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

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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

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

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.”


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.”


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.”


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.

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.”


Seating capacity for concerts

Seating capacity for basketball games

Seating capacity for family shows and hockey games

Seating capacity for rodeo and equestrian shows

Square footage of the arena

Square footage of the support building

Square footage of the outdoor plaza

Dallas Innovates. (2018, June 27).
The Rise of Dickies Arena: [Blog post]. Retrieved from

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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

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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

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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

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6 tech predictions for 2018 and how they’ll impact CRE

Technology is evolving faster than ever before. From Bitcoin’s explosive growth to drones buzzing in parks and construction sites across the country, 2017 was a year of rapid tech growth.

There’s reason to believe that growth will accelerate this year, and given how technology is impacting every segment of the industry, CRE professionals would do well to stay on top of unfolding trends—even those not directly related to the industry. From the fate of blockchain to increased job automation, here are six tech predictions for 2018.

1. Growth of blockchain and digital currencies

With Bitcoin’s incredible surge last year (the price of one coin went from $1,000 to peak near $20,000), it’s no longer possible to ignore digital currencies or blockchain technology. Thanks to its secure ledger, everyone from banks to healthcare companies are likely to start adopting blockchain systems this year.

When it comes to CRE, blockchain could increase transparency and limit fraud, making it easier to close deals faster and more efficiently. And as Bitcoin and other digital currencies become more popular, they could be used to finance more and more CRE deals.

2. Smart chatbots

Machine learning algorithms are a big part of artificial intelligence. This year, experts said that means chatbots.

For a few years companies have been experimenting with chatbots, hoping to enhance customer service while reducing the costs of call centers and service reps. Many of those experiments have been successful, and today’s technology lets chatbots learn how to respond to questions and actually predict what customers want.

Whether it’s helping brokers comb through prospect lists or assisting property managers when analyzing vendors, CRE chatbot adoption is ready to spike.

3. Internet of Things gets bigger

Everyday more devices are connected to each other through the Internet of Things, and that process will only speed up this year. While it’s hard to judge which industries will benefit the most, in the world of CRE, industrial is a strong contender.

Many industrial warehouses are already using a combination of sensors and robots connected through the IoT to boost efficiencies and cut costs. These “smart warehouses” are expected to multiply and become even more sophisticated over the course of 2018.

4. Increased cloud adoption

Cloud adoption rates have grown considerably over the last few years and they’re expected to keep growing in 2018. While security concerns are still the largest impediment to faster adoption, organizations are steadily becoming more comfortable making the shift.

Cloud systems can save up to 30% of IT costs while making it easier and faster to complete transactions thanks to e-signatures and the ease of accessing information on different devices at any time. Along with other industries, CRE companies are expected to continue to move more and more to the cloud this year.


5. Better virtual reality

While most experts agree virtual reality is years away from realizing its full potential, every year forward is a step in the right direction. That includes 2018, and this year virtual reality technologies are likely to become more sophisticated and better geared at their respective markets. If that happens we can expect adoption to soar.

That’s especially true for CRE, considering the two are a natural fit. Virtual reality can enhance the design process by enabling teams to see and change a space before it exists. The tech also promises to save time by letting prospects tour a property virtually. Companies like Matterport and Virtual Xperience are already fine-tuning virtual reality for the CRE world, and it’s only a matter of time before it becomes commonplace.


6. Job automation advances

Everyone loves how technology creates new opportunities, boosts efficiencies and just makes business easier. Yet a lot of the technology we love is also reshaping roles in the workforce. While few professional jobs are likely to be taken over by robots this year, many jobs will keep moving towards greater automation.

In the long-run not even brokers are safe — a report from the Royal Institute of Chartered Surveyors said up to 90% of the core tasks performed by people in real estate service firms could be taken over by technology by 2027. While luckily that deadline is years away, automation is expected to impact the industry in the short-term as companies modify office locations, layouts and designs in response to increasing automation in the workforce.

Apto. (2018, February 1).
Commerical Real Estate [Blog post]. Retrieved from

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5 Things You Didn’t Know About Angmar Realty

At Angmar Realty, our agents work diligently in the buying, selling, and leasing of commercial, industrial, and retail properties as well as raw land real estate in Texas. Our commercial properties are located in Tarrant, Parker, and Johnson Counties and include land, industrial, office space, retail, and investment. Along with assisting our clients in understanding the particular real estate market they are interested in, our commercial real estate agents help negotiate the best deal possible and advise our clients on zoning and planning. Through our extensive research and knowledge, we take pride in being experts in commercial real estate so our clients don’t have to be!

