Monday, November 21, 2016

Duke Realty, Baylor Scott & White Health Open 77,000 SF Medical Office Building in McKinney, Texas

baylormckinney2mob-mckinney-tx

MCKINNEY, TEXAS — Duke Realty and Baylor Scott & White Health, a not-for-profit healthcare system, have opened Baylor McKinney Physician Office Building 2 in McKinney. Located at 5252 W. University Drive, the three-story, 77,000-square-foot building is adjacent to Baylor McKinney I, an 114,924-square-foot medical office building. Affiliates of Baylor Scott & White lease a significant portion of both buildings. The Dallas office of Medco Construction served as general contractor, while the Dallas office of HDR served as architect for the project, which was developed by Duke Realty.

Civitas Capital Group Opens $15M Affordable Seniors Housing Facility in Dallas

simpson-place-dallas

DALLAS — Civitas Capital Group, along with StoneGate Senior Living, has opened Simpson Place, an affordable seniors housing facility in Dallas. The $15 million, 95,000-square-foot property offers 150 assisted living units. The development was financed through a public-private partnership involving the Dallas Housing Authority, City of Dallas, Federal Home Loan Bank, Amegy Bank, StoneGate Senior Living and City of Dallas Regional Center.

Thursday, November 10, 2016

What's Up with the Top of That 400 Record Street Tower in DownTown Dallas?



Anyone who's been to the southwest side of downtown Dallas lately is asking the same thing - what's going on on the top of that building?
Construction crews have been dismantling the upper floors of the 17-story former Belo Building at Young and Market Streets.
Now called 400 Record Street, the 1980s high-rise is getting a top to bottom redo.
Most noticeable is all the work on the upper three floors where contractors have removed the granite and glass exterior.
On the weekends, towering construction cranes lift new beams to the top of the building.
The profile of the downtown tower is being changed with an outdoor garden and deck on the roof, the architect who worked on the makeover says.
"We wanted to redefine the bounding on the skyline - give it a new presence," said Zach Edwards, principal with architect Gensler. "The new owners wanted to rebrand it as their headquarters building."
City Electric Supply - which bought the tower in 2014 - will use the refigured top of the building for its executive offices.
"On the 17th floor before it had a glassed in sky garden," Edwards said. "It wasn't a very hospitable place. - not very usable.
"We pitched the idea of opening it up and creating and outdoor sky garden with view of the Trinity River," he said. "It's going to create an outdoor event space and they will be able to host events and gatherings up there.'
A metal grid canopy that matches the one being installed at the base of the tower will extend over the new opening at the top.
"We need to provide some shelter - we didn't want it baking up there all day," Edwards said.
Opening the top of the tower and installing that grid takes some work to accommodate wind and water. "We had a full team of engineers and a wind analysis done," he said.
On the downtown side of the tower, the upper floors are getting an all-new look, too.
"The slender windows and stone have been removed and being replaced with floor to ceiling glass," Edwards said.
A final addition to the tower exterior will be installation of LED lighting effects.
Written by Steve Brown - Dallas Morning News
The End of 'Insane Regulations'? D-FW, National Real Estate Markets Weigh Potential Trump Effect

