Cresa Connection: Tollway Corridor - March 2021

Please find March's edition of my 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.

As we continue through 2021, if you have an office decision to make this year please contact me for help with your real estate needs.


Lease Transaction Comps

1. Capital Title
Building: 18383 Preston Road / One Stratford Park
Type: New Lease
Size: 5,550 SF
Term: 75 Months
Free Rent: 3 Months
Start Rate: $22.00 + Electric
Bumps: $0.50
TI: $25.00/SF

2. Toyota Insurance Management Solutions
Building: 7600 Windrose Avenue / Legacy West
Type: New Lease
Size: 6,150 SF
Term: 66 Months
Free Rent: 6 Months
Start Rate: $32.00/NNN
Bumps: 2.50%
TI: $30.00/SF

3. Asset Intertec
Building: 7161 Bishop Road / The Shops at Legacy
Type: New Lease
Size: 6,793 SF
Term: 85 Months
Free Rent: 1 Month
Start Rate: $30.00 + Electric
Bumps: $0.50
TI: $32.00/SF

4. Center for Autism and Related Disorders
Building: 5850 Granite Parkway / Granite Park Four
Type: New Lease
Size: 26,417 SF
Term: 56 months
Free Rent: 7 months
Start Rate: $32.00/NNN
Bumps: $0.50
TI: Turnkey

5. Catapult Health
Building: 5294 Belt Line Road / The Offices Prestonwood Place
Type: New Lease
Size: 30,657 SF
Term: 84 months
Free Rent: 0 months
Start Rate: $26.00/NNN
Bumps: $0.50
TI: Turnkey


Market News
For the 9th consecutive year, Texas has outpaced every other state by a big margin for the most new and expansion corporate real estate facilities. Texas had 781 projects in 2020, outpacing runner-up Ohio (419 projects) by a wide margin. Some of the major company investments in Texas include Tesla’s $1 billion plan to build an auto plant in Austin that will generate 5,000 new jobs, Houston-based Axiom Space’s intentions to invest $2 billion into expanding its aerospace facility that will generate 1,000 new jobs, Qorvo’s $850 million investment into expanding its Richardson facility that will generate 65 new jobs, Verizon’s $285 million investment into expanding its Irving facility and Amazon’s $200 million expansion into Waco that will generate 1,000 new jobs. The other highest ranked states included Georgia (#3), Illinois (#4) and North Carolina (#5).

Despite big tech firms being among the first to send employees out of the office to work from home early in the pandemic and then announcing several extensions of that policy, it appears the long-term plans for many of the top firms do include a return to the office. Many of these same household names were among those signing large office leases over 100,000 square feet during 2020. Facebook signed a 15-year lease for 740,000 square feet in New York City followed by a purchase of a 400,000 square foot office campus in Bellevue, Washington and a 350,0000 square foot lease in Fremont, California. Meanwhile, Apple expanded its New York City presence with 336,000 square feet added in 2020.

Amazon also appears to have a favorable long-term view of office space, as the company signed leases totaling 1.6 million square feet in Bellevue, Washington, where the company also plans to start construction on a 1.2 million square foot development. While Microsoft has implemented a policy allowing employees to work remotely up to 50% of the week, the company also signed 2020 leases for 520,000 square feet in Atlanta, 400,000 square feet in Reston, Virginia, and 250,000 square feet in Redmond, Washington. Although these companies have played a part in advancing technology to the point where the forced remote work experiment has largely succeeded on a scale never before tested, they still appear to put great value in having in-person collaboration to tackle complex problems and for strategic planning.

The DFW office market experienced 15.8 million square feet of office leasing activity in 2020, well behind the 24.6 million square feet reported in 2019. The metroplex’s suburbs have been the top performers. Two suburban submarkets – Legacy/West Plano and Addison/Bent Tree – captured 24% of the total DFW office leasing activity. For the first time in a decade, the DFW metroplex has experienced four consecutive quarters of negative net absorption, totaling 3.6 million square feet. Dallas’ CBD experienced several significant move-outs. In contrast, the suburbs of Plano, Frisco, Allen and McKinney all experienced positive net absorption in 2020.

Plano-based Tyler Technologies is growing again with a $2.3 billion all-cash deal to acquire NIC, a Kansas-based government payments company that handled 400 million online transactions last year for federal, state and local agencies. NIC works with more than 7,100 government agencies in the U.S. and provides digital services such as applying for unemployment insurance, submitting business filings, renewing licenses and making online payments. NIC processed more than $24 billion in payments in 2020. In fiscal year 2020, NIC recorded $460.5 million in revenue and $68.6 million in net profit. Tyler is already one of the largest software companies serving the public sector, with $1.1 billion in revenue and $194.8 in profit in 2020. Tyler’s net profit grew by 33% over 2019. Founded in 1966, Tyler has grown rapidly in recent years through acquisitions and new software development. It expects the NIC acquisition to significantly expand its business with federal agencies and accelerate its payments initiatives. NIC will continue to manage its operations from its Kansas home office, retain its 1,000 employees and keep its leadership team post-merger. Tyler plans to fund the deal using $700 million in cash and new debt, as well as $1.6 billion in financing from Goldman Sachs.

