Category: North Texas

Dallas industrial market: A closer look at submarkets and future trends

Posted on by Mia Goulart

The industrial real estate sector in Dallas, Texas, has witnessed remarkable growth and achieved significant milestones in recent years. With the market surpassing the one-billion-square-footage mark, second only to Chicago, it has become a key player in the industrial sector.

According to Q1 2023 data from Colliers, the Dallas-Fort Worth (DFW) industrial market continues to thrive. Construction levels remain elevated, with 62 million square feet under development. However, for the first time in eight quarters, the quarter-over-quarter construction growth rate has slowed. The delivery of a record 19 million square feet of speculative development has affected vacancy levels, resulting in a slight increase to 6.3%.

Rental rates in the warehouse sector have surged to all-time highs, with big-box rates reaching $5.72 NNN and non-big-box warehouse rates peaking at $8.39 NNN. These escalating rental rates indicate the robust demand and competitive nature of the Dallas industrial market.

To truly understand the Dallas industrial market, it is crucial to examine submarkets within the region. Transwestern Development Company Regional Partner Denton Walker emphasized the variations across different submarkets.

“The best submarkets in North Texas, such as north Fort Worth and north Dallas, have positive lease activity where there is better labor supply available,” said Walker. “The southern sector of the Dallas-Fort Worth area will experience slower lease activity for ample bulk distribution warehouse space due to the large supply available and less labor available.”

By focusing on submarkets, real estate professionals and investors can identify specific areas with unique characteristics, labor availability and infrastructure that align with their requirements.

In addition to submarkets, another delineation that’s important is the size of the project. Allen Gump, EVP at Colliers, splits the market between projects larger than 250,000 square feet and those that are smaller.

“In some places in the Metroplex, it’s very hard to find 150,000- or 200,000-square-foot space. In Dallas, for example, you really do have trouble finding spaces under 250,000 feet that fit the criteria that you’ve got,” Gump said. “The dynamics are very different.”

He explains that industrial development in the Dallas market has reached a turning point. While there are still numerous buildings under construction, the feverish pace of development has eased. Developers are now adopting a more cautious approach, with fewer new projects being initiated without significant leasing activity.

“It wasn’t that long ago that there were something like 17 million-square-foot buildings under construction around the Metroplex. That’s a lot of million-square-foot buildings,” said Gump. “It costs a lot to carry a million-square-foot building for several months or even longer.”

With factors such as rising interest rates and reduced liquidity, developers are now seeking greater stability and demand before commencing construction. This shift signifies a return to a more sustainable pace of development.

Newmark Managing Director Zach Riebe shed light on the capital markets for industrial properties in Dallas. Smaller, bite-sized deals are currently in focus due to challenges in financing larger projects. This shift aligns with the cautious approach taken by both equity and debt providers.

“There’s a theme we continue see is that buyers, developers, and equity/debt providers continue to prefer smaller, more infill projects in today’s environment, whether that be pursuing acquisitions or speculative development,” Riebe said. “However, we anticipate that there will be some larger portfolio trades and capitalizations in 2023 as larger institutional investors creep back into the market and feel the pressure to deploy capital .”

While the cost of capital has increased, the broader macroeconomic tailwinds in Texas, including favorable borrowing costs and availability of capital, continue to support the demand for industrial real estate. Despite the evolving financial landscape, the Dallas market remains a strong performer compared to other tier-one markets across the country.

Newmark President and Global Head of Industrial and Logistics Jack Fraker underscored the strength and resilience of the Dallas industrial market.

“The market’s fundamentals, including leasing activity, absorption, and rental rate growth, are at record levels,” he said. “The presence of a vast inventory of smaller buildings offers reliable and predictable returns, particularly in infill submarkets closer to population centers.”

Looking ahead, the Dallas industrial sector is expected to maintain its strength due to a variety of factors. These include the exceptional labor force, excellent transportation infrastructure, central location, access to major airports and availability of economic incentives for industrial development. The growth of educational institutions in the area, such as Southern Methodist University and the University of Texas, further contributes to a talented workforce.

With a diverse range of submarkets, a slowdown in big-space development, and a cautious approach in the capital markets, the Dallas industrial sector is adapting to changing conditions. Despite challenges, the market’s fundamentals remain strong, attracting investors and tenants alike. As the sector moves forward, careful analysis of submarkets and an understanding of future trends will be essential to unlocking the full potential of the Dallas industrial market.

Stonelake Capital Partners Announces Plans for 2626 McKinney

Posted on by Benton

Development Slated for Completion in Q3 2025

Stonelake Capital Partners announced today plans for 2626 McKinney, a new development located in the heart of Dallas’ Uptown district adjacent to Whole Foods. The 180,000-square-foot Class A office building is slated for completion in Summer of 2025.

The 17-story tower will feature elegant exterior with interior finishes that complement upscale offerings, including a covered hospitality style valet area, landscaped walkways and plazas creating a tailored arrival along McKinney Avenue.

