Part E-Commerce, Part Expertise: How Dallas Became An Industrial Powerhouse

Shiny office buildings and a slew of new corporate headquarters have dominated recent real estate headlines in Dallas. But despite all its glitz, office development is no longer the region’s largest source of growth. That distinction now belongs to the industrial sector. The DFW Metroplex has ballooned into the nation’s fourth-largest industrial market. It offers an ideal mixture of available land, a business-friendly environment and consumer demographics. Thanks to the rise of e-commerce, demand for industrial space in DFW has reached unprecedented levels. The challenge has become delivering warehouse space as fast as possible. Yet none of this has caught Dallas off guard — this is the culmination of almost a century of work. “Dallas has always been a pioneer in industrial development,” said Greg Gordon, the founder and president of Gordon Highlander, a Dallas design-build and tenant construction firm. “The magic of Dallas is that we have a world-class community of architects, developers, contractors and subcontractors.” In the late 1940s, Trammell Crow pioneered the development of speculative warehouses in DFW. He grew to become one of the largest multi-sector developers in the nation. Gordon’s father worked for Trammell Crow; having grown up in the industrial business, Gordon leveraged his father’s project management experience when he founded his own firm in 2007. A generation has passed, but a tight-knit group of builders lives on, Gordon said. Along with this community, DFW offers large tracts for development and little in the way of bureaucratic red tape. Zoning regulations and property taxes are minimal compared to other major cities. “There’s very little bureaucracy in the DFW area,” Gordon said. “Pro-business taxes and incentives make the region attractive. Many companies from California and other parts of the West Coast have migrated to DFW just looking for greener pastures.” But one trend has forever changed the face of industrial real estate in DFW, Gordon said. “The boom right now is a confluence of factors — our history, our expertise, the local environment, the business migration to Dallas, but most of all e-commerce.” As online sales and the demand for rapid delivery have grown, companies have moved distribution warehouses closer to urban hubs. And now, as more consumers send back the products they buy, companies need not only a distribution center but also a reverse logistics center to take care of stacks of returns. The result is that developers are building warehouse space in the DFW area on spec at record-breaking rates, hoping to capture a tenant that needs to move as soon as possible. “Developers are building mega-warehouses without ever having had a conversation with a potential tenant,” Gordon said. “When a developer secures a tenant, they come to us and say ‘we need to move in yesterday.’ So what we pride ourselves on is working diligently to build out those spaces as soon as possible, for whatever they need.” As the sophistication of the industrial sector grows, so do the speed bumps. Gordon said there are more stakeholders than ever before in any industrial project. If handled improperly, the coordination efforts can slow a project down to a crawl. “Everyone used to just have one representative at the table — now there are dozens of stakeholders on every team,” Gordon said. “We’re dealing with subcontractors, IT people, HR people, health and safety people. The more people you have around the table, the harder it is to avoid delays.” Avoiding delays requires smart team building, clever planning and agile project management. Gordon said he has learned and studied the DFW industrial environment to build the right team for every kind of project. Gordon Highlander has invested heavily in communication technology to speed the build-out process and ensure that all parties remain on the same page. “Having a hot market like Dallas’ means you need contractors that are responsive, agile and adaptive,” Gordon said. “But I’d say that our city has found a formula that works. Companies moving to DFW are just blown away by how fast things get done here.”

BISNOW. (2019, Jan 31).
Part E-Commerce, Part Expertise: How Dallas Became An Industrial Powerhouse [Blog post]. Retrieved from https://www.bisnow.com/dallas-ft-worth/news/industrial/part-e-commerce-part-expertise-how-dallas-became-an-industrial-powerhouse-96980.

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The Future of Brokerage: Opportunities for those who Advise and Adapt

Technology advancements and changes in consumer behavior are impacting and disrupting the commercial real estate (CRE) industry as we know it. The digitization of the workplace, the growing role of robotics, the Internet of everything, our gig economy, the introduction of automation and AI are all creating a biosphere of promise and challenge. On the brokerage side, access to information will make it easier for buyers and sellers to make more informed decisions. As a result, brokers will no longer control the conversation.

The reality is that a broker’s role will never truly go away, but there will be radical changes. While we won’t see an AirBnB or Uber-like company disintermediate CRE soon, technological enhancements will disrupt the traditional brokerage model that has already minimized much of the need for human touch. By revolutionizing data ubiquity and transparency, whether it’s through the blockchain or other means, brokers will need to provide more advisory information to clients.

