Cresa Connection: Tollway Corridor - June 2020
Welcome to the June edition of Cresa Connection, a monthly update on the North Dallas • Plano • Frisco office market detailing lease transactions recently signed, tenants searching for office space in the market and the latest office building news.
If your business has been negatively impacted by the Coronavirus pandemic and you would like help preparing your office for re-entry from a workplace design strategy expert on our team, please contact me.
COVID-19 Office Re-Entry Resources
- Guide: COVID-19 Workforce Reentry Strategies
- BLOG: Workplace 2.0 — Taking Advantage of a New Culture of “Work from Anywhere
- Clear Design: Rethink Your Workplace - Before & After Examples
Comp – Building: 4965 Preston Park Boulevard / Preston Park Financial Center, Tenant: Juno Energy, Type: New, Size: 8,019 SF, Term: 38 months, Free Rent: 2 months, Start Rate: $28.75 +E, Bumps: $0.50, TI: $10.00/SF
Comp – Building: 5810 Tennyson Parkway / Lincoln Legacy II, Tenant: NextAfter, Type: New, Size: 5,308 SF, Term: 72 months, Free Rent: 0 months, Start Rate: $27.00/NNN, Bumps: $0.50, TI: Turnkey
Comp – Building: 5700 Tennyson Parkway / Legacy Place East, Tenant: Dasan Zhone Solutions, Type: Sublease, Size: 7,515 SF, Term: 68 months, Free Rent: 3 months, Start Rate: $16.00/NNN, Bumps: $0.50, TI: $0.00/SF
Comp – Building: 5001 Spring Valley Road / Providence Towers, Tenant: Morgan Stanley Smith Barney, Type: Renewal, Size: 24,658 SF, Start Rate: $26.00/NNN
Comp – Building: 5601 Granite Parkway / Granite Park III, Tenant: Entrata, Type: Renewal, Size: 12,315 SF, Start Rate: $32.00/NNN
Allied Van Lines, in its annual Magnet States Report, showed Texas was the top destination for corporate moves nationwide in 2019. Texas has ranked as the top move destination for Allied corporate customers for the last six years. The next states on the list for corporate transfers included California, Florida, Illinois and North Carolina.
Frisco-based MTX Group has been awarded a $295 million state contract to track down Texans potentially infected with the coronavirus. MTX won the 27-month contract in a whirlwind bidding process, beating out ten mostly big-name corporations, such as IBM, AT&T Global Business Services and Accenture. MTX already has a web-based tool it developed this year for COVID-19 contact tracing that has been deployed in several states. In four years, MTX has grown from three employees to a 200-person workforce with 150 of the company’s employees based in India.
Phoenix-based VEREIT has placed the 4-story, 230,621 SF 5543 Legacy Drive property on the market for sale at $108 million or $468 per SF on a 5.50% cap rate. Located near the Legacy Drive and Parkwood Boulevard intersection, the building is 100% occupied by USAA and nThrive, which each occupy 50% of the building. nThrive will phase out of the building in December 2021 and USAA will then occupy 100% of the building with an 11-year lease term running through July 2031.
Czarnowski, an international exhibit and event firm with more than 4,000 employees in 24 offices in North American, Europe and Asia, is more than doubling the size of its Plano office at Legacy West. The Chicago-based company opened a 6,000 SF office at Legacy West two years ago and will relocate into 15,000 SF within Legacy West at 5908 Headquarters Drive across the street from Liberty Mutual Insurance’s regional office. Czarnowski expects to take occupancy of the new space in August. The company creates business exhibits, event spaces, pop-up retail displays and outdoor structures used by a variety of firms. Czarnowski is currently producing temporary medical structures in response to the COVID-19 pandemic and one of Czarnowski’s clients is Toyota, which has its North American headquarters at Legacy West.
Medical City Frisco is working on plans for a major expansion of its Frisco campus that would include two new hospital buildings, a medical office building and a parking garage on a 10-acre tract at the southeast corner of the Dallas North Tollway and Main Street. The two hospital buildings would be 8- and 10-stories each and would comprise 520,000 SF surrounding a landscaped courtyard. The Frisco city plan commission is scheduled to review the plans in mid-May. Medical City parent HCA Healthcare bought the former Forest Park Hospital in Frisco out of bankruptcy four years ago. The Medical City campus expansion is the latest medical center addition to the suburbs north of Dallas, with Scottish Rite Hospital for Children, Children’s Medical Center, Cook Children’s and Baylor Scott & White all expanding their operations in the far north Dallas suburbs.
Keller Williams Realty–North Dallas has signed a 24,971 SF lease to relocate its headquarters north to 18333 Preston Road in Dallas.
Premier Health Solutions expanded its office lease to 17,350 SF at 6801 Gaylord Parkway in Hall Park.
Gaedeke Group, developer of One Legacy West at the corner of Legacy Drive and SH-121, has finalized plans for a sister high-rise office building called Two Legacy West. The 17-story, 414,000 SF office tower will be constructed along the SH-121 service road as the second phase of Gaedeke Group’s Legacy West project, which started in 2015 with the purchase of 11 acres in the mixed-use development. Construction on the building may start later this year with the tower opening scheduled for 2022. The Two Legacy West office tower will include a market-style grocery, community park, work and game lounges, three outdoor decks with fire pits and a wellness center with saunas and workout classrooms. A covered walkway will connect to the One Legacy West building, which faces Legacy Drive. Two Legacy West will include a cantilevered section above the 9th floor on the west side, as if reaching out to its predecessor.