The amenity level, located on the 11th floor, will include a lounge with a coffee and cocktail bar, flexible conference and event space, a warming kitchen for events and a landscaped terrace offering unobstructed views of the Dallas skyline. The state-of-the-art fitness center will include cardio and strength training areas, spa-style men’s and women’s lockers, a flexible studio with an integrated smart trainer and a fitness-focused outdoor terrace.

“2626 McKinney will provide all of the amenities and finishes of a state-of-the-art, Class AA office building with a boutique, white glove feel that will make the tenant experience bespoke and unique,” said Coleman Brown, Partner at Stonelake Capital Partners. “At 2626 McKinney, a 50,000-square-foot tenant can feel like an anchor.”

The building features on-site property management, ceiling clear heights of 15’-0” on the amenity and penthouse floors, 13′-6” on typical office floors and a parking ratio of 2.9 per 1,000. Additionally, the penthouse suite offers a 2,300-square-foot private terrace.  

“Being next door to Whole Foods and walking distance to the Crescent and Ritz Carlton, 2626 McKinney will provide the full spectrum of offerings for tenants who want to be in the urban core of one of the most dynamic markets in the country – Dallas,” Brown said. 

2626 McKinney is located in the most pedestrian-friendly neighborhood in Dallas, offering an exciting blend of outdoor activity with unique dining, arts and entertainment scene nearby.

Matt Schendle and Zach Bean of Cushman & Wakefield will lead leasing efforts. 

About Stonelake Capital Partners

Stonelake is a real estate private equity firm that was founded in 2007 by Kenneth Aboussie and John Kiltz. Stonelake focuses solely on investing in major Sunbelt markets such as Austin, Dallas, Houston, Atlanta, Nashville, Phoenix, Tampa, Orlando, San Antonio and El Paso. Over the last 15 years, Stonelake has raised and invested nearly $2.5 billion of equity through seven (7) fully discretionary opportunistic funds and one open ended fund, acquiring or developing over $4.0 billion of commercial real estate. Stonelake owns, has acquired, has developed or is developing 28.0 million square feet of industrial warehouses, 8,100 Class-A multifamily units and 3.3 million square feet of Class-A office buildings.

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 50,000 employees in over 400 offices and 60 countries. In 2020, the firm had revenue of $7.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

Texas-based LanCarte Commercial Real Estate announces major expansion into Dallas market, spearheaded by industry veteran

Posted on by Mia Goulart

LanCarte Commercial Real Estate, a dynamic real estate company offering, brokerage services, commercial investments and property management, announced the addition of its Dallas office led by industry veteran, Bill de la Chapelle. Sarah LanCarte, founder and president of LanCarte Commercial, will continue to guide the overall vision and operation of the firm. With over 30 years of commercial brokerage experience, Bill and the LanCarte team will provide client-centered real estate solutions in Dallas Fort Worth and across the United States. The addition of a Dallas office continues the firm’s strategic growth across the state over the next 10 years. 

This strategic expansion positions LanCarte Commercial to provide creative solutions and proactive partnerships to its clients. With concern in the marketplace about rising interest rates, this may seem like an unlikely time for growth, however, according to Sarah LanCarte, “there’s no better time than now to invest and grow.”

“Our company was founded during a period of robust growth. I know there is no better fit to support LanCarte’s continued growth than Bill,” said LanCarte. She continued, “Working together over the years, I have seen Bill’s tenacious commitment to the genuine success of each client and his skillful ability to work collaboratively. Now, this will be an official partnership and we could not be more thrilled to welcome his expertise and experience to the LanCarte team. As we enter this expansion phase of our company, we know he will be a major asset. As part of our growing team, we are pleased to announce that Sharon Cramer will join LanCarte Commercial as VP. With over 30 years of industry experience, we know she will be a vital team member!” 

Launched in 2018, LanCarte Commercial continues to grow by prioritizing collaboration and partnership. The firm sees this model as crucial, leading with the knowledge that clients require, complemented by guidance and expertise in all market conditions. Building upon Sarah’s innovative team-based approach, de la Chapelle brings a depth of technical knowledge and client relationships to the team that will support LanCarte in strategic planning for this expansion phase. 

When asked about his goals for LanCarte Commercial’s future, Bill de la Chapelle said, “The LanCarte team seeks to provide our clients with thorough and thoughtful service proven by profitable results. I am thankful for the opportunity to join Sarah and further support LanCarte’s clients and prospects. Texas is the number one growth state in the country; the Dallas-Fort Worth metropolitan area is the largest in the state and one of the fastest growing areas in the country. Although the economy suggests that storm clouds are ahead, the greatest outcomes emerge from times of the greatest adversity. The best is yet to come.”

