This past year has proven to be strong across all commercial real estate sectors. What’s encouraging both brokers and investors is the diversity of demand and the strong market fundamentals, with the region’s surging job and population growth. Although landlords currently have the upper hand in several submarkets, development that’s underway will help balance things out. Here we look at the top five office, industrial, and retail leases of the past three months, with data provided by Xceligent Inc.
“The outlook for 2015 is bright and very promising. With continued population migration to Texas, robust job growth, more corporate relocations, strong organic growth, and fresh capital crossing the Red River, I am very optimistic about another banner year here in North Texas.”
— Mike Wyatt, Executive vice president, Cushman & Wakefield of Texas Inc.
“Many tenants are dumping up to 50 percent of their space and paying double rents to be in buildings with walkable amenities and housing. Landlords are scrambling to offer six to eight parking spaces per 1,000 square feet—what would have been considered call-center densities five years ago.”
— Riis Christensen, Senior vice president, Transwestern
“Industrial lease rates are sitting at historical highs. These should remain stable throughout the lease-up period of newly delivered space. If more new starts aren’t introduced into the pipeline during the next two quarters, we may see another shortage of supply in the under-500,000 square feet category.”
— Rick Medinis, Executive vice president and principal, NAI Robert Lynn
“The fundamentals for retail have never been better. There’s stronger retail and restaurant sales volumes, rising rents, and limited vacancy. Add in favorable lending dynamics that’s fueling the investment side of the business. Our greatest obstacle is rising construction costs.”
— Mike Geisler, Managing partner, Venture Commercial
LARGEST OFFICE LEASES
1. EnLink Midstream Partners and EnLink Midstream LLC
Size: 157,568 s.f. in One Arts Plaza at 1722 Routh St. in Dallas
Tenant reps: Steve Thelen, Jeff Staubach, and Torrey Littlejohn with JLL
Landlord: Billingsley Co., represented in-house by Lucy Burns and Marijke Lantz
Details: 7-Eleven Inc.’s decision to move its headquarters to Irving opened up a chunk of space in this Arts District property. Much of it was leased by EnLink, which will relocate from Uptown in mid-2016. The deal includes an option to expand into more space during the term of the lease.
2. Locke Lord
Size: 145,000 s.f. in Chase Tower at 2200 Ross Ave.
Tenant reps: Steve McCoy and Alan Harrington of Transwestern
Landlord: Hines, represented in house by Tyler Baker, as well as Blaine Hall of Colvill Office Properties
Details: After scouring other options in the market, the law firm decided to stay in the Arts District tower, but will move to new space within the building, occupying about six floors.
3. Softlayer Technologies Inc.
Size: 125,000 s.f. in Stanford Corporate Center at 4849 Alpha Road in Dallas
Tenant reps: Clay Vaughn, Steve Rigby, and Mike Cleary of CBRE
Landlord: TCI Stanford LLC, represented by Henry S. Miller Cos.’ Jerry Averyt and Greg Trout, formerly of HSM
Details: The fast-growing tech firm, which was acquired by IBM in 2013, needed space to house its corporate headquarters. The new office can accommodate up to 700 employees.
4. Heritage Auctions
Size: 89,518 s.f. at 3500 Maple in Dallas.
Landlord: Champion Partners, represented by Johnny Johnson, Layne Mayfield, and Trey Smith of Cassidy Turley.
5. Legacy Texas Bank
Size: 78,705 s.f. in Plano Tower at 5851 Legacy Circle in Plano
Tenant rep: Ben Sumner of Centurion Real Estate Partners
Landlord: American Realty Capital Partners
Leasing agents: Greg Biggs, Doug Carignan, Torrey Littlejohn and Marc Feldman represented the sublessor, Encana.
Details: LegacyTexas Bank will move its commercial banking corporate headquarters to the top three floors of Encana Oil & Gas USA Inc.’s former regional headquarters within Legacy Town Center. Eight 26,550-s.f. floors within the building remain available.
LARGEST INDUSTRIAL LEASES
1. Navistar Inc.
Deal: 360,000 s.f. in Pinnacle Park at 4038 Rock Quarry Road in Dallas.
