Friday, March 30, 2012

Dallas-area office development ready for restart

Hall Arts Center: The 17-story, 500,000-square-foot office tower is planned on Flora Street across from the Meyerson Symphony Center. A project of Hall Financial Group, the building was designed by HKS Architects.
Forecasts are calling for an end to the drought in North Texas office construction.
But will a potential deluge in office developments turn out to be just a trickle?
Almost a dozen multitenant office projects are on the drawing boards for the Dallas area, planned mostly for Uptown, downtown and along the Dallas North Tollway in Plano and Frisco.
With the Dallas area at the top of the list of the country’s fastest-growing economies and employment centers, office demand is likely to jump during the next couple of years.
But getting money to construct buildings is still tough, developers say.
“It’s still very difficult to get any kind of speculative office financing,” said developer Randy Heady, who’s building a six-story multitenant building in Legacy Business Park in West Plano. “Most developers can’t make the numbers work yet.”
Without a large amount of leasing from business tenants, Heady said, developers will have to put up a chunk of cash before an office groundbreaking.
“You have to put in 40 or 50 percent equity,” he said. “And you have to have a really great site.”
Other developers scrambling to get projects under way in the tollway corridor include Trammell Crow Co., Hines and Granite Properties.
Granite is marketing a fourth building in its Granite Park project at the tollway and State Highway 121.
Granite chief operating officer Greg Fuller said only some of the office buildings being talked about will actually be started.
“About half of the smaller projects and maybe one of the larger projects, if pre-leased in 2012,” Fuller said. “Who knows what 2013 will bring?”
Ran Holman of Hines is more optimistic. He predicts about half of the office buildings now being pondered in the Dallas area will make it to groundbreaking.
But rents have to come up, he said...