There’s a “flight to quality” in office development, says Granite Properties’ David Cunningham, who identifies development opportunities and leads project design and construction at the real estate firm. While the trend has been in play for years, it has an all-new prominence in the pandemic rebound.
The senior director of development and construction sees amenities helping to win deals.
“Class-A buildings with the best mechanical systems, amenities, and locations will continue to see demand and—we think—will win the bulk of new customers,” he said.
Cunningham says architecture matters, too. That goes well beyond just cool design, he says. It’s a total package that includes the right look and feel, along with amenities and sufficient parking.
“You spend a large amount of time at the office, and I view the office as another home to spend with your work family,” he says. “Offices need to be comfortable, have drive-up appeal, and give you an image of what you want your company to say about itself.”
A wellness real estate market
We’ll see more office buildings offering wellness and sustainability-focused features, such as green and outdoor spaces for people to work and gather, Cunningham says. As a case in point, the firm’s 19-story office tower Granite Park Six in Plano includes a large outdoor terrace for people to work, meet, and unwind. The project, which recently broke ground, is scheduled for delivery in 2023.
Designed by BOKA Powell with “modern interiors” by HKS Architects and general contracting from Austin Commercial, it has an anchor tenant, Stonebriar Commercial Finance.
Granite’s Cunningham is among the experts invited to share their thoughts on the CRE market for our recent DALLAS® magazine that focused on how DFW punches above its weight in commercial real estate. Here’s what he had to say in “View from the Top Tier.”
What activity are you seeing in the DFW office sector right now?
New office projects, delayed due to the pandemic, are now being developed, and we expect that to continue. Granite is well into re-starting the bulk of our pipeline that was ready to start back in March of 2020. By mid-2022 we will have started the 2020 projects, and we’ll begin to refill the pipeline for new projects for future starts.
How is leasing going?
We’ve seen increases in leasing activity in the past six months.
What are the biggest opportunities and challenges for office developers in DFW?
The biggest opportunity is that people and companies want to be in Dallas—there is demand here. And while costs are greater, they are still lower than other cities.
The biggest challenge is cost. Whether that’s due to shortage of manpower, materials, or a delay in shipping. Costs are increasing and fast.
What are the top reasons from your perspective on why the Dallas region is now one of the nation’s hottest CRE markets?
Because of Dallas’ central location, you’re no more than a three-hour flight away from any major city in the country. The region itself also offers ease of transportation with a great roadway and highway system. The area offers a conglomeration of cities and a wide diversity of neighborhoods. You can find anything you want somewhere in the region.
Plus, Dallas still has relatively affordable housing and excellent school districts, making it a desirable place to live. Because of this, Dallas attracts a highly educated workforce, which is a great base to build a business around.
This interview has been edited for brevity and clarity.
A version of this story first appeared in the print edition of DALLAS® Commercial Real Estate 2022, published by Dallas Next for TREC and the Dallas Regional Chamber. Read more in the digital edition of the magazine below, and request the next print edition here.
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