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Industrial real estate in the Dallas-Fort Worth Metroplex is having a very good year. In fact, it’s safe to go as far as saying that industrial real estate throughout the region has been having a great decade. After posting Q3 results, the area has witnessed 44 consecutive quarters, or eleven straight years, of net positive industrial absorption.
And there’s still a lot of industrial space still on the way.
But where are the biggest projects being built? And exactly how big are we talking?
CBRE has provided REjournals with a list of the 11 largest industrial developments currently under construction in the Dallas-Fort Worth metro area, and the numbers are substantial. Between these 11 projects, the total combined area of new industrial space comes out to roughly 10.75 million square feet.
Nearly 11 million square feet is a lot of space to fill, but Dallas-area businesses are soaking up the industrial space as quickly as it is completed. According to the list, there are six projects currently under construction that will be 1 million or greater square feet in scope. The remaining five projects range between 800,000 square feet to 994,000 square feet.
The single largest industrial project under construction is the 1.163 Dalport Trade Center, Building G on Millers Ferry Road in Dallas. With an expected completion target of April 2022, the Class A building will join a cluster of other industrial properties at the DalPort Trade Center. At 1.095 million square feet, the Logistix Hub, Building 1 development in Hutchins is the second-largest industrial project under construction. It is targeting a May 2022 completion date.
Dallas and Hutchins are seeing the most action when it comes to big-box industrial construction. Three of the projects are in Dallas, three are in Hutchins, and two are in Lancaster. And not surprisingly, the bulk of the projects on the list will be for logistics and distribution uses.
FRISCO, Texas (October 7, 2021) – Dallas-based Cambridge Holdings Incorporated, a national healthcare, commercial office and mixed-use real estate firm, has entered into an exclusive agreement with the Frisco Station Partnership to develop healthcare and health and wellness-related projects within Frisco Station, a 242-acre mixed-use development in Frisco. This agreement will commence the Health and Wellness District at Frisco Station, situated in the northwest quadrant of the Dallas North Tollway and Warren Parkway, adjacent to the Dallas Cowboys’ world headquarters, The Star, and The Ford Center.
“With Cambridge joining our team, we are reaching the full potential of Frisco Station as a globally recognized Smart, Creative, and Healthy mixed-use neighborhood,” said Trey Sibley, general manager of The Rudman Partnership. “As a well-known powerhouse, Cambridge brings the most innovative approaches to health and wellness-related development. We couldn’t be more pleased to have them join us as we execute what’s considered to be the crown jewel of the project – the place where residents and visitors can experience ways to live healthier, more active and longer lives.”
A result of a prominent partnership between Rudman, Hillwood and VanTrust Real Estate, Frisco Station Partners has delivered 650,000 square feet of office space, 955 units of multifamily housing, 450 hotel rooms and six acres of a programmed park system since launching the project in 2015. As one of the first communities in the nation built from the ground up with AT&T’s 5G platform, Frisco Station has leveraged this connectivity throughout the development to create one of the most robust mixed-use projects in North Texas. Click to read more at www.wolfmediausa.com.
Gensler architect Steven Upchurch drives past Campbell Centre every day on his way to and from work. Despite being called the “fugliest” building by the Dallas Observer, the twin gold towers—flush with history—still manage to spark interest for the esteemed designer.
Located at the intersection of North Central Expressway and Northwest Highway, the first tower at Campbell Centre was built in 1972 using glass with a microscopic coating of real gold. The second building was added in 1977.
Cementing a place in American television, the buildings were portrayed as the office of Cliff Barnes—the nemesis of J.R. Ewing on the popular television show Dallas from 1982 to 1988.
But, as the investors who purchased the building (Fenway Capital Advisors and Waterfall Asset Management) put it, the building has lost some of its luster over the years.
Patrick Tribolet, managing partner of Fenway Capital, had been eyeing Campell Centre since pre-COVID and, about a year into the pandemic, purchased the 20-story towers. It is said the property sold for about $105 million, or about $120 per square foot. At the time (in April), it was the second-largest office acquisition in 2021 to take place in North Texas. Click to read more at www.dmagazine.com.
On Wednesday, September 29th, some of the biggest names in Texas real estate convened at Toyota Stadium in Frisco to discuss the numerous facets of commercial real estate in Collin County. The summit consisted of four panels highlighting commercial real estate investment trends and insights across the broader region.
Despite the brief economic uncertainty caused by the pandemic, population growth and investment in real estate in Collin County has continued to press forward. Cities such as Frisco, McKinney, Plano, Allen, Celina, Anna, and more, are just some of the places where positive growth and expansion are taking place.