The hot commercial real estate and housing markets are heading into the final months of the year with a lot of momentum.
Will a surprise Trump win in the presidential election make investors and homebuyers take a step back?
"Thankfully our November elections come at one of the slowest time of the year for home sales, so I doubt we will see much disruption to the normal seasonal pattern," says Jonathan Smoke, chief economist at Realtor.com. "However, one short-term risk could be If the outcome has a big impact to financial markets that lasts more than a few days, then we could see some disruption beyond the usual seasonal decline.
"Unfortunately we don't have a comparable period in history with good data to draw any sharper conclusions," Smoke said. "Remember that about half of voters got what they wanted.  If this does impact purchases it is more likely to be in blue states and not the red heartland."
James Gaines, chief economist at the Real Estate Center at Texas A&M University says he expects no short term changes in the Texas housing markets because of uncertainties created by the election. He's more concerned about Federal Reserve actions that would hike finance costs and thinks a December rate hike is now more likely.
"The main result is greater uncertainty about future," Gaines said. "Folks will either hunker down and do nothing or anticipate tougher times - i.e. higher interest rates - and try to move quicker to buy."
Ralph McLaughlin, chief economist with Trulia.com, said the Trump effect on housing could be different across the nation.
"The shock of a Trump victory will be both a boon and drag on confidence of American homebuyers," McLaughlin writes in a statement. "Homebuyers in economically healthy blue states will likely be rattled and more hesitant about the future the U.S. economy, which will curb their interest in making large investments.
"In economically stagnant red states, on the other hand, homebuyers will likely feel a surge of confidence that could bolster demand."
Commercial real estate execs were already seeing some slight pullback this year.
But a surge of foreign capital coming into the market in North Texas and the U.S. has fueled more building buys.
"I would expect a short - very short pause - and then back to business as normal," said Jeff Swope, who heads Dallas commercial real estate investor and developer Champion Partners. "The great news is that there is a businessman as president - should mean an opportunity to lessen some of the insane regulations being forced on businesses."
Most investors don't see a short-term change in the property markets.
"My personal view is that it will have relatively little near term impact on real estate transaction activity," said Greg Kraus with Invesco Real Estate. "We can speculate on the longer term effects based upon his stated policies but believe it will come down to his first 100 days in office to really determine the impact of a Trump presidency on the real estate sector broadly.
"Areas I'll be watching: Immigration policy and how it could effect construction labor, interest rates and trade policy on the logistics/industrial sector."
Jack Crews in the Dallas office of commercial real estate firm JLL said there is uncertainty among the investors he talks with about what a Trump election means.
Written by Steve Brown - Dallas Morning News
Why Dallas Area Apartment Builders, Analysts Expect Starts to Slow in 2017

With more than 28,000 apartments set to open in North Texas next year, will there be enough renters to fill them all?
As long as Dallas-Fort Worth's economy keeps growing at current levels demand for new rental units will remain high, apartment analysts and developers say.
But developers say that tougher financing requirements and affordability issues could put a ceiling on rising apartment construction in the year ahead.
Currently there are more than 50,000 apartments under construction in North Texas - more than any other metro area in the country.
"Dallas-Fort Worth has really had a tremendous run in this cycle," said John Sebree, national director with commercial real estate firm Marcus & Millichap. "
people say it seems this cant keep going - look at all the cranes in the air.
"It seems like a lot but you have had 130,000 new jobs in the last 12 months so it' going to be okay," Sebree said. "I'm not seeing anything that leads us to believe we are getting out over our skis."
But other factors are likely to reduce apartment starts next year, even in D-FW, Sebree told hundreds of apartment builders and managers meeting in Dallas Thursday morning.
"About six months ago the lenders really started pulling back on new construction," he said. "They started increasing the equity and requirements.
"There is a possibility that in 2018 we actually see a drop in new construction deliveries."
Apartment builder say they are having to put more money into new projects at the same time construction costs are jumping and rents resistance is growing.
"In the really active markets the lenders have been pulling back a lot," said Spencer Stuart with developer Legacy Partners. "Where we used to be able to get 10 or 12 lenders to look at a new project, now we are sometimes looking at one.
"The equity requirements - especially on our larger projects - is a minimum of 40 percent," Stuart said. "We think that's going to slowdown the market a bit."
Stuart said he sees no slowdown in construction or land cost increases, which have driven rents in North Texas to record levels.
On average apartments in the D-FW area now rent for more than $1,000 a month. And the newest units go for about $1,400.
Developers say that spiking apartment costs have put a strain on renters.
"It's an affordability issue," said Doug Chesnut, one of the founders of StreetLIghts Residential, one of Uptown's busiest apartment developers. "People just can't afford the cost.
"We can build it but if they can't afford it will set there vacant."
Rick Williamson with Dallas-based apartment builder Lang Partners is also worried about rising apartment tents.
"We are seeing a ceiling of around $1,800 a month," Williamson said. "I'm not sure how many 27 year olds coming out of school want to keep spending $1,800 a month for an apartment."
He said developers are having to start offering rent concessions to attract and retain tenants in some neighborhoods where there has been lots of construction.
"We're typically seeing a month free up front," Williamson said. "You always have our crappy units and end up doing two months."
Construction costs have been rising even faster than apartment rents, which is reducing profits on new developments, builders say.
"We've had upward pressure on labor," said developer Mike Lynd. "Hopefully we will see that trend down soon but we haven't seen it yet.
"Texas is still on fire."
Even though North Texas apartment vacancy averages less than 5 percent, apartment builders and analysts seem resigned to more empty units and smaller rent increases in 2017.
Greg Willett, chief economist with MPF Research, said that about 50,500 apartments are being built in the D-FW area.
"We've been at that point just one time previously in the mid 1980s," Willett said. "It's a lot that's on the way.
"In Uptown and downtown Dallas we have more than 6,000 units under construction," he said. "You also have about 6,000 units under construction in Frisco and about 4,000 in the Allen -McKinney area."
He said so far demand has been keeping up with new supply but that might change in 2017 because of the huge volume of apartments that will be opening.
"We have been doing pretty well but we are going to have to do better than that if we can absorb all these new apartments," Willett said.
He predicts that average vacancy will increase by about 25 percent.
Written by Steve Brown - Dallas Morning News

