second quarter of 2017.
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WILDLIFE COMMERCE PA
PROSPER BUSINESS PARK
MCKINNEY BUSINESS CENTER CORPORATE DR
13 PRESTIGE CIR THE TECH CENTER ON GREENVILLE CREEKVIEW 121
LEGACY CENTRAL 5
PLANO COMMERCE PARK
For North Texas industrial developments at least 10,000 square feet in size, Xceligent reports that 67 buildings totaling 18.5 million square feet are under construction. Another 182 projects totaling 48.4 million square feet are planned or proposed. All are represented on this map; a sampling are labeled.
MOTION INDUSTRIES INC.
SIZE: 470,000 square feet KEY PLAYERS: Jacobs Engineering and Beck Group DETAILS: This new $100 million manufacturing and R&D facility for the Addison-based cosmetics giant will sit on about 26 acres along Denton Tap Road at E. Vista Ridge Mall in Lewisville. The 470,000-square-foot facility is expected to be ready for occupancy in the first quarter of 2018.
2910 GUILDER DR
DCT MILLER ROAD
MERCER BUSINESS PARK
NORTHGATE DIST CENTER GARLAND LOGISTICS CENTER BLDG
3600 LEON RD
MESQUITE INDUSTRIAL BUSINESS PARK
I-30 BUSINESS CENTER BLDG 3
I-20 COMMERCE CENTER
PLANNED POINTSOUTH LOGISTICS & COMMERCE CENTRE
DALPARC IH 20 BLDG 2
SOUTHPORT LOGISTICS PARK
SOUTHFIELD PARK 35
PARK TWENTY CROSSROADS MIDPOINT TRADE CENTER LOGISTICS CENTER BLDG III
SUNRIDGE BUSINESS PARK SUNRIDGE BUSINESS PARK LOT 10
DFW INLAND PORT
DATA SOURCE: XCELIGENT INC., A COMMERCIAL REAL ESTATE RESEARCH FIRM IN PARTNERSHIP WITH NTCAR
SIZE: 193,000 square feet DEVELOPER: EastGroup Properties DETAILS: The Jackson, Miss.-based developer is expanding its Texas portfolio with this two-building industrial complex in Lewisville, a portion of which has been leased by Alpha Insulation and Waterproofing Inc. The first building totals 121,758 square feet; a second phase will add 70,823. Beyond that, two additional buildings are planned.
SIZE: 156,000 square feet DETAILS: Industrial distributor is expanding its North Texas operations with a 200 W. Trinity Blvd. in Grand Prairie. The operation will serve more than 550 branch locations in North America. A two-story office component will house the company’s Southwest division and a visitor’s showroom.
I-20 COMMERCE CENTER
SIZE: 900,043 square feet DEVELOPER: Copeland Commercial DETAILS: Located at 3535 N. Houston Road in Lancaster, this warehouse will sit on a 50-acre site near both Interstates 35 and 20. The tilt-wall facility was designed by Powers Brown Architecture and is being built by ArchCon Construction.
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THE CRANE REPORT:
EPIC APARTMENTS AT UNICORN LAKE
ANNOUNCED + UNDER CONSTRUCTION
DISTRICT OF HIGHLAND VILLA
ANNOUNCED DEVELOPMENTS 1
RIVER WALK VI
● ANNOUNCED ● UNDER CONSTRUCTION
UNITS: 234 DEVELOPERS: Stoneleigh Cos. and Realty Capital DETAILS: This new complex will sit on Broadway Street, across from the DART commuter rail station in downtown Carrollton. Designed by EDI International, construction is expected to get underway in early 2017.
THE CRANE REPORT: INTERACTIVE VERSION
online at dfwrealestatereview.com
VERA LUXURY APARTMENTS
DOLCE LIVING HOME TOWN PH 2
THE SCENIC RESIDENCES AT RIVER EAST PH I ALTA LEFT BANK-FLATS
ARLINGTON COMMONS PH I 250 LANCASTER SOUTH 400 APARTMENTS
THE KELTON AT CLEARFORK
THE RES AT GRAND P
UNITS: 300 DEVELOPER: Hillwood DETAILS: This new multifamily project will help kick off Frisco Station, a 242acre mixed-use development off the Dallas North Tollway at Warren Parkway, adjacent to The Star. Designed by JHP Architecture/Urban Design, amenities include an outdoor kitchen, massage room and Pilates studio, coffee bar and wine bar, game room, terrace lounges, and a pool area.
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THE MAIN STREET LOFTS
DATA SOURCE: AXIOMETRICS INC.
GREYSTAR CITY LIGHTS
UNITS: 365 DEVELOPER: Greystar Real Estate DETAILS: The latest multifamily project from South Carolina-based Greystar will sit at Live Oak and Texas streets, with the developer’s City Lights project. The 10-story tower will feature a full-service Tom Thumb store at its base.
UNITS: 200 DEVELOPER: Crescent Communities DETAILS: This new 21-story tower will sit at McKinnon and Randall streets in Uptown, next to Frost Bank Tower at the edge of the Harwood District. Designed by WDG Architecture, it will include a six-story parking garage at its base.
ADARA WINDSONG RANCH
PARTMENTS I MCKINNEY
SOVEREIGN PRESTON RD
THE MANSIONS 3EIGHTY
SANCTUARY AT WESTRIDGE WATERFORD AT FRISCO PH I
PARKVIEW APARTMENTS MAXWELL
STRATUS PHILLIPS CREEK RANCH
CHAPEL CREEK COMMONS
DOMAIN AT THE GATE RAVELLO STONEBRIAR BROADSTONE LAKE RIDGE THE GRAND AT LEGACY WEST
TWIN CREEKS CROSSING II DOLCE LIVING TWIN CREEKS PH I
Situated for business.
DISCOVERY AT THE REALM
POST OAK APARTMENTS
PARKSIDE AT CRAIG RANCH III
AVILLA PREMIER PLACE THE PARC AT WYLIE
RP ON PARK
LOT C AT CITYLINE
HEBRON 121 STATION IV
E PH II
ALTA PALISADES I HEIGHTS AT CAMPFIRE CROSSING
AURA 5515 THE MALLORY EASTSIDE
HARMONY HILL I
BRICKYARD AT MERCER PARK
RICHLAND PARK APARTMENTS VILLAGE OF ROWLETT
LBJ STATION APARTMENTS MARK AT MIDTOWN PARK
LINCOLN WATERS EDGE II
MODENA ALEXAN LAS COLINAS
GALLERIES AT PARK LANE
JEFFERSON ON LAKE CAROLYN
CREST AT OAK PARK
ONE AT EPORT
AURA CEDAR THE ALEXAN
BISHOP ARTS STATION
AS CENTRAL PARK
SERVE PRAIRIE EAGLE CROSSINGS
UNDER CONSTRUCTION 4
VILLAS AT VANSTON PARK STELLA
- MONEY 2014 -
ALEXAN WEST DALLAS THE COLORADO PLACE
WESTERN RIM BAYSIDE
The gateway to your business future. Strategically located 30 minutes north of Dallas, McKinney is perfectly situated for business with a highly-educated workforce, available space opportunities and competitive incentives. Discover why companies like Raytheon, Encore Wire, UPS, Torchmark Corporation and Emerson Process Management choose McKinney as the place to grow their business.
ALEXAN KATY TRAIL
UNITS: 159 DEVELOPER: Trammell Crow Residential DETAILS: Designed by GDA Architects, construction is underway on Trammell Crow Residentialâ€™s latest project, which will be built on Carlisle Street near the Katy Trail. The luxury development, which will feature larger units, is scheduled for completion in November 2018.
McKINNEY ECONOMIC DEVELOPMENT C O R P O R AT I O N McKINNEYEDC.COM INFO@McKINNEYEDC.COM 972-547-7651
D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W / 2 5
PHOTO: MICHAEL SAMPLES
Deal size has compressed a bit, but leasing velocity remains strong across all sectors, with companies continuing to move to and expand in North Texas. With demand comes higher lease rates, which are pushing tenants to some secondary corridors and creating an ever-strengthening overall market. Here, we look at the top five office, industrial, and retail leases across North Texas during the past three months. As always, data is provided by Xceligent Inc. BY CHRISTINE PEREZ
ON-THE-GRO U N D I N S I G H TS
“I believe we’ll continue to see companies relocate and grow in Texas, because the state off ers lower cost options for the workplace, with less government regulations, than the highly regulated states in the West, Upper Midwest, and Northeast.”
“The big driver is job growth. North Texas has been keeping pace at well over 100,000 jobs annually for the last few years. This puts us ahead of nearly all major U.S. markets except L.A. and NYC, both of which are larger than DFW.”
Partner, Younger Partners
Managing Director, JLL
“Activity in 2016 was gangbusters, and we’re seeing a continued strong demand for industrial space from e-commerce and other sources. Lease rates have not only been holding, but steadily ticking up—after years and years of no increases.
“In 2016, we saw more demand than there was space to serve retailers and restaurateurs. There’s a lot of excitement and anticipation surrounding 2017, because new developments will be completed and provide more supply.”
Senior Director, Cushman & Wakefield
President and CEO, Falcon Realty Advisors
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Perfect Location | Vibrant Economy | Can-Do Culture
ARLINGTON: WHERE DEALS GET DONE Arlington is in the spotlight and perfectly situated at the epicenter of North Texas. Beyond our world-class entertainment is the backbone of our city: Economic vitality, a diverse, skilled workforce and a culture of global opportunities. Office of Economic Development ArlingtonTX.gov/ecodev | 817-459-6155 | email@example.com
0-11,271 SF 11,27150,706 SF 50,706130,000 SF 130,000327,183 SF 327,183750,000 SF
LARGEST OFFICE LEASES
SIZE: 300,000 square feet TENANT REPS: Jeff Staubach, Greg Biggs, Torrey Littlejohn, and Chase Monroe of JLL LEASING AGENT: Marijke Lantz of Billingsley Co. DETAILS: The pharmaceutical giant will take occupancy of a new facility at Austin Ranch in Carrollton, designed by Gensler and developed by Billingsley. It will initially house 1,200 AmerisourceBergen employees and, eventually, as many as GREG BIGGS 3,000.
CALIBER HOME LOANS
SIZE: 182,700 square feet at Point West Office I TENANT REPS: Jeff Ellerman, Chris Sido, and Jennifer Young of CBRE LEASING AGENT: Chris Taylor, Cushman & Wakefield DETAILS: The national mortgage firm is consolidating its North Texas operations into this new space at 1525 Belt Line Road in Coppell.
SIZE: 114,247 square feet at Campbell Commons TENANT REPS: Tom McCarthy and Melissa Holland of JLL LEASING AGENTS: T.D. Briggs, Jeff Wood, and Lauren Perry of Peloton Commercial Real Estate DETAILS: The company, which makes radio frequency solutions for mobile, infrastructure and defense and aerospace markets, will move into space at 1201 E. Campbell Road in Richardson.
SIZE: 100,000 square feet in Irving LEASING AGENT: Kyle Jacobs of Rubicon Representation DETAILS: The private practice is kicking off a new medical office project at Gateway and State Highway 161, within walking distance to DARTâ€™s Belt Line station. The developers are KDC and Rubicon
SIZE: 55,226 square feet TENANT REPS: Van Power and David Schrock with NAI Robert Lynn and Jon Silberman with NAI Partners LEASING AGENT: Bill Cawley, Jeremy Duggins, and Addie Ludwig of Cawley Partners DETAILS: The company will occupy Tollway Center at 14675 Dallas Parkway in Addison, a sixstory building recently developed by Cawley 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 / 2 9
Imagine. Empower. Impact.
The Real Estate Council, the largest and most influential organization of its kind in Texas, represents more than 2,000 individual members and 600 companies. With exclusive access to education, events and connections you canâ€™t find anywhere else, TREC members spark community transformation, influence policy and propel careers in DFW and beyond. Join us for our Bank of Texas Speaker Series presented by The Dallas Morning News Thursday, January 19, 2017 at 11:30 a.m., Belo Mansion You and your colleagues can hear our panel of experts detail what forward-thinking measures Texas will use to tackle the growing pains that follow explosive growth. Members will also have an opportunity sign up for committees and learn how to make the most of their membership. Visit recouncil.com for information on membership or to sponsor, purchase a table or buy a ticket to Speaker Series.
Imagine. Empower. Impact.
Join TREC and build the city youâ€™ve imagined. 3100 McKinnon Street NO. 1150, Dallas, Texas 75201 RECOUNCIL.COM 214 692 3600 PHONE
2 0-42,000 SF 42,000167,354 SF
492,5001,440,000 SF 1,440,0003,018,708 SF
DATA SOURCE: XCELIGENT INC., A COMMERCIAL REAL ESTATE RESEARCH FIRM IN PARTNERSHIP WITH NTCAR
SIZE: 1.1 million square feet LEASING AGENTS: Terry Darrow, Kurt Griffin, and Nathan Orbin with JLL DETAILS: The third-party logistics provider will take occupancy of warehouse and distribution space at 501 W. Danielle Road. The property was developed by Seefried Properties and USAA Real Estate.
AMERICAN TIRE DISTRIBUTORS
SIZE: 756,000 square feet TENANT REPS: Adam Faulk and Ryan Browder with Jackson Cooksey LEASING AGENTS: Tony Creme and Bill Burton of Hillwood DETAILS: The tire distributor will consolidate two smaller facilities in Carrollton and Fort Worth into Alliance Gateway 60, a large warehouse project near Interstate 35W.
LARGEST INDUSTRIAL LEASES
SIZE: 663,000 square feet TENANT REPS: Mark Collins and Dean Collins with Cushman & Wakefield LEASING AGENTS: Kacy Jones and Steve Koldyke of CBRE DETAILS: The pet food and supplies company will locate its first North Texas distribution center at 7243 Grady Niblo Road in Dallas, a property developed by Crow Holdings.
TRIMARK USA LLC
SIZE: 211,312 square feet TENANT REP: Mark Miller of NAI Robert Lynn LEASING AGENT: Al Sorrels with Majestic Realty DETAILS: The restaurant supply firm will occupy space at Majestic Airport Center DFW at 2801 S. Valley Parkway, off State Highway 121 in Lewisville.
HEMPEL USA INC.
SIZE: 205,522 square feet TENANT REP: Cannon Green and Luke Davis of Stream Realty Partners LEASING AGENTS: Bob Hagewood, and Forrest Cook of Stream Realty Partners DETAILS: The global industrial coatings manufacturer and distributor will take occupancy of Building B at Northport 35 Business Center in Northlake.
MARK MILLER TERRY DARROW CANNON GREEN TONY CREME
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 SCORECARD 1
0-5,129 SF 5,12916,297 SF 16,29737,500 SF 37,50078,844 SF 78,844152,946 SF
DATA SOURCE: XCELIGENT INC., A COMMERCIAL REAL ESTATE RESEARCH FIRM IN PARTNERSHIP WITH NTCAR
DICK’S SPORTING GOODS
SIZE: 90,000 square feet TENANT REPS: Greg Bracchi and Megan Trimble of EDGE Realty Partners LEASING AGENT: Robert Dozier of Lincoln Property Co. DETAILS: The national retailer of sporting goods will anchor the Gates of Prosper development at the northeast corner of Preston Road and State Highway 121 in Prosper, developed by Lincoln Property Co. and Blue Star Land.
SIZE: 53,000 square feet TENANT REPS: Larry Jordan and Steve Williamson with Transwestern, who also represented the landlord, Centergy Left Bank LP DETAILS: The supermarket brand of Randall’s Food and Drug will anchor the 110,000-square-foot retail component of the Left Bank development west of the Trinity River in Fort Worth. It will be the first location in Texas for the grocer’s new urban concept.
LARGEST RETAIL LEASES
SIZE: 52,000 square feet TENANT REPS: Blake Shipp with The Weitzman Group and Neil Baron of Cinépolis USA DETAILS: The movie chain will go into the second phase of Glade Park, a power retail development at the southwest corner of State Highway 121 and Glade Road in Euless. It will develop a multiscreen cinema that will feature plush automated recliners, a bar and gourmet snacks. The theater is set to open in summer 2017.
ALAMO DRAFTHOUSE CINEMAS
SIZE: 45,240 square feet TENANT REP: Tyler Isbel of SRS Real Estate Partners DETAILS: The popular theater chain will open a third location in North Texas with an East Dallas venue at 6770 Abrams Road at Skillman. It will take over an old Tom Thumb store and open in the spring of 2017.