Bill de la Chapelle Recent Milestone Projects: 

  • Supported a state-to-state relocation that achieved more than $20 million in cumulative savings over the course of the project. 
  • Acquired a highly competitive property in Austin, Texas, against six competitive bids by structuring a compelling offer and presentation that stood out among the rest.
  • Secured an ideal property for an Arlington startup business whose day-to-day operations were challenging for institutional property owners and municipalities.

Edge Realty promotes new principal, Warren Smith

Posted on by Mia Goulart

Edge Realty Partners announced that Warren Smith has been appointed a principal at the firm. Smith, who joined Edge’s Dallas/Fort Worth office in 2015, was most recently a senior vice president. He specializes in tenant representation as well as land acquisition and disposition.

Smith represents institutional residential and industrial developers along with publicly traded companies such as Public Storage, Simmons First National Bank, and Texas Roadhouse. Throughout his real estate career, Smith has completed transactions valued at over $500 million.

Healthy Australian cuisine concept restaurant coming to Stream Realty Partners’ The QUAD project in Uptown Dallas

Posted on by Mia Goulart

A community-focused eatery based in Australian café culture will open its first Dallas restaurant at Stream Realty Partners’ office development, The QUAD, in Uptown Dallas.

Two Hands will occupy one of the five free-standing retail spaces surrounding the 12-story, Class AA office tower at 2699 Howell St. in the heart of Uptown. The casual restaurant will offer indoor and outdoor dining with a menu of fusion share plates and well-traveled classics for breakfast, lunch, and dinner. A comprehensive coffee program and full-service bar also will be featured. 

Stream, a national real estate services, development, and investment firm headquartered in Dallas, is developing the 345,425-square-foot, office building and surrounding 18,500-square-foot retail area heralded as the dawning of “A Different Dallas”. The project plays a key role in the rebirth of the Quadrangle, which once was Dallas’ first mixed-use development dating back to 1966.

Two Hands, which launched in 2014, currently has six locations in some of the country’s most upscale, chic neighborhoods including NoHo, Nolita, Williamsburg, and Tribeca in New York City, the Gulch in Nashville, and SoCo in Austin. Two additional restaurants in Denver and Franklin, Tennessee, are expected in 2023. An opening date for The QUAD eatery is planned for Q1 of 2024.

Two Hands is the first retail lease signed at The QUAD, with additional restaurant announcements anticipated by mid-2023. Chicago Title was the first office tenant to commit to the project in September 2022. The largest title insurer and provider of real estate-related products and services in the world will occupy 20,000 square feet in the office tower. The firm has officed at 2828 Routh St., an existing building on the same site as The QUAD, for more than a decade.

In addition to a workplace and next-generation retail space, The QUAD will boast amenities including a penthouse tenant lounge and conference center, full-service fitness studio with floor-to-ceiling windows, dedicated underground parking, bike valet, and plenty of outdoor seating and green space. The building will feature a cutting-edge user functionality and technological foundation with smart elements such as a proprietary centralized building operations app, hands-free “wave” doors, and hospital-grade air filtration systems.

The QUAD is owned and managed by Stream’s Investment Management Platform, which leverages expertise from the firm’s 14 local offices to make investment decisions based on real-time supply and demand fundamentals. Stream actively manages four discretionary commingled funds, in addition to several joint ventures, and wholly owned assets totaling 31 investments of 21 million square feet and approximately $3.1 billion in assets under management.

Stream Vice President Ryan Evanich and Senior Associate Marissa Parkin lease the office space at The QUAD.

Marcus & Millichap arranges metroplex hotel sale and financing

Posted on by Mia Goulart

Marcus & Millichap announced the sale and financing of Courtyard by Marriott Dallas Grand Prairie, a four-story, 120-room hotel in Grand Prairie, Texas.

“Growing occupancy and average daily room rates throughout the Metroplex are drawing the attention of hospitality investors,” said Chris Gomes, senior managing director investments in Marcus & Millichap’s Dallas office. “The area’s strong economic growth, underscored by the large quantity of corporate move-ins during the pandemic, indicate a coming increase in business travel that bodes well for the hospitality industry overall.”

Gomes and Allan Miller in Marcus & Millichap’s Austin office represented the seller, Anderson Companies and procured the buyer, MCR Hotels. Pete Fehlman, managing director with Marcus & Millichap Capital Corporation in Dallas arranged acquisition financing.

The hotel is located between Dallas and Fort Worth along President George Bush Turnpike, near the intersection of Interstate 20 and Highway 161, 15 miles from DFW International Airport. Businesses nearby include Dallas Naval Air Station, Lockheed Martin Corp., Poly-America, Bell Textron Inc., Lear Grand Prairie, Forterra Pipe & Precast, and Flex-N-Gate Texas. Year-round entertainment, shopping and leisure are provided by Lone Star Park, Six Flags Over Texas, the Grand Prairie Premium Mall, and Ripley’s Believe It or Not. Constructed in 2021, the hotel’s guest amenities include an on-site restaurant, outdoor swimming pool, over 2,000 square feet of meeting space, a fitness center, and laundry facility.