Hillwood’s Mike Berry: ‘North Texas Has a Lot Working in Our Favor’

Overall, industrial leasing activity and renewals have remained “very healthy,” he says. The firm’s multifamily communities have also maintained essentially pre-pandemic rent collections. But, he cautions: “This is an unprecedented period. We’re watching for a lag effect but anticipate it will be mitigated by potential relocation activity.”

Berry discusses the impact of the COVID-19 pandemic on corporate relocations in Dallas-Fort Worth, as well as long-term changes and new opportunities in the commercial real estate market in our Q&A. There are reasons for optimism, he says.

Where was the relocation market heading prior to March of this year?

The pandemic accelerated many market trends that were already underway, especially in the industrial sector and particularly in e-commerce, which has proven to be the backbone of our U.S. supply chain. Obviously, this acceleration has hit the retail sector the hardest, which was already hurting. As it relates to relocation and reshoring, before COVID-19, major brands like Stanley Black & Decker were starting to reshore a portion of their manufacturing operations from overseas due to higher tariff costs. We’ll see more of this in the near future as companies reshore more operations to minimize potential supply chain disruptions. And, certainly, we’ll see this occurring in the manufacturing of goods important to national security and public health.

How has the pandemic impacted logistics and supply chain sectors in the region? Are you seeing some businesses switching from international to domestic sources as a focus for production?

Disruptions to the nation’s essential supply chains during the pandemic are causing a lot of companies to consider reshoring, and even relocating their domestic manufacturing and distribution to more central geographic locations. They are looking at Texas, and North Texas in particular, because of our business-friendly environment, highly skilled workforce, and our multimodal transportation options. The region also stands apart in its ability to offer space for corporate offices and manufacturing or distribution facilities in close proximity, which makes it easier for companies to quickly troubleshoot and address any issues.

What new challenges and opportunities are you seeing in the current market?

Hillwood sees some great opportunities in the single-family housing market. There is still a lot of demand for housing in North Texas as companies continue relocating to the region, and we expect demand to further increase as fallout from the pandemic leads more families to choose suburban homes with more space over urban density. The low-interest rates make this an ideal time to refinance or to buy a home, especially for first-time homebuyers who are not trying to sell a home.

Are there reasons for optimism in the balance of 2020 and looking to 2021?

There are certainly reasons to be optimistic as we approach the next 12 to 18 months. Historically, the North Texas commercial real estate market has experienced relatively fast recoveries, and although this downturn comes with unique challenges, North Texas has a lot working in our favor. Our central geographic location, transportation options, workforce, and business-friendly environment continue attracting new business opportunities. North Texas also offers affordable housing options and plenty of suburban communities that will allow families to have more space in the era of social distancing. From an office market perspective, we’re unique in that we have available land to build campus-style facilities, like the Charles Schwab headquarters. These types of facilities provide a horizontal footprint and can be customized to accommodate greater space between employees, outdoor work areas, and the latest in automation and clean building technologies.

How is Hillwood adapting as you seek prospective tenants in this season of uncertainty?

These are unprecedented times, and the speed at which everything changed has resulted in our team utilizing technology like never before. I’ve been very impressed with how people have adapted so quickly to doing business through Zoom, WebEx, Microsoft Teams, or other videoconferencing platforms. While it’s not the same as meeting a prospect or customer in person, we’ve leveraged technology that’s been around for quite a while, and finally figured out how to use it in our day-to-day business lives. We’re still building new relationships and reinforcing established ones, but we’re also being very efficient with our time, since travel between offices has become limited. I’m looking forward to the day when we can return to normal, but we’ll take some of this period’s best practices and incorporate them into how we do business going forward.

Do you see any long-term changes in your business and the needs of your customers prompted by the pandemic?

Technology and space designs that support employee safety and remote working are long-term changes we’re seeing across each of our business units. Particularly in the office sector, where touchless technology, such as automatic doors, touchless locks, motion sensor lights, temperature controls, and even voice-activated technology are becoming standard features. Layouts that have been popular during the past 20 years, centered-around collaborative workspaces, are giving way to more traditional ones (with partitions). However, the new spaces are designed to make the transition to the employee’s home office more seamless. Work stations in manufacturing and industrial spaces are seeing greater separation between employees, with robotic systems being incorporated. In the residential sector, we’re seeing more demand for suburban housing with an additional room being designed specifically to serve as a home office space.