With that being said, let’s dig into some things that you probably didn’t know about AngMar Realty!

1. Angmar Realty can assist in land planning and development.
Our real estate agents can assist you with zoning and planning and help guide you through unique challenges you may face.

2. Angmar Realty specializes in medical, professional and space leasing.
Whether for sale or for lease, we can help tenant/buyer save valuable time and connect you to the professional property you seek.

3. Angmar Realty works all over Texas in farm and ranch transactions.
Our team is qualified and understands the law and standard practices of buying and selling agricultural land.

4. Angmar Realty buys & sells our own real estate assets.
Contact our agents on listings throughout the DFW Metroplex or visit our website for more details.

Angmar Business Center consisting of 5,000-10,000 SF industrial buildings in Tarrant County.

Working as a team will show our clients that we all have the complete knowledge of the real estate industry and are willing to go above and beyond for our clients. By partnering with Angmar Realty you can rest easy knowing that you will be served in the quickest and most professional manner possible. If you are interested in discussing opportunities, please call Aaron Stalberger at 817-469-6737.

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AngMar Commercial Real Estate was established in August of 2008 by Aaron Stalberger and Mark Eddins, whose vision is to successfully buy, sell, and lease commercial and investment properties.

DFW Still A ‘Top Market to Watch,’ According to ULI, But Less So Than Last Year

The Emerging Trends in Real Estate report, which utilizes surveys from 1,600 responders across the real estate industry, has been released for 2018, and the folks at PwC and ULI have some ‘splainin’ to do. Dallas-Fort Worth, which topped the report’s “U.S. Markets to Watch” in 2016 and placed second in 2017, has fallen to the fifth spot.

But don’t feel slighted just yet, according to the report’s author.

“This report is no less bullish on Dallas today than it was a year ago—or two years ago—but we’ve got to make room for places like Fort Lauderdale and Salt Lake City,” says Mitch Roschelle, PwC partner and co-publisher of the report.

The “Markets to Watch” rankings had a few surprises for Roschelle. For one thing, Seattle took the top spot, knocking last year’s No. 1 city—Austin—to No. 2. Salt Lake City came in third, Raleigh/Durham fourth, DFW fifth, Fort Lauderdale sixth, Los Angeles seventh, San Jose eighth, Nashville ninth, and Boston 10th.

“When cities like Salt Lake City and Fort Lauderdale get in the top 10, they have to displace another city,” Roschelle says. But virtually all of these cities have a few things in common: they’re affordable to live and do business in and they have a growing population of talented young people. “Employers are attracted to these cities. That’s the common theme here, including in Dallas-Fort Worth,” Roschelle says.

In a continuing trend, the top-ranking cities are getting smaller by population. Investors are continually finding more opportunity in smaller, non-gateway cities.

In Dallas, the population growth rate for those aged 15-34 is higher than the national average, as is the five-year economic growth rate.

The 107-page report, which includes data and commentary on nationwide trends, capital markets, specific markets, and asset classes, as well as emerging Canadian trends, also notes the most significant trend for the commercial real estate industry in 2018 is a so-called long glide path to a soft landing. From the report:

Baseball announcers have taken to a phrase that captures the situation when nine innings find the score tied. They proclaim, “Free baseball!” Our Emerging Trends interviewees have tired of the “what inning are we in?” metaphor. They have the sense that no particular clock is ticking on this real estate cycle. While loathe to claim that cyclical risk is passé, few are willing to identify signs of a coming downturn. While it has been a very long time since economists have seen a “soft landing” in their projections, we may indeed be on a glide path to that result. Importantly, it seems that many in the industry are implicitly anticipating such a scenario.

Is the wish the father of the thought here? After all, soft landings are comparatively rare in economic cycles. It is arguable that only in 1994, during Alan Greenspan’s “maestro period,” have we seen a confluence of public policy and private sector performance that produced a deceleration without bumping into a recession. Yet our interviewees see accumulating evidence that the final years of this decade may replicate that pattern.

Unlike previous cycles, the report notes, the checks and balances in place to prevent the market from imploding.

“What’s interesting is that the industry is self-correcting. It has discipline,” Roschelle says. “There’s a tremendous amount of [investment] on the sidelines waiting for the right time to invest. This is not a typical boom and bust cycle.”

Though this phenomenon may seem atypical now, Roschelle says this is the new normal.