C-Store Portfolio Lands Acquisition Financing


Shell gas station exterior

DALLAS—HFF said Monday it had arranged post-acquisition financing for a portfolio of 154 net-leased convenience and gas station sites totaling 97.8 acres in the Northeast. Deal terms were not disclosed; the financing took the form of a five-year, floating-rate acquisition loan with 18 months’ interest-only to a private real estate investment fund advised by Crow Holdings Capital–Real Estate. The loan was provided by a consortium of lenders, led by Capital One and BMO Harris.
The portfolio properties comprise 88 sites in New York state, 45 sites in Massachusetts and 11 sites in Connecticut.  There are also seven sites in New Hampshire, two Rhode Island sites and one site in Pennsylvania.  All 154 properties are subject to an absolute net lease for 20 years with a subsidiary of Petroleum Marketing Group, a leading jobber and distributor of petroleum products and operator of convenience stores.
HFF’s debt placement team was led by Dallas-based senior managing director Andy Scott and associate director Michael George. Also headquartered in Dallas, Crow Holdings Holdings Capital–Real Estate closed on Crow Holdings Realty Partners VII this past December, capping it at $1.85 billion.
Written by Paul Bubny - Globest

How State Farm's $825M deal in DFW sets 'blueprint'

 for Atlanta, Phoenix hubs


It's been less than a week since State Farm Insurance closed on a $825 million sales-leaseback of its Dallas-Fort Worth regional campus — the biggest deal of its kind in North Texas history — but the deal could pave the way for Bloomington, Illinois to strike similar arrangements in Atlanta and Phoenix.
Even though State Farm spokesman Chris Pilcic said "there was nothing to share on those properties at this time," real estate executives say the North Texas deal could be a blueprint for future similar State Farm sales-leaseback deals.
"It could signify a pathway for them to do the same thing with their other two properties," said John Alvarado, a senior vice president at CBRE's Dallas office.
"The negotiation of a joint venture is a complicated process and once a document has been created it's easier to replicate the document with the same structure on future deals with that particular buyer, entity or partner," he added.
Alvarado has no involvement in the transaction, but has decades of experience brokering large real estate investment deals.
The sales-leaseback deal was a complicated real estate deal that took two years of globetrotting and lots of late nights to complete. It was the biggest deal Transwestern Investment Group President Laurie Dotter has ever worked on in her career.
Transwestern Investment Group, which has a 30-year business relationship with State Farm Insurance, led the formation of the new ownership group and eventually brought in Seoul, South Korea-based Mirae Asset Global Investments Co. to the deal.
The new ownership group — Corporate Properties Trust I LP — will be the owner of the four building, 2.2 million-square-foot mixed-use development near a DART rail line in Richardson. The property is being leased back to Illinois-based State Farm Auto Insurance Co.
Dotter said her team plans to sit down with the South Korean real estate investment firm in the near future to "listen and learn more about their long-term investment goals."
"We want to work to meet those objectives with them," Dotter told the Dallas Business Journal, who also said the deal was struck by a foreign investment firm because there was no U.S. investor that could step for the entire deal.
Dotter declined to disclose if future State Farm Insurance regional campuses, which are still under construction, were some of the future investment properties on the table for the newly formed partnership.
Even though it's unlikely a single investor would want to have that much exposure to one tenant, the real estate investment trust structure could be telling, said Evan Stone, a longtime office investment broker in Dallas.
"It is certainly possible that Mirae could take down more State Farm campuses given their access to capital and interest in the real estate with their prime locations, new urban design and long term leases to such a high credit tenant," Stone told the DBJ.
Like Alvarado, Stone has no involvement in State Farm's sales-leaseback deal, but has decades of experience brokering large real estate investment deals.
"Interestingly, if what's been reported that the owning entity is a REIT, it could foretell a strategy to easily syndicate their interest to other investors and allow them to acquire more State Farm complexes," he added.