What sectors are more pandemic proof? Where do you anticipate growth?

Sectors that cater to our nation’s essential services are the most pandemic proof, including food processing and manufacturing, medical equipment manufacturing, and distribution and logistics services. Our increased reliance on e-commerce during the pandemic creates a growth opportunity as companies expand to serve online customers more efficiently. Data centers are another pandemic-proof sector where there is a growth opportunity as we demand more bandwidth and storage for remote working and online learning. To sum everything up, improvements in technology and broadband connectivity have never been more essential.

A version of this story first published in the Summer 2020 edition of the Dallas-Fort Worth Real Estate Review.

Sandra Engelland contributed to this report.

Dallas Innovates. By Quincy Preston (2020, October 13). Hillwood’s Mike Berry: ‘North Texas Has a Lot Working in Our Favor’ [News post]. Retrieved from https://dallasinnovates.com/mike-berry-president-hillwood-north-texas-has-a-lot-working-in-our-favor/

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DFW Industrial Market Today Is More Competitive With Infill Sites Harder To Find

The Dallas-Fort Worth industrial market is known for being red-hot and flush with enough land to accommodate ongoing spec and build-to-suit development, but at least one of those factors is gradually declining. Commercial real estate experts say DFW’s industrial sector remains highly competitive with growing e-commerce demand forcing businesses to nab warehouse space to compete in the last-mile delivery space. But quality land deals, particularly infill sites, are much harder to come by with everyone on the hunt.

“Everybody is looking for value-add industrial. The question is does it really exist?” LanCarte Commercial founder Sarah LanCarte said while speaking on Bisnow’s DFW Industrial Deep Dive webinar. There are still some quality infill sites primed for redevelopment for smaller-sized deals, LanCarte said. But those deals usually require a high level of creativity and repurposing. She has seen a former Toys R Us location turned into a smaller regional distribution center, and there’s plenty of potential for former large-box mall retail sites to be repurposed into last-mile industrial space, she added. But there are lingering questions about how many adaptive reuse industrial assets will easily convert and pencil out, LanCarte noted. “Are there going to be value-add opportunities turning smaller retailers into flex space? Some are believers, and some are not.”

Peinado Construction Chief Revenue Officer Robert Shelton said he is seeing more redevelopment work associated with infill spaces as the industrial sector remains on overdrive. A mixture of more competition for assets, declining land site availability and harder to develop reuse projects are creating a competitive landscape on the investor and developer side.  “We have been spoiled because we had it easier, and now it’s a little bit harder to find competitive sites,” Transwestern regional partner Denton Walker said. “It comes down to who can execute and no question, it is very competitive.” Adding to that competitive equation is the issue of dealing with cities on entitlements, a process that requires infill industrial developers to be much more aggressive and patient today, Walker said.  Land sites may be declining, but industrial specialists still see an abundance of development activity in the Great Southwest, the South DFW Airport area, South Dallas, parts of McKinney, North Fort Worth and parts of Denton County.  Overall, e-commerce is keeping the market heated even as the coronavirus has cooled other real estate sectors. “You can’t overstate the impact e-commerce has had on the industrial market these past five years and what that impact will be in the next 10 to 20 years,” Black Creek Group Senior Vice President Mace McClatchy said. “We have been very blessed in the industrial sector.”

Biznow. By Kerri Panchuk (2020, September 24). Coronavirus Pandemic Lifts Drones Higher In The Construction Chain Of Command [News post]. Retrieved from https://www.bisnow.com/dallas-ft-worth/news/commercial-real-estate/coronavirus-pandemic-lifts-drones-higher-in-the-construction-space-105676

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Office Space: Pandemic Redefines Commercial Real Estate Industry

Office space. Will it become a thing of the past?

As more people work from home, what does that mean for the entire commercial real estate industry?

Experts are anticipating a lot of changes that could totally redefine the industry, especially as companies get a taste for how a work-from-home structure operates.