What does this mean for brokers? Three things:

There will be no room for “C” players who hoard information and simply serve as connectors. In the future, information will be more readily available to clients and transparency will rule the day. We will see that the matching of a particular property in a particular asset class to a particular client can and will be done by AI. In fact, we are already seeing this being tested in CRE tech companies. In short, the obvious will be automated, whereas specialization and adding cerebral value to a transaction in an advisory capacity will be demanded and rewarded.
Double-ending deals with a finite group of clients will be rendered obsolete. Every day new and unlikely buyers are entering the market. In the past this meant international buyers in Gateway markets. Today we see not just international buyers entering into secondary markets, but we also see family offices, previously local investors expanding out of market, and even crowdfunding. These new investors are more sophisticated, expect real-time information and access to all data. As a result, landlords are going to demand that their brokers make their properties available to the entire brokerage industry in order to drive value.
There will be no more secrets in CRE. As real estate becomes more commoditized, data more readily available, clients more sophisticated, and the basics automated, the industry will be forced to operate with an open playbook. Fees will need to be clearly stated and they will be earned through creativity and adding value to the process. Those who built their businesses through obfuscation will no longer have an advantage and may in fact be relegated to “C” player status.

The reality is that the service that too many brokers in our industry offer clients today is simply not good enough. Changes in CRE client behavior, coupled with emerging technologies will radically change both the way in which transactions are facilitated, and the industry functions as a whole. This creates new opportunities for skilled participants. Those who lead and adapt today will sit in the pole position; those who seek to maintain the status quo are at risk of being disintermediated.

The following article appeared in the digital version of the National Real Estate Investor 2019 Market Outlook.

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CRE Snapshot: A Look At The North Central Dallas Retail Market

With three prominent and sizable retail developments gaining steam, the North Central Dallas retail market has been adding tenants and gaining a fair share of attention.

Year to date, the North Central Dallas submarket has delivered 205K SF of new retail construction, fourth in the Dallas-Fort Worth region behind leader Far North Dallas, which delivered 491K SF in Q3, West Dallas (246K SF) and the Mid-Cities (245K SF), according to CBRE Research, which provided a snapshot to Bisnow on how North Central Dallas retail is performing. The North Central Dallas submarket extends north of Interstate 635 and is situated between I-35 and U.S. 75. It incorporates all or portions of several fast-growing northern suburbs, such as Plano, The Colony, Frisco, Allen and McKinney, as well as a portion of northern Dallas. The submarket and the entire Dallas-Fort Worth region are benefiting from a robust economy that has added jobs at one of the fastest rates in the country during this real estate cycle. The DFW metro area has added 114,900 non-farm jobs since August 2017 with 31,800 of those coming from the professional and business services sector, according to the Texas Workforce Commission. Growth is particularly strong in the metro’s northern suburbs.

Three large mixed-use developments in the submarket have changed its landscape. Grandscape: The 433-acre development in The Colony was named the best mixed-use project in D CEO’s commercial real estate awards. Grandscape, anchored by Nebraska Furniture Mart, includes over 3M SF of retail, entertainment, dining, residential and office, including first-to-market tenants Scheels and Andretti Indoor Karting & Games. The development announced several new retail tenants over the summer: Barley and Board, Davio’s Northern Italian Steakhouse, Seven Doors at Montecito Grill and LSA Burger Co. The Star: The 91-acre retail, restaurant and office campus in Frisco is home to the Dallas Cowboys headquarters and team practice facility but also has over 30 restaurants, shops and a hotel. In the fall, the Dallas Cowboys opened a new retail concept there, Dallas Cowboys Studio, which offers exclusive Cowboys-themed apparel and accessories made exclusively for the boutique. Legacy West: Located at the Dallas North Tollway and State Highway 121 in Plano, Legacy West is in one of DFW’s highest traffic areas. Besides high-profile office users such as Toyota, Liberty Mutual and JPMorgan Chase, it features the first European-style food hall in the region with close to 30 different food and beverage options. A new concept, Neighborhood Goods, announced plans to open there in November.

BISNOW. (2018, Oct 30).
CRE Snapshot: A Look At The North Central Dallas Retail Market [Blog post]. Retrieved from https://www.bisnow.com/dallas-ft-worth/news/retail/cre-snapshot-a-look-at-the-north-central-dallas-retail-market-94372.

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Class A Office Buildings in North Texas Evolve With New Tech

Over the last decade, Dallas-Fort Worth (DFW) has been consistently recognized as one of the fastest-growing metropolitan areas in the nation, and there are no immediate signs that the growth is stagnating.

