North Texans are known for playing a big role in creating their own destiny. It’s a region that asks, “Why not?” instead of “Why?” After all, this is a market that built a 6-acre park on top of a highway moat that separated Uptown and downtown Dallas during the last economic downturn, funded by broad private and public support.
So, it’s no surprise that even in a time of uncertainty, the talented development force in Dallas-Fort Worth is soldiering on. They know that betting on the region is a solid investment. Not only does it offer a diverse, growing economy, people and companies continue to target the area for relocation. Its central location is another key asset.
One of the most active developers in the region, especially on the office side, is Dallas-based KDC, which also does work across the country. “The entire North Texas region is performing very well and is one of the best areas for business growth in the United States,” said Steve Van Amburgh, CEO. “Although COVID-19 is creating a pause, the interest level for companies adding employees in DFW is as strong as ever. KDC’s business pipeline is solid, with a lot of interest from both coasts.”
The lures that have long been in place still exist, Van Amburgh said: low cost of living, business-friendly environment, DFW International Airport, manageable traffic, and a solid city and state government. “A lot rests on when the pause slows down, as a lot of great companies are focused on our area, and new development will no doubt occur,” he said. “Everyone is just being careful and thoughtful about how COVID-19 will impact workspaces going forward.”
Retail development is tempered until demand bounces back, but ongoing work continues at Grandscape in The Colony and the 225,000-square-foot Shops at Chisolm Trail Ranch. Retail also is a must-have component of all larger new office buildings. One of the biggest new retail projects, of course, is the five-block, $100 million AT&T Discovery District, which brings 65,000 square feet of new restaurant and retail space to the heart of downtown Dallas.
Hotel projects are springing up all over the region, from Sam Moon Group’s new 283-room JW Marriott in the Dallas Arts District to the new 500-room Omni hotel that will be part of PGA of America’s new headquarters in Frisco.
A shining star continues to be DFW’s industrial sector, with hotspots in Southern Dallas, DFW Airport, and North Fort Worth. Deliveries in the first half of the year totaled 3.5 million square feet, and projects in the pipeline top 23 million square feet, according to a recent study by CBRE. The firm tracked 5 million square feet in new industrial leases signed in the second quarter of 2020 alone.
On the office side, 1.2 million square feet of new space was delivered during the first six months of the year, with another 4.2 million square feet underway, according to data from JLL. Walter Bialas, the firm’s director of research in Dallas, said the big question for the future all centers around jobs. After an extended period of significant job growth, North Texas lost 226,000 jobs between May 2019 and May 2020. It’s a stunning number, but it still favorably compares to markets like Chicago, which lost 450,000 jobs and Los Angeles, which has lost 860,000 jobs.
It’s hard to say with any kind of certainty what may lie ahead, Bialas said. “We’ve never seen anything like this; it’s indescribable what’s happening,” he explained.
“JLL is not doing any forecasting of the office market right now because the uncertainty is so high and because everything is moving so rapidly.”
Underlying fundamentals—a diverse economy, pro-business environment, a deep labor pool, and talent with a strong work ethic—bode well for the region’s future. “All those ingredients make for a better recovery,” Bialas said. “From a macro view, we’re very upbeat.”
Anatomy of a Deal
Here are five notable projects underway:
Ben Swanger contributed to this story.
A version of this story first published in the Summer 2020 edition of the Dallas-Fort Worth Real Estate Review.
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