According to Global Workplace Analytics, a research-based consulting organization specializing in telework, a recent survey shows that we will see 25-30% of the workforce working at home on a multiple-days-a-week basis by the end of 2021.

Commercial real estate expert Stephen LaMure, owner of Dominus Commercial, said how the industry reacts to the pandemic should really be broken down into three major parts: office buildings, industrial and retail.

All three are experiencing some major changes, both in good and potentially bad ways.

“Right now, it’s a little bit of a wait and see. Especially with this uptick in COVID-19 cases,” said LaMure.

He works in Dallas’ design district and believes only 20 percent have come back to their offices in his area.

He said overall, the pandemic has really caused companies to rethink whether they want to permanently work from home or alter their office space.

“Most of them said they needed to redesign their space to be able to spread out,” he said. “A big part of our business is talking to companies about their values and their purpose and what their culture is. How do you get a space and work environment that supports that or projects that?”

In the last few months, some companies like Twitter and Square have already made the call to let some employees stay at home for good.

“These companies are really going to have to take a step back,” LaMure said. “How much space do you need? How many desks do you need? Now, they’re having to take a step back and say what does this really do for us? Is it necessary? Can we all work from home and not have this cost? Or if we can’t, what does it really need to be like?”

LaMure said as far as what he’s noticing, it’s not so much downsizing office space due to more people working from home but instead, companies are needing more space so that they can meet the CDC’s social distancing guidelines.

“I don’t think it’s going to be as dramatic as some people are saying. There are people saying ‘Oh this is the end of office space as we know it. I think it’s just the opposite,” he said.

LaMure elaborated, “I’ve interviewed over 100 tenants in the last 90 days and almost all of them – other than a small percentage – are saying the same thing. We need more space. So if you have 50 team members that are in 3×2 cubicles, you have to triple your space in order to get those cubicles separated by six feet.”

He said he’s noticing many larger companies are concerned about the liability issue for their employees.

“If they’re not following the CDC guidelines and some of their team members get sick or died, then there’s a substantial liability on that company so they’re going to really have to conform to those new standards,” he said.

LaMure clarified that office spaces were already drastically changing long before COVID-19.

“Twenty-five years ago, everybody had a private office or it was a large office. There was 250 to 300 square feet per person. We all kept paper files and had a giant fax machine,” he explained. “We’ve continued to get more and more dense, with more people per square footage than we used to have. Now, we’re more at like 100 square feet per person.”

Companies are re-evaluating their own spaces to ensure that people have the ability to social distance, especially for those who are unable to work from home permanently or indefinitely.

“What I’ve seen is that companies have found that certain people on their team do really well working from home and they’re more productive and more profitable. But certain people are not at all,” he said.

As for industrial commercial real estate, LaMure that’s doing really well because of shipping and supply-demand.

“There’s a lot more shipping going on. Manufacturing is coming back to the United States from outside of the country so the industrial segment is very strong, especially for DFW being centralized,” he said.

However, the future of the brick and mortar retail sector of commercial real estate is more up in the air. Businesses are either closing down because of the pandemic’s impact on the economy or their fate is in the hands of their renter.

“The retail market is certainly suffering. When you have restaurants that can only be at X percent capacity, they might not be able to make a profit themselves,” said LaMure. “The Paycheck Protection Program helped out but it only lasts for so long.”

NBCDFW. (2020, July 2). Office Space: Pandemic Redefines Commercial Real Estate Industry [News post]. Retrieved from https://www.nbcdfw.com/news/local/office-space-pandemic-redefines-commercial-real-estate-industry/2399509/

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There May Be CRE Opportunity Post-Coronavirus, If We Can Find Out What Anything Is Worth

The commercial real estate market is in limbo, with developers waiting to see if opportunities for low-interest rate refinancing and acquisitions bubble to the surface. But, the timeline for finding these opportunities in the post-COVID-19 landscape remains murky at best, especially as valuations are difficult to pin down. 