Collin County officials are striving to provide the business and quality of life amenities being sought by the incoming companies while Municipal authorities and economic development councils are working hard to stay ahead of infrastructure needs, and to ensure that projects can get permitted and built within an acceptable time frame.
These topics, and more, were much of the focus of the summit. The event kicked off with a brief intro from keynote speaker from David Craig, Chairman & CEO, Craig International, and then jumped right into identifying and wrangling some of the region’s biggest challenges and opportunities.
Big things are on the way
National interest in Texas not only means new investment but there’s much more competition to get the next deal. Fortunately, there is still plenty of room (and opportunity) in Collin County for everyone from employers, residents, and institutional investors.
These themes were discussed during the first panel, which featured Allen Gump, Executive Vice President with Colliers; Herb Weitzman, Executive Chairman of Weitzman; Steve Zimmerman, Managing Director of Brokerage for The Retail Connection; and Barry Hand, Principal and Studio Director of Gensler’s Dallas office. The moderator for the panel was Doug Jones, Managing Principal at Cushman & Wakefield.
Pictured from L to R: Doug Jones, Barry Hand, Herb Weitzman, Steve Zimmerman, Allen Gump
Some quick stats help illustrate the story: with 43 million square feet of industrial space over 716 separate properties, Collin County represents roughly 5% of the total industrial product in the Dallas-Fort Worth Metroplex. There is currently another 35 million square feet of industrial under construction, making Collin County poised for the boom in leasing demand the region is currently experiencing.
Additionally, there are 107 users in Collin County with 100,000 square feet, or greater, of industrial space. There is a notable presence of big names in Collin County, which include the likes of Amazon, UPS, Southwest Airlines, Motorola, and of course, the Dallas Cowboys. New York and California-based hedge funds are some of the biggest investors in Collin County: since 2016, $1.7 billion has been invested with $237 million under construction just for this year.
Pressure remains to build more multifamily across the region
Multifamily properties remain desirable for investors across the region, but there are some headwinds facing the asset class.
This theme, and more, was discussed during the event’s second panel, which featured Todd Franks, Executive Managing Director & Founding Principal at Greystone; Paris Rutherford, Principal at Catalyst Urban Development; Jorge Abreu, CEO of Elevate Commercial Investment Group; and Nadia Christian, Partner at Wolverine Interests.
The panel discussion was moderated by Paul Hendershot, Senior Director of Market Analytics for Texas, Oklahoma and Arkansas with CoStar Group.
Pictured from L to R: Paul Hendershot, Todd Franks, Paris Rutherford, Nadia Christian, Jorge Abreu
Collin County is leading the Metroplex in job growth, which means that there will need to be additional housing in the area. Rising single-family home prices have helped with multifamily absorption, with sellers seeing 3-5% cap rates, the group highlighted. In some cases, rents can be higher than mortgages due to economic pressures and demand.
While there are currently 26,700 new units under construction across the Metroplex, some developers are facing headwinds. For instance, municipalities with strict zoning guidelines — where detached single-family homes are favored — cause a longer lead time with entitlements. Developers have to present plans to residents of a community and in many cases, “follow the vision for the city.”
Other trends that are challenging new multifamily development across the Metroplex are generational changes and cost of living. As some groups resist change and new development, it can put more pressure on the market, elevating the need for more affordable housing. However, Collin County has a remarkable opportunity to build a working community and set a new precedent. The challenge becomes getting it right. Collin County has already established a reputation apart from the Dallas-Fort Worth area as its own “brand.”
The time to scale up infrastructure and master planning is now
During the third panel, the group discussed themes related to the area’s infrastructure, major developments, recreation amenities, and planning for the future.
Panelists included Peter J. Braster, Director of Special Projects for the City of Plano; Jason Ford, CEcD, President of the Frisco Economic Development Corporation; Joe Hickman, General Manager at Blue Star Land, LP; Mehrdad Moayedi, President and CEO of Centurion American Development Group; Clay Roby, Managing Director at Stillwater Capital; Lucy Billingsley, Partner with the Billingsley Company; and Michael Swaldi, Senior Managing Director at JLL Capital Markets.
This panel was moderated by Jeff Johnson, CEO of REjournals.
Collin County is “spiraling up,” but this means that major infrastructure projects, such as the expansion of the North Dallas Tollway, are crucial for the region. Cities need to be aggressive and forward-looking when it comes to infrastructure development or there could be bottlenecks — or worse, a stalling-out — of growth. While there’s a traditional trope that the private sector moves faster than the public sector, there’s an opportunity for Collin County to buck that trend.