Particularly in the last several years, DFW has experienced a wave of corporate relocations and expansions from a wide variety of industries. This activity has brought an assortment of valuable economic opportunities to the metroplex, resulting in a robust construction pipeline. This new product is focused on meeting the strong demand for highly amenitized, future-proofed Class A office space and embracing the high-tech connectivity that helps guard against obsolescence.

Fortune 500 and other prominent companies continue to eye DFW as a top location. These users expect buildings to include not only standard amenities like fitness centers and conference rooms, but also access to the latest technology and seamless connectivity.

Arie Barendrecht, WiredScore

How We Got Here

In the 1980s, a major commercial construction boom in North Texas set the benchmark for Class A office buildings, which were traditionally developed without modern technology in mind.

Buildings such as The Crescent, Bank of America Plaza and Fountain Place were the gold standard for office properties and served as benchmarks for quality for much of downtown and Uptown Dallas.

Over time, these upscale buildings evolved to offer advanced services and amenities, such as covered parking, high-end finishes, open gathering spaces for collaboration, on-site food-and-beverage options, health and wellness services and conference facilities.

Nowadays, discerning tenants at Class A properties tend to view traditional amenities as standard features and necessary conveniences. As such, office users are increasingly looking for developers and building owners to provide additional, innovative infrastructure that can meet and adapt to evolving technological needs.

J.J. Leonard, Stream Realty Partners

In addition to common offerings like eco-friendly efforts — such as achieving LEED certification, activity-based designs and on-site meeting facilities — Class A offices are now expected to be outfitted for present and future tenant requirements in the digital era.

Shifting Priorities

In a recent WiredScore survey, 84 percent of office tenants indicated they would pay more rent for a space if the building owner could prove the development had reliable connectivity.

This shift in expectations for on-site offerings in office spaces has redefined corporate standards nationwide. It has led developers to design buildings with both present and future tenant needs in mind, as opposed to simply emulating existing buildings.

Similarly, in the recent Value of Connectivity survey, which polled leasing decision-makers across the 10 largest U.S. cities about issues pertaining to the availability and quality of internet connections in the workplace, 75 percent of office tenants stated that poor connectivity impacted their company’s profitability. To stay competitive, DFW’s commercial real estate industry has elevated the general standard for Class A office product to support the sophisticated technology that tenants are starting to use on a daily basis.

Both DFW and the nation have learned through Amazon HQ2’s request for proposals (RFP). Not only are requirements such as proximity to local transit, access to a robust talent pool and buildings within walking distance to entertainment among the top preferences, but so too are standards around sustainability and connectivity. According to Amazon’s RFP, “ensuring optimal fiber connectivity is paramount at our HQ2 location.” Responses to the RFP needed to demonstrate the fiber connectivity on all submitted potential sites, while also offering multiple cellular phone coverage maps to ensure optimal service.

Amazon HQ2’s RFP is just one prominent example of how office tenants in today’s market are seeking properties with built-in infrastructure that supports telecommunications and data connectivity, including multiple points of entry, extensive capacities, backup power, conduit availability and numerous service providers available to cover the building and premises.

In addition to high-speed Wi-Fi connections, corporations specifically request distributed antenna services (DAS) installation during the development process to help combat and prevent poor coverage.

Employee recruitment and retention also drive demand for tech-based amenities in top office assets. It’s no secret that this is critical to operations for any business. Consequently, tenants are tasking landlords and developers with providing buildings that feature integrated, reliable technology that enhances the overall employee experience.

By taking advantage of new technologies that are accessible in state-of-the-art office spaces, tenants can gather valuable data to ease employees’ workloads, save money and optimize operations. A good example of this trend in action lies in the Internet of Things (IoT), a network of interrelated devices, embedded electronics and digital machines that are used to transfer data over a network to determine the status of a slew of in-office activities, alerts and even human-to-human interactions.

Take, for instance, IoT-powered HVAC systems that understand how office temperatures react to changing weather conditions. These systems can track office temperatures in real-time and adapt their heating and cooling functions more intelligently, resulting in more pleasant working conditions and happier employees. Workplaces today need to be ready to accommodate smart sensors, artificial intelligence (AI), robots and much more as such technologies become more prevalent in sophisticated office environments.

What’s Next?

Due to technological evolution in Class A office space, many landlords in DFW are enhancing existing assets — Pinnacle Tower, New York Life and Encore Office’s newly renovated building and Fortis Property Group’s Chase Tower — with digital connectivity capabilities that match tenant needs.

