$500 Million, DART-adjacent Master Plan Underway in Addison, TX

Cushman & Wakefield has been engaged by the town of Addison, Texas to solicit proposals for a master developer for an estimated 18-acre high-density, transit-oriented development opportunity within the nationally acclaimed Addison Circle urban district. Cushman & Wakefield’s engagement is the next step in the town’s efforts to maximize the benefits of the Dallas Area Rapid Transit (DART) Silver Line/Cotton Belt Corridor by creating a walkable, transit-oriented, mixed-use development adjacent to the future rail station in Addison, which could rival the development value of North Texas’ premiere regional destinations. Chris Harden, Maureen Kelly Cooper, Ryan Duffie and Michael Thomas of Cushman & Wakefield’s Dallas office will lead marketing efforts and provide brokerage and advisory services on behalf of the town of Addison. The team was chosen based on their notable experience representing public agencies locally and throughout Texas, including recently representing DART on the 11-acre Mockingbird Station East mixed-use, transit-oriented development and CapMetro in Austin on the Plaza Saltillo mixed-use, transit-oriented development Both projects are currently underway and represent nearly a billion dollars of development value around the rail stations. The Addison and Cushman & Wakefield team will collaborate with DART on the station-area build-out to effectuate similar type density within a walkable, mixed-use environment. “We’re pleased to have been selected by Addison to find a highly-qualified, forward-thinking mixed-use master developer who can build out the site to its full potential,” said Harden. “The unparalleled central location, access to transit, major employment, and proximity to high-traffic areas like Belt Line Road, a nationally-known hotspot for restaurants, and the exceptional quality of life the town of Addison affords make this a prime investment opportunity.” Addison is an affluent suburb located nearly equidistant from Dallas and Frisco with direct access to the Dallas North Tollway with its own executive airport. The future development’s location sits just south of Addison Circle, an award-winning development and one of original mixed-use developments in the country that set the standard for the “New Urbanism” movement—a planning and development concept that centers on walkability, access to residential and retail properties, and public spaces. When finished, the new development will be connected to a broader, 300-acre walkable urban district. “This future development will become an extension of Addison Circle and solidify its presence as a major regional destination, based not only on location, but in its design in that it will prioritize the experience of the people living, working, and visiting the community,” said Cooper. “We’re looking forward to working with Addison’s leadership and the development community to bring the Town’s vision to life and building on the legacy of the highly successful Addison Circle development.” The future Silver Line Rail Station in Addison will be part of the 26-mile Cotton Belt Corridor that extends between Dallas/Fort Worth International Airport and CityLine / Downtown Plano, providing access to major employment and attractions in the area. Addison envisions the new development at the future rail station will be an architecturally significant, world-class, regional destination consisting of high-density residential, creative and corporate office, boutique hotels, a grocery store, restaurants, and service-oriented retail within a well-designed, walkable framework. The new development will be a catalyst to a much larger vision for the area. The transit station is expected to be completed and operational by the end 2022 or the first quarter of 2023, with ground-breaking for the future development occurring within the same timeline. “We look forward to working with the Cushman & Wakefield team on this significant Addison transit-oriented endeavor,” said Addison Mayor Joe Chow. “We believe that their experience working on similar projects will help us find the right developer for this high-profile project that straddles two vital Addison landmarks: the Addison Circle District and DART’s Silver Line.”

Leasing Efforts Bring Three Texas Buildings to Full Occupancy

Byron McCoy, a partner with Younger Partners, has filled up three buildings totaling 92,941 square feet of space in the past six months. The three fully occupied buildings are Metrocrest II Business Centre at 3033 Kellway Drive in Carrollton, Texas; 1200 Commerce Drive in Plano, Texas and 3365 Regent Boulevard in Irving, Texas. “Everyone is feeling it; these are tough times to make a new deal,” McCoy said. “But the timing was right for these deals. The tenants wanted to be in these specific areas, and we have very responsive owners who defer to their leasing teams’ market expertise and recommendations.” 3365 Regent Boulevard, which McCoy leases with Younger Partners broker Garrett Marler, was filled because the location was just what the tenant needed. That deal was brokered with Younger Partners broker Tanja McAleavey representing the tenant. Metrocrest II reached full occupancy with some organic growth of an existing tenant, as well as other leases (totaling 17,181 square feet.) The owners weren’t afraid to invest in improving the building and the rental rates were competitive to make a deal. The transaction at 1200 Commerce worked out because the owner made the right moves to help the tenant get into a great space for its specific needs. That tenant will be moving in at the end of October. McCoy has leased this building for 17 years. This is the third time he’s gotten this building to 100 percent occupied during this period. “We did some creative leasing deals and I have some great owners who maintain the buildings well and are willing to tackle obstacles that might give some tenants a reason to pause,” McCoy said. “Plus, I’m pretty tenacious and don’t want to let a possible deal slip away.”