It’s likely to stay this way until the timeline for curtailing the impact of the coronavirus becomes more apparent, giving appraisers the data needed to make true property valuations, National Valuation Consultants Senior Managing Director Chuck Dannis and Dreien Opportunity Partners CEO Sam Ware said during Bisnow’s “Weathering A Downturn” webinar Tuesday. “Appraisers are just going to have to wait,” Dannis said. “They are going to have to look for other things than just sales [as part of their valuations], which appraisers normally do. I think it’s pretty naive to think that values are not changing as we speak.” A guidepost for what the COVID-19 downturn might look like is the 2008-2009 recession. But, there is one major difference between that economic meltdown and the COVID-19 crisis, Dannis said. While the ’08-’09 recession was caused by investors marking down assets and pushing up cap rates to deal with increased market risk, the coronavirus downturn is the result of market uncertainty over a disease that will end at some point. 

“What I think we are going to see this time is just a sudden and precipitous, unprecedented drop in net income in a lot of the property types — hospitality, student housing, senior housing and the restaurant business,” Dannis said. “This time I think we are going to have income shock … and so if, we don’t even change the rates, property values are going to come down.” Ware agreed that while on the surface cash flow and income disruptions devalue properties, the temporal nature of the COVID-19 crisis and the underpinnings of the economy make it difficult to predict a property’s value several months from now.  If an appraiser hypothetically completed a $200M valuation in December, the historic metrics for deciding value would likely show the same property’s value down by June because of the market disruption, Ware said. But with this downturn more of an economic delay than a financial disruption, Ware doesn’t believe true market value is lost, particularly when demand and supply were strong right before the crisis.  “I use the word pause because to me the word pause is a positive adjective. It’s a pause,” Ware said of the economy.  If there is one hidden boon in all of this madness, Ware, who specializes in office redevelopment, predicts developers may soon find opportunities to acquire assets at reasonable prices and to benefit from declining construction.  “I do see a pause in new construction for office buildings from this point forward,” Ware said. “I think existing becomes much more valuable, which I, of course, like the empties. I don’t like new construction.”

BizNow. (2020, April 7). There May Be CRE Opportunity Post-Coronavirus, If We Can Find Out What Anything Is Worth [Blog post]. Retrieved from https://www.bisnow.com/dallas-ft-worth/news/commercial-real-estate/the-new-world-order-of-cre-according-to-sam-ware-and-chuck-dannis-103803

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Real estate agents adapt to coronavirus with virtual tours, other creative ways to do business

Real estate companies are struggling to adapt to a new business environment with reduced person-to-person contact.

Most brokers and agents are working from home, and many are conducting business remotely.

Residential agents are giving virtual tours of properties and directing clients to online listings.

“We will be conducting virtual tours of Hall Arts Residences via Facetime and other comparable technologies,” Briggs Freeman’s Kyle Richards, who is marketing the new downtown condo tower, said in an email.

Tod Franklin of DFW City Homes said agents are looking for ways to protect buyers and sellers from coronavirus.

“I have many buyers and sellers that just can’t pause because they have immediate housing needs,” Franklin said. “Also many that don’t want to miss the low interest-rate opportunity.”

Even so, almost half of residential agents say that buyer interest has decreased due to the coronavirus outbreak, the National Association of Realtors reported.

“The decline in confidence related to the direction of the economy coupled with the unprecedented measures taken to combat the spread of COVID-19, including major social distancing efforts nationwide, are naturally bringing an abundance of caution among buyers and sellers,” Realtors chief economist Lawrence Yun said in a statement.

Commercial agents are adapting, too.

More than half of the Realtors associations’ commercial members have seen a decline in leasing clients.

And Yardi Systems’ reports that traffic to the firm’s apartment finding website dropped by a quarter in the last week.

“Our professionals, working hand-in-hand with our clients, are finding ways to manage through these difficult days by modifying meeting protocols, touring properties with smaller groups and finding ways to keep moving forward,” Brett White, executive chairman and CEO of Cushman & Wakefield, said in a letter to clients.

“At the same time, we are adhering to important public health restrictions and recommendations. “In some jurisdictions, we know that business-as-usual simply isn’t possible and that managing through this disruption is a daily undertaking.”

Dallas Morning News. (2020, March 23). Real estate agents adapt to coronavirus with virtual tours, other creative ways to do business [News post]. Retrieved from https://www.dallasnews.com/business/real-estate/2020/03/23/property-agents-adapt-to-business-with-coronavirus/

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Dallas developer plans 2,000-plus homes for $950M master-planned community in Midlothian

A Dallas-based real estate developer has acquired 966 acres of land in Midlothian for a $950 million master-planned residential community with thousands of homes.