Written by Candice Carlisle - Dallas Business Journal

This oil and gas company just signed a long-term,

 120,000 square-foot lease along the Tollway


The two six-story office buildings will connect with 'The Hub,' a three-story amenity building.

Houston-based Occidental Petroleum Corp. (NYSE: OXY), one of the largest oil-and-gas companies in the United States, just made a long-term commitment to Dallas-Fort Worth less than a year after it sold its office tower along LBJ Freeway for an estimated $95 million.
Oxy's chemical division signed a 120,000-square-foot, long-term lease on Wednesday that will make way for the development of a new office complex along the Dallas North Tollway, according to a handful of North Texas real estate sources.
The division is expected to set up shop in about half of one of the two office towers along the Dallas North Tollway, which is part of a larger office complex, known as Fourteen 555, at 14555 Dallas Parkway between Belt Line Road and Spring Valley Road in Addison.
The office complex includes two, six-story office buildings totaling 480,000 square feet tied together by a three-story amenity building, called 'The Hub.' The complex will include a full-service restaurant, fitness center, conference center, and a covered terrace for lounging and to play games, among many other amenities.
It may have been those amenities that swayed Oxy's chemical division to make a move from its longtime office along LBJ Freeway, said Randy Garrett, a principal at Transwestern's Dallas office.
Garrett was not connected to the Oxy deal, but Garrett has worked with office tenants as a broker for more than three decades and specializes in the Platinum Corridor along the Dallas North Tollway.
"Business environments have changed drastically over the last five to 10 years," Garrett told the Dallas Business Journal."Firms are always seeking the most productive office space design possible and, if I had to speculate, I'd say selecting (Bill) Cawley's new building was just too good for OxyChem to pass up."
Occidental Petroleum Corp. did not immediately respond to an interview request late Thursday.
Construction will begin in the near future on Fourteen 555, with plans to complete the office complex in September 2018. Bill CawleyJeremy Duggins and Addie Ludwig of Dallas-based Cawley Partners are leasing the remainder of the office complex, which totals 360,000 square feet of office space.
Cawley declined to disclose the name of the tenant, but said an undisclosed tenant with a long-term lease will office in about half of the northernmost office building in the complex.
Dallas-based BOKA Powell is the project architect.
Last year, Occidental Petroleum decided to consolidate its Dallas operations and relocate up to 100 employees to its new Houston headquarters.
The energy firm has major operations in the Permian Basin. In addition to its oil and gas divisions, Oxy has operations in chemicals and midstream assets such as pipelines and terminals.
By deciding to consolidate and better align its divisions, Oxy sold its 24-story office building at 5005 LBJ Freeway for a reported $95 million in January to an affiliate of Dallas-based Encore Enterprises and New York Life.
The new ownership group has since unveiled plans to spend $9 million upgrading the office tower that was originally built in 1986 to attract a major corporate tenant.
Oxy's chemical division still sits in about 20 percent of the 540,514-square-foot building, fulfilling a two-year lease that was signed at the time the building was sold.
The energy firm signed the real estate lease a day after reporting a $241 million third quarter loss on Tuesday, which was higher-than-expected revenue by analysts.
In Tuesday's earnings call, CEO Vicki Hollub said Oxy spent $2 billion in cash on acquiring 35,000 net acres in the Permian Basin in West Texas.