New Skyscraper in the Works for Downtown Dallas’ South Side

Almost 40-story tower would be the first phase of 18-acre mixed-use district. Developers are showing off plans for a new skyscraper proposed on downtown Dallas’ south side. Dallas-based Hoque Global and Lanoha Real Estate of Omaha are planning the Newpark mixed-use tower to be built on Canton Street near city hall. The almost 40-story high-rise would contain a combination of office, retail, hotel and residential space in a rapier-thin tower. The lower levels of the building would have retail and lobby areas with parking underground. The building was designed by Merriman Anderson Architects and Pickard Chilton. Moss Construction has been selected as the general contractor. The developers hope to break ground on the project in 2021. The proposed tower project is planned to include 225,000 square feet of offices, a 245-room hotel, 268 apartments and ground-level retail. “I have been working with the city behind the scene to create something different,” said Hoque Global CEO Mike Hoque. “It’s a transformative project “How to crate a project a project that will change south Dallas forever.” The high-rise would be the first phase of a 20-acre district of new buildings along Canton and Cadiz streets on the south side of downtown. The Newpark Dallas district that includes the new skyscraper is planned to include more than a million square feet of office space, 200,000 square feet of urban retail space, thousands of residential units and a four-star hotel. The so called Newpark “Smart District” is also envisioned with a 1 million-square-foot educational campus. Click to read more at www.merriman-maa.com.

TX: Addison Gets all Aboard DART’s New Silver Line with Plans for $500 Million Project

The new Silver Line commuter rail project that DART is building from DFW International Airport to Plano is giving developers new opportunities. The Town of Addison is seeking a “master developer” to build on an 18-acre site surrounding its planned Silver Line – formerly Cotton Belt – rail station. The city has hired a commercial property firm, Cushman & Wakefield, to solicit development proposals for the property which is just west of the Dallas North Tollway near the Addison Circle mixed-use development. Addison officials are hoping that the property will be used for a transit-oriented development that could be valued at a half-billion dollars. “We’re pleased to have been selected by Addison to find a highly-qualified, forward-thinking mixed-use master developer who can build out the site to its full potential,” Cushman & Wakefield’s Chris Harden said in a statement. “The unparalleled central location, access to transit, major employment, and proximity to high-traffic areas like Belt Line Road, a nationally-known hotspot for restaurants, and the exceptional quality of life the Town of Addison affords to make this a prime investment opportunity.” Click to read more at www.masstransitmag.com.

What’s Driving Distribution? CBRE Experts Weigh in on the Industrial Market

In the pre-pandemic world, e-commerce was already a giant. Industry observers predicted it would account for more than a third of all retail sales by the year 2030. Now, roughly a year since we first heard about COVID-19, the virus helped accelerate the growth of e-commerce in a way few could have predicted in 2019. “Even older Americans are now accustomed to buying things online, so it’s pervasive,” said Jack Fraker, vice chairman and managing director at CBRE. Now that threshold of 39 percent of retail sales is viewed as something e-commerce could reach by mid-2027. To meet that consumer demand, Fraker said, there is and will be a need for much more industrial real estate. Texas markets, such as Dallas-Fort Worth, Houston, Austin, San Antonio and El Paso, are benefitting from that push because of their ever-growing populations. On the one hand, explained Fraker, manufacturers want to get distribution hubs closer to their customers to satisfy the existing demands. More than ever, customers expect to receive goods within days of ordering, if not the very next day. “All those retail products have to reside inside warehouses for a while,” Fraker said. Along with satisfying retail needs, warehouses and logistics hubs are essential for growing communities. Before the tub, shower head, curtains, washer, dryer, carpet paint, floor tiles and ceiling fans can be installed in a new home or apartment, they must take up space in a warehouse located nearby. The pandemic also revealed systemic flaws in the international supply chain, prompting manufacturers to relocate to the U.S. or Mexico. “A lot of real blue chip U.S. corporations like the low cost of labor in Juarez, for example. They can assemble products on the Mexico side of the border, ship them across to El Paso and to distribute into the United States from there,” said Jonathan Bryan, executive vice president at CBRE, adding that those goods might end up in a warehouse in San Antonio as well. On top of all that, Texas is an affordable place to set up shop compared to popular hubs on the east and west coasts. “We have freeways that crisscross the state, as well as a number of great railroads. It’s a friendly right-to-work state with a low cost of living and tremendous population and job growth. Not to mention it’s really flat. That makes it easy to build,” Fraker said. “There’s a whole list of Chamber of Commerce reasons companies want to be here and that’s why the Texas markets are exploding.” As much of a bargain as Texas industrial prices are, they’ve certainly increased in the past few years. Fraker points out that some of the new prototypes or big e-commerce companies are paying $200 per square foot or more. That isn’t a deal breaker these days, however. “The number one question the investor would ask us when we sell a property used to be ‘What’s the price per square foot?’” said Fraker. “It’s still asked, but it’s not the overriding question.” That, he emphasizes, is usually related to other fundamentals. Investors want to know how much space is already available in the market, what the tenant profile looks like and the range of lease rates. They’re also keenly aware of the value of location over just about any other factor. “A lot of users have realized they can’t only have three distribution centers that serve the entire United States. Just-in-time demand has created a need for more dots on the map, more locations,” Bryan said. “So we’re seeing a lot more demand in what we would categorize as secondary strategic markets.” As examples, he cites Indianapolis, Columbus, San Antonio, Savannah and Reno, which provide more touch points closer to the population base is key for companies to be competitive. Many of those companies have developed algorithms based on where the customers are and where they need to be to get the product to the customer quickly. “We like to say, ‘location trumps functionality’ or ‘location trumps age,’” Fraker said, explaining that many companies looking for an industrial footprint will take an older infill site over a shiny new building. “They sacrifice the clear height of the building. They don’t care as much about the length and depth of the truck court. What matters most to them is how long it takes to drive to the best customers.” While the huge industrial deals are the ones that usually make the headlines, CBRE’s experts say smaller tenants are the core of the market right now. “We all talk about the million-square-footers, which are happening left and right. But at the same time, 20 or 30,000-square-foot leases are signed,” said Fraker. “If you visualize the national inventory of industrial real estate as a pyramid, the million-square-footers are at the top. The base of the pyramid is all the smaller tenants, who represent the vast majority of the universe of industrial real estate.” The challenge now, besides fighting off the competition, is finding space for those small tenants. Most require infill interior sites, which are few and far between these days. Even when a site is located, it can be cost-prohibitive because you lose the economies of scale on a smaller building, resulting in higher rent. Fraker predicts that will prompt the industry to consider new prototypes, such as the multilevel industrial examples in Tokyo, Singapore and Hong Kong. “In those cities, it’s not uncommon to see a 10-story, 1-million-square-foot building,” he said. “However, the floor plan is only 100,000 square feet. The buildings go vertical.” That, Fraker added, isn’t something that’s necessary in a market like Dallas, where the topography is flat and there’s plenty of land. It’s more likely an option in urban markets such as Seattle, San Francisco or New York. While they expect the sector to evolve and change over time, Fraker and Bryan agree that the white-hot demand for industrial will continue for at least a decade, possibly more. “Some of these major e-commerce companies are trying to make sure they can have delivery to everybody within one or two days. That requires a very ambitious and long-term expansion plan,” Fraker said. If you have to choose between throwing money in a savings account or even the stock market, it’s hard to argue against industrial real estate, especially in the current market. “You get some very attractive returns,” Fraker said. “That’s what’s driving our asset class.”