Hanover Property Co. on Monday announced the acquisition of the land at the northeast corner of Highway 287 and Walnut Grove Road, about 30 minutes south of downtown Dallas. 

Plans for the property include 2,000 single-family homes priced from the $300,000s,160 townhomes, 26 acres of commercial and 42 acres of industrial development. Pre-development is underway, and the first homes will be available by early 2022, the company said.

The development’s name and builders for the first phase, which will consist of 350 homes, will be announced later this year.

Ben Luedtke, executive vice president of Hanover, said the company has been working with the city of Midlothian for the last year on planning the development.

“The city is a great partner, and the result is the first true master-planned community of this size in Midlothian,” Luedtke said in a prepared statement. ”There is substantial tree coverage, gentle rolling hills, and a 50-acre lake. We will thoughtfully enhance the natural beauty that is already in place.”

Hanover is developing multiple master-planned communities in North Texas, including Somerset (487 acres, 1,105 lots) and M3 Ranch (720 acres, 1,571 lots) in Mansfield; and Berkshire (358 acres, 641 lots) and Wellington (610 acres, 1,680 lots) in north Fort Worth. The company is also the developer of the Mira Lagos community in Grand Prairie.

Midlothian has been one of the most dynamic growth areas of the southern DFW new home market, with 511 housing starts last year, Ted Wilson of market research firm Residential Strategies said.

“As land and development costs have risen, it has become increasingly challenging for developers to produce lots that can translate into the $275,000 to $400,000 home price — the historical ‘sweet spot’ for Midlothian new home construction,” Wilson said in a statement.

JLL Capital Markets Managing Directors Michael Swaldi and Larry McCorkle and Director Nick Hayden marketed the property on behalf of the seller, ECOM Real Estate. JLL International Director Paul Whitman represented Hanover. 

The project team also includes MESA as the landscape architect and land planner and LJA Engineering.

Midlothian will also be the site of a massive data center that Google is building. The company is putting $600 million in the Ellis County facility and is creating construction and ongoing jobs at the site.

Dallas Business Journal. (2020, February 4). Dallas developer plans 2,000-plus homes for $950M master-planned community in Midlothian [Blog post]. Retrieved from https://www.bizjournals.com/dallas/news/2020/02/04/hanover-property-co-midlothian.html

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Hanover Midlothian Master Planned Community

