Tag: Dallas

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.

Stream promotes development expert to lead its central region industrial development team

Posted on by Mia Goulart

Bates Arnot will lead Stream Realty Partners’ central region industrial development services division in his elevated role as managing director.

In his new role, Arnot will continue sourcing development opportunities throughout Texas and Colorado and other markets in the region. Arnot will manage the Industrial Development Services platform’s largest team, continue to source new development talent, and contribute to Stream’s national IDS platform’s leadership and overall growth strategy.

Arnot originally came to Stream, a national commercial real estate firm offering an integrated platform of services, as a young industrial leasing broker in Dallas in 2009. Green, a fellow leasing broker at the time, took the initiative as Arnot’s professional mentor and business partner. The duo saw great success together. 

In 2013, Arnot left Stream to learn more about industrial development at Hillwood (a Perot Company), a multinational industrial, commercial, and residential real estate development company based in Dallas. While there, Arnot was responsible for leasing, land acquisitions, development, and property acquisitions in multiple markets, including DFW, Denver, Houston, Austin, and Memphis. He was involved with over 28 million square feet of leasing and 1,170 acres of land acquisitions, representing 14.5 million square feet of industrial development.

Armed with seven years of development experience at Hillwood, Arnot rejoined Stream in 2020 to help build its new Industrial Development Services platform. Since his return, the team has accumulated 10 current projects in the central region with a total cost basis of $1.1 billion. His most recent success was a start-to-finish development and forward-sale of a 300,000-square-foot industrial building to Westcore Properties executed earlier this year.

Moroch Partners relocates into new 24,000-square-foot office HQ in Dallas Design District

Posted on by Mia Goulart

Transwestern Real Estate Services (TRS) and Quadrant Investment Properties (QIP) announce Moroch Partners, a Dallas-based full-service, independent marketing and communications agency, has signed a new, long-term 23,365-square-foot office lease at the Manufacturing District (MD), located at 147 Manufacturing St. The firm relocates from Hall Street at The Centrum and plans to move its employees into its new offices in 2024. Transwestern’s Paul Wittorf, Kim Brooks, Laney Delin and Collin Burwinkel represented QIP in lease negotiations. Jihane Boury and Clay Vaughn with Savills represented Moroch Partners.

Moroch Partners is a leading full-service, independent marketing and communications agency based in Dallas, with a presence in over 30 markets across North America. Moroch clients include McDonald’s, Planet Fitness, Six Flags Entertainment Corporation, Altitude Trampoline Park, Disney, Sony, Universal, Make-A-Wish Foundation and Midas, among others.

Moroch joins other tenants on-site at MD, including Alto, Smart Business Concepts and Kirksey. In June, Pennsylvania-based 84 Lumber, the nation’s largest privately held supplier of building materials, signed a 4,933-square-foot lease for its new western office headquarters. With the recent leases, MD is now more than 80% leased.

With tenant amenities such as a shared rooftop lounge featuring unobstructed panoramic views of downtown Dallas, Triumph’s Espresso & Whiskey, a pedestrian path that was re-envisioned from an abandoned rail spur, and The Grove, a shared outdoor community lounge with casual seating, lush landscaping and 6G Wi-Fi, amenities on-site at MD were carefully designed to create opportunities for tenants to work, socialize and enjoy outside of their office environments.

According to Transwestern research, the Design District has seen nearly $1 billion in private investment over the last 15 years. With top-tier local and out-of-market restaurants and new retail concepts recently announced, the area is one of Dallas-Fort Worth’s most widely sought-after locations.

For more images of the Manufacturing District, click here.

Chelby Sanders joins Cresa

Posted on by Mia Goulart

Industry veteran Chelby Sanders has joined Cresa, the world’s leading occupier-centric commercial real estate firm, as a managing principal, announced Sharon Morrison, managing principal, and Texas market leader. She will be based in the firm’s Dallas office.

A well-respected advisor who has negotiated some of the largest, highest-profile deals in the Dallas-Fort Worth area over the years, Sanders was most recently an executive vice president with CBRE’s transaction advisory services group. She focuses on corporate work, helping her clients navigate the complex, post-pandemic world of office occupancy. A prolific dealmaker, she and her team averaged more than 100 transactions per year for office users. During her career she has arranged more than 40 million square feet of transactions valued at $4.0 billion plus. Notable transactions Sanders has secured are: American Airlines’ 1.5 million-square-foot headquarters campus lease in Fort Worth; JC Penny’s 1.2 million-square-foot sale-leaseback in Plano; Charles Schwab’s 500,000-square-foot lease in Westlake; and Hilton Worldwide’s headquarters relocation from Los Angeles to Tysons Corner, VA. Her diverse client list also includes: Gainsco, Enovis, Riveron, KnollMiller, Goosehead Insurance and Brunswick.  

