Dallas Business Journal: The Next Big Bet in Office Development

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CROW HOLDINGS BETS ON ESG-MINDED OFFICE PRODUCT

A mass-timber development, The Offices at Southstone Yards, in Frisco is named for its railway roots.

BY ANNA BUTLER abutler@bizjournals.com

estarting the office development vertical of one of the most prolific developers in Dal las history has come along with the ardent thought and assiduous intention required to encounter a workforce’s fast-changing relationship with the workplace.

It’s a continuation of the already legendary Old Park land, coupled with plans to build what could be the larg est mass-timber building in the United States, that will mark Crow Holdings Development’s step back toward ground-up office development. It’s an effort destined to build upon a decades-old, storied heritage in the home town of the Crow family legacy.

With the experience and discipline gleaned through Trammell Crow Residential and Crow Holdings Industrial, Crow Holdings Office is looking to lean into the successes found in other asset classes as it expands and scales in a thoughtful way. The question for the vertical is simple, but nonetheless daunting: How can CHD approach office development using the TCR and CHI molds in order to create a distinctive product that will stand out among investors and entice end users alike?

“With starting this new business in January 2020, there was admitted ly time for self-reflection. We came to the conclusion – and we wanted to test it and not be cavalier about it – that the office is going to continue to evolve and that a lot of the trends and themes from the previous 10 years were hyperaccelerated,” said Cody Armbrister, senior managing director of Crow Holdings Office, in an interview.

With that premise, CHD felt con fident enough to make a calculated bet. That bet was that companies are

going to not only want new space com ing out of the pandemic, but they’re going to want space that’s unique in their quest to stoke retention and build a sticky culture.

CHD is testing its theory in Dallas and Frisco due not only to its famil iarity with the market, but the region’s strong population influx and other key demographics.

“The vision is best-in-class build ings that are suited to today’s tenants and tomorrow’s tenants that can stand the test of time – that’s going to be our mantra,” said Cole Rothwell, vice president in the Office Development

Group that has been with the firm since 2011.

“What that means in terms of the product itself is that it will likely evolve over time, but we’re trying to stay ahead of that curve as we come out with these new buildings now,” he said.

While it would be tough for neo classical Old Parkland's East Campus and the mass-timber development, dubbed The Offices at Southstone Yards, to be any more different, the pair share one thing: The dedication to creating a curated environment based on lessons learned from the original

Cody Armbrister.

“It’s a

unprecedented application of an exciting new product.”

Jim McCaffrey, managing director, Office Development Group

Old Parkland experience.

“It’s not to say that every build ing we’re going to develop is going to be Old Parkland, but we identi fied chief tenets: collaboration, com munity and differentiated environ ments,” said Armbrister. “We won’t have a debate chamber in every build ing we build, but the debate chamber is a proxy for how you bring people together. That challenges us to say, “How can we express this in other locales around the country?’”

CHD’s exploration into mass tim ber started from a place of curiosi ty, where the firm sought to make an

statement about its sus tainable goals. In that quest, the team found there was an interesting over lap in not only creating a point of dif ferentiation from the end-user stand point with an ESG-minded premise, but it created an opening for capital to place investment dollars under the same premise.

Offices at Southstone Yards – with Sumitomo Forestry America acting as joint venture partner and Frost Bank as lender – will anchor the broader 45-acre, mixed-use South

stone Yards project in Frisco.

CHD plans to bring 235,000 square feet of environmentally friendly office space over seven stories to the project, designed by Duda Paine Architects in partnership with Gensler.

The broader Southstone Yards development, named for its railway roots, will feature retail, restaurants, hotel space and more than 1,000 urban living units nestled around a central park with green space snaking amid and among the new builds. The resi dential component includes a 355-unit rental community from North Caroli na-based LMC, part of Lennar Corp.

Like the site’s master developer, CHD has selected the Office of James Burnett, the firm behind Dallas’ Klyde Warren Park, to lead its landscape architecture efforts, planning to seam lessly and cohesively blend allotted green space within the greater acreage.

