Dallas/Fort Worth
May Be Upgrading To A Primary Market


Ken Robertson

Dallas/Fort-Worth (DFW) “is rapidly approaching the level where it is considered as a core primary market,” according to the ULI/PwC Emerging Trends in Real Estate. Generally considered a secondary market up until now, this puts DFW near the top of list for best markets for investment.

The ULI/PwC report has placed Dallas in the top five most promising real estate markets for the last four years. The study analyzes high job growth rate and increase in population, as well as the available space and young workforce.

DFW commercial real estate is booming for many obvious reasons — low taxes and a business friendly attitude — but, according to Bisnow, a few lesser-known features are also fueling its growth. These include older building stock and older neighborhoods that offer the experiential living that Millennials crave (at affordable prices).

Even so, multifamily rents are rising in DFW while declining nationwide. According to Abodo, one-bedroom apartment rents increased in Fort Worth by 4.6 percent in April 2018. That’s the second-largest increase in the country. Dallas placed tenth on the list, with a 2.5 percent increase.

Former Dallas Mayor Tom Leppert told Bisnow he predicts that Metro DFW is on track to be the country’s third-largest metro in population in the not-too-distant future.

In the first quarter sales of 2018, DFW was the most active of the Texas markets in terms of office sales, according to Commercial Cafe. There were 11 sales that quarter, with the average building size of 157,683 square feet.

DFW was ranked the fourth-best market to purchase retail property, according to research by Ten-X. This makes for three Texas cities in the top five markets, including Austin (#1) and Houston (#3).

The reason for the high rankings: economic and employment growth.

Ten-X also states that effective rents increased for 30 straight quarters, up 2.4 percent year-over year. Retail net absorption remained positive in Dallas for 14 consistent quarters, dropping vacancies by 11.6 percent, according to Reis data.

Hotel construction remains strong in Texas, particularly in Dallas, Austin and Houston. STR, a hotel research company, ranks these three Texas cities in their top five for most hotels constructed in 2017.

In 2008, the nation’s largest telecommunications company — AT&T — moved its corporate headquarters from San Antonio to Dallas, creating about 6,000 jobs on that campus. Currently, AT&T is investing $100 million on this four-block downtown Dallas headquarters, which will include restaurants, a concert venue, and a six-story video wall. This downtown development is in addition to the renovation of both the Statler and the Adolphus Hotels, and the relocation of the Dallas Morning News to the former location of the Dallas library.

“We’re looking to inject additional growth, commerce and entertainment into Downtown Dallas,” AT&T Regional Vice President Mike Peterson said in a news release. “This investment will result in an urban green space that gives people a place to recharge and reconnect. And we couldn’t have done it without the help of the City of Dallas, DART, Downtown Dallas Inc. and local businesses.”

The campus, known as the AT&T Discovery District, will be “more walkable, bikeable and well lit.”

Other projects within the last decade that have turned DFW into a major player include the relocation of corporate headquarters for Toyota, State Farm, Blue Cross Blue Shield, Samsung Mobile and Fujitsu.

KBS’ newest Dallas project under construction is Nove at Knox (3031 Oliver Avenue, in the Knox-Henderson neighborhood). It’s a 19-story, 309-unit luxury development sitting on 1.7 acres and set to open in 2020. The project is being created with Southern Land Company and GDA Architects and will provide unobstructed views of downtown Dallas. It also provides direct access to the city’s central business district, which is less than three miles away.

The property will include a 10,000-square-foot open space among other outdoor amenity spaces, featuring a dog park and outdoor seating area with grills and fireplace. The property will also feature concierge and resident services, a resort-style pool with private cabanas, a fitness center and a residents’ lounge. The living quarters will consist of 41 junior suites, 158 one-bedroom apartment homes, and 94 two-bedroom apartment homes. On floors 18 and 19 will feature 16 penthouses.