24 HOUR FITNESS
SIZE: 37,000 square feet TENANT REP: Jeff Kittleson of CBRE LEASING AGENTS: Steve Ewing and Josh Flores of EDGE Realty Partners LANDLORD: North Rock Real Estate DETAILS: The California-based health club chain will open its newest Tarrant County location at Glade Parks in early 2017.
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The Shape of Things to Come As we enter a new year, our experts examine what is ahead in the area of design and construction. BY CHRISTINE PEREZ | PHOTOGR APHY BY MICHAEL SAMPLES
North Texas is fortunate to be home to some of the world’s top design and construction firms. We gathered six of the best people in those fields — Eric Krueger, Scott Lowe, Paul Manno, Walt Mountford, Dan Noble, and Don Powell — to learn about the latest industry trends, challenges, and opportunities in all sectors. Employee recruitment and retention are among the challenges facing the industry. 3 4 / D A L L A S - F O R T W O R T H R E A L E S TAT E R E V I E W
CHRISTINE PEREZ: Let’s start with introductions.
PAUL MANNO: I’m a principal with Gensler in Dallas. My focus is to lead the design work that comes out of the Dallas office, primarily interior architecture. I do a lot of work with change-management clients and am involved with large corporate projects. WALT MOUNTFORD: I’m an executive vice president with KDC. We’re essentially a corporate custom home builder -- I’m a quintessential development person in that organization. I’m the development executive responsible for CityLine, which includes 1 million square feet from State Farm and some other uses, as well as Toyota North America headquarters up at Legacy West. DAN NOBLE: I’m president and CEO of HKS, an international firm with 24 offices worldwide, about 1,400 employees, and about 650 here in Dallas. DON POWELL: I’m one of the founders of BOKA Powell architects, and I’ve been with the firm for 40 years this summer. It’s been
a fun run for me. I’m glad I moved to Dallas. It was a great choice, from the Midwest to Dallas. ERIC KRUEGER: I’m executive vice president of Balfour Beatty Construction. I manage the two North Texas offices in Dallas and Fort Worth. I’ve been with the company 20 years. We’re about a $4 billion-a-year company in the U.S., $15 billion worldwide. We’re a little over a billion dollars here in Texas, and I’ve been blessed to have worked with everyone on the panel. SCOTT LOWE: I’m one of the partners at 5G Studio architectural design studio here. I represent small business at the table: I’m the little guy. We’ve been around since 2005. We have about 75 employees scattered about, mostly here in Dallas, but we have offices in Atlanta and Miami. My primary focus lately really has been hospitality.
I like to start by getting the pulse of things in your industries and talk about how business is going—how 2016 worked out for you—better or worse, or about what you expected. And, for those who aren’t just focused on one particular sector of commercial real estate, talk a little bit about which sectors are hot for you right now. Scott [Lowe], I know you were talking about hospitality.
LOWE: This will be our best year financially. It’s one of these things where you go for growth or profit. It’s hard to have both, but this year we’ve focused more on profit than growth, and we’ve experienced both. As far as real estate, it’s fine. It’s better than fine: It’s a great cycle. Everyone up here is very, very busy doing great projects. What I’m focused on now is, how do you keep the ball moving, and what markets do you look at to diversify in those kinds of things?
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R ROUNDTABLE We’re filling in a pent-up demand curve in terms of product placement, especially this marketplace. I heard a stat the other day — and I don’t know if it’s true or not — but 1,500 people a day are moving to the Metroplex. KRUEGER: A little bit on hospitality: For us, it’s good news. The other news is, the Houston marketplace slowed down. We don’t see it rebounding much before 2020, as far as oil prices over $70. The benefit of having those low energy prices is leisure; it’s hospitality. That’s a lot of what we have all seen — growth in hospitality. We’re just opening a 1,000room Marriott Marquis convention hotel in Houston. That’s the next level up on amenities on those types of things. The next two years look very, very strong. It’s been a good year in our core market. There is tremendous pressure on fees and pressure on our people just being poached. It isn’t all great news. For us, we do a broad diversity of work. Health care has cycled up again in Houston. It goes in fouror five-year cycles. Here in North Texas, with Parkland, the Methodist System, and THR, it’s gone through a cycle. A lot of folks here do health care. We don’t know where that’s going
because of Obamacare. We know wellness is going to be incredibly important. That’s the biggest question mark for us. Where does that market go? POWELL: We expected 2016 to be our record year, and we’re over-performing. We have been building our staff steadily over the last 36 months. We also are the leading indicator in the construction industry, and we know six months ahead of the construction industry that the end is near. We haven’t seen any signs of the brakes being tapped in North Texas and in the regions we work in outside of Texas. Architects are one of the worst professions in terms of when the economy turns south; there is little we can do to stop that momentum. We have to be ahead of the curve and be cautious now that the office market we’re in has been one of our traditional strongholds, and is at its record peak. One of the things I love about the future is the [so-called] death of the office building: That myth has passed. Millennials love collaborative working — they want to socialize, and they want to be in the office as opposed to working from home. We want to do those office buildings in the next 20, 30 years, before it changes. NOBLE: Ironically, our best year ever was 2008. We were hitting on all cylinders and all of our sectors, but we knew the end was right around the corner. It’s bittersweet, but this has been our second-best year ever. We are coming up to those numbers of 2008. We’re actually over the number in people, and we’re about right at the net revenue per employee. Our bellwether metric is the net revenue per employee. We’d like to be above $185,000 of revenue per employee. We’ll be above that this year. Our revenue is up about 20 percent this year from last year and was up 20 percent last year from the year before. Our profits are up over 25 percent. So like Scott [Lowe] was saying, I focus more on profit than revenue. When people say, ‘How do you want to grow?’ I say, ‘I don’t really care about growth.’ If we’re 1,200 people next year, we lose 200, but our profit and our revenue go up — to
MEET THE EXPERTS
Eric Krueger is executive vice president with Balfour Beatty Construction. He manages the two North Texas offices in Dallas and Fort Worth.
Scott Lowe is a partner at 5G Studio architectural design. The company has been around since 2005, and has roughly 75 employees. It has offices in Dallas, Atlanta, and Miami.
Paul Manno is a principal at Gensler, whose primary focus is to run the design work that comes out of the Dallas office.
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R ROUNDTABLE me that’s better growth. I believe our industry can “eat their young,” and compete against each other on a slow cycle downward in terms of fee. When somebody will do it for a couple of points cheaper, it just doesn’t do our profession any good, and we still see that downward pressure on fees. People are just looking at fees, they’re looking at you not as a service, but looking to you to give them the cheapest service in the quickest time. We put about 5 percent of the profits into research and development. We have a research group called Line — Laboratory for INtensive Exploration, and a consultancy business called Knox, HKS Knox. [Founder] Harwood K. Smith — his middle name is Knox. We do financial planning, strategic planning, and workplace strategies. Our best sector this year is health care, by far. Health care is a stellar performer this year, 35 percent profit. By the end of the year, it’ll probably be 40, and that’s on our biggest revenue. Behind that is sports. We’re doing the [Los Angeles] Rams and finished up the [Minnesota] Vikings. That’s been bringing in cash this year in a positive way. Then it’s commercial, workplace strategy, and hospitality. It’s tougher for us to squeeze a profit out of hospitality. I don’t know why that is yet, and I’m still trying to figure it out. It could be the hands-on relationship you have to have — there is so much effort. Our revenue is pretty good in hospitality, but margins just aren’t there. We’re very happy about this year. We have a backlog of a year. I don’t see any abatement in the growth. Our next strategic plan is, how do you develop a soft landing? We know the downturn is going to come because it always does. All the indicators are that growth is great: people moving here, people moving to the United States, and 7.5 billion people in the world. It’s going to be 9 billion in about 20 years. The growth is there, but there’s always a cycle, so we’re preparing for that. When things go down, and our clients aren’t building, we’ll still be planning.
MOUNTFORD: Arguably, we’ve had a fantastic year. We’ve got a little over 5 million square feet under construction right now, a couple of additional million square feet under development and a focused business model. We have an organization that supports implementation — everything from accounting systems to project managers who have forgotten more about construction than I have and a great safety team to augment that, as well as a delivery model that is focused on what we do. We have the fortuitous opportunity to meet up with a positive economy. A lot of companies make the decision to move out of higher-cost areas and are coming down into Dallas. We’ve been sitting here with a catcher’s mitt on some of those and hoping that continues. If the economy continues, it’s easier for the board of directors to make decisions to move to these type of locations. If things start to go poorly, they tend to want to cut costs and then hunker down, as opposed to a forward-looking mode. That’s a concern we have, but it’s been fantastic. I have no complaints. MANNO: This will be our second most profitable year. Last year was our most profitable
Walt Mountford is executive vice president with KDC. In his morethan 20 years with the company, he has helped develop over 7 million square feet of commercial projects valued at over $1.4 billion.
Dan Noble is president and CEO of HKS International, which has 24 offices worldwide and 1,400 employees, roughly 650 of whom are in Dallas.
Don Powell is one of the founders of BOKA Powell architects, and has been with the firm for 40 years. He has planned and designed more than 35 million square feet of architecture and interiors.
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R ROUNDTABLE year. We’re down about 6 percent from where we were last year. What we’re looking at is a couple of different things. We had a partners’ meeting in October, and I wish we would have talked about the viewpoint of the economy. For the first time in the firm’s history, we have two full-time economists on staff who work on the leadership of the firm. They try to understand what’s happening economically in the world and how that impacts what we do, and how we develop strategies. It’s interesting for a design firm to have economists on their staff who help map out a trail. That’s one way we’re trying to position ourselves to better understanding because you’re right: Architects and economy numbers don’t always mix very well. We’re looking for ways to address that. The second thing is you’ve got to diversify. The Dallas office now has a sports group and is dealing with more hospitality. It’s dealing more with mixed-use. We’ve always had retail and automotive. We’ve learned that we have to diversify. We can’t have one focus, and that’s what’s happening here. Thirteen years ago, it was 23 people; now we’re 210. That growth has all come through diversification. We’ve always been known for the workplace, and that’s been the bread and butter of the firm. As the economy gets down, people look for a workplace strategy. Part of our consulting is the workplace survey we do, and the different ways we study what organizations are looking like. Those are things that will be coming to the forefront as the economy makes its turn. POWELL: If I may circle back on one issue, we have a different philosophy in our company. We have a personal relationship with everybody on our staff. One of the owners knows the family. While profit is always a key for us, we have forfeited profits many a time to keep people through downturns. For us, it’s about the intellectual capital that we build up in the down cycle. Give people assurance that it’s not a month-to-month wave on whether they’re going to be here or gone. And, I’m not criticizing anybody, because there are different philosophies and different motivations, but our ownership group has really erred on that side many times in keeping people in the downturn that we didn’t necessarily need at that moment.
Have you seen that pay out for you?
POWELL: Absolutely. I know Ralph Hawkins,
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your predecessor [at HKS] was criticized by some in the industry because he kept a lot of people in that three-to-five-year downturn — but when the economy picked up, everything I heard on the street was that you guys were cooking and running fast. You have to have that engine. NOBLE: We’re Subchapter S, and if we retain profit, we have to pay tax on that. If we redistribute it, we have to pay tax again. When I became CEO, I asked our new CFO, ‘Is there a way we can get around this, legally?’ There has to be something we can do to soften the blow in a downturn with the money that we receive when things are good, otherwise you just distribute it all and it’s feast or famine for a lot of people. Now, for somebody at the top who can absorb that, it’s not that big of a deal, but somebody on the margins, that’s a big deal in the down time. What we’ve found is we can prepay pretty much all of our expenses. We can prepay all of our rent, we can buy all the machinery that we’re going to buy that year, and we can put it in a trust. If we have lawsuits, we can put that and the settlement in a trust, and do that without paying taxes on it. Last year, we put a large chunk of money into that. We prepaid 80 percent of our rent. This year, we’re going to prepay 100 percent of our rent. If we have a downturn — and I don’t think we’re going to have it in 2017 — but if we have it in 2018, the profits can be bad, and we’ll still have some money to distribute. MOUNTFORD: One thing we do is to keep our base salaries very competitive and have bonuses — significant bonuses — when times are good. Others can’t necessarily poach our employees — or it’s difficult to do that — and in a downturn, you have a manageable overhead. MANNO: Do you think that it’s changing a little bit? A lot of the younger staff who are looking for a position aren’t necessarily always interested in bonuses. They’re thinking, what money can I get right now? We’re re-evaluating the bonus structure. Having big bonuses is great, but if you get a bonus once a year, it doesn’t help you pay the rent the other 11 months. MANNO: We’ve all poached people from other firms. Let’s be honest about it. Part of what drives that is people. They want the money up front because you get a little more salary — you can get a little better house, maybe a little better apartment. …
R ROUNDTABLE I think if I’m a young professional starting out and I get a new car, getting a bonus doesn’t necessarily help me get to work the other 11 months. I think there’s going to be some change there. As people get more in tune to that, I think the whole bonus structure is going to take a hit, and people are going to want their money now. LOWE: I find this conversation fascinating because this is something we grapple with in our company. It’s really why our company even exists. When we talk about compensation — growth structure, retention — we examine this idea. As an 11-year-old company, we’ve made it through what we call a crucible, but we’re still in adolescence. We started to look at different models out there, and the idea of compensation, retention — those kinds of things — we left the place we were initially, because we saw a path that excelled. But the path was so long, so far. We looked at different business models. We looked at franchise models. We adopted the idea of a franchise, and now we have five other partners outside the collaborative umbrella at which those primary partners set the board of directors. We promote from within, primarily. They’re now each a franchise. NOBLE: Does every employee own a piece of that? LOWE: We’re talking about that. We haven’t evolved it to that level. Right now, it’s a separate LLC with the primary partnership sitting as a board of directors and the directorship, and we have another group which is set up as a managing partner. They make the decisions every year, and I’m happy to say now we have the entertainment sector — a very talented entertainment group. We have an interior group that’s now separate. We also have regional diversity, which is our only international office of construction in Atlanta. We’ve diversified around those regions. Those are now franchises. There’s no real methodology for how you’re supposed to set these things up, but they’re all in the black now. Last month was the first
month that happened. We set this model up, I believe, two years ago in June. NOBLE: And Paul, you guys are in ESOP [employee stock ownership plan] aren’t you? MANNO: Yes. KRUEGER: I think the ESOP model is fascinating, especially for service companies. MANNO: It is. They [younger staff] understand better what a 401(k) is. A lot of these programs are great. The first question is: How do you determine the value of the share?
Let’s talk about the office sector. It seems to be evolving where office users must have more in the way of amenities and tenant finish out. I was recently talking to Bill Cawley [of Cawley Partners] about tenant finish out going up 14 percent a year, 7 percent every six months. How has this affected your work as, or with, developers and landlords and users?