Rocket engine startup Firehawk Aerospace is moving from Florida’s Space Coast to the Dallas area to grow its 3-D printed rocket engine and fuel concept and join the space race as Texas becomes a growing hub in the commercial rocket world. Firehawk is searching the Plano-Richardson area for space for its primary research facility after receiving $1.2 million in investment funding from local startup fund Harlow Capital Management. Firehawk uses 3-D printing technology to produce a hybrid-style rocket engine, which is simpler, cheaper and more stable than traditional solid-fuel-style rockets. The company says its fuels can be loaded earlier onto rockets and stored for months or years at a time, thus helping prevent the kinds of explosions that SpaceX has demonstrated during its research phases. Firehawk plans to hire an additional 20 researchers and developers upon relocating to North Texas.

Florida-based Accesso Partners is marketing its seven-building Legacy R&D portfolio for sale. The 40-acre campus-style business park, which is situated between Tennyson Parkway and Spring Creek Parkway along Pinecrest Drive, was constructed between 2006 and 2012 and comprises 374,085 square feet of office/flex space with a 6/1,000 square foot parking ratio. The portfolio is 93% leased to 21 tenants with 55% cumulative rollover within the next three years. Accesso acquired the property in 2012.

Developer Craig Hall announced his plans to kick off construction on the first phase of his reimagined Frisco mixed-use development – Hall Park – later this year. Hall Group was preparing to break ground on an ambitious redevelopment of his 162-acre Hall Park when the pandemic hit. Hall Park is already Frisco’s largest employment center with more than 2.5 million square feet of office space housing 10,000 workers. Hall has been crafting new plans for the project that would increase the density and add multiple new uses, including residential, retail, hotel and entertainment. To make way for the additions, Hall Group tore down two, three-story office buildings at the corner of Warren and Gaylord Parkways across the street from The Star. Last month, Frisco approved a new tax increment finance district that would help pay for infrastructure improvements to Hall Park. With new construction, the project’s taxable value is estimated to grow from $632 million to $2.6 billion by 2045. Some of the additional construction that has been discussed includes a 27-story, 300-unit residential tower, food hall, 20-story office building and additional residential high-rise towers. A 1,500-seat performance hall and a new public park and green space with walking trails, plazas and waterways are also in the works. Once the pandemic hit, Hall revised his plans by eliminating the original hotel and adding back a different hotel. Office leasing at Hall Park is at its lowest levels in 15 to 20 years, but tenants have not vacated and instead chosen to sign short-term renewals, for the most part, in order to buy time until the pandemic dust settles.

The 4-story, 49,504 square foot Galleria Square (4901 LBJ Freeway) office building has been placed on the market for sale by Dallas-based upstream oil and gas investor Scout Energy Partners. Scout owner-occupies approximately 75% of the building and will vacate upon closing, making this purchase a pure value-add opportunity. Built in 1982, the Class “B” building offers a 3.5/1,000 SF parking ratio on a one-acre site near the intersection of LBJ Freeway and Dallas North Tollway and was most recently renovated in 2012.

Frisco-based natural gas producer Comstock Resources, which is owned by Cowboys owner Jerry Jones, was able to cash in on a surge in fuel prices during the February storm that gripped the central U.S. Comstock was able to sell gas from its Haynesville Shale wells in east Texas and northern Louisiana as premium prices. As demand jumped amidst the cold weather, gas at some regional hubs soared north of $1,000 per million British thermal units from prices in the single digits just one week ago. Gas from Comstock’s Haynesville wells was sold on the spot market for between $15 and $179 per thousand cubic feet, which translates to between $15.55 and $186 per million British thermal units. “This week is like hitting the jackpot with some of these incredible prices. Frankly, we were able to sell at super premium prices for a material amount of production,” said chief financial officer Roland Burns.

Richardson-based ATW Corporation, which manufactures professional and consumer trailers and parts throughout North America, has signed a 26,127 square foot lease at Greenhill Towers (14131 Midway Road) in Addison with plans to relocate from its current Richardson headquarters by June. The move doubles its current footprint of 14,000 square feet. Greenhill Towers’ recently added health safety measures, including a double air filtration system and virus-killing UV lighting, helped the company make its decision with confidence. Building owner Codina Partners has invested $8 million in capital improvements to the building over the last four years, including an Ascension Coffee and Café, fitness center with country club-style locker rooms, dry cleaning services and conference facility.

Local developer Cawley Partners has broken ground with concrete tilt walls in position on its new four-story, 120,000 square foot office building – The Parkwood (3920 Dallas Parkway) – that will feature modern design elements, fitness center and 4/1,000 surface parking. The building is currently 50% pre-leased to First United Bank, which has leased the entire 2nd floor and portions of the 1st and 3rd floors. The project is scheduled to deliver in November 2021 and is quoting $29.50/SF, NNN.

Plano-based Tyler Technologies was hired by Collin County to upgrade its antiquated jury management system to “Tyler Jury Manager,” which streamlines its jury selection process and provides a better experience for jurors. With the new software, the county can contact jurors via email or text message to remind them of upcoming jury duty and send real-time text notifications in the event jurors get dismissed early before making the trip to the courthouse.

Dallas-based developer Primera Companies has announced a completion date of September 2021 for the second phase of Towne Square Place, which is a 100% speculatively built-out Class “A” office project just west of Preston Road and north of Headquarters Drive in Plano. The 80,000 SF Towne Square Place II will deliver 24 pre-finished office suites ranging in size from 1,918 SF to 5,429 SF and marketed at $36.00/SF plus electricity. Both buildings will be joined with a short walkway surrounded by a generous green space. The newest feature at Towne Square Place II will be an indoor-outdoor café with a two-level seating area.




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).

Learn why Cresa only represents tenants/occupiers exclusively.

Tor Erickson | Senior Vice President

5005 Lyndon B. Johnson Freeway, Suite 800
Dallas, TX 75244