Crow Holdings Development celebrated the groundbreaking of Core30 Logistics Center, a two-building, Class A industrial complex in the East Dallas submarket located five miles from downtown Dallas.

Situated at 5323 Lawnview Ave., this state-of-the-art development is scheduled to deliver in the first quarter of 2025.

Core30 Logistics Center spans 511,000 square feet across two meticulously designed buildings that are strategically positioned just off Interstate 30. Building 1, a 300,347-square-foot cross-dock facility, complements Building 2, a 210,653-square-foot front-load building.

Boasting a prime location within the densely populated labor market of East Dallas and immediate access to Interstate 30, Core30 Logistics Center offers unparalleled access to a vast consumer base, with approximately 1.3 million people within a 10-mile radius and 3.4 million within 20 miles.

“The development of Core30 Logistics Center is an exciting one,” said Stream Managing Director and Partner Matt Dornak. “The project is strategically positioned to attract a wide array of tenants needed to support the dense and growing population base in the greater Dallas area. Stream is grateful for the opportunity to partner with the industrial team at CHD to help bring success to this much-needed development.”

Dornak and Vice President Ridley Culp with Stream Realty Partners, a national commercial real estate firm offering an integrated platform of services, are handling the leasing of the development on behalf of CHD. Leasing of the property is currently underway. 

Other key contributors to the project include the general contractor McFadden and Miller, as well as Azimuth Architecture as the architect.

Dallas and Chicago led the way in a new report highlighting the nation’s top-20 metropolitan areas for manufacturing.

Dallas ranked first and Chicago second on CommercialSearch’s May 22 list of the top metropolitan areas for manufacturing in 2024.

The manufacturing sector itself is gaining strength across the United States. CommercialSearch pointed to the $39 billion from the CHIPS and Science Act. All that money will have been allocated by the end of this year.

Then there is the increased production of batters for electric vehicles and the growing interest among investors for more U.S.-based production. It adds up to a surge in U.S. manufacturing.

CommercialSearch ranked the Dallas area as the best metropolitan area for manufacturing in the United States. CommercialSearch said that more than 9.2 million square feet of manufacturing space was added to the Texas market in the last five years. That ranks as the highest amount in the United States during this tim.

“While logistics and distribution, corporate services, healthcare and information technology are industries that normally come to mind when analyzing the Metroplex’s economic backdrop, manufacturing is a Dallas-Fort Worth centerpiece — and that may ring even more true in the near future,” CommercialSearch said in its report.

Coming in just behind the Dallas-Fort Worth market was the Chicago metropolitan area. CommercialSearch reported that Chicago is home to the largest manufacturing inventory in the country at 226.4 million square feet, 40 million ahead of second-place Los Angeles and 60 million more than Dallas-Fort Worth.

Chicago is also home to the second-largest workforce employed in production occupations with almost 287,000 such jobs. Chicago also boasts the third-most miles of roadways servicing its metro area with more than 4,800.

“As one of the most storied manufacturing centers in the U.S., Chicago’s strong finish is to be expected,” CommercialSearch said in its report. “Light manufacturing always stood alongside the local steel industry throughout its history.

“Although offshoring in the last few decades has challenged the sector considerably, recent supply chain issues are now leading companies to reevaluate the significance of local production. Similarly, government initiatives like Made in Chicago are also aimed at sustaining and developing the place that manufacturing holds in the local economy and securing its position among the foremost production centers in the U.S.”

Detroit was the only other Midwest metro to make CommercialSearch’s top five, coming in as the fourth-strongest metropolitan area for manufacturing.

Cleveland, at number 6, and Cincinnati, at number 10, also made CommercialSearch’s top 10 in the Midwest. In Texas, Austin, at number 8, and Houston, at number 9, also made the top 10.

Other top-score metro areas include Columbus, Ohio, in 11th place; Elkhart, Indiana, at 12th; and Grand Rapids, Michigan, at 14th. Rounding out the top 20 were Milwaukee at 17th; Akron, Ohio, at 18th; and Minneapolis at 20th.

