Jobs, Friendly Government And A Lot Of New People Drive DFW Master-Planned Communities In Suburbs
Historically low interest rates, a global pandemic that prodded many to re-evaluate their living situations and a veritable firehose of corporate relocations bringing tens of thousands of new residents to DFW have boosted the fortunes of mixed-use master-planned communities over the past 18 months.
And few, certainly not Allen Economic Development Corp. CEO and Executive Director Dan Bowman, expect development of the purpose-built communities to slow down much anytime soon — especially north of the Metroplex where business is booming, land is more plentiful and small local governments are outhustling their big-city rivals in terms of incentives, cutting red tape and doing what it takes to make developments happen.
“Allen has been talked about more in the last year than in quite a while,” said Bowman, a panel moderator at Bisnow’s DFW Master-Planned Communities event Sept. 21. Bowman pointed to recent wins like California tech company MD7’s Monday announcement it would be moving its headquarters to One Bethany West on the 17-acre Watters Creek campus and the 550 acres of new mixed-use development along the city’s Highway 121 Corridor.
That development includes the former Monarch City master-planned community project picked up in June by Billingsley Co. from The Howard Hughes Corp. The 238-acre development — "the largest undeveloped tract at the corner of two major highways in all of North Texas," according to Bowman — is already zoned for 10M SF of multifamily, office, retail and hospitality.
Billingsley Co. partner Lucy Burns and others said demand for master-planned community space has spiked for a variety of reasons. Buyers of single-family homes have been drawn by historically low interest rates, businesses are chasing higher-quality office space in growing population centers, retail and hospitality are following the money, and multifamily residents, many of them newcomers to the area, want to be close to their workplaces.
Burns said leasing activity is robust for office and multifamily space within master-planned communities like Cypress Waters, which Billingsley also developed near Dallas-Fort Worth International Airport.
“There are a couple of major drivers,” she said, pointing to the fact such projects generally have a single organization calling the shots and steering the vision as well as the ability to take advantage of economies of scale in providing a range of amenities. “And then I think especially when you mix commercial and residential, you're allowed to create these retail environments that are alive all day long, not just when people are at work or just when people are at home. I think everyone wants to be in a vibrant environment and I think that sort of lends itself to that.”
New residents, especially, are drawn to the ready-made communities, McAdams Director of Planning and Entitlement Director Randi Rivera said. And there have been plenty of those — more than 500,000 new residents have been moving to the Lone Star State annually.
Rivera expects such development to mostly concentrate along the 32-mile Dallas North Tollway — what she called the “billion-dollar highway” — currently stretching through Addison, Farmers Branch, Plano and Frisco to U.S. Highway 380 and slated to eventually extend an additional 14 miles through fast-growing towns like Celina to the Grayson County line.
“I think that growth is going to continue to push north,” Rivera said. “It's open prime farmland ready to be developed [and] there's not a lot of challenges with those properties, whereas on the west side of the Metroplex there's a proliferation of gas pads and drilling sites and pipelines ... things like that that have to be worked around."
Beck said the city of Dallas has failed to effectively attract corporate relocations within its city limits, driving master-planned community development north to Allen, Frisco and Plano, and to communities like Irving and Fort Worth, where leaders "are taking the bull by the horn and having the good leadership to actually work with the developers to create these communities" via incentives and a willingness to partner up and make things happen.
Successful DFW suburbs, he said, are recognizing two truths. One is that successful large-scale mixed-use projects can only occur in areas with a thriving existing employment base. The second is that tenants are coming to Texas to escape high taxes and regulation.
"So if they get to those municipalities, and it's like, 'Oh, this is more of the same,' they're just going to go next door to the next municipality," he said.
PMB Capital founder Peter Pincoffs, whose firm specializes mostly in single-family-oriented master-planned communities, agreed, adding that without help from municipalities, financial help in particular, projects won't happen.
"All the low-hanging fruit is gone — the small sites that can be bought, affordably, that are in a city where you don't have a special financing district, those are effectively all gone," he said. "And if it's still around, just know that everybody in town has already looked at it and there's some body buried there that you just haven't discovered yet."
Pincoffs said special financing districts are required for master-planned communities to get off the ground because the cost of laying in infrastructure is just too daunting.
"Cities [need to] understand what it's going to take to get a high-quality master-planned development going," he said. "To attract homeowners and renters and ultimately office or industrial tenants, it's going to require some creativity, and it's going to require some amount of reimbursement to get new deals done today."