To get ahead of the technology challenge and offer top-of-the-line office space, some developers are also building office properties from the ground-up with these technologies embedded.

According to the recent estimates, sustained job growth is anticipated in DFW, which naturally creates demand for office space. Developers and investors will continue to experience shifting tenant needs and expectations regarding future-proofed Class A office space.

Developments such as JPMorgan Chase’s 2000 Ross mixed-use project and Stream Realty Partners’ Platinum Park in Legacy are prime examples of DFW-area buildings being constructed to serve future technology needs. With many similarly ambitious buildings and major renovations on the horizon in North Texas, developers have already begun constructing smarter buildings — a necessary first step in helping to create a truly “smart city.”

Rebusiness Online. (2018, Sept 7).
Class A Office Buildings in North Texas Evolve With New Tech [Blog post]. Retrieved from https://rebusinessonline.com/class-a-office-buildings-in-north-texas-evolve-with-new-tech/.

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Baylor Scott & White plans massive office center on edge of Deep Ellum in Dallas

A new office project coming on the edge of Deep Ellum in Dallas will relocate hundreds of jobs to the area.

Baylor Scott & White Health plans to build a large office administration complex with more than 600,000 square feet of construction in the 3700 block of Elm Street. The planned office center is just south of Baylor’s huge Dallas campus. Building permits value the project at more than $70 million.

The project will include 300,000 square feet of office space and a parking garage.

Officials with the Dallas-based hospital and health care firm confirmed they are working on a major development.

“Plans are underway to develop a new workspace that will bring together Baylor Scott & White Health’s five North Texas offices under one roof,” a representative for the health firm said in an email. “The building will be constructed on the south side of Landry Park near Baylor University Medical Center in Dallas.

“Although we are in the early stages of this project, we believe this move will not only produce significant cost savings as we consolidate our five office leases, but will also provide new opportunities for our colleagues to work more collaboratively and deliver greater service to our patients and health plan members,” the statement said.

Construction is expected to be completed by late 2020.

Baylor Scott & White is a major office tenant in the Bryan Tower on the east side of downtown. And the health services provider has other offices in the area.

The planned Deep Ellum office building site is adjacent to DART’s commuter rail line and is just blocks from new apartment and retail construction underway in the neighborhood.

It’s one of two new office projects on the way in that area.

Closer to downtown, a 250,000-square-foot office tower is being built as part of the Epic development on Elm at Good-Latimer Expressway.

Dallas News. (2018, Aug 21).
Baylor Scott & White plans massive office center on edge of Deep Ellum in Dallas [Blog post]. Retrieved from https://www.dallasnews.com/business/real-estate/2018/08/21/baylor-scott-white-eyes-new-office-center-edge-dallas-deep-ellum-district.

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Google buys DFW property slated for data center with potential $500M investment

Alphabet’s Google has bought a Dallas-area site slated for a data center that could deliver a $500 million investment.
The search giant purchased property in the city of Midlothian, said Andrew Silvestri, head of public policy and community relations for central U.S. at Google. As part of agreements with the city of Midlothian, Ellis County and the state of Texas, the site will be for a data center that’s targeting a minimum of 40 jobs and an investment of $500 million over five years, according to a source familiar with the matter.

“While we do not have a confirmed timeline for development for the site, we want to ensure that we have the option to further grow should our business demand it,” Silvestri said in an email.
The announcement comes after the Dallas Business Journal reported last month that a massive data center was slated in Midlothian, according to city documents. The site is near industrial operations such as a distribution center for Target. It is located in the southwest part of the city, according to the documents, which referred to a company called “Sharka LLC.”
North Texas is becoming a more popular home for data centers with technology companies and others choosing the region to help handle the growing demand for digital information. The local area is ranked among the largest markets in the country in 2017, according to BBG, a commercial real estate valuation, advisory and assessment firm. Other top areas include Northern Virginia, Chicago and Phoenix. Facebook, another Silicon Valley giant, has a massive $1 billion data center campus in Fort Worth, and late last year the development team behind it filed permits for two additional halls. That operation has more than 200 employees.

As of 2018, Google has invested more than $10 billion equipping its data centers to deliver services, according to its website. Earlier this year, it officially broke ground on a $600 million data center in Montgomery County, Tennessee, the company said. Once up and running, it will employ more than 70 employees in full-time and contractor roles, including computer technicians and engineers, along with food services, maintenance, and security positions, the website said.