The commercial real estate industry in Texas faces a unique set of environmental challenges and opportunities. Partner Engineering and Science, Inc., a leading environmental services firm, is at the forefront of helping clients navigate these complexities. With a focus on due diligence, innovative solutions and sustainability strategies, Partner empowers Texas CRE investors and developers to make informed decisions and future-proof their projects.
“One major issue is the potential wave of distressed assets due to factors such as declining property values in various sectors, stagnant rent growth, higher interest rates and a tight credit market,” said Summer Gell, a principal at Partner and an environmental science expert. “As a result, many investors have been focusing on property maintenance due diligence such as asbestos and mold, to carefully consider measures to avoid liabilities and reduce losses on distressed assets.”
Another emerging challenge is perfluorinated alkyl substances (PFAS) contamination. The Environmental Protection Agency’s recent classification of PFAS as hazardous substances necessitates its inclusion in Phase I Environmental Site Assessments (ESAs). “Partner has been preparing for the implications of the new PFAS regulation, integrating this into the firm’s due diligence processes,” Gell said. “This includes offering specialized guidance and support to commercial real estate investors in Texas on how to navigate the challenges presented by the new EPA regulation and its impact on property investments.”
Innovation is also a hallmark of Partner’s approach. Gell pointed to the growing adoption of vapor intrusion mitigation systems in Texas developments. These systems prevent hazardous vapors from entering buildings, safeguarding occupant health and facilitating smoother transactions. Partner leverages risk assessments aligned with ASTM standards to identify potential vapor concerns and recommend mitigation measures.
“Incorporating vapor intrusion mitigation barriers during construction can significantly benefit commercial properties by mitigating potential health risks and enhancing the property’s marketability,” Gell said. “These measures can also minimize liability for property owners and increase the overall value of the building. This proactive approach to environmental challenges demonstrates how innovative solutions can be successfully integrated into commercial real estate projects.” Sustainability is another critical area where Partner guides Texas CRE stakeholders, helping them minimize both financial and physical risks. Partner advocates for setting clear decarbonization goals using frameworks like the Carbon Risk Real Estate Monitor (CRREM) Pathway.
“By adopting sustainable measures, CRE investors and owners can futureproof their assets and enhance the long-term value of their investments,” Gell said. “By focusing on sustainability, developers and investors not only align with global trends but also contribute to the overall resilience and success of their commercial real estate projects.” The future of Texas CRE looks increasingly electric, Gell added, noting the growing shift to electric vehicles, which necessitates incorporating EV charging stations into properties. Partner recognizes this trend and its alignment with environmental, social and governance (ESG) goals.

Any experienced property manager is no stranger to calculated risk management and disaster planning for the assets under their care.But after a global pandemic and civil unrest followed by continued climate change, property managers can add substantial value to property owners by implementing new technology, digging into data, leveraging contractors, and creating plans to minimize the risk and cost of any future disaster. 

During the pandemic, property managers were at the frontline, adding signage for social distancing, implementing facial recognition for access control, providing unprecedented cleaning protocols, and working with HVAC contractors to improve air quality and filtration in their buildings. Today, they are on the frontline combating rising insurance and operating costs and increased office vacancies, creating cool amenities for tenants, or even pivoting office assets to multifamily.

For each of those challenges, property managers are invaluable to property owners and tenants by bringing their creative problem-solving, practical experience, and judicious expense control to the 530 million square feet of commercial office, retail, and industrial space in the Twin Cities.

Rising costs drive operating expenses

In the world of CRE, property managers are often in the background, focused on the large and small details. Every detail contributes to the building’s operating expenses and directly to the tenant’s monthly expenses. It’s the job of the PM to find the best option for long- and short-term expenses necessary to operate buildings.

Among these, insurance costs can have a substantial impact on property operating expenses.  Over the last three years, insurance premium increases have reached double digits, driven by the increasing frequency and intensity of natural disasters and rising replacement values due to inflation of construction materials. 

Catastrophic insurance coverage for properties with poor risk profiles have seen increases from 45% to 150% over this timeframe.   Some PMs combat rising premiums by bundling buildings together under one portfolio policy, which benefits all clients.  This often offers better coverage and significant cost savings that smaller-scale property owners cannot purchase on their own. This kind of expense control allows owners to pass the savings on to their tenants or use the money to improve buildings.  Shrewd expense control also leaves room for incremental rent increases for landlords.

Property taxes — another rising cost — have extended to industrial spaces in most cities due to office valuations declining and significant increases in industrial property valuations. While the increased value of industrial assets has been good for industrial property owners and sellers, tenants in industrial properties may receive serious sticker shock when reviewing year-over-year expenses with the increased property tax included. For tenants in office spaces, the reduced valuation of the property may not translate into lower property taxes for 12 months or more, unless the property managers and owners are diligently seeking reductions.

When will the next crisis strike? What are the possibilities?

A few crises are predictably looming. According to Bloomberg, more than $900 billion or 20% of the total US commercial and multifamily real estate debt will mature this year.  The potential for lenders to require payback of outstanding debt on office properties with significant vacancy could be crippling to the regional banking and commercial real estate industries.  The remaining debt on these properties is likely to exceed today’s appraised value, meaning the owners would need to find additional capital to pay or renew the loan. If the owner doesn’t have that option, it’s possible to “give the keys” back to the lender.    