POWELL: From the standpoint of the amenity package that goes into a speculative office building, it is very different today. Over the past three or four years, the hospitality
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influence in office buildings has grown dramatically. Walking into a corporate living room where employees can work from any place in the building is a critical point today. There’s a lot of money being invested. From an architect’s perspective, one of the biggest challenges is: ‘We’re doing a conventional lobby in the building, but we’re also throwing in a corporate living room, some lounge space, and fitness.’ All of those components somehow get dialed into our core and shell budget. We’re fighting an uphill battle on how to mitigate that cost because the amenity package can be 2 to 3 percent of the overall square footage of the building, and tenants will pay a higher add-on factor if the amenities are baked into their lease. You have to have unique things. We talk about this a lot. It makes no sense to provide a conference room the size of the one the tenants already have in their space. If you’re going to provide a conference facility, it has to be different from those in a 3,000-square-foot lease space. Training rooms, that’s another thing we provide. We have to look at what gets used. And, if they’re going to pay for their rent and their add-on factor, it has to be meaningful to them. It’s been very interesting to see how hospitality has invaded the office world. KRUEGER: To your point, someone mentioned earlier the millennials, the collaborations. The whole collaboration space is [about] having the break-out area, especially if you’re on an open-space-plan type of format. You’ve got to have those areas. We also are seeing exterior
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terraces, and those types of things, which to Don’s [Powell] point, drives up that cost, even though it isn’t necessarily giving you extra space. For us, I don’t know whether it was a great strategy or just fortuitous. A few years back, we saw a great opportunity in the tenant finish sector. There was a lot of market share by very few, so we made a focus into this area. That’s been a huge market and a huge win for us for the last couple of years. Eight years ago we hardly had an interiors presence, and ENR (Engineering News-Record) just named us the No. 1 interior contractor in Texas. It’s been a great opportunity for us. NOBLE: What we’re seeing is variety. I think the key is to have a variety of spaces for people to collaborate. If you read the research on how the mind works in its best creative state, it goes from collaboration and openness to a more focused perspective. My son went to UT, graduated, got a job at Cisco, and moved out to San Jose. Cisco in San Jose has 40,000 employees, and they’re all in buildings that are ‘80s vintage. I was shocked when I walked into his cubicle. There are 6-foot partitions. ‘You know, we’re revamping all of these,’ he said. Let me take you to a building we’re revamping.’ We went to another building, and it was all open — people were facing each other, no partitions. They had more people per floor than they had in the other building, but they also had private spaces to be alone — private spaces that were comfortable for two, eight, or 16. Like Eric [Krueger] was saying about outdoor terraces, they had a cappuccino machine, and a ping-pong table, of course. But, with the densification of where they worked, it allowed this other variety. And, ironically, they got more people in that floor plan. MANNO: Diversity is probably the big word. I think that’s what we’re seeing right now. So a couple of things: When you talk about amenities, you have to talk about it two ways. You have to talk about the amenities that the building provides and you have to talk about the amenities within the workplace. Some of the things that you talk about, as far as meeting centers and things like that are great. I think most industries are looking for ways to provide amenities that allow [companies] to have a higher impact on their employees. Those are the amenities that we’re seeing. We’re seeing things creeping into the workplace. I’m doing my third navigation bar. We’re taking the juice bar concept, and instead of calling somebody, you go to a space where there’s a series of IT guys. There’s a nav bar set up with computer equipment, and they actually can change your software there. They can fix your cell phone. This whole idea of service is really what’s happening to
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amenities. I think we’re going to start seeing these interesting retail concepts. The things people are looking for are beyond that. The last thing is, you can’t underestimate the value of food. How do you really improve the quality of food? We’re doing a project right now where we have no serving at all. What we have are just a series of items, and every item is basically a culture or ethnically-based food. You have to recognize there is an amazing amount of diversity. It’s the first time in the last few years that we recognized the fact that we have to deal with [these] cultural and ethnic issues in the workplace, but also deal with gender issues. Those things are impacting how we think about amenities. I think mothers’ rooms were great. We’re doing more things such as prayer rooms. We’re doing more things that are gender neutral. And those are just as much an amenity as the great food or great meeting spaces we provide. LOWE: Well, thank God for the millennial. I’m probably the only one ever to say that. There’s a movement about — and it’s been about for awhile, in office, just like health care went through it several years ago. We’ve got a little under 4 million square foot of office in design, currently. And I think what the millennial has forced everyone to think about are authenticity and experience. What they really care about is how they spend their time. And they care about quality. I’ve got employees who would save up and do a tailor-made suit rather than going and getting one off the rack, just because it fits better. It’s a ‘better’ thing; it’s a quality-type thing. I agree with Don [Powell] very much. I think in the sense of community and the sense of getting together and working together, that it’s here to stay. It’s the working from home and those kinds of things that are not true. There are going to be office buildings that foster that type of relationship. It’s what’s inside, the guts of the building, and how that’s designed, that is playing out. I attribute that to hospitality. I also attribute it to pop culture. Shows like Boston Legal totally transformed the way we think about the office and those environments. Where we spend the most of our time — where the millennials, especially, spend most of their time — that goes directly to recruiting. If all things are the same, they’ll even take a little less money for a cooler environment. MANNO: I think it comes down to people recognizing that work is not a place, work is activity. Work is a verb, right? All these days that you’re going to work, it’s not a ‘place’ you’re going to. I think that mindset is completely gone. What you
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R ROUNDTABLE have to recognize is the activity and how it gets done, and then provide the right environment to do that, whether it’s building a community or social spaces. We call it activity-based design. We go in without assuming everybody needs an office, or everybody needs a workstation. We go in and say, ‘What’s the activity that you’re doing?’ We need to design around that activity. If it means you get an office, great. You’d be absolutely amazed at the solutions we give them. Things like how you deal with storage, and how you deal with acoustics, lighting, privacy, and all the good stuff that goes with it. You [may] say, I go to work each day, but it’s not a place, it’s an activity. I think once you understand that, and you get people to communicate that to you, we’re going to start seeing another evolution in how we think about the workplace. MOUNTFORD: From our perspective, our clients want to attract and retain the best people to become an employer’s choice. Clearly, they’re looking at all the things we’ve talked about. As it pertains necessarily to cost, we’re not seeing a price sensitivity. We certainly see a price acceptance, so anything that it takes to create a place that will attract this target millennial for the next 20 years — allow them to compete against the competitors of that industry for work function, not necessarily insurance company to insurance company, but insurance company to financial company, right? They’re both financial companies, both seeking that same type of employee. They’re trying to create that interesting environment where all those experiences mesh. One of the things we’re seeing is clearly a transition from a real estate executive running the show to an HR executive running the show. There is no real estate cost that can’t be overcome with an HR rationale, which I think is exciting. The other thing I’ll mention is to talk about the inside of the building: We’re seeing companies that need to be in an environment and are making the commitment to be there. That means structured parking and a fairly advanced configuration. We’re doing more coding on buildings than we’ve ever done. There are a lot of advantages to coding on buildings, but density is critical to walkability. Clearly, a trend that we’re seeing is people wanting to be close to outside amenities. Amenities are supported by the private sector — hotels, restaurants, and retail — those type of things. PEREZ: CityLine pioneered that here on a scale.
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MOUNTFORD: Absolutely. And if you go back in time, State Farm was the most progressive client we had in that regard. Something that a lot of folks don’t understand about CityLine — and may not acknowledge if they have — State Farm has 2.1 million square feet, and they have zero food service in that space. Not a single ounce of food service, because they want to drive their employees down to the plaza, out to the restaurants. They want the work to continue at other places, and they want to provide that chance meeting with someone at a restaurant. If you look at some other clients, they’re still tethered to the cafeteria concept. I think that will evolve over time. It’s a confidence that you can get the right restaurateurs to invest in your concept because you have various price points and food types, along with services and levels of variety. POWELL: I think everything you said is spot-on, Walt [Mountford]. I’m concerned about adaptive reuse of some of these big office spaces with extraordinarily big lease debts. Yes, we’ve increased the ceiling high enough to let daylight in, but these buildings, by and large, will not attract multi-tenants. You’re looking for that needle in a haystack when you need a million-square-foot tenant to replace the million-square-foot tenant that just moved out. One of the strategies we’ve seen many times is to build the building around a mixture of tenant sizes. But I’m concerned that when a building is occupied today with a credit-worthy tenant, its developer will flip that building into the marketplace, and the capital market now owns it. And 15 years from now, when it becomes a multi-tenant building out of necessity, I just don’t know how well they’re going to perform. Exit strategy has been put on the back burner in favor of employee attraction and retention. POWELL: It is cyclical, and I hope we find ourselves on the other side of this world we’re in today with buildings that don’t sit empty because they’re dinosaurs at 15 years of age. KRUEGER: We have a few of those around the DFW area. POWELL: Yes, we do. Look at J.C. Penney. J.C. Penney trying to subdivide their building is very difficult. MOUNTFORD: That’s an extreme example of what we’re talking about, because of the interconnectivity, and the time and space and variety. That was truly a
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R ROUNDTABLE build-to-suit as opposed to any vertical delineation of space, and clearly what you said is absolutely correct. HR is driving it. Attraction/ retention is the key — and residual reuse after 20 years, there is no consideration. NOBLE: When you talk about HR driving it, I’m like Scott [Lowe]. I’m a fan of millennials, and I’ve been one since we started talking about them. I hear my partners talk about the millennials and try to categorize them with a particular broad brush. What you’re saying about the millennial is what your dad said about you, and what his dad said about him. And every generation is confronted with the new generation trying to push them out. That’s good, and I love that, and I was one of those. We weren’t called millennials, but we were the same thing. So I like them, I like the energy they provide. Paul [Manno] said work is an activity; it’s not a place. And we have found that they do like to work at home, or they do like to work at a Starbucks sometimes. If you hire the right person with the right fire in their belly, they’ll get their work done. They’ll work 60 hours a week. You do have to come to work, and come to a place together and collaborate. I’m not hung up on the 40-hour week. I mean, how many hours a week do you guys work and where do you work? LOWE: About 30. PEREZ: Yeah, right. POWELL: Every two days. NOBLE: Probably around 70, but you’re at home. It’s when you’re traveling. You’re never away, and millennials are like that too. Years ago we had a group of real smart young guys that were on blogs at night. And they were solving problems with people around the world, things with Rhino and Grasshopper, and how do you make this work? A couple of them got poached from a firm in Seattle that was deep into technology. My perspective is — back to the HR issue — it’s not that you want to control people, it’s that you want to understand them and understand what they want, and then make your environment a place where they want to come.
Let’s talk a little bit about health and wellness, and how an increased focus on that is impacting both design and construction. What do you guys think?
NOBLE: We can start with construction. KRUEGER: We’ve talked a little bit about the wellness, the desks that go up and down, and the sunlight. But when we look at health and
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wellness, for us, it’s around safety. It’s around zero harm. That’s something we’ve been very fortunate to have a strong focus on. It’s been recognized by some of our clients, the level of attention that we pay to that. For example, having Monday morning meetings with the entire staff to get their heads out of the weekend, back into the workforce out on the job site, so they know what they’re doing. It’s the number one thing for us. Nothing else matters if we don’t have a good zero-harm program. The other thing that goes along with that — and it’ll blend into a couple of other questions here with millennials — is we’ve got to have a lot more plug-and-play type of stuff out in the field. The folks just don’t have the specialized crafts nature that they had in the past. We look at a lot of prefab, which helps in our quality. It also helps in our safety program and around labor, which is a whole issue. A lot of things around safety manifest in a number of different ways. MANNO: The point about HR is a much more overall way of thinking about it. For example, you should be connected with the food you serve as a part of a health and wellness program. Most organizations give their staff a discount for a healthy choice versus a non-healthy choice. I think you have to tie it into what fitness means. If you go to the wellness center a certain number of days per week, you get a reduction in your insurance, which is a great idea, but we have a responsibility to think about it, as well. I think about, where is the best place to put the stairs so they get the most use? We have a responsibility to design spaces that encourage movement, depending on how you lay out the space. If you laid out the space in a way that encourages people to move from one side to the other because they have to, you’re starting to create that basic health and wellness. We have to recognize that everybody is different. Tying it all together is a much more strategic idea, as opposed to just thinking about creating a wellness center with some great showers and thinking it’s going to make everybody healthy. There’s got to be a stronger attitude about it. MOUNTFORD: Our clients, generally, from an HR perspective, are fully bought into the whole wellness thing. There are a variety of reasons. It promotes a connection with your employees. They care about you outside of the work function, and
R ROUNDTABLE there are a lot of benefits to that. There are companies out there … that are focused on teaming with large clients and providing services — going right into the space and offering immunizations or flu shots and those kinds of things. It helps integrate that service-providing right in the space. NOBLE: At our firm, we offer meditation, yoga, Pilates, and boot camp — almost every day we have something for our employees. We had a [space] that we turned into a gym. In the past, we looked at things like a direct relationship. For example, people worked eight hours, and they had to be at their desk eight hours. They had to get the work done, but we weren’t really looking at productivity, and we weren’t really looking at quality. Now we’re looking at what can we offer people to enrich their lives, enrich their experience. I’m not saying that to sound hokey, but to say that [even] if you’re just looking at it from a business perspective, it still makes sense. People do better work, they’re more attentive, more focused, and make fewer errors. There’s a lot of research on it, and I believe it. We can affect people’s lives in a big way. It’s being mindful of materials, putting into the spec the right materials that have been tested to be environmentally better. LOWE: I agree with everything that’s been said. When I think of health and wellness, I think of removing the stress out of any situation or environment. Those are pieces that play into part of everything that’s been said: What’s the lighting like in this space? Do you get to see the sun? Do you get to see daylight? The color that’s in the room, those kinds of things. You get health care, you talk about evidence-based design, getting hospitality — certainly a lot of it is about high-end hospitality. It’s a lot about providing a place that reduces stress. When I think about it from an employee’s perspective, I try to give them the most flexibility possible to do their job. I love what Dan [Noble] said: I don’t care where you do the work, it’s more deadline/product driven than it is process driven. I don’t care how they got there, just as long as that they [do] get there. The fundamental idea is, we’re a 24/7 operation, and we have a mandatory close two days out of the year, Good Friday and Christmas. Other than that, you can do your work however and whenever you want. If that takes you 35 hours or 40 hours a week, good for you, because it’s going to be evident that you either did your work or you didn’t. If that takes you 70 hours to do it, take some breaks here and there. If you want to take the graveyard shift, go ahead, if you’re into that. A lot of people are. [It’s about creating an] office space environment that fosters communication, right? That’s where it’s at. I have to communicate what I did when I was with you and when I was away. NOBLE: Communication is still key.
We talked about some of the office design trends that came up in another question. I’m not sure if we addressed the open office versus the private office. Have you seen where that is?
POWELL: In our industry, the architectural profession, we always frowned upon people having headsets on in the studio. How can you be paying attention to what’s going on around you if you have a headset on? Today, that culture has shifted to it being an acceptable behavior because people can focus when they don’t have a lot of audio interruptions. And we’re not providing partitions between work spaces. We’re letting people focus on their work. It does require you to walk up and tap someone on the shoulder sometimes and say, ‘Hey, I’d like to visit with you for a moment.’ But, it’s no longer taboo to have earbuds in the studio. A lot of our partners — old school people, people over 50 — resented that at first. I think today we all accept the fact it’s a productivity issue, and it goes back to the stress issue, too. Generally, [when] people control their environment a little bit more, their stress reduces and they’re more productive. We’ve accepted the fact that we’re not going to give everybody visual privacy, but we can give them the option for audio separation.