Leasing agents: John Gorman of Holt Lunsford Commercial represented the landlord, TA Associates
Tenant rep: Nathan Orbin of JLL represented Navistar, a manufacturer of trucks and buses.
2. KGP Telecommunications
Size: 260,700 s.f. renewal at 9400 N. Royal Lane in Irving
Landlord: Prologis, represented in-house by Mitch Pruitt
Tenant reps: Tom Walrich and Reed Parker of Lee & Associates represented KGP Telecommunications, which provides supply chain management and logistics solutions.
3. Fruit of the Earth
Size: 145,579 s.f. Riverpark 1000 in Grand Prairie
Developers: Amstar, Huntington Industrial Partners, Seefriend Industrial Properties
Leasing agents: Kacy Jones and Steve Koldyke of CBRE
Tenant reps: Tom Walrich and Reed Parker of Lee & Associates
Details: It began as a speculative project, but Riverpark 1000 has been fully leased to Fruit of the Earth, which will take occupancy when the building is complete in the second quarter of 2015.
Size: 130,000 s.f. at AllenPlace
Developers: Sentinel Capital LLC, Centra Partners, and Triad Real Estate
Leasing agent: Ben Appleby with Paladin Partners
Tenant rep: Jeff Patman with Site Selection Group
Deals: KONE, which makes elevators and escalators, announced in May that it would be the lead office tenant at AllenPlace, a $26 million, five-building office park under construction off North Central Expressway near West Bethany Drive. Four months later, it announced it would add an on-site manufacturing facility, creating 80 new jobs.
5. SWS Re-Distribution Co. Inc.
Size: 127,506 s.f. at 1440 Lemay Drive in Carrollton.
Landlord: Lightning Propco I LLC
Leasing agents: Adam Graham, Mark Graybill, Nathan Denton, and Scott Giordano of Lee & Associates.
LARGEST RETAIL LEASES
1. Dick’s Sporting Goods
Size: 50,018 s.f. at Glade Parks in Euless
Developers: North Rock Real Estate and Iron Point Partners
Leasing agents: EDGE Realty Partners
Details: Glade Parks is a new development being built along State Highway 121 in Euless. More than 400 apartments have been constructed; 800,000 square feet of retail space is planned.
2. Texas Family Fitness
Size: 45,000 s.f. in Plano Towne Square at 920 W. Parker Blvd. in Plano.
Tenant rep: Dan Avnery of NAI Robert Lynn
Details: With more than 11,000 members it was time for Texas Family Fitness to open a second location. After a $500,000 remodel, the club will move into its new space. The company has secured funding to open three new locations in 2015.
3. Whole Foods
Size: 45,000 s.f. in Waterside, Bryant Irvin Road and Arborlawn Drive in Fort Worth
Developers: Trademark Property Co. and Sarofim Realty Advisors
Details: Whole Foods is the first anchor tenant to sign on for space in this new 63-acre mixed-use development along the Trinity River. Ultimately, the project will include 200,000 square feet of retail space, riverside restaurants, 200,000 square feet of office space, and more. The first phase will open in the spring of 2016.
4. Trader Joe’s
Size: 14,000 s.f. in Preston Hollow Village at Walnut Hill Lane and North Central Expressway
Developers: Provident Realty Advisors and Kroenke Holdings
Leasing agents: Aaron Stephenson and Zachary Porter of Retail Street Advisors
Details: Trader Joe’s will anchor this 42-acre development, and will open in February 2015. The first phase totals 75,000 square feet of retail space and 60,000 square feet of office space. More than 500 apartments will be built as a second phase of the project.
5. Del Frisco’s Double Eagle Steak House
Size: 13,000 s.f. at McKinney & Olive in Uptown
Developer: Crescent Real Estate
Tenant rep: Kevin McIntosh of KMAC Group Inc.
Leasing agents: Jack Gosnell and Jack Breard of UCR Urban
Details: Del Frisco’s will close its longtime North Dallas venue when it moves to new two-story space in Crescent’s McKinney & Olive tower in 2016.