Big Industrial Developments In DFW Show Ongoing Confidence In Market’s Bandwidth

As 2019 comes to an end, industrial spec building and acquisition activity in DFW remains red-hot with investors and developers prowling to develop large warehouses, urban infill and other industrial commercial real estate product. Big Industrial Developments In DFW Show Ongoing Confidence In Market’s Bandwidth Flickr/Mark Hunter DFW is building more industrial assets than any other U.S. metropolitan area, with 39M SF of industrial space under construction, according to a recent CoStar report. Large additions to that pipeline keep coming, such as Black Creek Group’s Monday groundbreaking on 570K SF in South Fort Worth. “We have evolved into a world-class industrial market when you look at all of the connectivity we have with the airport, the rail infrastructure we built over the last 15 years, with the [International] Inland Port [of Dallas] and Alliance Airport … and just the confluence of highways that have made DFW one of the rising stars of the industrial market,” CoStar Director of Market Analytics Paul Hendershot said. With such strong demand, the DFW industrial market is on course to reach 20M SF of net absorption for its fourth year in a row, JLL reported in its third-quarter Industrial Insight report. Demand for space in industrial continues to offset supply increases with the region’s total vacancy rate hovering at a modest 6.6% in Q3, JLL said. While some asset classes may fear oversaturation and supply fears heading into a new year, investors and developers believe DFW’s industrial market faces a much longer and safer runway even if the economy slows in 2020. “My bet is over the long-term there is still much more industrial that needs to be built to service the way people are going about their lives,” Fort Capital Chief Investment Officer and CEO Chris Powers said. “For everything that is brought online, it needs to pass through some type of industrial facility to get to its final destination.” Fort Capital has been buying up Class-B industrial buildings in urban core areas. This month it acquired 10 light industrial buildings totaling 455K SF in the Great Southwest Industrial submarket in Arlington, and has stated its intention to buy millions more square feet in the next two years. Big Industrial Developments In DFW Show Ongoing Confidence In Market’s Bandwidth Courtesy of M2G Ventures Rendering of M2G Venture’s North Quarter 35 Industrial Development in North Fort Worth. The most recent new project announcement came Monday from M2G Ventures, which showed it remains optimistic about North Fort Worth’s industrial potential. The development company, which is more widely known for redeveloping The Foundry District near Downtown Fort Worth, plans to build a 640K SF Class-A industrial complex with four buildings at 10705 North Freeway in Fort Worth, near the intersection of Interstate 35 and Golden Triangle Boulevard. Known as North Quarter 35, the project is a short drive from DFW International and Alliance Airport. The areas within 5 miles of each airport have been the hottest industrial development markets in the Metroplex. M2G Ventures co-President Jessica Miller Essl said the building’s look, conceptualized by GSR Andrade Architects Inc., is modern and chic with a design aesthetic that is more polished than a standard run-of-the-mill industrial building. M2G Ventures is not the only developer betting on Fort Worth. Denver-based Black Creek Group just launched construction on a three-building industrial complex known as Carter Logistics Center in South Fort Worth. The site, located near Interstates 35 West and 20, will bring another 569K SF of industrial space into the firm’s current DFW holdings, which total approximately 6M SF. “With the South Fort Worth submarket boasting strong industrial fundamentals and solid demand for modern, Class-A space, we believe Carter Logistics Center is well‐positioned for success and we continue to look for developments like this to increase our presence in such a solid market,” Black Creek Group Senior Managing Director for the South Central Region Mace McClatchy said in a press release. Black Creek Group’s three industrial warehouses will feature 32-foot clear heights and at least 180-foot truck courts, the company said. While spec building requires a certain amount of risk-taking, the data available shows new product is unlikely to face market volatility on the industrial side. “I would consider us a growing market, but not an overheated market,” Hendershot said. “It’s not immune to economic cycles, but [industrial has] definitely benefited from e-commerce and the restructuring of retail more than any other sector, and I think that will continue to help bolster this sector in the near and the long term.”

Bisnow. (2019, December 4). Big Industrial Developments In DFW Show Ongoing Confidence In Market’s Bandwidth [Blog post]. Retrieved from https://www.bisnow.com/dallas-ft-worth/news/commercial-real-estate/how-big-

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DFW 2020: Long CRE Cycle Continues, Election Time Slowdown Expected And The Rise Of Midtown And 635 Corridor