KRUEGER: Maybe it’s traditional industry that takes longer to change, but we see law firms and energy companies, and they still love the individual office. Beyond that, you get into the open plan, and then you go into hoteling and a lot of flexibility with that. MANNO: I’d like to turn the question back around to you guys. I had an interesting conversation yesterday, and it was about the impact the internet has on our client. How many of you guys have gotten an image from a client or an article from a client, such as ‘Why does Google suck?’ or ‘Why do they hate their open offices?’ In the last ten years our clients now have access to all of this data that we typically have to ourselves. We’re the ones who did the research. You can Google anything right now. You can Google ‘modern open office,’ and you’ll get a hundred different ways to do an office. They’ve gotten so much more educated than they were before about the good and the bad. Unfortunately, with the open office concept right now there’s a trend about talking about the bad. They’re talking about the bad for a couple of reasons: One is, a lot of spaces were done by early adopters of the open plan. They didn’t understand that you’ve got to provide other spaces for people to go. It was all about rapid prototype. It was about getting the work done, hiring as many people as possible, and getting it done as quickly as you can. It wasn’t about longevity because they’re going back, changing it, and doing it the right way. Unfortunately, a lot of the older, early ‘dot com’ way of doing things is still sitting out there in the workplace, and it’s giving everybody a bad name. Our clients now have access to all that information. When you hear Google’s work space sucks, you think, ‘Wait, why are we doing an open plan? Google thinks it’s horrible.’ We have to do a much better job of actually getting the information out there. We used to be the guys who told them what it’s going to look like. We were the ones who set the tone and the metaphors for the projects. How many of you guys have that communication with your clients? We never had that before. NOBLE: That dynamic is maybe 30 percent pain in the butt and 70 percent good. And the reason I think it’s 70 percent good is any time you can have a conversation — dig a little deeper and do design solution with your client — it’s better. If we held all the information and just presented it, then it’s a one-way dialogue. I grew up doing a lot of health care, and a lot of times it wasn’t a
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R ROUNDTABLE one-way dialogue. We knew what we were doing. We came in and showed them what we thought; we presented it to them, and we had very little feedback. They walked in and said, ‘Oh, this isn’t what I thought we had.’ We talked about this quite a bit, but their head wasn’t really in it. When they do that prep work, when they get their head in it, it’s always better. It might take a little longer, and you might go a little bit in a circle. MANNO: The problem is everybody wants to know what everybody else is doing. If you can see what somebody’s corporate headquarters looks like, and if you’re a competitor, you know exactly what you need to do when you build your corporate headquarters. I think it comes down to the idea that everybody wants to know what everybody else is doing because we’re constantly benchmarking each other. POWELL: It’s not up to me as an architect to convince a law firm or an oil-gas company that they need to be an open concept space. They have cultural and business reasons. We’re still holding onto some of those things. Things about attracting and retaining the employees they want to have for their own reasons. We can share with them all these alternatives — putting glass and partition, allowing daylight to move through the office in different ways, it’s far superior to old dry wall partitions. The HR person in the law firms is the one telling us they want private offices. It’s not like they have a disconnect between HR and their groups and everyone else. I think we have to, as architects, always shine a light on productivity and better work environments — cleaner air, better environment. MANNO: You have to really understand [your client] because I’m doing things right now that are 100 percent open plan. If you provide the right tools, you provide the right work space, and you provide the right amenities; it can all work if you understand what happens within that energy. Not only do they not all have the same historical backgrounds, they’re not all culturally the same. You have to understand what they are doing to bring some of that out. I do think law firms will go to the open plan eventually. We’re doing interior offices for lawyers now. We’re doing two people per office. It’s not going to happen tomorrow, but eventually they’re going to realize the real estate costs and exactly what they’re doing in those 15-by-15 offices, as opposed to what you can do in an 8-by-8 work space. POWELL: There’s still a status issue in some
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corporate cultures related to those private offices, and that’s part of the HR model, as well. PEREZ: I think it may have something to do with confidentially, too. With an attorney, they’re always representing — they’ve got to protect the interest of that person. It’s interesting what you were saying about Cisco. Newsrooms have been doing [the open space plan] for decades, but the partitions are just high enough that you can’t quite see someone. NOBLE: They have no partitions at all. KRUEGER: A little bit of a different lens on all this. This is an obvious statement: The internet’s changed how we all do business because there’s so much information out there. In the construction industry, statistics have shown that our clients choose how they want to procure their construction. Over 70 percent know how they’re going to procure construction before they ever talk to their contractor. A lot of us used to get hired based on our reputation. What we have found is, we’ve got to go in there and understand as much as we can about our client and their business : How can we help them achieve their business goals? And eventually, we’ll get around to construction. If we can get aligned with their business goals and what’s important to them, then [construction] comes out of it. If I’m just trying to sell the construction, I’m just a commodity along the way. MOUNTFORD: Those are the partnerships we’re looking at having. LOWE: It’s interesting what I hear around the table. It’s an incredibly complex process to get a space built. Our job, initially, is to be good listeners and gather as much data, as fast and efficiently as possible. I’m on the opposite side of that. If a client wants to send me a thousand images, that sucks to have to go through, but I’m going to have to go through it and discern what’s important out of those images and [then] couple that with the listening and learning. MANNO: Don’t you think those thousand images gave you a thousand better points of light about your client? I would love to get a thousand images. What’s their vision for this project? What were they aspiring this to be? [Clients] have a hard time getting it into words. Any time you can get an image from a client, you’re farther ahead because they can sit all day and tell you they want crisp white
R ROUNDTABLE walls. Well, what the heck does that mean? KRUEGER: We agree on this issue. We have to learn as much as we can, and that’s just one way of gathering information. MANNO: I agree it’s not the only way, but it’s nice that the data is available. It means they’re engaged. NOBLE: That’s what I was going to say earlier. MANNO: They’re engaged in the process. They care about the end results. They took their weekend and pulled images. They will travel somewhere and see a really cool thing — a great piece of furniture they saw in the lobby. The fact that they took the time out of their day means that they’re totally engaged. NOBLE: It makes your job easier. MANNO: In the end, when you get done with it, you feel good about it because you really gave them exactly what they wanted. MOUNTFORD: Sounds like you guys should have been designing my house.
There are two more questions I want to get through. One is talking about innovation. What innovative things do you see out there within your business and your industry that has you excited about the future?
POWELL: Virtual reality. It’s affordable, it’s transportable, and I think we’re just upping the expectation of our clients. The sketch-out model can be used through a whole lens for a tremendous walk-through experience. That’s something that we’re embracing. The other is 3D modeling. We have a number of 3D modeling stations in our office. The size and scales of those models and facilities are changing dramatically. There’s a company that now produces a printer that’s the size of a British telephone booth that can produce a 6-foot-tall model with
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relatively small equipment. Those things are transforming. NOBLE: I like the idea of not being a commodity, about offering something different. We put quite a bit of effort into research. We’re working with UTA and Tex-Fab on developing prefabricated panels that can go direct from schematic design — skip design development and skip construction documents — and work [directly] with the fabricator. We’ll bring the fabricator on board early and work with them to be more efficient in the process and have a better product that’s less expensive and, we think, better for all. Then using the computer not to create funky shapes — although you can do that now — but to create predictive spaces that will perform how you thought they would. We now can do virtual reality. I’d like not just to let somebody see how the space looks, but to understand how that space will perform. For us, this idea is taking the construction industry and re-imagining it. It’s not a designer thinking of something and giving it to a contractor who tells you how you can and can’t build it. You have this confluence of disagreements
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R ROUNDTABLE and agreements through the process, and then you end up with a building. This is an idea of design-build with a collaborative spirit under one contract. We’ve talked about that for about a decade now, but with fabricators. We can be much more efficient. We can spend more time on design — not just aesthetics. I’m talking about a qualitative, predictive performance of design: How can we help our clients do their job better? How can we be an ally in their business? MANNO: It’s somewhat reverse innovation with the whole maker movement. Architects are known to have the idea of what craft is about. I’m interested in us getting back to the idea that we’re using the maker to build more than we built before. The idea that things like furniture can have more of an integrative craft, as opposed to just things that we drop into the space. We have a maker lab where a lot of people have 3D printers and [tools], but we’re on the verge of using that maker lab to build parts of a project we intend to give to our clients in a really meaningful way. I’m excited about the idea of bringing the craft back. I’m all for the renderings and all that goes along with it, but there’s something about being able to show a client a part of a project or a piece of a project that they can hold in their hand. This is where I’m hoping we go from an innovation standpoint. LOWE: Without a doubt, the most exciting thing is the visualization. I hate surprises in the design process. I want to know exactly what it’s going to look like, what it’s going to be like, to experience it. [What’s] new is how we’re integrating it into our practice. You can go up in a 40-story building, look out, and know what you’re going to see, know what it’s going to look like — that’s valuable. Visualization tools are a tremendous asset to our practice because it’s real. POWELL: And it’s cost-effective. We’re not spending a lot of extra money to deliver that service. LOWE: Shame on us as a profession. When the computer first came out, we had a lot of really monumentally-scaled buildings [because] the computer went into this 2D space. We’d start doing a section, and when we’d get on the job, it was a lot larger than we thought it would be. What it’s allowed us to do is bring the scale back to a more human scale — more of a mid-century modern movement — which is really what modernism should be about.
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Shame on the people that tried to do it in 1983 and gave modernism a really bad name. The qualities we’re looking for are the more human, the more hand-crafted. Everything in the space has been touched and looked at — crafted and designed. Those are the spaces you remember, right? Those are the spaces that you want to be in longer, and I think we’re getting to that. We’re definitely getting back to that. POWELL: I caution you, the cycle after modernism was post modernism, and we know how successful [that was]. LOWE: That’s what I’m saying. KRUEGER: I had told everyone here we had VR. We talked about prefab and pre-assembly, and all of these are great ideas. We’re doing a top-down method where we’re literally going up with a building at the same time that we’re excavating and building down, which is pretty innovative. It’s been done in Chicago and other places. It’s also a part of your next question: The challenge [is] listening. There are a lot of people talking, not a lot of people listening. One of the most innovative things we do is … understanding the behaviors. We use a tools called StrengthsFinder — understanding what each individual’s strengths are. It’s amazing. We’re usually one of the last ones brought to the party, the project already has a design architect, an architect of record, there may be an interiors architect, other consultants, and there’s an owner. We sit down, and we work to understand: What are your strengths? What are your goals? It gets us aligned so we can create an environment for a high-performing team. That’s when innovation happens. For us, one of the biggest successes we’ve had is coming in and helping to create that environment. Many times, like I said, we’re the last ones in the party, and we see the owner and the architect. We have to sit back [and listen] because they’re now rediscovering each other and getting aligned. MOUNTFORD: Those are extremely valuable sessions. KRUEGER: We did it on Liberty Mutual. PEREZ: We did it here. It was 85 percent ideation, and we figured out, ‘Oh, there’s no one to do it after the idea. People come up with the ideas.’
KRUEGER: Exactly. PEREZ: We needed some execution, people.
Can I ask you a quick question? We were over at the WeWork [coworking office space] site yesterday, and it’s not as open as you’d think. There are a ton of offices in that space, and I’d like to hear your take on that trend.
POWELL: You need both. You need a touchdown space to work; you need a collaborative space. Sometimes there’s two people, four people, however many people. For every chair that we have an employee, we have another seat in the conference room, a collaborative space or something else. So there are twice as many chairs and office space as there are people. NOBLE: It becomes a choice, if you do it in variety.
Let’s end by talking about both challenges and opportunities as we look forward to 2017.
LOWE: I think it’s going to be a great year. We don’t see it slowing down at all. I’m proud of our little city here. We’ve gone through quite a renaissance, and it’s very exciting to see. I think the recession was a very good thing, although incredibly painful to go and move through. The deals that are getting done now
are much smarter and more quality-intensive. I think it will be interesting to see what the financial markets continue to do. There’s been a bit of tightening in lending for some sectors, hospitality being one of those, residential multifamily being another. I do think [the election] is going to have an affect. We talked about parameters and those kinds of things. How is that going to be affected? That’s still a huge question mark, but I think there’s tremendous opportunity out there for everyone at the table. Dallas is a very rich market for architecture and construction. It has a wealth of savvy and wise developers at its disposal. The city is going to continue to become greater and greater, still. I’m excited to be here at this time. KRUEGER: We are blessed to be here. Whatever challenges exist are far outweighed by the opportunity and environment we have here. In some cases, we, as contractors have to reset expectations [for project completion] with our clients. We’re used to saying we can get an interior space done in eight weeks, no problem. And quite frankly, there’s been a failure in a lot of those areas. You have upset owners. It comes down to the labor shortage. It isn’t that anyone has any ill intent, they just can’t deliver. In the same regard, that provides opportunity. When you have that, you start looking towards innovation … what I just discussed about alternatives: How can we collaborate to make this happen? That forces you to look into prefab and preassembly. Any time you have that challenge, it’ll create an opportunity for us. As a company the next two years feel very strong. It’s a great opportunity for us to continue to focus on operational excellence and execute at the highest level we can. POWELL: In our business, it’s attracting and maintaining employees over the next year or two. Our HR personnel have a much stronger voice in how we manage our company. We have focused on health care benefits for our employees. I think we have one of the most — if not the most — generous health care plans in the city. Our employees have a maximum exposure of $1,500 per family. We’ve helped them overcome the challenges we face in the rising cost of health care, and that’s becoming an even more important factor as people look at employment opportunities. Another thing we’re doing is providing killer technology and support. We want
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R ROUNDTABLE people to be able to work from anywhere — that means portability with their desktop, laptop — any time. Lastly, we [explored] how to make our summers better. We started having four-day holidays for Memorial Day, Fourth of July, and Labor Day. Those days off don’t count against [employees’] vacation days. But having three four-day weekends: All of our developer clients are gone on those days so we said, ‘Let’s do this.’ And we’ve done it for the past 10 or 12 years. NOBLE: I agree with that. It’s playing off of the idea of unlimited vacation, unlimited time off. You can take as much time off as you want, but you’ve got to get your work done. Places that are doing this are finding people don’t take more time off. One issue I’m concerned about is talent. We’ve hired about 250 people this year. I think it’s the best talent we’ve ever had at entry level and strategic positions. It takes a while to get the team and momentum going. I believe we have all of that now. But the things that keep me up at night are things we can’t control [such as] the economy. That’s our fuel, that’s our engine. If the economy drops, all bets are off. I’m excited about the ideas and things we have in the works, and I’d hate to see them abandoned. The geopolitical situation, what if there’s crazy terrorist activity in Western Europe, and what ramification will that have on the EU and the economy? What if a little bit of this isolationism goes even farther? Twenty percent of our work is outside of the United States, and that concerns me. I’ll take two percent [growth] a year, every year for the next decade, and have something that we could bank on; we could build around. It might drop a point next year, or it might not, you just don’t know. That’s my biggest worry, the things you can’t control. KRUEGER: That’s interesting, it’s just the opposite for me: Am I doing the right things for the employees? Am I doing everything I can? Things that are out of my control, I give that up to God. I sleep like a baby. NOBLE: I’m confident we’re doing the right things for our employees. I can control that, so we’re good there. MOUNTFORD: You really can’t control the economy, per se. You’re hoping it’s going to turn out great, and clearly, we have the framework here in North Texas to continue our success. We’ve laid the groundwork, and I think we’re creating the right environments in a lot of different locations. There are a lot of great opportunities. I’m most concerned about banking, about the lending. ... There are things putting pressure on
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reduced loan value, and I think it will ultimately affect us in a negative way. I also believe with this framework for success which includes low taxes and cost of living, that we’re going to be somewhat insulated. We’re not going to go as deep if the economy turns. In that regard, I’m hopeful that the lending will still be available when the good projects come along. Another thing I’m concerned about, and I think the construction industry has dealt with fairly well, is that we’ve done projects as a four-legged stool. We have quality, schedule, budget, and safety. Safety is a real issue because there’s a shortage of workers. You have guys coming to the job site, [people] who’ve never been on a job site, yet alone performed a function. It’s a critical thing for the construction and development community to maintain great safety practices because we don’t want to lose anybody. KRUEGER: That’s a great point. We deal with people who are stepping on a complex job site for the first time. You have to make sure you’re separating man from machine; you have to put all of those [safety points] in place. MANNO: The global perspective that’s happening right now hasn’t concerned me, yet. We do have a large percentage of our work overseas. It’ll definitely have an impact on our business … I’m doing a project in Beijing, and I go there once a month for a week. Every time I go there I’m amazed how much they know about what’s happening in the United States. Again, crazy internet thing, right? Whether you believe it or not, their perspective is very much framed by some of the things that they hear. Whether it’s true or not, it does have an impact. I worry that a lot of the great talent is still not in this part of the country. The great talent, as far as finding great people, pretty much happens on the East and West Coasts. That’s where people want to work — in Los Angeles and New York. We’ve always had a bit of a challenge in driving people to this part of the country to get great talent, whether it’s architectural talent or corporations moving here. What I’m excited about? There’s this interesting evolution happening with projects. I was fortunate to work on The Star in Frisco. Those projects where you put a hotel, a training facility, an office building, retail, parking, and a football
R ROUNDTABLE plaza — when you put all that together into one big development, to me, it’s cool. Once you start finding great ways to reinvent what mixed-use means, reinvent what the hotel experience is, reinvent the idea of what an office building is … That model, and the vision that I have for that project, which is a lot of people’s visions, is really interesting in the sense of the dynamic that was created. I’m excited about doing more projects like that. I really like the idea that it’s not just about a corporate campus over here. It’s a corporate campus that’s connected to a university, and they all work together. There will be more of these interesting dynamic master plans or building configurations that are not just the ‘normal’ way of doing things. The whole idea of hackable buildings — how we take these older buildings and do something different with them: Those are the things that get me excited … coming up with ideas for creating these new environments and new experiences for people.
So what do you tell people about why they should come to Dallas instead of the coast, and why are you here?