The company says the data centers have a positive impact economically. Other locations include Council Bluffs, Iowa; Douglas County, Georgia; and Lenoir, N.C.
“Google’s U.S. data centers generate significant income and economic activity for the communities around them and have created over 11,000 jobs,” the company said.

Dallas Business Journal. (2018, July 31).
Google buys DFW property slated for data center with potential $500M investment [Blog post]. Retrieved from https://www.bizjournals.com/dallas/news/2018/07/31/google-buys-dallas-area-property-slated-for-data.html.

The Rise of Dickies Arena: Fort Worth Lassos $540M Facility Via Public-Private Partnership

Dickies Arena

Dickies Arena received its last ceremonial piece of steel this week. Carrying the signatures of more than 100 city leaders and representatives, the beam moved the massive multipurpose facility even closer to hosting big-name concerts, sporting events, rodeos, and family entertainment.

The 14,000-seat, $540 million venue is coming to life thanks to a unique blend of public and private money and the leadership from a member of one of the most prominent families in North Texas.

The arena will open in late 2019 at the southeast corner of Montgomery Street and Harley Avenue west of downtown, and the 2020 Fort Worth Stock Show & Rodeo will host its rodeo performances in the arena a few months later.

Other events already lined up include the 2020 through 2022 NCAA Women’s Gymnastics Championships and the American Athletic Conference men’s basketball championship from 2020 to 2022.

In 2022, the first and second rounds of the NCAA men’s basketball tournament will bring March Madness to Fort Worth.

And that’s just the beginning.

“The people of Fort Worth have really been underserved in the sport and entertainment side,” said Matt Homan, president and general manager of Trail Drive Management Corp. “We are booking concerts. We’re on the ground running.”

Other than the monthlong Fort Worth Stock Show & Rodeo, Dickies Arena will have advantages over other venues such as the American Airlines Center in Dallas and AT&T Stadium in Arlington, which must schedule around the Dallas Mavericks, Dallas Stars, and Dallas Cowboys.

“Our ability to schedule the new arena, at least in the foreseeable future, will be much more flexible,” said Mike Groomer, CEO and president of Event Facilities Fort Worth, a nonprofit organization started by chairman Ed Bass, who is leading the effort to privately fund more than half the cost of the facility by enlisting other wealthy individuals and foundations.

“As the beautiful, impressive domed roof of Dickies Arena takes shape with new steel members added every day, I’m thrilled to think of what is to come under that roof,” Bass said. “I truly think whatever people expect, Dickies Arena and the events it hosts will be far more than they ever dreamed of.”

THE PATH NOT TAKEN

Talk of a Fort Worth arena goes back about 25 years when North Texas put together a bid for the 2012 Summer Olympics. The building’s main focus, at the time, was to replace the aging Will Rogers Coliseum.

“But over time it was recognized that a new state-of-the-art arena could and should be truly multipurpose — bringing to Fort Worth and Tarrant County a whole new level of experience for not only rodeos, but also for concerts, sports, family shows, graduations, conventions, and community events,” Bass said.

The failure of the 2012 Olympic bid stung area leaders in the early 2000s, but sometimes it’s the road not taken that makes all the difference.

Talk picked back up again in 2008 but the recession hit, slowing momentum yet again.

“That vision for a new arena never went away,” Groomer said. “We just made strategic purchases, quietly buying land. We always had in mind that someday they would get an arena.”

Patience and persistence paid off, though, as Fort Worth was able to structure the deal its way, rather than rushing to meet an Olympic deadline.

Fort Worth established a public-private partnership deal where the public portion will be funded by those who use the facility and stay in the hotels around it.

“We didn’t want a property or sales tax increase and we couldn’t afford, nor did we want to have, a serious impact to our general fund,” Mayor Betsy Price said. “The plan, it’s even better now than it would have been then. The beauty of the arena, also, it’s going to belong to the city but it’s going to be privately managed. And, the upkeep of the arena comes out of profits generated so it’s not going on the books as a liability.”

PUBLIC-PRIVATE PARTNERSHIP LEADS TO DICKIES ARENA

Price explained how it came together, starting with the Texas Legislature in 2013.

Rep. Charlie Geren, R-Fort Worth, and Sen. Jane Nelson, R-Flower Mound, sponsored a bill that allows cities to allocate the state’s portion of the hotel taxes within a three-mile radius of a certain facility to pay off debt for capital improvements. Lawmakers approved Senate Bill 748, and it was signed by then-Gov. Rick Perry.