The Dallas-Fort Worth commercial real estate market thrived on capital liquidity and a strong local economy in 2019. Now, 2020 is expected to bring even more commercial growth in DFW, with interest rates remaining low and demand for North Texas real estate going strong. DFW 2020: Long CRE Cycle Continues, Election Time Slowdown Expected And The Rise Of Midtown And 635 Corridor Bisnow Scott Beck A group of top developers and real estate executives told Bisnow that 2020 will bring a 10th inning to the long-winded real estate cycle that started close to a decade ago. However, there will likely be some drag mid-year as the volatile politics of election season rear their head after July. “I think the first half of the year, you are going to see a bull market related to real estate,” Beck Ventures CEO and President Scott Beck said. “You’ve seen some of the banks pull back slightly, and I think that’s healthy … some areas have had a tremendous amount of overbuilding, especially in the apartment residential space in urban core areas.” But Beck and other developers speaking at Bisnow’s DFW 2020 Forecast event Dec. 17 expect history will repeat itself with some dampening of activity in the second half of the year. “It’s an election year, so I think what you will find is a lot of people are more eager to place capital in the first half of the year,” Fort Capital CEO Chris Powers said. “I think there will be a lot of speculation about a coming slowdown in the second half of the year.” The slowdown could be driven by developers and investors waiting to see whether our nation’s leadership will change and what that might mean for policies. “Typically, with an election, there is uncertainty, and uncertainty usually drives developer perception about the marketplace,” Beck said. DFW 2020: Long CRE Cycle Continues, Election Time Slowdown Expected And The Rise Of Midtown And 635 Corridor Courtesy of Dallas Midtown Dallas Midtown rendering But excluding that possible dip, DFW executives are confident in market fundamentals across asset classes. On the retail front, Dallas-based Goodwin Commercial founder and CEO Pam Goodwin is confident brick-and-mortar retailers will have a strong year if they focus on innovation and consumer experience. “With there being so much capital out there and the interest rates at the lowest [level] they’ve ever been, I still say 2020, and even 2021, will be a booming year for multifamily, senior living and retail if it’s innovative,” Goodwin said. The industrial market in DFW also is expected to remain strong as demand for last-mile delivery locations and e-commerce make distribution-focused assets in urban environments a top priority, Dalfen President and Chief Investment Officer Sean Dalfen said. “Whether there are tailwinds in the market or headwinds in the market, I think there is going to be increased demand in the near and long term for industrial,” Dalfen said, citing e-commerce delivery demand as a catalyst for industrial’s long-term strength in DFW and nationwide. Even those who foresee some slowdown in 2020 predict a more controlled drop-off inactivity rather than a rapid decline. “I think next year we may see some submarkets lose a little bit of ground, but it won’t be dramatic,” Lang Partners Vice President of Development Cindy Harris said. “[Multifamily] occupancies are still in the 95% range, so if they drop a little bit, I don’t expect it to be problematic, but I do think we will see a little bit [of a drop off] because a lot of supply will come over the next year or so.” DFW 2020: Long CRE Cycle Continues, Election Time Slowdown Expected And The Rise Of Midtown And 635 Corridor Wikipedia Commons/Robertb-dc at English Wikipedia I-635 in Dallas. I-635: The New Center Of The Metroplex? In 2020, more North Texans will continue to choose homes in far-flung suburbs to the east, north, and west of Downtown Dallas, CRE experts say. As this expansion happens, Beck is confident his firm’s Dallas Midtown development atop the old Valley View Mall will create the new center of the Metroplex near I-635. “The location of the Midtown project … is in the center of the population of the Metroplex, which is precisely why we are focused on large urban, infill office buildings,” Beck said. From Beck’s point of view, as more residents move to the outer reaches of the Metroplex over the next two decades, the redeveloped Dallas Midtown project will offer luxury offices in what will become the most centralized office market for all DFW communities. “As we move further out over the next 10 to 15 years, we will end up with this rubber band effect, basically pulling consumers and office users back toward the center of the population density,” he said.

Bisnow. (2019, November 26). DFW 2020: Long CRE Cycle Continues, Election Time Slowdown Expected And The Rise Of Midtown And 635 Corridor [Blog post]. Retrieved from https://www.bisnow.com/dallas-ft-worth/news/commercial-real-estate/how-big-

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Big D Is Becoming Coveted Esports CRE Market As Envy Gaming Sets Up HQ In Victory Park

Dallas-based Envy Gaming Inc., which runs esports teams — groups that engage in video game competitions — is moving its training center and headquarters to a 21K SF facility in Victory Park. Big D Is Becoming Coveted Esports CRE Market As Envy Gaming Sets Up HQ In Victory Park Unsplash/Florian Olivo Esports, which takes place in the virtual world, is a lucrative professional sport right here in the real world. It is increasingly taking up commercial real estate, and it is growing in DFW. The numbers internationally show a groundswell of support for video game competitions. Global esports revenue hit $865M in 2018 and is expected to grow to $1.79B by 2022, according to Statista. Envy Gaming oversees league teams, such as Dallas Fuel, a member of the Overwatch League, and the Dallas Empire Team in the Call of Duty League. The groups play other esports teams around the world, and the new HQ is in a strategic location for these teams that are expected to continue playing large events at the local and international level. The new Envy headquarters and training facility will be located near one of Dallas’ prime sporting hubs, Victory Park, at 3030 Olive St. Cushman & Wakefield’s Ryan Hoopes and Tom Sutherland helped Envy Gaming find its new spot. Envy Gaming, which has been in temporary space since moving to Dallas from Charlotte, North Carolina, a few years ago, is now looking for space to hold larger conventions in DFW, potentially resulting in more local commercial real estate shopping on Envy’s part, Hoopes said. “Dallas is definitely becoming a hub for esports; and it’s not just the esports arena in Arlington or some of the esports groups that have relocated here,” Hoopes said. “Esports is moving very quickly in the direction of what we would call geo-based competition … that is leagues that have teams that are geo-located such as the Dallas area.” Hoopes, who has followed the sport extensively, said investors view Dallas as an emerging mecca for esports because of its demographics, corporate profile and massive growth in the past decade. DFW also has the type of real estate development that is attractive to the industry. “The type of environment that esports would thrive in would be more of a mixed-use development that has a significant arena component to it,” Hoopes said. “Think anywhere between 6,000 to 8,000 seats in an actual sporting arena that has the type of infrastructure … any sporting arena would need.”