NOBLE: This is an easy place to live. It’s exciting, and it’s got a lot of opportunity. It’s the fourth largest metropolitan area in the United States — 7 million people living between here, Fort Worth, and north and south. Every great concert comes here, every professional football team, and we have great arts. I live in Lakewood, and I can get to a Mavericks basketball game and home in 15 minutes. If you lived in Chicago, it would take you an hour. When people ask, why, since I didn’t grow up here, am I in Dallas? I’m four hours away from anywhere in the United States with the airport, and it’s a very easy, comfortable, enriched place to live. MANNO: I think number one — and we always talk about it — is the cost of living. You can’t compare. Talk to somebody who rents a $6,000 apartment in San Francisco. NOBLE: And the pay structures are different. We pay an entry level architect about the same in San Francisco, maybe $5,000 more, but not nearly enough to cover [the cost of living]. KRUEGER: All of those things, everything they said: The thing I’ve been the most pleased with is how they’ve redone Love Field, and how you can get around. Linda [McMahon] is in the room, and I was blessed to be a part of the Deck Park and what that has done for downtown — The Real Estate Council’s leadership and how we’re now redeveloping downtown. It was a ghost town 20 years ago. What’s happening now is exciting. Millennials are picking up on that, and it gives me a lot of hope for the future in Dallas. LOWE: I think those are some of the reasons I came to Dallas in ’97 — I had a few choices. I was going to go to Barcelona; I was going to go to Philadelphia, or Denver, or Dallas. LOWE: Full disclosure, I’m a Texan. I grew up in the Texas panhandle, so I love Texas. I came here for the quality of life: I could rent a house here. I came right out of college. I could live a good life, I could have a car, and I could make $27,000 a year in ’97 and actually have a life. It was good, but I’m here for a different reason now. As a business owner, I love the attitude of this state, and I love the attitude of this town. It’s can-do — anything’s possible. KRUEGER: And, it’s generous. LOWE: Exactly. And it’s an attitude that’s hard to find. I love New York, I love LA. I love lots of places in the world. I’ve been a lot of different places, and I love them, but I would not trade any of them for my home. I think we’re blessed to be where we are. POWELL: I grew up outside of Indianapolis, and when I was a thesis student I looked at the Sunbelt. I felt like the growth of the United States was going to happen in the south. A lot of my family, cousins and aunts and uncles, were moving
FOR US AS A COMPANY, AS I SAID, THE NEXT TWO YEARS FEEL VERY STRONG, SO IT’S A GREAT OPPORTUNITY FOR US TO REALLY CONTINUE TO FOCUS ON OPERATIONAL EXCELLENCE, REALLY EXECUTE AT THE HIGHEST LEVEL THAT WE CAN. —ERIC KRUEGER
to the Sunbelt and I thought, ‘Wow, there may be something going on here.’ So I looked at Atlanta, Dallas, Houston, San Antonio, and Phoenix, Tucson. Dallas in 1976 was the emerging market. In 1976, there wasn’t much design in Dallas. But the point is, Dallas has been great for business. And when I got here as a 24-year-old college graduate, people gave me opportunities. By the time I was 30, I had designed 10 million square feet of office space. If I had stayed in Indiana, that would have been a half a million square feet. NOBLE: If you had gone to New York, you might not have had that opportunity. POWELL: For me … the quality of life, the winwin attitude, and the expectation that if you worked hard and you were smart, you could succeed here. [That] still exists 40 years later. NOBLE: It’s a level playing field. MANNO: I’m not going to diss on Dallas in any way. When we interview new grads — we interviewed globally — and ask them what office they want to go to. You have to do exactly what you guys have done at this table: You have to go through plenty of reasons to come here. That’s the challenge we have. NOBLE: People who haven’t experienced what we have — it’s hard to sell it. [DallasFort Worth] is a very welcoming place. Toyota couldn’t have been happier. They’re extremely pleased. And we should be grateful that we’ve got a community that is so embracing. To me, it’s about opportunities and employment. n
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Go North The growth of Collin County is spurring investment in the regionâ€™s health-care infrastructure. BY MAT T GOODMAN
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F FEATURE In 2007, when the recent corporate relocations were still distant drumbeats, Children’s Health decided to expand to Plano. Its hospital is on 155 acres, the land separated by a sliver of White Rock Creek that extends north into Collin County like a tree branch. It built first to the west of the creek. It would take 10 years for Children’s Health to develop something on the east side of that water. But in 2017, the region’s leading pediatric health system will open a sports medicine outpost with a concept driven by an orthopedic surgeon who is perhaps the nation’s most famous, Dr. James Andrews. And it will be for children solely. This region has changed. Current headlines read like a success-themed MadLibs: Fill in the blanks with a company from another state, another couple thousand jobs, and another real estate development and you’ve got the hang of what has reshaped Collin County. Since 2010, it’s added just over 131,000 people, about a 16 percent jump. It’s the 11th-fastest growing county in Texas, but it is probably important to consider that it added more people than the entire populations of three counties in the top 10. It will almost certainly crest 1 million people in 2017, propelled by the arrivals of companies such as Toyota North America, Liberty Mutual, and FedEx. With that sort of growth (the county has just about doubled since 2000), the eyes of its residents and of elected officials begin turning toward infrastructure. Specifically, for the purposes of this piece: will there be enough hospitals to
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THE HEART HOSPITAL BAYLOR PLANO
PHOTO: THE HEART HOSPITAL BAYLOR PLANO
meet the need? “They’re chasing the population,” says John Huff, the managing director of health care at brokerage firm Stream Realty. “It used to be, we’d load up our car and drive to where the hospital was, whether it’s 15 minutes away or five minutes away. … But all the urban sprawl went up north, and what went up there were your patients who had good paying insurance and good jobs and had young families.” With that sort of growth (the county has just about doubled since 2000), the eyes of its residents and its elected officials begin turning toward infrastructure. Specifically, for the purposes of this piece: will there be enough hospitals to meet the need? Children’s and other provider systems saw opportunities throughout the region as it began popping belt loops. The population was clearly migrating here from Dallas and beyond, and these folks were largely upper middle class and privately insured. The median household income was more than $84,000 in 2015, its per capita income $38,883. Compare that to the state’s median of roughly $53,000 and $27,000, respectively. Those are attractive data points for health systems. For those that have been present in the region for decades—like HCA-owned Medical City Plano, formerly the Medical Center of Plano—it meant years of expansions and new
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“All the urban sprawl went up north, and what went up there were your patients who had good paying insurance and good jobs and had young families.” — JOHN HUFF, MANAGING DIRECTOR OF HE ALTHCARE,STRE AM RE ALT Y.
service lines. Medical City Plano is on a path to become the county’s only Level I trauma center, the closest other one being in downtown Dallas. Collin has also attracted newcomers, like what was then known as the Baylor Health Care System in 2004 and Children’s in 2007. And now that the general acute care services are built out, the systems are building state-of-the-art specialty hospitals. “In 1983, the Galleria at the Dallas North Tollway was the top, and beyond that it was cow pastures and grass,” says Dr. David Brown, the president and founder of The Heart Hospital Baylor Plano. This was in 2003, and you can probably guess the strategy Brown used in determining the cardiac surgeons and cardiologists he would target to invest in his idea. “They were in the geographic location of what I decided was the future nexus of the universe of Dallas, Texas: The intersection of the Dallas North Tollway and the newly developing George Bush (Turnpike.) The world is going to evolve north.”
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F FEATURE CHILDREN’S HEALTH SPECILATY CENTER II
The Heart Hospital Baylor Plano opened in 2007 and has grown into one of the nation’s best centers for cardiac care. It was among less than 1 percent of American centers last year to score a full three stars on all three of The Society of Thoracic Surgeons’ quality categories, and is undergoing a 150,000 square-foot, $100 million expansion. Sports medicine appears to be the next opportunity. In addition to the Children’s Health Andrews Institute for Orthopedic Sports Medicine, there’s the Baylor Scott & White Sports Therapy & Research center at The Star in Frisco, the Dallas Cowboys’ new headquarters. And Scottish Rite Hospital for Children bought 40 acres in Frisco for a full-service hospital and leased another 15,000 square feet in Plano for sports medicine and general pediatric orthopedics. “With the type of jobs that have been created in that corridor, you’re seeing a lot more younger families and a lot more opportunities to participate in multiple sports at multiple levels,” says Chad Gilliand, the senior director of the Children’s Health Andrews Institute. He says Dr. Andrews got the idea to target children because “he was seeing so
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many injuries in young athletes that, historically, had been injuries seen in pro players.” The Institute will be housed on two of four floors at the Children’s Health Specialty Center II, which will also include physician offices, an imaging suite, outpatient rehab services, an ambulatory surgery center, and research and education space. But the walls of the building aren’t keeping their services in. On the day I catch up with Gilliand, he’s speaking from Waco, where he’s been advising the Texas Association of Private and Parochial Schools, or TAPPS, on training and education to aid in recovery and prevent injuries. Baylor Scott & White has partnered with Frisco Independent School District to have their high schools play at The Star, the headquarters and training facility of the Dallas Cowboys. The city chipped $261 million into the project, and it’s said to be the first between a hospital system and a professional football team. They hope the team effort can fuel research initiatives to combat the development of the neurological disorder CTE, which has been linked to blows to the head. “The problem with the concussion issue right now is that it’s based more on emotion than facts,” said Mickey Morgan, a surgeon and chairman of Baylor Medical Center at Frisco. “This facility will provide us the opportunity to study more athletes and we’re hoping that the new diagnosis protocols we develop will spread out from here to the rest of the world.” And that may be the byproduct that emerges from the growth and the success of Dallas’ northern suburbs. As demand increases, hospital systems are willing to double down on specialties and non-acute services as a community need, as a public good. In the groundbreaking ceremony for the sports medicine center at The Star, Frisco Mayor Maher Maso, perhaps the city’s biggest cheerleader, proclaimed the standard politico pontification that accompanies so many of these ceremonies: “The best is yet to come.” The evidence hints that he might be right.
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A ANATOMY OF A DEAL
THE STAGE IS SET
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A ANATOMY OF A DEAL
THE CITY OF IRVING AND THE MUSIC FACTORY DEVELOPER ARE IN HARMONY AGAIN BY KERRY CURRY
A brisk wind kicks up dust at the massive plot of land near the Irving Convention Center in Las Colinas where four cranes tower above a stark cement building boldly rising 70 feet into the air. Despite the grit and grind of construction, there’s a “cool” factor already present. The building, to be called the Pavilion, will house the cornerstone concert venue at The Music Factory — a 17-acre entertainment district that has been a decade in the making. The development is scheduled to open in summer 2017. With the Pavilion as the centerpiece, The Music Factory will radiate outward with some 25 restaurants and bars, an eight-screen Alamo Drafthouse Cinema for moviegoers, an office building, a parking garage and walkways connecting it all to a Westin Hotel and the Irving Convention Center. “Irving is a city built for business,” says Beth Bowman, president and CEO of the Greater IrvingLas Colinas Chamber of Commerce. “But we’ve had leakage in that lifestyle-visit-play piece.” The Music Factory, city and chamber officials believe, will position the city to offer Irving residents, visitors, employers and employees outstanding choices for shopping, dining, and entertainment. The best-in-class project could help woo businesses that are thinking about relocating or expanding in Irving while enticing those already in the city to stay, Bowman says. “When the Music Factory comes online, what we get to say to the businesses that we have lost
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A ANATOMY OF A DEAL because we didn’t have entertainment options is — now we do,” Bowman says. Maura Gast, executive director of the Irving Convention & Visitors Bureau, says The Music Factory will also help put heads in beds. The CVB should be able to attract a wider variety of conventions, including those that may have declined to book the center previously because of the lack of entertainment options.
NEW JOBS AND ECONOMIC VITALITY
Scott Connell, the city’s economic development director, says The Music Factory will bring 1,500 direct jobs to Irving and about $14 million in local sales tax revenue for the city over a 10-year period. Because the entertainment district is in the city’s urban core, it won’t just benefit local residents but should create a live-work-play environment for the city’s Las Colinas employment center where about 90,000 people come each day to work. “We have a great office environment but we are underserved in restaurants, and we are underserved in after-hours opportunities. Our employers are telling us that that they want to be able to attract the best and brightest employees, and they are looking for these types of amenities,” Connell says. “It’s important that we create this holistic environment.”
BRINGING IT ALL TOGETHER
A deal this big doesn’t come together overnight. This project took years, starting in 2007 when Irving residents voted to spend city funds to build a convention center and to help fund an adjacent entertainment district. The project stalled in 2012 when the city broke ties with the first developer, Billy Bob
Barnett and Las Colinas Group. A lawsuit filed by Las Colinas Group that alleged breach of contract risked torpedoing the project altogether. That’s about the time that North Carolina-based ARK Group stepped in. The ARK Group was tracking the project and saw a potential opportunity, says ARK Group President Noah Lazes, who visited Las Colinas after the project stalled. “To us, the most interesting thing about the market is that you have 29 million square feet of office space and 12,500 hotel rooms,” he says.
THE MUSIC FACTORY HAS BEEN IN THE MAKING FOR A DECADE. HERE’S A LOOK AT WHY IT’S TAKEN SO LONG TO WRITE THIS SONG: 3 2007: City of Irving residents vote to help fund an entertainment venue and convention center to replace revenue from the Dallas Cowboys’ planned move to Arlington.
3 JULY 2008: Irving partners with Las Colinas Group, and its affiliate, Billy Bob Barnett of Billy Bob’s honky-tonk, to jointly develop a $252 million-dollar entertainment venue.
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3 2010: The city hires an accounting firm to audit payments to Las Colinas Group. 3 AUGUST 2012: City of Irving pulls out of the deal.
3 AUGUST 2012: Las Colinas Group sues the city in $139 million breach of contract lawsuit.
3 JULY 2013: City hires new developer, ARK Group, for a smaller project at the site. ARK promises to pay the former developer to drop its lawsuit.
3 AUGUST 2013: A judge dismisses the lawsuit after a settlement is reached for ARK Group to buy out Las Colinas Group’s interest.
A ANATOMY OF A DEAL
All of that office space translated into a huge demand for restaurants, retail and entertainment that wasn’t being met, he says. “We are not typically retail developers, we are entertainment developers,” he says. As such, ARK was already confident that an entertainment district with 20 or so restaurants, a movie theater, and a concert venue would be successful in any city on the weekends. “The problem is what do you do on Monday through Thursday? How are you
3 AUGUST 2014: Alamo Drafthouse announces it will open a venue at The Music Factory.
3 DECEMBER 2014: Live Nation announces it will be the exclusive operator of the concert venue.
3 AUGUST 30, 2014: Groundbreaking occurs.
3 MAY 2015: Construction stops as ARK Group seeks contract adjustments to address earthquake risks.
3 SEPTEMBER 2015: City Council votes against the project 5-4 after ARK and the city fail to agree on contract amendments.
3 SEPTEMBER 2015: The contract gets tweaked and unanimously approved.
going to make money? That’s always the problem in an entertainment deal.” But in Irving, that won’t be an issue, he says. “You have a massive weekday population that is coming in from all over the world and filling hotel rooms and visiting that 29 million square feet of office,” Lazes says. “It’s a beautiful base and makes a truly well-rounded seven-day-a-week venture. That is what excited us about the market.” Indeed, restaurant space at The Music Factory leased quickly. The food and beverage portion of the project, with nearly 25 spaces for lease, is nearly 100 percent leased, he says. The Ethos Group, meanwhile, will take the entire 100,000 square feet of office space. Like the developer before them, ARK also had some issues getting the project moving. It stalled after the developer’s lender raised concerns about earthquakes in Irving. When ARK asked for changes in the city’s agreement to appease the lender, the city balked and relationships soured. ARK Group stopped construction temporarily and brought in a new lender and both sides eventually resolved their issues. Goodwill returned, and the project has moved forward.
BRINGING THE PROJECT TO LIFE
Gensler, the design architect and architect of record, said the firm worked closely with the city of Irving and the Las Colinas Association to come up with a design that fit in well with the surroundings. “Las Colinas is a corporate, sophisticated, mild-mannered environment,” Gensler Principal Barry Hand says. “To go in with a message-heavy entertainment district is quite a turn from the original
3 MARCH 2016: The Ethos Group leases the entire office portion of the project, 100,000 square feet. 3 SEPTEMBER 2016: ARK Group seeks private financing.