While at CBRE, Sanders was awarded the Gary J. Beban Teamwork Award, which recognizes an individual’s multi-disciplinary approach to client service (2017). She was also an annual Americas and Dallas Top Producer.

Prior to CBRE, Sanders served as a vice president at JLL and a vice president at The Staubach Company. 

Sanders is committed to philanthropic endeavors, and currently serves on the board of directors at Fair Park First, working to preserve and enhance Dallas’ cultural and civic landmark which serves as the permanent home of the State Fair of Texas. She also served as the chair for the annual Go Red for Women lunch, the American Heart Association’s signature women’s initiative, in 2015-16 and chair emeritus in 2016-17. In addition, she has devoted time to the YWCA of Metropolitan Dallas serving on its board of directors from 2006-2012. 

Sanders earned a Bachelor of Science from the University of Texas at Tyler. A native Texan, Sanders and her husband own QB 6666’s Ranch in West Texas and are active cattle ranchers. 

Cresa continues to grow its Texas operations and Sanders’ addition to the team is just the latest in a series of moves the firm has made to bolster its services in the state in the last 18 months.  In 2022 Cresa expanded its Dallas footprint with the acquisition of esrp and in Austin with the acquisition of Elevate Growth Partners.

StreetLights Residential breaks ground on The Galatyn

Posted on by Mia Goulart

Dallas-based StreetLights Residential has commenced construction on The Galatyn, a 20-story high-rise community featuring 56 penthouse-style apartment homes. Situated in the Upper McKinney District, where Harvard Avenue meets Highland Park, it stands across McKinney Avenue from its sister residential building, The McKenzie. Located on the quieter side of nearby Knox Street, The Galatyn is in close proximity to numerous dining and retail establishments, including the upcoming Tres Market specialty grocery store, and is just one block from the Katy Trail. The Galatyn is slated to open in 2025.

The Galatyn will offer two- and three-bedroom residences, averaging 2,700 square feet, with penthouse suites over 4,500 square feet. Building upon the success of The McKenzie, The Galatyn will offer spacious unit floor plans, with only three units per floor and two units on the penthouse level. Residence living spaces will include a formal entry with an attached powder room and an open kitchen with designer appliances, a waterfall island, and a bar. Private service kitchens will contain a second fridge, sink, and dishwasher. Primary suites will feature dual closets and a spa-grade bathroom with a freestanding bath and a walk-in rainfall shower. The interiors will showcase top-tier finishes, including natural wood flooring and quartzite countertops throughout, as well as floor-to-ceiling windows in the living areas.

Residents will have access to luxurious amenities, a full-service concierge bar, a variety of workspaces within private nooks or communal settings, and a resident coffee bar. A courtyard with a stunning community conservatory for tranquil relaxation, along with a fireplace, will overlook an exterior colonnade with lounge seating and pool views. As you explore, an expansive sunroom will await with antique fixtures and grand arched windows. Additional on-site resources will include a dog wash for dogs of all sizes with relief areas conveniently located on each residential floor. The property’s fitness center will feature a breakout flex room and an infrared sauna, as well as a year-round pool with a fully equipped catering kitchen, ideal for entertaining guests.

StreetLights Creative Studio is the architect of record for the project and is handling all interior design in-house. SLR Construction, LLC, is the general contractor.

Stream Realty Partners names new partner in Dallas

Posted on by Mia Goulart

A longtime commercial real estate leader credited with growing Stream Realty Partners’ Dallas industrial leasing team by more than 100% in three years has been named a partner.

Managing Director Matt Dornak will continue to oversee day-to-day industrial activities for Stream’s Dallas-Fort Worth office alongside Managing Director and Partner Ryan Boozer. He joined Stream, a national commercial real estate firm offering an integrated platform of services, as an Analyst in 2011 and ascended over the last 12 years to associate, vice president, and managing director before being named partner.

During his tenure at Stream, Dornak has helped increase the Dallas-Fort Worth industrial portfolio by more than 30 million square feet. He is credited with building a successful South Dallas industrial leasing team from scratch and establishing relationships with countless new clients.

Dornak graduated with a Bachelor of Arts in Sociology from Dartmouth College and spent one year as a Paralegal at an Austin law firm before starting as an analyst at Stream DFW. He said he was drawn to Stream’s competitive environment and team and entrepreneurial mentality.

Stream Chief Operating Officer and Partner Blake Kendrick noted the DFW industrial group has become the largest business unit within Stream under Dornak’s leadership.

Dornak said one of his favorite quotes that he lives by and perfectly represents his time at Stream is: “When hard work becomes fun, success follows.”