Pictured from L to R: Mehrdad Moayadi, Peter J. Braster, Joe Hickman, Jason Ford , Michael C. Swaldi, Lucy Billingsley, Clay Roby
“Frisco is located within both Denton and Collin Counties,” said Jason Ford, president, Frisco Economic Development Corporation. “And, the PGA’s new headquarters and resort is strategically located in the Denton County side of Frisco. We anticipate that the PGA will have a tremendous regional economic impact that spurs regional growth and development across both Denton County, Collin County and areas far beyond for years to come.”
The emergence from the pandemic is the perfect opportunity to come up with new and fresh ideas for Collin County communities in terms of amenities and overall quality of life. Building new parks, hiking and biking trails, and other recreational amenities are just one piece of the equation. Looking at planning from a more holistic perspective, where creating a complete community that meets everyone’s needs, will lead to success.
The quickly increasing cost of living is having an impact on lower-earning families across Collin County, but there are opportunities to not only build new but to repurpose existing structures in order to add more housing and office space more quickly. While some companies are still waiting on the sidelines to see how things shake out with the pandemic, they may be missing their moment. The time to jump in and participate in planning and development is right now.
Exponential growth is real, and it’s here
The fourth and final panel featured Daniel Bowman, Executive Director/CEO of the Allen Economic Development Corporation; Rex Glendenning, broker and owner of Rex Real Estate; Joey Grisham, Economic Development Director for the Anna Economic Development Corp.; Alexis Jackson, Director of Celina EDC; Peter Tokar III, President & CEO of McKinney Economic Development Corporation; and Carl Pankratz, President and Managing Director at Blackacre Commercial.
The final panel was also moderated by REjournals’ own Jeff Johnson.
Collin County has a great problem: the area has had 100% growth in ten years. But the flood of new residents and the evolving circumstances impacting the workplace are raising the bar in city planning. There is one major theme and question which should lead master planning and community development, which is, how does Collin County become the next next-gen county?
For example, incoming residents of McKinney in desirable corporate workforces are joining long-time residents in the county’s small rural communities. These existing residents may suddenly find themselves in an urban environment as the area quickly develops. So how do you balance the mix and meet the needs of both old and new residents?
This is where the role of economic development councils comes in. Economic development councils make investments and deals not to compete with private developers but to steer development in a balanced way. Convention centers, hotels, entertainment venues, community colleges, medical projects, and manufacturers are also being wooed. Meanwhile, developers are being encouraged to put in roads at their expense against future impact fee credit, in order to help the cities where they are doing projects.
Birmingham, AL, October 5, 2021 – Harbert United States Real Estate Fund VII, L.P., along with its parallel fund (“HUSREF VII” or the “Fund”), together with Harbert Parkside Co-Investor, L.P., a Fund-sponsored co-investment vehicle, has closed on the acquisition of Parkside at Craig Ranch (“Parkside” or the “Property”), a unique, 1,824 unit, class A multifamily property located in the acclaimed 121 Corridor of Dallas-Fort Worth. The Property presents a compelling risk-adjusted opportunity to create value in a rapidly growing and high-quality submarket. Developed in five phases between 2013 and 2021, the Property features market-leading amenities in a one-of-a-kind lifestyle environment that is difficult to replicate.
Parkside is part of a 2,200-acre master-planned, mixed-use development that provides great livability between the booming suburbs of McKinney and Allen. The Property’s location in Craig Ranch and the heart of the 121 Corridor is proximate to numerous large employment centers and adjacent to significant new mixed-use developments including HUB 121, District 121, and McKinney Corporate Center.
HUSREF VII’s renovation strategy will be light in nature, focusing on modernizing the interiors of Phase I and upgrading the technology throughout the Property. Most importantly, management plans to prioritize building a sense of community at Parkside through an extensive combination of on-site amenities, social events and tenant services. The property management effort will be led by BH Management Services. Click to read more at www.harbert.net.
Founded in 1989, Regent Properties, LLC is a real estate investment management and development firm based in Dallas, Texas, and Los Angeles, California. The company is a vertically integrated operator and fund manager with investments managed throughout the Sun Belt markets. They have registered investment advisors who manage a variety of investment portfolios.
Regent Properties continues to grow as they open a second headquarters in Dallas. New and existing members of Regent Properties’ corporate team will relocate to the Dallas Fort-Worth area. This expanded corporate presence will function in parallel with the company’s longtime headquarters in Los Angeles.
Eric Fleiss, CEO of Regent Properties, explained, “As Regent looks to acquire a significant amount of high-quality office product across the Sun Belt over the next 24 months, it makes perfect sense to be rooted full-time in one of our core historical markets, where we can remain in constant touch with our entire portfolio. DFW is one of the fastest-growing metros in the nation and offers unparalleled infrastructure, talent, and dynamism to help build on Regent’s 30-plus year track record of success.” Click to read more at www.dallasexpress.com.