Now, hotel occupancy tax funds within a three-mile radius of the Fort Worth Convention Center and the Will Rogers Coliseum that would have gone to the state coffers are redirected to pay off the public portion of the debt for Dickies Arena. Hotel guests don’t notice any difference, the state’s portion is just reallocated.

Then, the city asked the voters to approve taxes that will be paid by users and those who visit the new arena. That includes a $5 parking tax, a $20 tax on livestock stalls and pens, and a 10 percent tax on tickets. All three propositions passed by 72 percent or more in November 2014.

Fort Worth has issued 25- and 30-year debt instruments to pay for the public share of the project, which is capped at $225 million.

“The public perception has been very, very good,” Price said. “It’s not a draw on city funds. Average Fort Worth citizens won’t be hit with it unless they’re using it. There are very few cities around that get a $550 million arena and the city’s paying less than half that.”

That’s where the private sector comes in.

Event Facilities Fort Worth, a nonprofit led by Bass, will pursue the private individuals and foundations to fund the remaining cost.

A separate entity called Trail Drive Management Corp. was created to manage the day-to-day operations of Dickies Arena. The 501(c)(3) has a 70-year lease on the building.

Dickies Arena will have a premium sound and lighting system for concerts and other events, as well as new restaurants, Price said.

Homan said they’ve even discussed having Mavericks or Stars preseason games at Dickies Arena, which would help the teams reach fans in the 817 area code and build excitement for the regular season.

In the future, the arena could attract a minor league team, Homan said.

Price said it’s not a priority right now, though.

“I think it’s possible, and we’ll look into it,” Price said. “Right now that arena’s going to get so booked, we may not have space for it.”

INSIDE THE CONSTRUCTION SITE

Four tower cranes loom over Dickies Arena as workers set up the trusses that will become the roof for the facility. Rising from the floor of the arena are two steel towers that will temporarily hold up the roof. Once the roof becomes self-supporting, the towers will be removed and the floor will be ready for the real action. It could have hardwood floors for basketball, a stage loaded with guitars, drums, and amps for a concert, layers of dirt for a rodeo, a ring for professional wrestling, or an ice skating rink for hockey games.

Making sure the arena reaches the finish line on time is Scot Bennett, regional director for The Beck Group.

Construction is more than one-third complete, and the scale of it even takes a veteran like Bennett aback.

“It’s really a fascinating picture, and it’s a fascinating construction process,” he said. “This is going to be one of the tallest arenas in the nation. It’s able to handle a lot of events that Fort Worth hasn’t been able to hold at this scale.”

There are premium rodeo boxes that will put people close to the action. There also are suites and loge boxes, which are mini suites that seat about five to six people. And there are the full-size suites.

The regular seating is specially designed for a more intimate feel so even people in the upper levels will feel part of the action. At each level, spectators will walk down to their seats rather than having to walk up.
DICKIES ARENA APPROACHES THE FINISH LINE

The Dickies Arena did displace some parking lots so the project also includes a new 2,200-spot parking garage specially designed for larger trucks that will be coming for rodeo-type events.

The peak of construction began in February, when an estimated 1,000 workers were working on the interior finish out of the 560,000-square-foot facility.

“We’ve been focused on trying to grow smaller, minority-based contractors and have become an incubator for smaller companies,” Bennett said. “We’re really creating a big impact with a job like this. We broke it down into smaller size pieces and held multiple outreach events and pair these smaller subs up with larger companies so they could play a role in the larger project.”

DICKIES ARENA BY THE NUMBERS
14,000

Seating capacity for concerts
13,300

Seating capacity for basketball games
12,200

Seating capacity for family shows and hockey games
9,300

Seating capacity for rodeo and equestrian shows
560,000

Square footage of the arena
150,000

Square footage of the support building
210,000

Square footage of the outdoor plaza

Dallas Innovates. (2018, June 27).
The Rise of Dickies Arena: [Blog post]. Retrieved from https://dallasinnovates.com/rise-dickies-arena-fort-worth-lassos-550m-facility-via-public-private-partnership/.

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SWAP SHOP: Investors mull retail to industrial conversion

As online shopping continues to cut into traditional retail, some desperate shopping centers are also contemplating a switch to ecommerce.

The idea hasn’t been tested, at least not in New York or New Jersey, but some owners and investors are exploring the prospect of converting defunct malls and shopping centers into warehouses to meet the ever-growing demand for last-mile distribution.

“There are folks looking at these projects but nothing is public yet,” Robert Kossar, head of JLL’s northeast industrial leasing team, said.