Written by Candice Carlisle - Dallas Business Journal
HILLWOOD PROPERTIES TO OCCUPY 32K SF AT ALLIANCE TOWN CENTER

Hillwood Properties will move this month to its new corporate office at Alliance Town Center within the master-planned AllianceTexas it developed nearly 30 years ago under Ross Perot Jr. 
About 80 Hillwood Properties employees will occupy 32k SF within Hillwood Commons I at 9800 Hillwood Parkway in Fort Worth.

Hillwood Properties is coming home. The development company will move this month to its new corporate office at Alliance Town Center within the master planned AllianceTexas it developed nearly 30 years ago under Ross Perot Jr. 


About 80 Hillwood Properties employees will occupy 32k SF within Hillwood Commons I at 9800 Hillwood Pkwy in Fort Worth. In the past 19 years, development within the project has almost tripled, Hillwood SVP Steve Aldrich tells us. This has led to the growth of the team and the need for larger space. Relocating to Alliance has been Hillwood's goal for some time, president Mike Berry says. Mike says amenities such as mixed-use options, greenspaces, and health and wellness initiatives will encourage employees to have a good work/life balance. 

Read Full Story Here

Written by Julia Bunch - BisNow DFW

Thursday, November 03, 2016

Crow Residential Kicking Off Third Oaklawn Apartment Project in Dallas

Apartment builder Trammell Crow Residential is tripling down on the Oak Lawn rental market.
The Dallas-based developer is about to begin work on its third major rental community in the Maple Avenue corridor near Oak Lawn Avenue.
Crow Residential built the 299-unit 4110 Fairmount apartments two years ago.
Then the developer built the 368-unit Alexan Fairmont apartments on Fairmount Avenue. The apartment project just sold to a Canadian investor for $71 million.
Now Crow Residential is working on a third project at Fairmount and Throckmorton Street.
The 340-unit project will replace older apartments on the block. Building permits value the development at $43 million.
"We are excited to the be part of the all the changes going on in the neighborhood, specifically the completion of Old Parkland and the new restaurants open along Maple Avenue," Matt Enzler, Crow Residential managing director, said.  
Crow Residential is one of Dallas' busiest apartment builders, with projects under way in several close-in neighborhoods.
Written by Steve Brown- Dallas Morning News
Thanksgiving Tower Redo Brings New Downtown Restaurant

Downtown Dallas' Thanksgiving Tower is getting a new restaurant as part of a $37 million makeover.
Gather Kitchen — a fast casual restaurant — will open a 2,400-square-foot ground-floor restaurant in the Elm Street skyscraper early next year.
The new concept restaurant is being developed by restaurateurs Nicki Hamilton and Soraya Spencer.
The planned restaurant will include a bakery and outdoor seating and will serve recipes with seasonal produce from local farmers.
 "Downtown Dallas is booming, growing and evolving, and we believe our concept fits a need for professionals in downtown who want a quick, casual, healthy and limitless menu," Spencer said in a statement.
The eatery will serve breakfast, lunch and dinner.
The almost 1.5 million-square-foot Thanksgiving Tower is currently getting its first major renovation since the building was constructed in the 1980s. Upgrades include new retail and outdoor dining areas.
"As part of our renovation of this iconic building, we want to provide distinctive, high-quality restaurant options," Billy Prewitt, executive vice president with building owner Woods Capital Management, said in a statement.
Written by Steve Brown - Dallas Morning News
Dallas's 18-Story Parkside Tower in Oaklawn Is Up For Grabs