That process, called Receivership, requires the court to appoint an impartial third party as Receiver, typically a property management team, to take control of a property and act as owners on behalf of both the lender and the property owner during the Receivership period.  Receivership is a big step for both lenders and owners, and few in the industry take that step lightly. While widespread Receivership hasn’t started, property management teams are already thinking about what that might look like to get prepared. As the frontline for the tenants, lenders, and property owners, PMs are key to the success in that process.

Being appointed a Receiver is not for the faint of heart.  The process can be hostile if both parties are not aligned in the decision to proceed. The relationships can be emotional if the defaulting party has long-standing ties to the property and is not ready to exit. It is also often that the defaulting party simply abandons the relationship and there is little information or transfer of knowledge for the Receiver to operate the property. Tenants can feel lost in the process if the Receiver is not knowledgeable enough or staffed well enough to effectively oversee things like lease renewals, approvals of tenant requests, or problem-solving on their behalf.  Simple account receivable disputes can be difficult to resolve if the information is not available from the debtor. The rules for Receivers are clear in Minnesota but each lender and debtor bring a different set of operating challenges.   

Inevitably, climate, workforce, and market changes will continue to challenge the operations of commercial properties. In some locations, the PM staff will need to plan for wildfires due to drought. In others, drought will cause reduced water available for operations, which may drive new environmental regulations.  Hybrid workforce preferences will likely require new ways to heat/cool, clean, and operate buildings allowing for more flexible and sustainable systems.  All change is interconnected, and we see building operating costs increasing in response. 

Looking forward

One key duty of the property manager is to look forward – for operational or staffing needs, capital improvements, budgets for ongoing maintenance, technology trends, and tenant turnover. If the pandemic, recent environmental disasters, and the GFC taught us anything, it was to not be surprised when bad things happen. We’ve also learned yet again to plan for the worst and hope for the best during any challenge.

Amy Melchior is executive vice president of property management with Bloomington, Minnesota-based Forte Real Estate Partners.

SPI Advisory, the Dallas- and Austin-based multifamily private equity firm, closed the sale of Oaks on Marketplace, a 254-unit, Class-A apartment complex built in 2017 at 20400 Marketplace Ave. in Kyle, Texas.

Located just seven miles south of Austin, Oaks on Marketplace attracts renters seeking a high-end lifestyle at an affordable price.

SPI Advisory and its partners acquired the newly built property directly from the developer as part of a two-property portfolio in 2019. The sale of Oaks on Marketplace marks the completion of more than five successful years of ownership and is SPI’s first property disposition of its Central Texas portfolio.

Restaurant openings are on the rise. And one segment that’s especially active? Celebrity-backed eateries.

JLL in a May research brief reported that 361 celebrity restaurants have opened in the United States and Canada from 2019 through 2024. The roster of celebrities backing these restaurants includes celebrity chefs, actors and musicians.

The year 2021 was an especially busy time for celebrity-backed restaurants. JLL says that celebrity restaurant openings doubled from 2020 to 2021. This happened during the height of the COVID-19 pandemic, a time in which overall U.S. restaurant openings only jumped by 13%.

Another interesting tidbit? Chefs and actors opened 67% of the celebrity restaurants during the last five years in Canada and the United States. JLl reported that 37% of celebrity restaurant openings were powered by high-profile chefs and 32% by actors.

Don’t expect the pace of celebrity restaurant openings to slow, either. JLL reported that there were 1,832 new U.S.-planned restaurant openings announced in the first quarter of 2024 alone.

In this competitive atmosphere, attracting investors, appealing to landlords and connecting with customers is a challenge, JLL said. Celebrity-backed restaurants can help bring loyal fans to a new restaurant.

What celebrity-backed restaurants have opened recently? Houston rapper Bun B opened Trill Burgers, a restaurant specializing in upscale hamburgers. Former NFL quarterback invests in Walk-On’s Sports Bistreaux and Smalls Sliders.

Comedians Pete Davidson and Jason Sudeikis, musician Mark Bronson and actors Nicholas Braun and Justin Theroux are all investors in New York City’s Pebble Bar. Kris Jenner signed on as an investor in Health Nut, a healthy-foods chain that is looking to expand beyond its Southern California base.

There’s also Kevin Hart’s Hart House, LeBron James’ Blaze Pizza franchise, rapper Drake’s Dave’s Hot Chicken franchise and Priyanka Chopra’s SONA.