Other KBS DFW area assets:

Preston Commons   8111, 8115 & 8117 Preston Road
A three-building, Class A office park located in the high-end Preston Center submarket. The 427,799 square-foot property won the 2015 Office Building of the Year (TOBY) award in the Renovated Building category from the Building Owners and Managers Association (BOMA). The tenant list includes JP Morgan Chase, Wells Fargo and Key Bank. Building amenities include two conference facilities, a Wi-Fi café, 24-hour security and an upscale bar and grill.

Sterling Plaza   5949 Sherry Lane
This 313,609 square foot, 19-story Class-A tower is LEED-EB-certified and the second-tallest office property in the coveted Preston Center submarket of DFW. Amenities include a conference center and an on-site cafe.

Tower 909   909 Lake Carolyn Parkway
Located in Irving, Texas, this Class-A, multi-tenant office building features 19 stories, 364,336 square feet, and a seven-level parking garage. It’s also a terminal stop on the Las Colinas’ Area Personal Transit System (the “APT”) and is adjacent to the Urban Center Station and the Orange Line of DART’s light-rail system. The extension of the DART Light Rail Orange Line connects the property directly to uptown, downtown and DFW Airport, and the pedestrian access area is protected from weather (an amenity that no other building can offer tenants).

3811 Turtle Creek   3811 Turtle Creek Boulevard
This 300,961-square-foot Class A office tower is located in the uptown market, perhaps the most prestigious address in Dallas. It features high-end retail, restaurants, hospitality, entertainment and residential developments. The property offers spectacular views of downtown Dallas, Turtle Creek and the Park Cities. The property is also within blocks of West Village, which includes 275,000 square feet of restaurants and pedestrian-friendly retail, as well as the Katy Trail, a 3.5-mile walking, biking and jogging trail winding through Uptown Dallas.

Providence Towers   5001 Spring Valley Road
With its grand archway, Providence Towers is one of the most recognizable buildings in Dallas, and the jewel of the platinum corridor. This Class A office property is considered a prestigious business address along the Tollway in North Dallas. It’s houses some of the most prominent companies in America, including Morgan Stanley and Transwestern. KBS’ 2011 renovation of the property includes a complete redesign of the grand east and west tower lobbies, and the addition of theatrical lighting and custom chandeliers. It offers 510,529 square feet of space.

Highland Park Place   4514 Cole Avenue
Located in the vibrant Knox Henderson District, and is one of Dallas’ premier business addresses. The Knox Henderson District offers tenants access to an electric mix of food, fashion, fitness and fun, all within walking distance of the building. The district offers a cultured and distinctive blend of both new and old unlike any other in Dallas. Bright and modern, Highland Park Place is a 164,011-square-foot, 18-story Class A building that offers many light-filled workspaces.

Tollway North Office Park   5200 Tennyson, Plano, TX
Located in the prestigious Legacy Business Park in Plano, this Class A, single-story office building complex ranges in size from 29,023 square feet to 64,137 square feet, covering about 27 acres.  Parking totals 1,400 spaces (4.7/1000 square feet). Construction, completed in 2001, consists of painted textured concrete panels, aluminum-framed storefronts and detailed reveals, recessed windows and EFIS accents.

Legacy Town Center I – III   6900 N Dallas Pkwy, Plano, TX
Consists of three Class A architecturally distinct office buildings located within a prominent business, retail and residential community in Plano, Texas. This master-planned community is home to the corporate and regional headquarters of numerous Fortune 500 and 1000 companies. Buildings I and II were completed in 2001/2002 and building III was completed in 2006. The buildings feature richly detailed, granite-accented exteriors and lobbies appointed with granite and exotic wood finishes. The 10-foot ceiling heights and floor-to-ceiling glass provide exceptional views of Legacy Town Center.

 

Dallas/Fort Worth<BR><noscript><img class=
Ken Robertson oversees a team responsible for all acquisition, disposition, and asset management activities for his region on behalf of KBS REIT, pension fund and sovereign wealth fund clients. His portfolio consists of 32 assets containing 12M SF.