The Parkside Tower faces Maple Avenue just north of Uptown.Champion Partners

A tower on the edge of Uptown has hit the market.
The 18-story Parkside Tower at 3500 Maple Ave. has just been remodeled.
Investors Champion Partners and Building and Land Technology spent $10 million to redo the 378,000-square-foot tower built in 1985.
The reflective glass high-rise is a couple of blocks north of Uptown and overlooks Reverchon Park.
Eastdil Secured has been hired to market the office property, which is about 74 percent leased.
The building is expected to sell for close to $300 per square foot.
Written by Steve Brown - Dallas Morning News
Developer Eyes 19-Story  Luxury Hotel Tower for Uptown Dallas Site Near Maple Ave

A developer that's done several Uptown apartment projects is ready for something new.
Alamo Manhattan Corp. proposes to build a hotel — not more apartments — on a half-block site off Maple Avenue near Turtle Creek.
The 19-story, 220-room hotel would sit on a site now occupied mostly by a condominium complex on Carlisle Street. 
"It's a great opportunity for a full-service hotel," said Alamo Manhattan CEO Matt Segrest. "Everybody loves Uptown, and there is a demand for this hotel.
"We are looking for something different with this project."
Segrest said Alamo Manhattan proposed the almost $80 million project to several firms and "the hotel groups jumped at it."
He said the hotel would be created using Marriott's new luxury modern design program.
WDG Architecture designed the brick and glass building, which will include a ground-floor restaurant and about 12,500 square feet of meeting space."Our sweet spot is the professional business traveler," Segrest said. "One thing Uptown is lacking is good meeting space — the demand is huge."
To build the hotel, Alamo Manhattan must obtain increased development density approval from the city. Segrest said the firm is starting to meet with neighborhood groups and city planners about the project.
If everything goes as planned, construction would start in 2018 with an almost 2-year building period.
Alamo Manhattan is proposing the hotel project as it completes one Uptown project and prepares to begin construction in Oak Cliff.
Written by Steve Brown - Dallas Morning News
Ilume's Apartment Buildings Added to Venterra's Dallas Investment Portfolio

One of Oak Lawn's biggest rental communities has a new owner.
The two Ilume apartment buildings have been purchased by Venterra Realty which has offices in Houston and Toronto.
The 556-unit apartment projects are located at Cedar Springs and Douglas Avenue.
Venterra - which owns other apartments in the Dallas area - completed the purchase this week, said COO Richard Roos.
"We've looked at a lot of stuff to buy and we are very bullish on Texas and Dallas," Roos said. "Texas is our backyard and Dallas is an important market for us."
Roos said the Ilume buildings are about 90 percent leased. One of the buildings has ground floor retail.
"We think we can make some improvements in the property and improve occupancy," he said.The new owners plan an upgrade program for the buildings.
"There is some massaging that can be done to the physical exterior and we plan some light renovations inside," Roos said. "We are definitely excited to get our hands on the deal."
Venterra owns eight Dallas-area apartment communities, including the Zang Triangle building in Oak Cliff.
"We have about 14,000 units as a company about 9,000 or 10,000 of those are in Houston," he said.
Written by Steve Brown - Dallas Morning News
Frisco Plans $300 Million Industrial Park to Bring in More Business


The City of Frisco plans to build a 216-acre office and industrial park to attract more business to the city.
The Frisco Park 25 will be built on Preston Road at Rockhill Parkway, just south of U.S. Highway 380. The property is east of the Dallas North Tollway.
The city's economic development corporation said Thursday that the first buildings in the $300 million project would start in 2018.
Frisco plans to develop the industrial park with building sites and sell them to companies and developers representing firms.
"Many businesses look to lease existing multi-story, class-A office space in Frisco; but the Frisco Economic Development Corp. frequently receives inquiries from prospects who want assistance finding a site where they can own and occupy their own building," Jim Gandy, president of the Frisco Economic Development Corp., said in a statement.
The project is designed to accommodate about a dozen office, showroom and industrial buildings of various sizes. There will also be a greenbelt on the north side of the development.
The commercial project is planned for a total of 2.2 million square feet."Our plan with Frisco Park 25 is to sell the sites to individual companies that want to purchase and own their own real estate," said Gandy. "This allows us to better control the design and development happening in the park."
Frisco approved the purchase of the land for the project in 2015.
Hardy McCullah/MLM Architects Inc. designed the business park.

Read full story
Written by Steve Brown - Dallas Morning News