3 FEBRUARY 2016: Second groundbreaking occurs. 3 SUMMER 2017: Expected completion of $173 million entertainment venue.
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A ANATOMY OF A DEAL
conception for Las Colinas,” Hand says. “The design (of The Music Factory) is very graphic. In an entertainment district, there are marquee signs, video boards — to have the ability to do that required us to work with the city and the Las Colinas Association.” Both the city and the association, which oversees signage and other standards in Las Colinas, worked closely with Gensler to come up with agreeable design standards, says Ross Conway, Gensler design director for The Music Factory. “I want to compliment them because they were very open minded and willing to work with us on what will be a catalyst on the northern end of Las Colinas,” Conway says. The entertainment district’s design is far different from the corporate office buildings of Las
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Colinas. Its buildings are component driven and support advertising and brand statements from the tenants, he says. They also have visual texture and patterns making them stand out from the more button-downed corporate persona found in Las Colinas. The landscape design works in a musical theme, but also fits in with the character of Las Colinas, says Bill Millsap, partner with landscape architect Studio Outside. The outer road, for example, uses geometric designs with lots of repetition of trees and paving patterns to fit in with the business district, and the landscaping also forms an aesthetic link between the convention center, the Westin hotel and The Music Factory. Interior landscaping will use paving patterns that resemble sounds waves using different textures and materials, he says. Studio Outside Landscape Architects incorporated lyrics from famous songs of many different genres — sandblasting them into the paving patterns. “You can actually walk and remember songs,” he says. “You can read these words and they recall the history of music.”
A Master-Planned Masterpiece! For over 30 years, Las Colinas has stood as the premier business address in North Texas. From mixed-use lease spaces to corporate development opportunities designed to accommodate your entire company, you can become a part of this unparalleled business address.
(214) 217-8484 irvingchamber.com
A ANATOMY OF A DEAL
ALL TOGETHER NOW
MORE THAN 50 COMPANIES AND CONSULTANTS AT WORK ON THE MUSIC FACTORY BY KERRY CURRY
A project the size of The Music Factory takes an army of workers and contractors to pull everything together. To date, more than 900 people have worked on site, with about 200 workers reporting to the construction site daily. Besides the sheer number of workers, more than 50 companies, including contractors, subcontractors, and consultants have obtained work on the project. Master developer ARK Group, a Cornelius, North Carolina-based developer, focuses on mixed-use developments that often include an element of public entertainment. Its other projects include a similar entertainment complex in Charlotte and other entertainment complexes in Florida and Indiana. Construction manager Skanska, an international company with a significant U.S. presence in Texas and Dallas-Fort Worth, was awarded a $94 million construction contract for the project. The project’s architect of record is Gensler, a global architecture, design, and planning firm with 46 locations and more than 5,000 professionals worldwide. Gensler is also handling branding, signage, and wayfinding for the project. The architectural firm has put its imprint on the DFW area with a variety of major projects, from Legacy West in Plano to a renovation of Dallas’s iconic Reunion Tower Observation Deck and café. Barry Hand, Gensler principal and studio director at the company’s Dallas office, says it has a consultant team on the project spanning structural, mechanical, plumbing, electrical, A/V, landscape, acoustics, lighting, civil, and traffic specialties, among others. Skanska, meanwhile, has hired 47 subcontractors for the project, ranging from
a temporary fencing provider to flooring and electrical contractors. The ARK Group is using in-house real estate brokers for the retail/restaurant portion of the project, which is over 90 percent leased. Andy Leatherman and Brad Selner of Jones Lang LaSalle Inc. handled the office leasing and signed the Ethos Group to take the full 100,000 square feet available.
GENSLER CONSULTANTS/ CONTRACTORS: STRUCTURAL ENGINEER: TSA MEP ENGINEER: Purdy McGuire CIVIL ENGINEER: JQ LANDSCAPE ARCHITECT: Studio Outside LIGHTING DESIGN: Scott Older Lighting Design ACOUSTICS: WJHW LOW VOLTAGE: Saunders & Associates RENDERING: GENSLER
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A ANATOMY OF A DEAL
LAY OF THE LAND FIRST LEVEL
Live Nation Pavillion > 8,000 Seat capacity > 103,620 SF RETAIL/RESTAURANT:
120 Bar Sociale 6,061 SF
110 3rd Coast Oyster Bar 5,654 SF
100 HWY 61 South 4,368 SF
110 ent m age Man 30 SF 2,3
130 Radio Studio 1,500 SF
Jam House 5,473 SF
Boi Na Braza Churrascaria Grimaldi’s Freshii Bar Sociale 3rd Coast Oyster Bar Jam House Yard House Gloria’s Kabuki Big Beat Dallas TCBY Thirsty Lion Uncle Gino’s Italian Cafe Granada Market Bar Louie
120 Big Beat Dallas 6,000 SF
OFFICE TOWER 100,000 SF
110 TCBY 1,500 SF
316 100 13,579 SF
Pavilion at Se 8,000 y Capacit SF 20 103,6
100 B Quick Serve Food Court 18,789 SF
100 Entertainment 1 4,975 SF
120 LN VIP Lounge 130 7,579 SF
110 B LOI 3,440 SF
110 A Freshii 1,700 SF
120 10,495 SF
100 A Granada Market 2,500 SF
130 6,000 SF
100 3,750 SF
110 6,000 SF
350 100 Thirsty Lion 7,714 SF
Unc 110 le G Ital ino ia ’s 3,0 n Cafe 00 SF
100 74 S
Ethos Office Tower
LAS COLINAS BL VD
CECIL’S INTERNATIONAL POLO LOUNGE
220 Phoenix Martini Lounge 5,198 SF
210 Cecil’s Dining Room 5,053 SF
200 Cecil’s Lounge 4,434SF
Alamo Drafthouse Phoenix Martini Lounge Cecil’s Lounge
240 Fitness 2,500 SF
230 Radio/TV Station 8,000 SF
220 Entertainment 4 5,362 SF
Parking Garage OFFICE TOWER 100,000 SF
Pavilion at Se 8,000 y Capacit SF 20 103,6
200 Bowling/Entertainment/Restaurant 20,684 SF
200 27,000 SF
LAS COLINAS BL VD
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A ANATOMY OF A DEAL
RENDERING: BOKA POWELL
BRIDGING THE GAP WESTIN HOTEL TO UNIFY CONVENTION CENTER AND MUSIC FACTORY BY KERRY CURRY
Technically, a planned convention center hotel isn’t an element of The Music Factory, but its future location —between The Music Factory entertainment district and the Irving Convention Center — should add harmony to the site. The $100 million Westin-branded hotel, expected to have about 350 rooms, will add cohesiveness to the area, binding the Irving Convention Center and its visitors to the entertainment and restaurant options at The Music Factory. Irving has learned from other cities, such as Dallas and Fort Worth, that a convention center hotel is critical to compete with similar-sized venues in the convention center space, says Maura Gast, executive director of the Irving Convention & Visitors Bureau. “The other piece that we have been missing from the Irving landscape was entertainment,” she says. “When we were competing with other destinations and it came down to what the group would do during its off time, we’d often lose out,” she says. The convention center, The Music Factory and the convention center hotel will form a three-legged platform that the city expects will ramp up convention and visitor activity in Irving, she says. Irving’s convention business is dominated by corporate meetings, but the addition of the Westin and The Music Factory should help the city diversify its convention and meeting business with association meetings. “Because Irving has been so dominant in corporate events, we are very vulnerable when the corporate cycle goes soft,” Gast says. Travel, training and meetings often are the first budget items cut in a corporate downturn. “Now we’ll have something that will support demand even in a soft corporate cycle,” Gast says. Irving says its sweet spot is groups in the range of 800 to 1,200 people, but now it will be able to consider larger groups.
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The Westin will have a 10,000-square-foot ballroom, which will fit 600-700 people for a banquet plus 6,000 square feet of meeting space. venues. The CVB will also be able to tap the concert venue, called The Pavilion, at The Music Factory during the day when it’s not in use, Gast says. The venue seats 4,000 inside and a total of 8,000 if outdoor amphitheater space is also used. “We could easily put a keynote speaker for a convention on the stage (at the Pavilion) and then bring people back to the convention center for your breakouts and meal functions,” Gast says. “The hotel becomes an extension of the convention center with another 16,000 square feet of meeting space, and the The Music Factory solves the ‘what is there to do?’ question,” she says. Another benefit that isn’t as obvious is that The Music Factory should benefit all Irving hotels that book meeting business. “They lose business to competing cities because of limited things to do. Now they have an arrow in their quiver, and it will be just as easy for hotels on the north side of the DFW Airport to shuttle people to The Music Factory as it will be to shuttle them into Grapevine,” Gast says. Construction of the hotel is scheduled to begin in March with an opening expected near the end of 2018.
KEY PLAYERS - WESTIN HOTEL DEVELOPER: Garfield Public/Private GENERAL CONTRACTOR: Austin Commercial ARCHITECT: BOKA Powell OPERATOR: Starwood/Marriott BRAND: Westin ROOMS: 350 or more MEETING SPACE: 16,000 square feet PARKING: 600-space garage
BUSINESS WORKS BETTER HERE Explore for facts supporting why Dallas Fort Worthâ€™s business climate is more than favorable, the workforce is highly skilled, and highly educated, and the location is about as close to perfect as it comes. Each page contains a snapshot of the DFW region, our people, companies, and industries. Use this fact-rich tool to promote the region, attract businesses to your community, and expand existing ones.
THE DALLAS-FORT WORTH REGIONAL ECONOMIC DEVELOPMENT GUIDE. AVAILABLE AT DALLASCHAMBER.ORG/DFWFACTS/ WINTER 2016
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SPECIAL ADVERTISING SECTION
ECONOMIC DEVELOPMENT DIRECTORY Looking for a new place for your company to call home? Consider this the start to your search. Dallas-Fort Worth is a great place to do business, and its vibrant and thriving communities offer myriad resources to help companies grow. With its high quality of life, strong state and regional economies, low cost of living, skilled labor force, and lack of corporate and personal income taxes, companies in DFW are well positioned to flourish in a market that ranks among the top three U.S. metropolitan areas for business expansions, relocations, and employment growth. The hardest part of your relocation search might just be choosing between DFW’s various communities, as they each provide unique qualities and impressive benefits. This guide to area economic development agencies at some of the best and most rapidly growing cities can help you get started.
Allen is a vibrant community of creative and talented people driven by achievement. Allen’s success is no accident—it is a testament to the community spirit of amazing people who want a better place for their families. A probusiness environment and a superior quality of life come together to empower Allen’s residents and businesses to achieve higher levels of success. Be Part of Something Bigger– Allen’s community spirit, highperforming schools, family friendly recreation, and vibrant economy continue to attract business and residents to our city. We can rattle off the standard stats and accolades, but we do things differently. And that is what makes us great–we are a vibrant and active community that connects our businesses, workers, and residents together to open the door for new opportunities. ALLEN ECONOMIC DEVELOPMENT CORPORATION 700 Central Expy S No. 210, Allen, Texas 75013
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Perfectly situated in the heart of North Texas and only 8 miles from Dallas/ Fort Worth International Airport, Arlington enjoys unparalleled access to the Metroplex. Its convenient location, combined with a strong economy, businessfriendly environment, and a skilled, diverse workforce continues to attract high-profile investments to the city. Arlington has an extensive track record of recruiting globally recognized corporations and developing largescale projects. Arlington is home to the only General Motors assembly plant that builds GM’s award-winning, full-size SUVs. It is also home to the University of Texas at Arlington, Texas Rangers’ Globe Life Park, Six Flags Over Texas, and the Dallas Cowboys’ $1.2 billion AT&T Stadium. Arlington is increasingly becoming known as a hub for engineering, advanced manufacturing, technology and medical sciences. This emerging innovation center is fueled in part by Arlington’s skilled, educated workforce.
Opportunities grow naturally in Cedar Hill, with its vibrant businesses, natural beauty, and a familyfriendly quality of life. With a location just 20 minutes from downtown Dallas, 30 minutes from Dallas Fort Worth International Airport, and 40 minutes from downtown Fort Worth, Cedar Hill offers outstanding amenities for business growth and relocation. ALLISON J.H. THOMPSON, Director CEDAR HILL ECONOMIC DEVELOPMENT 285 Uptown Blvd., Bldg. 100 Cedar Hill, TX 75104 972.291.5132 ext. 3 allisonthompson@ cedarhilltx.com cedarhilledc.com
In the heart of Collin County, Fairview is a welcoming community for thriving businesses and families. Considered by many as a ‘treasured gem’, the Town of Fairview is a unique North Texas community. Fairview is open for business and is poised for growth offering a unique development opportunity along the US-75/121 intersection. With more than 800 acres, the Commercial Planned Development District (CPDD) offers unique zoning that allows for commercial, retail, single-family and multi-family uses. Fairview is a great location for retail of all types. With a retail trade area comprised of both strong demographics and psychographics to match the town’s pro-business attitude, retailers and developers will find Fairview is right for them. RAY DUNLAP, Economic Development Manager 972-886-4222 rdunlap@ fairviewtexas.org 372 Town Place Fairview, TX 75069
BRUCE PAYNE, Economic Development Manager CITY OF ARLINGTON ECONOMIC DEVELOPMENT 101 West Abram St. PO Box 90231 MS 01-0300, Arlington, Texas 76004 bruce.payne@ arlingtontx.gov arlingtontx.gov
SPECIAL ADVERTISING SECTION
ECONOMIC DEVELOPMENT DIRECTORY Frisco is DFW’s boomtown. It’s hard to believe the area was a stretch of farmland a decade ago; now, it’s exploding with urban growth, and its population and skyline continue to reach new heights. The city is located across Collin and Denton counties, and boasts an easy 25-mile commute to downtown Dallas. Frisco’s residents have pride, and they’ve created a close-knit community atmosphere. They gather for Christmas parades on Main Street, and catch games at Dr Pepper Ballpark. Locals love Stonebriar Centre and Frisco Square, both filled with upscale stores, tiny restaurants, and street musicians. Kids adore Frisco’s abundance of playgrounds, such as the special-needs-friendly Hope Park, and with some of the best schools in North Texas, Frisco is a family’s dream. Luxe mixed-use communities, a pedestrian-friendly atmosphere, and the laid-back bar scene draw young professionals, too. Frisco has unbounded potential, and today is just the beginning. JAMES L. GANDY, CECD, CCIM, President FRISCO ECONOMIC DEVELOPMENT CORPORATION 6801 Gaylord Parkway, Suite 400 Frisco, Texas 75034 972-292-5150 / JGandy@ FriscoEDC.com www.friscoedc.com
The McKinney Economic Development Corporation (MEDC) was created in 1993 to support the development, expansion, and relocation of new and existing companies. The MEDC is an organization with a mission to work to create an environment in which communityoriented businesses can thrive. DARRELL AUTERSON, President and CEO MCKINNEY ECONOMIC DEVELOPMENT CORPORATION / CITY OF MCKINNEY 5900 S. Lake Forest Dr., Ste. 110 McKinney, Texas 75070 firstname.lastname@example.org 972.547.7651 mckinneyedc.com
Centrally located between DFW Airport and Downtown Fort Worth in affluent Northeast Tarrant County, North Richland Hills (NRH) is the third largest City in Tarrant County behind Fort Worth and Arlington. Rapidly growing, NRH added over 500 new single family homes valued over $350,000 in the past 3 years within the highly rated Birdville and Keller ISDs. Growth is expected around two transit oriented developments (TODs) along the Fort Worth Transportation Authority’s new commuter rail system TEXRail. Scheduled for 2018, TEXRail will run along the famous Cotton Belt line connecting Downtown Fort Worth to DFW Airport along two separate NRH rail stops. Late 2015 business additions include the expansion of Santander Consumer USA into 200,000 SF and 1,650 employees, the new addition of Southwest ADI, a distributor that purchased and converted a former Sealy bedding plant into their corporate headquarters, and the addition of Digital Alchemy, a technology company occupying 24,000 SF of office space. CRAIG HULSE, Director of Economic Development 7301 NE Loop 820, North Richland Hills, Texas 76180 email@example.com / 817427-6090 www.nrhed.com
Rockwall Economic Development Corporation assists new and existing companies, both large and small, in the development, modernization, and expansion of business in a booming global economy. We are dedicated to your company’s growth through incentive programs, financial assistance, comprehensive sites, and resource collaboration. While collaborating with city leaders, we have secured the necessary infrastructure, services, and high-tech amenities to maintain thriving, profitable businesses. Rockwall has big-city conveniences yet maintains a small-town atmosphere. Rockwall offers quality of place and peace of mind. SHERI FRANZA, President and CEO ROCKWALL ECONOMIC DEVELOPMENT CORPORATION 2610 Observation Trail Rockwall, Texas 75032 972.772.0025 firstname.lastname@example.org rockwalledc.com
The Colony is a growing city on the east side of Lewisville Lake, 25 minutes from downtown Dallas and 15 minutes from the Dallas Fort Worth International Airport located along the Sam Rayburn Tollway. Home to approximately 40,000 residents with businesses and retail locating here daily, The Colony continues to maintain its “hometown” feel. Affectionately known as “the city by the lake,” The Colony features 23 miles of shoreline along Lewisville Lake and two lake parks with boat ramps, camping and many other amenities. Golf courses within the city all provide outstanding lake views with two courses being recognized among Golf Magazine’s top-five in Texas in 2010. The Colony is the proud home of the nation’s largest home furnishings store, the new Nebraska Furniture Mart of Texas, anchoring the 400-acre Grandscape development. When complete, Grandscape will feature unique entertainment, dining and retail venues. KERI SAMFORD, Economic Development Director THE COLONY ECONOMIC DEVELOPMENT CORPORATION 6800 Main St., The Colony, Texas 75056-1133 972.624.3127 email@example.com thecolonyedc.org
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PHOTO: PINKYPILLS VIA ISTOCK
DFW REAL ESTATE GOES HIGH TECH
SAVVY COMPANIES ARE UTILIZING — EVEN DEVELOPING — TOOLS THAT ALLOW THEM TO MANAGE THEIR GROWING BUSINESSES BY JEFF BOUNDS
Long viewed as a late adopter of technology, commercial real estate is using bleeding edge hardware and software to work smarter – and Dallas-Fort Worth is helping lead the way, experts say. “A lot of the old guard is retiring, and the people replacing them have grown up in a technology-first culture,” said Bradley Joyce, founder of Skyrise Inc. Joyce’s North Texas business offers a mobile app that helps landlords communicate better with tenants, while also building a sense of community among people in a property. As tech-savvy people move into decision-making roles, commercial real estate across the board will be increasingly willing to take flyers on razzle-dazzle systems, Joyce says. “New technology companies will be able to take risks that may not otherwise have been acceptable previously.” In another break from tradition, some real estate-related firms are even building their own tools to meet their particular needs. The Common Desk, a Dallas coworking business with locations in Deep Ellum
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and the Bishop Arts districts, developed its own software to manage everything from billing to memberships and service calls, according to Nick Clark, who founded the 400-member organization in 2012. Although the software even acts as a social media platform, Clark was planning to switch in January 2017 to management technology from an outside vendor, Meshwork. “As we look at connected buildings, we will see more systems like smart elevators, smart lighting and better controls for the overall building,” Clark says. “The more time I can get for my managerial staff to focus on people rather than operations, the better able we are to turn our building into a community, rather than a commodity.” Improving communications and property operations both are key in how Chad Cook uses technology at Quadrant Investment Properties. The Dallas business Cook founded is a turnaround shop of sorts for real estate, purchasing well-built office and industrial properties that have fallen on lean times because of management or capital issues. Although Cook uses prominent tech brands such as Slack’s mobile app for teams, he’s also employed lesser-known tools from the likes of Wunderlist (whose app keeps todo lists for professionals) and Wricke, a vendor of project management software.
