Exponential Growth, Investment, and Planning for the Future Were Key Themes at the REDnews Collin County CRE Summit

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.

Parkside at Craig Ranch Acquired by Harbert Funds

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.

Bradford Secures Two Office Leases for One Lake Park Office Building

International firm Kroll Inc. and MaxDecisions Inc. are relocating and expanding their offices in North Texas, snapping up the remaining space in the class A One Lake Park in Richardson’s Telecom Corridor.

Kroll and MaxDecisions have leased 11,896 sf and 3,154 sf, respectively, on the first floor of 2140 One Lake Park Blvd. The new deals restore the mid-rise’s historical 100% occupancy after one year of downtime due to the pandemic.

“We were in the early stages of marketing the spaces when COVID hit. Once tours picked up again, we quickly had commitments in hand for the vacancies,” says Melanie Hughes, senior vice president of Bradford Commercial Real Estate Services. She and Elizabeth Hooper, market director, lease the 192,213-sf office building for Lennox International Inc., an owner/occupant.

Kroll is eyeing a September move-in. The firm has retained ARCO/ Murray, a national design and construction firm, to build out its new office, which has views of the lake and walking trails on Lennox’s multi-building campus. Alexandra Boury and Greg Langston of Avison Young represented Kroll, formerly Duff & Phelps, in the long-term lease negotiations.

MaxDecisions has just relocated its headquarters from nearby Plano to One Lake Park. Hughes and Hooper negotiated a direct deal with the IT firm, which also has offices in Oregon, Utah and California. The company is an analytical provider for the financial services industry.

The eight-story One Lake Park features such high-end amenities as an Aramark Corp.-operated, 120-seat restaurant, fitness center with personal trainers, structured parking and 24/7 manned security. The dining facility and gym are scheduled to come back online on Sept. 1 in tandem with Kroll’s move-in.

“Lennox is a Fortune 500 company so the infrastructure and amenities are top of the line,” Hughes says. “As a result, One Lake Park attracts leading tenants in their respective industries.”

Kroll is relocating its Addison team and keeping the Uptown office intact. The company provides diverse services to 61% of the Fortune 100 companies, including valuation, investigations, corporate finance, cyber risk, security, restructuring and regulatory compliance. The advisory firm employs nearly 5,000 professionals in 30 countries and territories around the world.

Partnership Acquires 50% Stake in Dallas-Based Developer KDC with Eye Toward Acquisitions

Toronto-based Cadillac Fairview in partnership with Dallas-based Compatriot Capital has acquired a 50% interest in Dallas-based developer.

KDC will continue developing corporate office facilities across the U.S., while also focusing on the development and acquisition of high-quality, mixed-use projects. Coinciding with the partnership, Cadillac Fairview, Compatriot Capital and KDC have closed on their initial $800 million U.S. commercial office and mixed-use fund. The fund marks new ground for KDC and will serve as a long-term investment vehicle for the partners, bolstering their combined portfolio of Class A office and mixed-use properties.

“For more than 30 years, the KDC team has been focused on developing commercial office buildings and custom corporate homes for some truly great companies in the U.S.,” said KDC CEO Steve Van Amburgh. “As we look to the future, now is the best time to take the next step and elevate our growth model with two dynamic partners: Cadillac Fairview and Compatriot Capital.”

Compatriot Capital is a wholly-owned subsidiary of Sammons Enterprises, Inc. Cadillac Fairview is the global real estate arm of the Ontario Teachers’ Pension Plan, which has over $200 billion of assets. Click to read more at www.fortworthbusiness.com.

Lewisville’s 90-Acre Resort-Style Complex Hebron 121 Bought by East Coast Investor

Hebron 121 Station in Lewisville, one of Dallas-Fort Worth’s largest privately owned luxury multifamily developments, has been sold, seller Huffines Communities announced last month.

EastSky, a multifamily investor with properties primarily on the East Coast, purchased the 90-acre “resort-style” complex from brothers Donald and Phillip Huffines, co-owners of Huffines Communities, for an undisclosed amount. The development includes 1,429 units and more than 2,000 residents and is near Interstate 35E at State Highway 121, as well as Denton County Transit Authority’s Hebron Station on the A-train line.

The Huffines, Lewisville natives, began the massive project when they purchased the land in 2007, building the development out over 10-plus years and five phases.

The first phase of 250 units opened in 2011, but the property now includes both apartments and townhomes with upscale amenities including four pools, sand beaches, fountains, entertainment lounges, an on-site restaurant and convenience store and a swim-up bar.

The last phase finished about two years ago and, with some of the leasing challenges brought on by the COVID-19 pandemic behind them, the Huffines decided to put it on the market.

“We just decided it was time,” Phillip Huffines said. Click to read more at www.dentonrc.com.

Winter Storm Pushes Texas Hotel Occupancy Gains

Texans displaced by freezing temperatures and outages pushed the state’s occupancy to a 50-week high, according to an analysis by STR. During the week of 14-20 February, Texas hotel occupancy reached 56.3%. That 50-week high in the metric contributed 0.9 percentage points of the 3-point gain in overall U.S. occupancy (48.1%) for the week. Texas’ occupancy level grew 9.4 percentage points over the previous week, which is the largest week-over-week occupancy increase for the state in the last year. Average daily rate (ADR) rose 5.8% week over week, which was Texas’ largest gain in the metric since the week of New Year’s. “Texas hotels are no stranger to housing displaced guests during a pandemic,” said Isaac Collazo, STR’s VP of analytics. “Similar to what we saw with Hurricane Laura, there was increased hotel demand for most markets because there wasn’t a great deal of business to lose ahead of the storm. We would have likely seen higher hotel performance across the state had hotels not experienced similar power and water loss as homes, in addition to the limited number of rooms available in some hotels due to reduced staffing as a result of the pandemic.” Click to read more at www.hotelnewsresource.com.