Cawley Partners and Rosewood Property Company, two of DFW’s most experienced commercial property developers, are teaming up to build a four-building, one million square foot office campus along Bush Turnpike (SH-190) in central Plano. The new office project will be part of Rosewood’s 156-acre, $1 billion Heritage Creekside development west of Central Expressway. The developers plan to build the office product in phases, beginning with a 6-story, 250,000 SF building near Bush Turnpike and Custer Road. Cawley is gauging market interest in the building now in order to determine if they will build speculatively or wait on significant pre-leasing prior to breaking ground. The developers’ goal is to bring the first live-work-play environment to the State Highway 190 corridor. Over the last six years, Rosewood has partnered with builders to construct a series of single-family homes, apartments and retail space in the Heritage Creekside project. Cawley Partners is planning for the four office buildings to surround a central courtyard with restaurants and other amenities. The first building will have a fitness center, conference center and rooftop deck.
Amazon has signed a 250,000 SF lease with Jerry Jones’ Star Business Park on Preston Road just south of U.S. Highway 380. The new Amazon fulfillment center is expected to be delivered and occupied in the 4th Quarter 2020. In 2018, Jones’ Blue Star Land purchased the 200-acre Frisco Park 25 project for $38 million. A 400,000 SF Dallas Cowboys Merchandising Distribution and Sales Center is currently located in the park and Blue Star expects to construct an additional 150,000 SF speculative building alongside Amazon’s facility.
Dallas developer Cawley Partners is partnering with Plano’s pioneer Haggard family to kick off construction on a Class “A”, 120,000 SF office building (“The Parkwood”) on part of the Haggard family’s original farm in the southwest quadrant of Parkwood Boulevard and Windhaven Parkway on the east side of the Dallas North Tollway. Designed by Gensler, the four-story office building will kick off with 50% of the building pre-leased to First United Mortgage, which does business primarily in Texas and Oklahoma, originating $2.8 billion annually in home mortgages. First Mortgage will lease the entire 2nd floor and portions of the 1st and 3rd floors. Portions of the 1st and 3rd floors and the entire 4th floor are available for lease. The Parkwood will feature open, modern design elements, 4/1,000 SF surface parking and is quoting $43.00/SF gross. The project is expected to break ground in September 2020 with a late 2021 completion date.
Legacy West developer Karahah Companies will deliver a Class “AA”, 100,000 SF office-over-retail building (6000 Headquarters Drive) in July 2020 directly across the street from Legacy Hall. The entire 2nd floor (30,000 SF) has been leased to Dallas-based law firm Haynes and Boone, which leaves 70,000 SF available for lease on floors 3 through 6. The ground floor will feature 25,000 SF of high-end retailers. The office space will feature floor-to-ceiling glass and a top-level amenity deck and terrace. Connected to the office/retail project on the west side will be a 161-unit apartment building.
Plano-based Reata Pharmaceuticals struck a deal with Wall Street titan Blackstone Life Sciences for a $350 million infusion to aid in bringing its chronic kidney disease drug to the commercial market. The cash injection comes at an important stage for Reata as it looks to double its workforce, move into a new headquarters and start selling its first two novel drugs. Blackstone will advance $300 million to Reata in return for royalty payments on worldwide sales of the drug Bardoxolone. Blackstone will also invest $50 million in purchasing Reata shares. The deal is expected to close June 24. Reata expects to double the number of employees to 400 by the end of 2020 and then again to between 800 and 1,000 employees by the end of 2021 or mid-2022. Reata is in the process of relocating on the south side of Legacy across from Legacy West into an office tower currently under construction.
Neiss Real Estate has placed 16675 Addison Road on the market for sale at $25 million ($184/SF). The 2-story, 136,084 SF asset was built in 1996 and is only 29% occupied with a 7/1,000 SF parking ratio.
The Realm at Castle Hills at State Highway 121 and Josey Lane has been on a lease-up spree since delivering to the SH-121 market last year. The 9-story, 235,000 SF high-rise office project from local developer Bright Realty is now 80% leased. Global Medical Response, a medical transport firm, recently signed a two-floor lease totaling 60,000 SF, which follows on the heels of CSC Corptax leasing 15,000 SF, Texas VA Mortgage leasing 4,000 and co-working firm Venture X leasing 30,000 SF. The office project includes 16,000 SF of ground-floor restaurant and retail space and is the first phase of a 324-acre, mixed-use project that will include more office, retail, restaurant, entertainment and multi-family developments. Bright Realty is the developer of the 3,000-acre Castle Hills community, which includes more than 4,000 homes and has been under construction for two decades.
I specialize in representing office tenants in the North Dallas/Plano/Frisco market. Please let me know if I can be of service with your real estate needs (relocation search, expansion, lease renewal negotiations, building/condo purchase, sublease, portfolio management).
Tor Erickson | Senior Vice President
5005 Lyndon B. Johnson Freeway, Suite 800
Dallas, TX 75244