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T TOOLBOX “We have also spent a significant amount of time exploring options like Skyrise and Elev8,” he says. Another vital tool for Cook comes from Dallas-based Glass-Media, which provides digital displays for storefronts, walls and other public places. “There is almost no comparison to how we operate today versus when I started my career almost 20 years ago,” he says.
SIMPLICITY SELLS For a glimpse of both how technology springs us in commercial real estate and for where it’s going, take a look at Dallas-based Primal Sensors, whose system helps keep track of people and stuff on commercial construction sites. Jerry King started the business in late 2014 after he was left shivering for hours in 30-degree weather at a triathlon, where he had lost track of his friends. He teamed with a pal, Andrew Davis, who feared becoming separated from his offspring at large public places. Although they geared their first stab of Primal’s technology at the amusement industry, they later learned that $750 billion-plus of people, materials and supplies go AWOL on commercial construction sites in America each year. Yet the industry lacks easy-to-use technology for finding it all – or, better still, preventing it from disappearing in the first place, King said. “So we pivoted,” he said. “The opportunity is enormous.” But so are the challenges. Like most every area of commercial real estate, construction companies traditionally have embraced technological change slowly, he said. “The key is simplicity,” he says. “For now, technology providers to construction are focusing on doing one thing well. Eventually, we expect to see people aggregate these various solutions in broader management tools.” For emerging vendors to commercial real estate such as Primal, the good news is that the technology revolution has helped foster a class of potential early adopters in the form of startups in everything from development to brokerage. Grant Pruitt launched Dallas-based Whitebox Real Estate in 2016 in part because
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PHOTO: IJEAB VIA ISTOCK
he felt constrained by the slow pace of decision-making at large firms. As president and managing director of the tenant-rep shop, he’s willing to consider new tools that might help give him an edge against the big boys. “We’re young, and we’re hungry,” he says. “Technology lets us work most everywhere.”
BETTER DECISIONS THROUGH DATA One step removed from the daily work that players such as Pruitt do to make the real estate industry run, new tools are emerging to inform the decisions of corporate chieftains and policy makers alike. In June 2015, CoreLogic, a California-based data analytics supplier for real estate with a Westlake campus, rolled out a big leap forward for academic researchers. Its University Data Portal centers on the housing market, giving analytical insights on everything from 148 million property characteristics (such as values and bathroom counts) to 45 million foreclosure records. “The subject matter and depth and breadth of the data is what sets us apart from any other real estate data source in the industry,” said Adam Laughery, a Washington, D.C.-based national account executive. Researchers have used the Portal to examine questions such as whether foreclosures make housing downturns worse, and the impact on housing from shale development of natural gas. “Our 2017 roadmap includes adding the CoreLogic Home Price Index, as well as several other analytics datasets covering listings, rentals and commercial property market trends,” Laughery said. Just as tools like the Portal have helped democratize analytics, look for future technologies to help real estate companies of all stripes better understand their customers, from top to bottom. “Location and price are no longer the only factors that go into tenants’ leasing decisions. Amenities and culture are playing a huge role now,” says Joyce of Skyrise. “Buildings need to better understand the individuals that occupy their space, and not just decision makers.” One academic has argued that any individual can have at most 150 stable relationships, Clark adds. “That theory is becoming ancient because of social media.”
Greg Kraus, Chairman Ran Holman, Vice Chairman
CHAMPION’S CIRCLE U.S Department of Treasury CDFI Fund Bank of America Merrill Lynch/ Bank of America Charitable Foundation Bank of Texas Compatriot Capital HFF Granite Properties Champion Advisory Partners Balfour Beatty Construction JLL Deloitte
CHAIRMAN’S CIRCLE CBRE Stantec BBG Republic Title of Texas Inc. Winstead PC Munsch Hardt Kopf & Harr PC Crow Holdings Capital Partners LLC JP Morgan KPMG EY Cushman & Wakefield of Texas Inc. Jackson Walker LLP Invesco Real Estate The Howard Hughes Corp.
Stewart Title NorthMarq Capital Texas Capital Bank Jones Day KDC LegacyTexas StreetLights Residential BB&T
PRESIDENT’S CIRCLE Holt Lunsford Commercial Wells Fargo Bank Chicago Title Company/ Fidelity National Financial (FNF) Corgan BBVA Compass Jackson-Shaw Stream Realty Partners Goldman Sachs Beck Group GFF DPR Construction Inc. Chief Partners LP NexBank Trammell Crow Co. View Dynamic Glass Billingsley Co. Todd Interests Grant Thornton Gables Residential Thackeray Partners
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.
BENEFACTOR’S CIRCLE AECOM AG&E Structural Engenuity American National Bank of Texas Bank of the Ozarks BB&T Berkadia Commercial Mortgage Billingsley Co. Bradford Cos. CallisonRTKL Capital One Bank Capital Title of Texas Chicago Title Company/Fidelity National Financial (FNF) Chief Partners LP Colliers International Cortland Partners EMJ Corp. Fischer & Co. Frost Bank Gables Residential Gaedeke Group LLC Gardere Wynne Sewell LLP Gensler GFF Grant Thornton Hall Financial Group Haynes and Boone LLP HKS Holt Lunsford Commercial Humphreys & Partners
WHO WE ARE TREC is where 2,000 commercial real estate professionals spark community transformation, influence policy, and propel careers in DFW and beyond. Only TREC provides the road map for success and the platform to Build the City You’ve Imagined. WINTER 2016
Architects LP Hunt Realty Investments Inc. Kane Russell Coleman & Logan PC KeyBank Kimley-Horn and Associates Inc. Lincoln Property Co. Locke Lord LLP Matthews Southwest Meyers Research LLC Mill Creek Residential Trust LLC ORIX Real Estate Americas Peloton Commercial Real Estate Prudential Mortgage Capital Co. Regions Bank Sarofim Realty Advisors Strasburger & Price LLP Thackeray Partners The Howard Hughes Corp. The Retail Connection The Spencer Co. Todd Interests Trammell Crow Co. Trammell Crow Residential Union Bank Foundation USI Southwest
PATRON’S CIRCLE Fauxcades Hilton Anatole Hotel OMNI Hotels
Learn more at recouncil.com or by calling 214-692-3600.
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C COMMUNITY The Dallas Regional Chamber recognizes the following companies and organizations for their membership investment at one of our top levels. Bolded companies are represented on the DRC Board of Directors. For more information about the benefits of membership at these levels call Diana Rivas-Smith at (214) 746-6744.
STRATEGY AT&T* BKD* Texas Instruments* Toyota Motor North America*
CATALYST ACTIVE Network* Baylor Scott & White Health* Capital One Bank* Chase* Chickasaw Nation Comerica Bank* DFW International Airport* EY* Hilti North America* Hunt Consolidated Inc.* ONCOR* Tenet Healthcare* Tom Thumb Food & Pharmacy Wells Fargo*
ADVOCATE 7-Eleven* Amegy Bank of Texas* American Airlines* Axxess Baker Botts LLP BB&T* BBVA Compass* CBRE Group Inc.* Children’s Health* Citi* Copart* Corrigan Investments Inc.* Dallas Morning News Dal-Tile Corp.* Deloitte LLP* Dr Pepper Snapple Group Energy Future Holdings* Exxon Mobil Corp. FedEx Office* Fidelity Investments* Fluor Corp.* Forest City Texas Inc. Frito-Lay North America* Golden Living*
Haynes and Boone LLP* HEB and Central Market Highland Capital Management LP* HKS* IBM Corp. Invesco Jones Day* KPMG LLP* Kroger Food Stores* Littler Mendelson PC* Locke Lord LLP* Lockheed Martin Manpower Group* Medical City Dallas Hospital/ Medical City Children’s Hospital Methodist Health System* Microsoft Corp.* NEC Corp. of America* New York Life Regional HQ Omni Dallas Hotel Omnitracs* PwC* Reliant Energy* Rent-A-Center* Sheraton - Dallas Southern Glazer’s Wine and Spirits* Spirit Realty Capital TDIndustries* Teledoc Texas Central Partners Texas Health Resources* Texas Scottish Rite Hospital for Children Thomson Reuters, Tax & Accounting TM Advertising* Tom Thumb Food & Pharmacy Torchmark Corp.* TXU Energy UT Southwestern Medical Center* LegacyTexas Bank Winstead PC*
BOARD OF ADVISORS Acadian Ambulance Accenture* ActivTek Global LLC
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Adastra Addison Law Airbus Helicopters Inc. AlixPartners Ameriflex Andrews Distributing Andrews Kurth LLP Army & Air Force Exchange Arthur J Gallagher & Co. AustinCSI Austin Industries* Baker & McKenzie LLP Bank of America * Bank of Texas.* Barnes & Thornburg BDO USA LLP* Bell Nunnally & Martin LLP Brasfield & Gorrie The Beck Group* Blue Cross and Blue Shield of Texas* Big 12 Conference Bracewell & Giuliani LLP Boomtime Boston Consulting Group* Brierley+Partners Brink’s Incorporated Brinker International Inc. Business Wise C.C. Young Cassidy Turley Century 21 Judge Fite Co.* Choctaw Nation of Oklakoma* CHRISTUS Health City Electric Supply Civitas Capital Group* CliftonLarsonAllen LLP ClubCorp Inc.* Coca-Cola Refreshments* Colliers International* Commemorative Air Force Commerce Bank Consolidated Communications Conway MacKenzie Cook Children’s Healthcare Corgan Associates Inc.* CP&Y Inc. CSI GlobalVcard
Cushman & Wakefield* Dallas County Community College District* Dallas Cowboys Football Club Dallas Marriott City Center Dallas Stars Hockey Club* Dallas Women’s Foundation DataMob Dean Foods Co. DHD Films Dunavant Distribution Group E Smith Realty Partners* Ebby Halliday Realtors* Edelman PR Worldwide EF Johnson Technologies Elemetal Recycling EN Consulting Inc. Etihad Airways The Fairmont Dallas FastSigns Federal Reserve Bank of Dallas Flowserve Corp.* Fossil Fox Sports Southwest Freeman* Frost Bank* Furniture Marketing Group* Gardere Wynne Sewell LLP* Generational Equity Gensler* Grant Thornton LLP* Greatbatch Inc. Greenberg Traurig LLP Gruber Elrod Johansen Hail Shank LLP Gulfstream Aerospace Corp. Gupta & Associates HDBD HDR Inc. Heritage Health Solutions Hill & Wilkinson* Hilton Anatole* Hilton Garden Inn Downtown Dallas Hilton Worldwide HNTB Corp. Holland & Knight LLP* HollyFrontier Corp.* Hoar Program Mgmt.* HOLT CAT* HPI Real Estate & Ross Tower*
HUB International* InStaff Interceramic* Int’l Leadership of Texas Invitation Homes Jackson Walker L.L.P.* Jacobs* JE Dunn Construction JLL* Johnson Controls Inc. Ketchum PR Kilpatrick Townsend & Stockton LLP Life School Live Nation Lockwood, Andrews, & Newnam McKissack & McKissack MHBT Inc.* Mission Foods Moss Adams LLP NACD North Texas Chapter Neiman Marcus Newmark Grubb Knight Frank Nextt Northwood University NTT Data Inc. Oliver Wyman ORIX USA Corp. Oscar Health Insurance Parker University Parkland Foundation PDS Technical Services* Perkins+Will Perkins Coie LLP People Performance Resources PlainsCapital Bank* Point B Poo-Pourri Premier Truck Group PSA Constructors, Inc. PureFlow Inc. Reflect Systems Regions Bank Responsive Ed Solutions RML Automotive Rosewood Crescent Hotel Rosewood Property Co. Santander Consumer USA SAPAmerica Saulsbury Industries Schneider Electric SCORE Dallas Showcall Sidley Austin LLP Slalom Consulting Southern Methodist University* Southwest Airlines* Southwest Office Systems* Squire Patton Boggs Staffelbach Inc.* Stantec* State Farm Insurance*
Strasburger & Price LLP* Strategic Staffing Solutions Susan G. Komen Taste of Dallas TDJ Enterprises* Texans Can Academies Texas A&M University Texas Star Alliance Texas Woman’s University* TGI Fridays Thompson & Knight LLP* Time Warner Cable* TopGolf* Town of Addison Trane Commercial Systems TravisWolff LLP Trinity Groves* TrustPoint Management Turner Construction Co.* Universal Mind UMB Bank N.A.* University of Texas at Arlington* University of Texas at Dallas* UnitedHealthcare Universal Mind URS Corp. Verizon Wireless* Village Green Holding LLC Vinson & Elkins LLP Walgreen’s Co. Weber Shandwick Southwest WFAA-TV Whitebox Real Estate Whitley Penn LLP* Weil, Gotshal & Manges LLP WFF* Worldlink*
LEAD 1820 Productions AAA Texas Inc. Account Control Technology Inc. Ackerman McQueen Acme Brick Co.* Adolfson & Peterson Construction Adolphus Hotel Advocare International LP Alcuin School Alliance Data Allsteel Wilson Ameriflex APAC - Texas Inc. Ash Grove Cement Co. Aviall, A Boeing Co. Bain & Company Inc.* Balfour Beatty Construction* Beasley, Hightower & Harris PC Berger Engineering Co.