“We are focused on a cohesive design, and CHD’s project has set the tone from which we will build,” said Lisa Rosenzweig, who is leading South stone Yards’ master development.

The quest toward differentiation naturally included the adoption of mass timber, the medium Walmart

selected for its new Bentonville cam pus. Not only has CHD found oppor tunities pertaining to ESG-mind ed investors, but office users looking to capitalize on the reported innate benefits of working in a mass tim ber structure – with tenants report ing 34% more physical workplace sat isfaction; 23% lower stress levels; 18% higher ability to concentrate; 8% high er productivity; and 13% greater over all well-being.

“It's a creative, unprecedented appli cation of an exciting new product,” said Jim McCaffrey, managing director in the Office Development Group.

McCaffrey, who hails from Chicago and relocated to Dallas in 2021, points to not only the scale of the mass-tim ber building, but the planned imple mentation of a MERV 15 filtration sys tem and a humidification system to help the property (and its air quality) further stand out.

CHD had a number of things work ing in its favor between the growth sto ries of Texas, Dallas and Frisco – but it was the ESG angle that attracted both capital and a partner for a specula tive office building in the middle of a pandemic.

“Several of the potential partners we talked to expressed that if we were

trying to capitalize a more tradition al building, they likely weren’t fits. It was great validation for us to say, ‘OK, but for the mass timber, we proba bly wouldn’t have this pick of poten tial capital partners.’ It’s hard to say what the mandate has been other

than these very savvy investors want ed to take something back to their own leadership teams and executive committees that stood apart,” said Armbrister.

Construction commenced in August on The Offices at Southstone Yards, located at Sam Rayburn Toll way and Spring Creek Parkway, with delivery anticipated in the third quar ter of 2023. CBRE’s Trey Smith, Jack ie Marshall and Ben Davis have been tapped to handle leasing for the office development.

Delivering two office projects simultaneously is no small feat – but that doesn’t mean that CHD isn’t look ing ahead as the firm hopes to seize the best opportunities that become available.

“The benefit we have is that we already have offices working on dif ferent asset types all over the country in the markets that we already want to play in,” said Rothwell.

Having those boots on the ground while the firm is head quartered in Dallas is a boon, he said.

“The goal always is to be great stew ards of our resources, our capital and our partners’ capital; to do what’s right because it’s the best thing to do;

to deliver extraordinary returns; and to build these incredible places,” said McCaffrey.

“I say that because no one has giv en us a growth mandate. We’re not going to do growth for the sake of growth,” he added.

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MORE DETAILS ON OLD PARKLAND’S EXPANSION

Cole Rothwell started at Crow Holdings Capital as an analyst right after graduat ing from TCU and later shifted to a role in which he began working on what was – at the time – the largest expansion of Old Parkland.

After holding a handful of roles within the Crow world over the past 11 years, Rothwell, given his institutional knowl edge of Old Parkland development, was able to make a natural shift toward work ing with the Office Development Group. Rothwell shared more details about the CHD’s jump across Maple Avenue: R “One of my favorite features of the Old Parkland is getting this team back together that we’ve had since Freedom Place, the bell tower and now East Cam

pus – Craig Hamilton from the U.K. is design architect; Beck is architect of re cord and on construction; and Pritchard on management.”

R “It’s this well-oiled machine for Old Parkland, which is not normal in any other construction setting.”

R “It’s the little details at Old Parkland that are really cool. We’ve had themes across our campuses, and I don’t think we’re ready to talk about it yet for East Campus, but we’re working on it. That’s where we can get all these different ideas and ways to express a theme from the smallest little bitty detail within the building to larger sculpture that you’ll see throughout East Campus.”

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JAKE DEAN / DBJ

— Anna Butler

“The opportunity at Southstone Yards presented itself by way of a relationship with the land owner, and it came with a confluence of things. The site has great visibility; it’s at the front door of the city of Frisco with great accessibility along Sam Rayburn and Highway 121.”

Cody Armbrister, senior managing director, Crow Holdings Office