Bisnow. (2019, November 3). Big D Is Becoming Coveted Esports CRE Market As Envy Gaming Sets Up HQ In Victory Park [Blog post]. Retrieved from https://www.bisnow.com/dallas-ft-worth/news/commercial-real-estate/how-big-d-became-coveted-esports-cre-market-as-envy-gaming-sets-up-headquarters-center-in-victory-park-101603

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DFW Brewery Locations Turn Neighborhoods Around

Dallas leads the four-pack of Texas cities when it comes to craft brewery locations.

DALLAS—While Labor Day officially marks the end of the summer picnic season, the Texas climate makes outdoor barbecues possible most of the year and Texas breweries will finally be able to legally sell beer-to-go now that House Bill 1545 has officially passed. With its recent passage, more entrants to the craft beer scene are expected, increasing competition and revenue for craft breweries across the state which has been previously hindered by restrictive laws surrounding alcohol sales.

The passing of the beer-to-go bill is one of many positive legislative changes the industry has seen in recent years, increasing awareness, competition and sales of Texas craft beer. And, Texas breweries are getting greater exposure nationally, thanks to the production of quality product, acquisitions and partnerships, according to a recent study by JLL.

Milton Black, JLL associate, concurs that Dallas brewery locations have made a significant local impact.

“When you look at a map of all the breweries in the metroplex, most of them cluster in and around the urban core. It’s not until you get out towards the suburbs where you generally see one or two breweries serving each community,” Black tells GlobeSt.com. “Due to the density in the urban core, breweries tend to open in edgy, emerging submarkets. They set up shop between quasi-industrial properties and areas with food, beverage and entertainment, where the buildings are cheap enough for small business owners to afford and accommodate the unique equipment. It also allows for a creative buildout and ability to customize the tap room. Having a successful brewery in these neighborhoods spurs more investment in the surrounding properties, in turn driving more traffic to the area.”

In Dallas/Fort Worth, Deep Ellum Brewing Co is a well-known brewery with a 2018 production of 45,466 barrels. It is known for Dallas Blonde 2. Another brewery, Rahr and Sons Brewing, had a 2018 production of 18,500 barrels. It is known for Rahr’s Blond 3. A third brewery, Community Beer Co., had a 2018 production of 16,791 barrels. It is known for Mosaic IPA.

Blake Rogers, JLL senior associate, says craft brewing has also impacted Fort Worth.

“Craft beer has continually impacted and adapted our social and commercial landscape here in Fort Worth,” Rogers tells GlobeSt.com. “Rahr brewery began in 2004 in what is now known as the Near Southside District of Fort Worth. At that particular time, Rahr’s Saturday brewery tour and tasting was the only reason to go into that part of town. Now the Near Southside is a vibrant renewed district, and the brewery continues to be a lively destination for a few Saturday afternoon suds with friends and live music. A few other brewers have followed a similar template to this model, and they continue to provide excellent social settings in Fort Worth.”

Texas now has more than six times the number of active beer production licenses than at the beginning of the decade. However, the state continues to rank 30th in economic impact per capita and 46th in number of breweries per capita in the US.

GlobeSt. (2019, September 8). DFW Brewery Locations Turn Neighborhoods Around [Blog post]. Retrieved from https://www.globest.com/2019/09/08/dfw-brewery-locations-turn-neighborhoods-around/?slreturn=20190830112346

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