Beshear Group BMO Transportation Finance BOKA Powell LLC* Business Jet Center* Carlo’s Bakery Carrington, Coleman, Sloman & Blumenthal LLP Cawley Partners Champion Partners* Chandler Signs LLP CityDoc Urgent Care Commercial Metals Co. Consumer Credit Counseling Service of Greater Dallas Inc. Crowe Horwath LLP* Dallas Foundation Dallas Mavericks Dave and Busters DCT Industrial DeGolyer and MacNaughton Domain at Midtown Park Essilor of America Inc. Estrada, Hinojosa & Co. Inc.* Fogo De Chao Four Seasons Resort & Club at Las Colinas Gables Residential Trust George W. Bush Foundation* Gibson, Dunn & Crutcher LLP H Mart Cos. Inc 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* Imaginuity Interactive Inc. In-N-Out Burger J-BJ Marketing LLC Joule, A Luxury Collection Hotel Kiewit Infrastructure South Co. Kimberly-Clark Corp. Kofax Linebarger Goggan Blair & Sampson LLP Lucas Group* Martin Marrietta Mary Kay Inc.* McAlister’s Deli – Dallas Metrocare Services MW Logistics, LLC MWH Americas Inc. Munsch Hardt Kopf & Harr PC National Math & Science Initiative Nationwide Networking Results Inc.
New York Life Regional Headquarters Ocean Prime Restaurant One Uptown Apartments Peter O’Donnell Jr. Polsinelli PC Post Properties Inc. Prudential Asset Resources The Ritz-Carlton, Dallas REES Rehab Synergies Republic Title of Texas Rising Fall Rone Engineering Services Ltd.* Ruth’s Chris Steak House Russell Reynolds Associates Inc. ScienceSoft Securadyne Systems Serta Mattress Co. Sewell Automotive Cos.* SevenTablets Inc. Signet Jewelers Ltd. Smile Workshop Stream Realty Southwest International Trucks Sparks Agency Stahls’ State Fair of Texas Stream Realty Partners* Structure Tone Southwest* Sun Holdings LLC Texas A&M University Texas Capital Bank* Texas Oncology Texas Rangers Baseball Club* The Taylor The Westin Dallas Downtown Willis Towers Watson* Tradition Senior Living Trinity Basin Preparatory Uber Technologies Union Pacific Railroad United Site Services University of Phoenix University of South Carolina Career Center USAA Virgin America Airlines VNA Vonage Business VOX Global W Dallas – Victory Hotel WageWorks Walter P Moore* Walton Development and Management* Weaver* Woodbine Development Corp. YP Marketing Solutions
* Building Tomorrow Together Fund Investors
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GIVING GALA 2016 On Thursday, Oct. 6, The Real Estate Council celebrated the joy of giving during its annual Giving Gala which supports TREC Foundation’s good works in education, housing, jobs, and the environment. The outdoor Sculpture Park of the Hilton Anatole was transformed into the Crescent City complete with fortune tellers and palm readers, delicious Cajun-style food, a beignet and hurricane bar, a wine pull and entertainment by New Orleans Jazz & Heritage Festival favorite Dirty Dozen Brass Band. This year’s event featured the inaugural Impact Awards which honor a member: Tyler Berns of Austin Commercial; a member company, Jones Day; and a nonprofit organization, the Dallas Police Youth Foundation.
PEGASUSABLON’S MARK ROPPOLO, BILLINGSLEY COMPANY’S MARIJKE LANTZ, MUNSCH HARDT KOPF & HARR’S GLENN CALLISON
TYLER CLARKE, SUSAN COX, ROBERT PLIMPTON, ANDY VAN NOORD; ALL WITH JONES DAY
JP MORGAN’S BRENT HOUSTON, STACY HOUSTON, JP MORGAN’S DIANE CHAVEZ, DAVID CHAVEZ
DARCY BAMES, CODY CANAFAX, WILL PRICE, LANCE BUXKEMPER; ALL WITH BANK OF AMERICA MERRILL LYNCH
ROSEWOOD PROPERTY COMPANY’S HALEY COLLARD, NATALIE VOLZ, JLL’S DUSTIN VOLZ
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FINDING OPPORTUNITY THROUGH TREC Munsch Hardt shareholder Phill Geheb calls his Associate Leadership Council experience an ‘awakening’ BY MOLLY WOLCHANSKY
2016 GIVING GALA CHAIRMAN ERIC KRUEGER, BALFOUR BEATTY CONSTRUCTION; TREC CHAIRMAN DIANE BUTLER, BBG; TREC PRESIDENT & CEO LINDA MCMAHON
JEFF WHEELER, JACKSON-SHAW’S MICHELE WHEELER
Phill Geheb, a shareholder at Munsch Hardt, specializes in public-private partnerships for urban development projects, focusing on financing, historic rehabilitation, tax credits, and new markets. In January 2013 Geheb became a member of The Real Estate Council. “TREC provides an amazing opportunity to get involved with a professional, forward-thinking organization,” Geheb says. In 2013, he joined TREC’s education committee which sponsors internships, as well as supports various policy initiatives to make sure that all children in Dallas receive an excellent education. He now chairs the committee, and he assists the Dallas Independent School District with affordable housing policy, education matters, and how bond issuance is going to affect DISD facilities. Geheb joined TREC’S Associate Leadership Council in 2014, and he says it helped to open his eyes to the wider issues that percolate around Dallas. His class project was with the faith-based organization Mercy Street, which provides afterschool programming and leadership opportunities for kids in West Dallas. The project improved the facility through a renovation of the interior, remodeling of the library, and transforming the back patio space into grounds with a mini auditorium. “It was an awakening,” says Geheb, who graduated from the ALC in 2015. Geheb continues to work towards facilitating change in Dallas by helping clients to
grow, and to reimagine how they see and utilize space in the city. He received his bachelor’s degree in history from The University of Pennsylvania in 2003. That same year, Geheb started his master’s program at Saint Joseph’s University in Philadelphia, where he completed the degree in 2005. He was a member of the highly competitive Teach for America program, where he taught middle school math for underprivileged children. After he received his master’s degree in elementary education, Geheb was awarded the Gates Cambridge Scholarship, a prestigious award that lead him to attend the University of Cambridge in the United Kingdom. In 2006, Geheb received his second masters in philosophy, but he wanted a degree that gave him more flexibility, he says. He attended Washington University in St. Louis, where he graduated Magna Cum Laude in 2009 with his Juris Doctor degree in law.
ASSOCIATE LEADERSHIP COUNCIL
SAMANTHA SCOTT, DELOITTE’S TRENT MATTHEWS
The Real Estate Council’s Associate Leadership Council (ALC) is a 10-month leadership development program for 27- to 37-year-old commercial real estate professionals designed to inspire and educate future leaders. For more details, visit recouncil.com.
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CALENDAR OF EVENTS Make plans now to attend these upcoming real estate and business events. For information on programs hosted by The Real Estate Council, visit recouncil.com. For details on events presented by the Dallas Regional Chamber, visit dallaschamber.org.
JANUARY.. JAN. 12 2017 Annual Meeting, 12pm to 1:30pm, Hilton Anatole Join us for our signature event of the year, which will include a progress report on how we are “Building Tomorrow Together” and feature special guest Robert Kaplan, president of the Federal Reserve Bank of Dallas. [Dallas Regional Chamber]
JAN. 19 Texas Today: Big Cities, Big Challenges, 11:30 a.m., Belo Mansion Join us for our Bank of Texas Speaker Series presented by The Dallas Morning News for lunch as our panel of experts detail the hurdles Texas faces and what forward-thinking measures will help our region keep pace with the growth. [TREC]
JAN. 28 2017 LDA in the Community Day, 7:30 AM TO 1:30 PM, Dallas Public Library – 1515 Young St., 6th Floor Join fellow Leadership Dallas Alumni for a half day to volunteer with several agencies in Dallas to make a difference in our community. The day will start with a kick-off breakfast and then volunteers will divide into groups to complete projects. Afterwards, we’ll meet up for lunch to talk about our day! [Dallas Regional Chamber]
MARCH.. MARCH 2 Casino Night, 7 p.m., Cityplace Tower Celebrate with a night of casino-style gaming, a live DJ, raffle prizes and cocktails, at the Young Guns tenth annual Casino Night. Event proceeds benefit TREC Young Guns Foundation project, the Aberg Center for Literacy. [TREC]
APRIL.. APRIL 27 FightNight, 6:30 p.m., Hilton Anatole Join us for one of North Texas’ largest philanthropic event, benefiting TREC Foundation. The evening features professional boxing, exceptional cuisine, casino gaming, Vegas-style entertainment and the opportunity to be among the top decision makers in the real estate industry and political community. [TREC]
APRIL 28 Women’s Business Conference, 8:00 AM-3:00 PM, Omni Dallas Hotel Celebrate professional women in the Dallas region at the DRC’s 21st Annual Women’s Business Conference. With esteemed keynote speakers and educational breakout sessions, this full-day event is packed with opportunities to connect with and learn from those who are the best in their businesses. [Dallas Regional Chamber]
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AN OPPORTUNITY EFFECTS CHANGE Jackson Walker’s Sara McEown says the DRC’s Leadership Dallas program helps participants delve into issues facing the city. BY HUMERA NAYEB
After graduating from Texas A&M University with a bachelor’s degree in construction science, Sara McEown joined MEDCO Construction. A year later, she went back to school, studying law at Southern Methodist University in Dallas. But her love for the construction industry never went away. It led her to join Jackson Walker after graduating. “The firm has a really strong real estate group,” she says. “They have been great about letting me pursue construction, both on the transactional side and litigation.” In 2015, about eight years into her law practice, McEown was accepted into the Dallas Regional Chamber’s SARA MCEOWN Leadership program. She says the program offered not only the opportunity to meet with executives and up-andcoming leaders from all industries, it also gave her a firmer grasp of things going on in Dallas—good, the bad, and the ugly—and an opportunity to help work on solutions. Additionally, the program helped her develop tools she could use in her professional life, McEown says. “I didn’t go into the program with the idea that it would further my career; I went into it thinking how can I figure out what’s going on in our town, and really meet people who have the ability to effect change,” she says. “But the benefit is, we all left Leadership Dallas being really close friends, and we’ve been able to make connections and help each other’s careers.” And graduating from Leadership Dallas, her work with the group didn’t stop. She went on to be an adviser in the Class of 2016. She describes the program as a once-in-a-lifetime opportunity that’s worth every minute you can put into it. McEown continues to support the Dallas community as a board member of the March of Dimes, a nonprofit that deals with prematurity, birth defects, and infant mortality. She’s also involved with Habitat for Humanity and is focused on helping children living in the “food deserts” of South Dallas gain access to fresh food and groceries.
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.
DEVELOPING A ‘CONSCIOUS PLACE’
Trademark’s Terry Montesi puts community first in new Waterside Development TERRY MONTESI
PHOTO: TRADEMARK PROPERTY CO.
BY LANCE MURRAY
The numbers alone are impressive for developer Terry Montesi, CEO and founder of Trademark Property Co. in Fort Worth — more than $2 billion and 11.4 million square feet of lifestyle retail, mixed-use properties, and enclosed malls in the United States. But the numbers don’t tell the whole story. A look at Trademark’s recently opened Waterside development in Fort Worth paints a broader picture of Montesi’s work. So does Trademark’s innovative plans to make Victory Park in Dallas a walkable, pedestrian-friendly retail and restaurant hub. Waterside, at Bryant Irvin Road and Arborlawn Drive, is Trademark’s first ground-up Conscious Place, the company’s next-generation experiential development model. What is a Conscious Place? It’s a center of commerce, community, and meaning. “Our approach is to take a stakeholder-centric approach to development,” Montesi says. Those stakeholders include the members of the community surrounding community, and Montesi believes it’s important for them to have a voice in how a development is planned. Each element of Waterside’s leasing and amenity selection was driven by input from the community and then evaluated for its ability to “inspire, educate, and connect with a broad group of stakeholders.” As Montesi puts it: “We start by listening.” Trademark held more than a dozen “community engagement” sessions – similar to focus groups – to gather public input on the site. “We told people about the site, and then asked their opinions,” Montesi says. He said one of the most common requests was to “have local tenants and local entrepreneurs.” Trademark’s approach is a nod to the core tenets of Conscious Capitalism, a nonprofit dedicated to idea that capitalism can be a force for both economic and social good. You create places that have meaning and purpose. Trademark is a sponsor of Conscious Capitalism. The Conscious Place at Waterside is an amenity-filled public space that is free to
the public — you don’t have to shop or spend money at the surrounding retailers to enjoy its benefits. Trademark is three years into developing the 63-acre Waterside mixed-use development on the site of the former Lockheed Martin Recreation Center. It is Fort Worth’s premier hybrid community and lifestyle center, and features best-inclass community and lifestyle retailers, and restaurants that engage the Trinity River and Trail. The development features “The Grove,” built around two 150-year-old trees on the property, is Trademark’s centerpiece public space with free Wi-Fi and other amenities, including a public art program that notes the area’s history. It’s “creating a place for people to just ‘be,’” Montesi says. It’s “a place that goes the extra mile to enrich people’s lives.” Montesi says: “We’ve been a purpose-driven company for years – do something well and leave the world a better place.” While doing good for the community is a core value at Trademark, making money also is an important element. “There’s a for-profit motive because we think that with all the ecommerce options, you need something to compel people to get off their couch,” Montesi says. Whole Foods and REI are anchors at the development, which includes 200,000 square feet of retail space and riverside restaurants, 800 multifamily units, 200,000 square feet of office space, and two hotel sites. At Victory, Montesi is creating a walkable, pedestrian-friendly environment that features features enhanced streets, sidewalks, signage, and public amenities. “At the core, you’re really rebranding Victory,” Montesi says. “We’re rebranding the area south of the AAC (American Airlines Center) as ‘South Victory.’” By widening sidewalks, reconfiguring streets, adding bike lanes, creating more directional signage, and finishing parking garages, Montesi believes Victory will be a place that draws people to the retail and restaurants that are planned for the ground level of the development.
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VIEW FROM THE TOP
BY LANCE MURRAY
DAVID PACE CEO, Jamba Inc.
WHAT WERE THE MAIN REASONS BEHIND JAMBA JUICE’S RELOCATION? With the pending expiration of our lease in Emeryville, California at the end of 2016, we wanted to explore a new location that would offer us competitive operating costs, a region with extensive access to skilled restaurant talent, an attractive cost of living for our current and future team members, and a geographically central location that facilitates our ability to expand our store base, particularly towards the east coast.
PHOTO: JAMBA, INC.
Jamba Inc. opened its new Jamba Whirl’d Support Center this fall in Frisco, relocating the company from California. The company owns and franchises Jamba Juice stores through Jamba Juice Co., its wholly-owned subsidiary. It is a restaurant retailer of specialty beverage and food offerings that are considered healthy options for customers. We recently caught up with CEO David Pace, who told us about the company, the move and how North Texas became a perfect fit for Jamba Juice.
WHY DID JAMBA JUICE CHOOSE FRISCO? Frisco is one of the fastest growing communities in Texas and boasts a highly skilled workforce, strong infrastructure and desirable place to work and live. Frisco continues to be a leading hotspot for business development and is a community committed to success for its businesses and residents. It was clear that Frisco was the best place for Jamba to grow our next generation.
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WHEN DID THE COMPANY OFFICIALLY TAKE OCCUPANCY IN HALL OFFICE PARK? We celebrated the opening of the Jamba Whirl’d Support Center in Frisco on Oct. 17, and launched the Whirl’d Tour, which included a week of fit and fun activities that we shared with the community. The Hall Park community aligns with our core values of healthful living and a fit and fun lifestyle, and we had a great turnout for each day’s events.
HOW ARE THINGS GOING SO FAR WITH THE NEW LOCATION? We’ve successfully relocated our support center to Frisco and made several key strategic decisions that will increase our focus on core stores. Our leadership team has quickly rallied to build a thoughtful approach to our 2017 operating plan and with Frisco being one of the fastest growing communities in Texas, we are optimistic about the future of Jamba.
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