All Aboard!


Giovanni Cordoves

How Light Rail is Luring Workers and Driving Commercial Real Estate

For millennials, who make up over 30% of today’s workforce, the advantages of owning a car are dwindling. Today’s young talent wants to be in areas that offer live, work, play environments, where things are often within walking distance—or, at most, an easy ride away. More specifically, employees want to be urban and they want to be mobile, both digitally and physically.

A study by the American Public Transportation Association shows millennials choose where they live based on ease of getting around, “urbanness” (especially if they’re single), and the  ability to feel connected to the area.  They also want to avoid traffic, parking costs and the burden of car ownership, and minimize their carbon footprint. Mass transit, particularly light rail, delivers it all.

Cheaper and easier to construct than subways or elevated trains, yet with dedicated rights of way, light rail provides fast transportation from destination to destination with fewer stops. Many light rail systems are designed to dart between suburban communities, while slowing down and stopping more frequently in town. The beauty of light rail is that it not only helps move pedestrians around the city, but also eases people in from the suburbs, the land of less pricey rentals and traditional home life. Plus, for urbanites and suburbanites, riding the rails is economical, communal and allows for a focus on digital (emails, social media and gaming) during commutes.

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For about ten years, light rail has been growing in many beacon cities, including Phoenix, Denver and Minneapolis. Other hotbeds are Irving, Texas and Bellevue, Washington. Not surprisingly, KBS has recent acquisitions and/or improvement projects in all five areas.

In October, KBS Strategic Opportunity REIT II purchased Grace Court, a business park in the Central Business District of Phoenix, Arizona. Grace Court includes three institutional-quality office buildings and Grace Court School, which was developed in 1911 and completely remodeled in 2006. The asset puts KBS at the center of the growing Phoenix market, while providing access to multiple Valley Metro Light Rail stations and first-class amenities. The mass-transportation train system also gives passengers easy access to professional centers from Mesa and Tempe to Downtown and Northwest Phoenix.

In May 2015, KBS acquired Village Center Station, a premier light-rail served office project in the Denver metroplex. Built in 2009, the nine-story, 234-915-square-foot Class A office building is located in the largest office market in Metro Denver. It has a live-work-play environment and sits directly adjacent to Denver’s most dynamic light rail station, Arapahoe at Village Center Station—the centerpiece of a pulsing town center development. Since August 2014, Arapahoe at Village Center Station has had 62 percent higher ridership than the next-busiest stop along Denver’s southeast corridor.

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There’s also RBC Plaza in Minneapolis, KBS’s 40-story Class A office tower next to the prestigious Nicollet Mall in the heart of the Minneapolis financial district. Constructed in 1991 and renovated in 2015, RBC Plaza is a core trophy-quality office investment leased to a diverse mix of tenants. Minneapolis has one of the most vibrant central business districts in the US. The city’s unique 8-mile-long skyway system links its high concentration of entertainment venues, retail stores, professional sport teams and office complexes. The Minneapolis Light Rail Transit runs directly to the north of RBC Plaza.

Other KBS property near light rail includes Tower 909, a 19-story, trophy-quality Class A, multi-tenant office building in the heart of the Urban Center of Las Colinas in Irving, Texas. Tower 909, which has seen extensive functional and cosmetic improvements in the last five years, is also the terminal stop on the Las Colinas’ Area Personal Transit System. It’s adjacent to the recently opened Urban Center Station on the Orange Line of DART’s light rail system, which conveniently connects the property to uptown, downtown and DFW Airport. Tower 909 tenants enjoy direct covered pedestrian access to the station—an amenity exclusive to the building.

In the central business district of Bellevue, Washington, KBS’s The Plaza Buildings comprise two Class A office buildings: the 16-story Plaza Center and 10-story U.S. Bank Plaza. Together, they span an entire city block, giving them prominent visibility. They’re close to The Bravern, a mixed-use project filled with luxury shopping, dining, entertainment and residential units. Just one city block away is the Bellevue Transit Center Station. Future light rail service is planned to reach downtown Bellevue at this site and will give The Plaza Buildings prime access to this transportation hub.

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America’s love affair with cars may be cooling, but people still want to be mobile, spontaneous and in on the action. With light rail helping to lure the cream of the workforce to urban areas, KBS is intent on offering the very best assets near key transportation arteries. KBS properties that are strategically situated near light rail let urban-loving millennials fulfill their personal and professional needs. That makes them an irresistible magnet for the workforce KBS clients desire.

 

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Giovanni Cordoves is a senior vice president for KBS responsible for acquisition and management of commercial properties in Texas and Minnesota. Currently Gio manages a portfolio of office, industrial and flex properties totaling approximately 4.1 million sq. ft.