D Magazine. (2017, October 26).
Commerical Real Estate [Blog post]. Retrieved from

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Dallas – Fort Worth Office Market Report | Q3 2017

Large Corporate Relocations Propel DFW Absorption
Large corporate relocations continue to generate buzz in the Dallas-Fort Worth real estate market. So far, Far North Dallas has seen more absorption in 2017 than the whole market had in all of 2016. After delivering their 2.1 million square foot headquarters in June 2017, Toyota has occupied the space, accounting for 70% of Far North Dallas’ YTD absorption. 2017 has already exceeded 2016’s annual net absorption by 1.1 million square feet. Multitenant office product has accounted for only 20% of the total net absorption and is lagging behind the same period in 2016 by almost a million square feet. Corporate relocations have been the fuel for this DFW real estate boom, but will this continue?
In September, Amazon unleashed a flurry of speculation by announcing it will build HQ2 — a second headquarters located in another major North American metro. The announcement sparked hundreds of proposals from cities and developers across the metroplex hoping that they have what it takes to attract one of the largest, most innovative companies in the nation. While prices have increased and the labor market is tightening, DFW still compares favorably to many competitors. Amazon already has an office presence in Galleria Towers and over 8 million square feet of warehouse space. Could Amazon be DFW’s next big Toyota?
A Look Ahead
• Major corporate move-ins will boost 2017’s net absorption significantly higher than in 2016. To keep this from being the peak, DFW will need to woo more corporate relocations, as in-market expansions are insufficient to maintain such high demand.
• Construction activity will continue to taper, as major corporate campuses deliver and new groundbreakings slow. So far in 2017, 49 buildings totaling 2.5 million square feet have broken ground, just over a quarter of the 8.8 million square feet that broke ground in 2016. Barring
any major corporate announcements, expect construction starts to slow as vacancy is higher than in 2015 and lenders are skittish about being caught at the end of the cycle.
Market Highlights
• Job growth slowed slightly in DFW, as the metro added less than 100,000 jobs from August 2016 to August 2017. Year-to-date Fort Worth has outperformed Dallas, with employment growth at an annualized 1.6% to 1.1% respectively. The unemployment rate in Dallas increased slightly to 3.9% but continues to trail the nationwide rate of 4.5%. Manufacturing and Mining and Construction led the metro with over 3% employment growth each, while office-using sectors experienced modest 1-2% growth.
• The market delivered 870,000 square feet in Q3 2017, and approximately 40% was leased. After the Toyota North American Headquarters delivered in Q2 2017, the construction pipeline after Q3 was about 57% multi-tenant speculative office, and the overall pipeline was 60% leased or owned.
The overall vacancy rate was flat at 15.5% from Q2 2017 to Q3 2017. The vacancy rate has held steady at 15.5% throughout 2017. Class A vacancy decreased 0.2% to 17.2% from Q2 to Q3, Class B vacancy remained the same as last quarter at 14.7%.
Far North Dallas saw the largest improvement from the prior quarter, dropping from 14.1% in Q2 to 12.7% in Q3 as several new projects saw significant move-ins. LBJ Freeway has the highest year-over-year improvement, lowering the vacancy rate 2.4% to 21.9%. It is likely this trend will continue as tenants experience higher rental rates in the Far North Dallas area, Preston Center, and now along Central Expressway.
Net absorption slowed in Q3 2017, totaling less than 500,000 square feet. The 2.1 million square foot Toyota North American Headquarters registered as being fully occupied in Q2 2017, raising Q2’s absorption total to 2.5 million square feet. Although market-wide absorption is strong, eight of the seventeen submarkets have negative year-to-date net absorption. While there is significant overall growth, it is disproportional in Far North Dallas (3 million SF YTD) and Las Colinas (1 million SF YTD); all other submarkets have seen less than 300,000 square feet of absorption each.
While Class A net absorption is reaching levels not seen since the early 2000s, Class B net absorption shows the opposite trend, with only 116,000 square feet through Q3. This is the lowest total seen in the first three quarters since 2003.
Rental rates continued to climb faster in 2017 than they had in 2016. Overall rates rose 1.5% from Q2 to Q3, reaching $25.47 overall — 5.4% higher than this same time in 2016. Class A rates were up 1.5% as well, rising to $29.45 overall, and Class B rates broke $21 for the first time.
Central Expressway saw the highest increase in rates from $27.21 in Q2 up 10.1% to $29.97 in Q3. Preston Center saw overall rates jump 7.6%, due to the start of construction on Park Plaza at 6517 Hillcrest Ave. The only office building in the elite University Park neighborhood is asking rates of $55 triple net for the 119,000 square foot property. This pushed Preston Center’s Class A average to $42.17, surpassing Uptown’s average of $40.78 for Class A space.

The Tenant Advisor. (2017, October 31).
Dallas – Fort Worth Office Market Report | Q3 2017 [Blog post]. Retrieved from h

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