Bisnow Dallas State of the Market: Day 2
While Houston and Austin lead in office development, Dallas is coming from behind, says Granite Properties COO Greg Fuller at the Bisnow Dallas State of the Market event last Thursday at the Westin Galleria. (Here he is either making a point or subtly modeling his cuff links.) Just look at the Galleria North building selling for $220/SF. Pricing is getting slightly ahead of fundamentals and driving rent growth, some projected at 8% annualized. He anticipates seeing more come on market as people try to take advantage. Prices aren’t eclipsing replacement costs yet, unlike Houston.
Cadence McShane Construction Co prez Will Hodges thinks multifamily has peaked, but every other market the firm is involved in is growing. There’s a big push for more efficient buildings, but less LEED certifications, he says. There’s also a demand for contractors to build faster and more efficiently. The challenge is getting quality subcontractors since many skilled laborers left the industry during the downturn. (How can we coax them back? Contracts? Love letters? Hamburgers?)
Younger Partners’ Moody Younger says DART is more relevant to big deals today. The State Farm deal along the Bush Tollway was driven by DART. He’s working a deal in Las Colinas now and a station is a big influence on where the firm wants to go. It attracts talented young people to your office, he says. (Young people want three things: WiFi, easy transit, and ironic t-shirts.)
L&B Realty acquisitions director Paul Noland (between Will and Billingsley Co’s Lucy Burns) says the big institutions with capital are making big investments, with some $100/SF above replacement cost. He projects some sales could fetch $400/SF to $500/SF. Rents still have room to rise in the newly constructed properties. Bisnow’s own emcee Will Friend learned from Lucy’s sister that Lucy wanted to be a “real estate person” as far back as kindergarten. (Will, however, wanted to be Thomas the Tank Engine.)
Thompson & Knight partner Ted Benn (right, with DHR International's Sayres Dudley) moderated. Via the law firm’s real estate and banking practice, he counsels clients on a variety of real estate, corporate, and general business matters, including mergers, stock and asset acquisitions and divestitures, partnerships and JV, debt and equity financings, lease transactions, management and consulting arrangements, and real estate developments. He has significant experience in the hospitality, golf and private club, multifamily property, real estate development, and wind energy industries.
Event sponsor Town of Addison’s Mayor Pro Tem Blake Clemens and economic development director Orlando Campos tell us the amenities that Addison offers have become a big attraction for Millennials, and companies following the young professional talent have helped fill up the office buildings in Addison. Large contiguous office spaces are becoming hard to come by in this trendy community, so Cawley Partners has just announced construction of the new 200k SF Class-A Tollway Center office building just north of Lawry’s Restaurant.