Analysts and real estate experts agree that there’s a supply and demand correlation between the products—with retail facilities in oversupply and warehouse use in hot demand—but it’s not a simple swap.

Kossar said “there are some challenges as many malls are on shopping highways that may not be ideal for distribution/fulfillment from a congestion and truck access perspective.”

Struggling to keep the lights on, many malls have been forced to retool, in some cases building apartments on-site or redeveloping for new commercial uses.

However, while repositioning might work at prime locations—such as the Westside Pavilion in Los Angeles, where Macerich and Hudson Pacific Properties are pouring $425 million into converting the mall into top-notch office and entertainment space—it’s not always viable option.

Many defunct malls are being converted to low-rent call centers, satellite campuses for community colleges, self-storage facilities or traditional warehouses, all of which command considerably less rent per square foot than even bottom-tier retail properties.

“It’s emblematic that the retail is, well, obsolete,” Suzanne Mulvee, director of research for the CoStar Group, said. “It happens when the trade area literally cannot support retail and the landlord acknowledges that the property is done as a retail asset.”

This is a harsh reality for owners and investors to face, Mulvee said, and the decision to reposition is not one that’s made lightly.

“Basically, it’s the landlord accepting that this property is not worth what it once was and that’s a big acknowledgement,” she added.

However, as retailers adopt advanced analytics to track where their customers live, where they want to shop and what they want to buy, the delineation between winners and losers has become clear for property owners. Class A and A+ malls, thriving properties in core urban markets, increased productivity by 5 percent while all other classes, from A- down, productivity decline, according to CoStar data.

Class C properties, the ones on the outskirts of metro areas or in rural markets, are the most vulnerable but some of these buildings—particularly the ones near major highways that can carry trucks into more densely populated areas—could be prime candidates for industrial conversions.

“We’ve heard that’s a possible option,” Manus Clancy, head of applied data, research and pricing at Trepp, said. “It would make sense because these are near heavily populated areas, they have access to highways and that industrial product has been on fire lately.”

The biggest barriers for retail to industrial conversion are building layout and utilities. Most new ecommerce distribution centers feature 28- to 32-foot ceilings and 50-foot-by-50-foot column spacings. Warehouses that serve the growing grocery delivery segment also need extensive refrigeration.

Meeting these needs will require large-scale renovations or ground-up development. For a drastic repositioning of any type—be it industrial, commercial, residential or otherwise—to make sense, Clancy said an investor would have had to scoop up a defunct retail properties at a heavily discounted price.

“Usually if you see that it’s a guy whose bought something for five cents on the dollar and the buyer thinks he can make money with a different use,” he said.

Despite the obstacles, there is a clear and growing need for ecommerce warehousing and available space in close proximity is disappearing quickly.

There are a few bargains to be found within big cities, as New York has seen in recent months with major distribution centers being announced in Queens and the Bronx, but the decision for would-be developers is either move farther away from the core market or start redeveloping and that’s where defunct retail centers could come into play.

“There’s a certain logic to it,” Gary Albrecht, a retail specialist at the law firm Cole Schotz, said. “We’ll have to see how it plays out.”

Real Estate Weekly. (2018, May 30).
SWAP SHOP: Investors mull retail to industrial conversion [Blog post]. Retrieved from http://rew-online.com/.

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Waze officially launches its ad program for small businesses

With the launch of Waze Local, Google-owned navigation app Waze is offering small businesses a way to market themselves to consumers  on the road.

Waze has allowed larger brands to buy ads for years, and it’s been beta testing Waze Local since 2016.

“It’s been a gradual strategy,” said Matt Phillips, who leads the Waze Local team. “We wanted to get it right.”

He added that the key is understanding the needs of small businesses — like the fact that most of them are more interested in driving traffic to their physical stores than their websites.

As Phillips explained it, Waze Local’s “core ad format” is the branded pin, which will appear on users’ screens as they drive near a store’s location. For some advertisers, such as coffee shops, a branded pin might persuade drivers to make a quick detour before they continue their commute. For others, the pin might not lead to an immediate action, but it still helps build awareness.

In addition, Waze Local offers advertisers the opportunity to promote their listings in Waze search results, and to run what the company calls a zero-speed takeover — a big banner ad across the top of the screen, which only appears when the driver has come to a complete stop. And advertisers can see real-time data on how their campaigns are performing.

Waze will charge for ads on a CPM basis, and Phillips said businesses running the most basic campaigns could pay as little as $2 per day.