$30 Million Residential Redevelopment Project Approved for Downtown Garland’s West Side

The City of Garland, Texas and GroundFloor Development have partnered to realize a $30 million commercial redevelopment project for the west side of downtown. Over the past two years, both parties have been actively working on a reinvestment project to be constructed on the northwest corner of South Garland Avenue and West Avenue B. Representing the first phase of what is intended to be a much larger mixed-use development, this sizeable anchor investment will launch the transformation of the entire block into a modern residential, retail and services hub in a part of downtown that has thus far struggled to realize its full redevelopment potential. In total, the approximately four-acre site is currently home to Chase Bank, a vacant former Wyatt Cafeteria, Commonwealth Land Title Company and a few other small businesses. Phase I will consist of demolishing the 11,000-square-foot former cafeteria building and replacing it with much denser new construction in the form of The Draper, a three-story, 155-unit residential complex. As perks for future residents, the new apartments will include a community-oriented amenity center, an outdoor pool, as well as “tuck-under” garages. Looking to Phase II of the project, plans call for the existing five-story, 1960s-era Chase Bank building to be fully renovated for new tenants, with Chase Bank remaining as the primary retail services anchor. Upon completion, the center will be a modern, mixed-use housing development. “We have big plans for The Draper, and we’re envisioning a renewal of Garland’s West downtown commercial activity while catalyzing future growth,” said Mark Drumm, a partner with GroundFloor. “Partnering with the city, we hope to add another successful modern housing development to our portfolio in Texas.” The Draper will be a community-oriented living space geared towards professionals who are seeking a more urban living lifestyle in a centralized community location. Residents will be walking distance away from various shops, restaurants and entertainment venues on the Downtown Garland Square. They will also be close to the Downtown Garland DART light rail station, where residents will have access to the greater DFW Metroplex. “After many months of hard work, we are extremely excited to see The Draper finally come together and look to provide the west side of Downtown Garland with a much-needed development catalyst project. We’re happy to support GroundFloor with this first phase, especially as we seek to further focus our efforts on redevelopment projects in the city’s historic downtown core,” said David Gwin, director of Garland’s Economic Development Department. Major redevelopment projects have been on the city’s radar for a while, as Garland continues to mature and is now largely built out particularly in the central core of the community. Recent residential redevelopment in downtown include the City Square Lofts off of Avenue B and Glenbrook in the former Bank of America building. This project resulted in the entirely repurposed, four-story office building into the now 126-unit apartment complex, while increasing the site’s real estate value from $460,000 to $7 million.