If you’re worried about the app getting overrun with ads, it’s worth remembering that Waze was already offering these formats to larger advertisers. So you may just see more ads now, and more of them are likely come from local businesses. (Phillips also said Waze will never show more than three branded pins at one time.)

During the beta test, Waze Local ended up driving an average 20 percent increase in navigations to the businesses buying ads. One of the early advertisers was Kung Fu Tea, which saw more than 5,500 drivers navigating via Waze Local to 16 Kung Fu Tea locations over a three-month period.

When asked if Google might eventually connect Waze Local to its other ad products, Phillips acknowledged that Waze does share some anonymized data with Google around things like traffic, but he said, “Our focus is to build this platform for small and medium businesses … We’re happy with the roadmap as is.”

Tech Crunch [Blog post]. Retrieved from https://techcrunch.com/2018/03/28/waze-local/?mc_cid=c5bba81246&mc_eid=ff60c661f6

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7 Prospecting Strategies to Get More Clients in Your Area

Strategy. It’s one of those words that people have overused because they think it makes them sound smart; like “paradigm” or “[something]-centric”. Simply put, a strategy is a plan – that’s it. Your grocery list can be renamed your weekly sustenance strategy. But, just because it’s simple doesn’t mean it’s not important. In commercial real estate, we’ve all seen brokers become unsuccessful because their prospecting strategies was to sit back and wait for clients. Or, we’ve all been victims of the “spray ‘n pray” approach to business.

Your commercial real estate business should have a strategy. And your strategy should have strategies. And each strategy should be strategically strategized by strategies until you find yourself in commercial real estate Inception. The point is, you need closing strategies, appointment strategies, and prospecting strategies. Since prospecting is the lifeblood of the rest of the stages in your business, it’s important to maintain a simple, successful plan to move forward.

So, here are 7 prospecting strategies to get more clients in your area, as well as help you maximize your efforts and results.

Mark your territory

First, you’re going to want to clearly understand where your borders are. All of your efforts should be concentrated on a specific region. One way to do this is simply putting a map up in your office. Or, you can drive street by street until you find the edges of your market. Either way, setting your territory allows you to focus your efforts on the people within your market instead of spreading you thinly throughout various different areas. This first tip is the foundation for the rest.
Be the history buff

Once you’ve determined your territory, set out to learn as much as you can about the history of your community. Obviously, you’ll want to focus on sales and leasing history. But, it doesn’t hurt to learn about the the history of the businesses in your area. Learning the history allows you to understand the current trends in your market and, more importantly, allows you to project new trends in the future.

Immerse yourself in your community

Now, it’s time to get yourself mingling with other community members so that you can meet the people in your area. You can take a leadership role in your community by joining a board or the chamber of commerce. Or you can emphasis your personality by joining sports, school, or church groups. Go out to the farmer’s markets or local fairs.

This is done so that you can get to know your market and the business owners that you will be working with. Most importantly, you can introduce yourself without being seen as a salesperson because, at a farmer’s market, you aren’t there to sell.

Become a local whiz

Immersing yourself in your community allows you to keep your finger on the pulse of your market and keeps you in the loop of coming events. You should be on the lookout for information about new developments that are under consideration. Also, maintain a working knowledge of the local laws and ordinances that could affect businesses. And, keep a close eye on trends that you notice throughout your neighborhoods. All of these can help you plan for the future and notify decision makers about changes that may influence their businesses.

Know your enemy

You should make it a point to know the competitors in your market. Try to learn how they work, and what their strengths are. Keep track of how they’re marketing and prospecting in your area. This information will allow you to find your niche and focus your efforts on potential clients that may be overlooked by your competitors. Forgotten prospects could be a great source of business.

Monitor the listings

You must track the listings and transactions that are occurring in your area. Monitor the price, time on market, and marketing method. Specifically, keep a close eye on listings that are expired or being listed by the owner. These prospects benefit the most from having a dedicated broker. If so, they may be your biggest advertisement if you can help them with their needs. Additionally, if you are monitoring your community, you will be able to quickly adapt or adjust to any situation that may arise in your business.

Spread the word

Throughout the prospecting process, you’ll mostly encounter people who aren’t ready for your services. That doesn’t mean that they don’t know someone who is. Even if they say “no” they may remember you if a need does arise. Don’t be afraid to ask for a referral, especially if you’ve helped them before. If you are actively engaged in all of these tips, there are very few situations where you won’t be of service.

 

The Broker List [Blog post]. Retrieved from https://blog.thebrokerlist.com/7-prospecting-strategies-get-clients-area/

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