Tuesday, August 16, 2016

THE STAR IN FRISCO (Dallas Cowboys World Corporate Headquarters and Multi-use Event Center)

91-acre, mixed-use 66 acres retail, privately developed 5-acre headquarters, privately developed 20 acre multi-use event center, publicly developed Potential development impact: 1,708,000 SF Two hotels with 480 rooms Potential 4,500 new jobs at full development Multi-use indoor stadium 12,000 seats The Ford Center at The Star: HQ and MUEC opening late summer 2016

Developers Are Building Frisco's $5B Mile as a Spec Project

As Frisco's '$5 Billion Mile' begins to take shape in the one mile stretch of roadway off the Dallas North Tollway, the Dallas Business Journal held a Corridors of Opportunity event focused on the 549 acres slated for high-end development. The event Tuesday morning brought in more than 660 North Texas executives and professionals looking to learn more on the projects behind the $5.4 billion of real estate investment. Frisco Economic Development Corp. President Jim Gandy told me the event was the biggest real estate event he's seen in Frisco in the past two decades. Even as the Dallas Cowboys-anchored development with the football club's headquarters and new practice facility underway, developers are bullish on the corridor and are preparing to begin construction on speculative office space within the mile. The Cowboys plans to lease about 280,000 square feet of office space spanning two towers overlooking the practice fields, said Joe Hickman, CEO of Frisco-based Blue Star Land LP, who was one of four panelists at the event. “Jerry wanted to put black-out windows on the building to make sure the Redskins don’t lease space,” he added, laughing. Other panelists included Stan Thomas of Thomas Land & Development (Wade Park), Barry Hand of Gensler (The Gate) and Ran Holman of VanTrust Real Estate LLC (Frisco Station).

729-acre residential development planned for East Frisco

A 729-acre master-planned community is in the works on the east side of Frisco on property owned by the Gartner family.
American Newland Communities and North America Sekisui House, also called NASH, announced June 15 the acquisition of the land in a joint venture to develop single-family and multifamily housing, office space and retail space. The development will stretch from north of Main Street to Rolater Road and from Independence Parkway to Custer Road. The property, owned by one of the largest land owners in Frisco, covers more land than all of the $5 Billion Mile developments combined. Construction is expected to begin later this year with a grand opening slated for 2018. When complete, the community is expected to include approximately 1,800 single-family homes and up to 1,400 apartment units. Newland and NASH are also developing Hollyhock, and 20-acre residential community off of Teel Parkway and south of US 380.

West falls Village Frisco, Texas Details

This month’s featured neighborhood is Westfalls Village. The neighborhood is located south of Main Street and west of Teel Parkway. Some of its amenities include a pool, a playground and a private pond. Featured Neighborhood: Westfalls Village Build-out year: 2005 HOA dues (estimated): $500 annually Amenities: Pool, playground, private pond, greenbelt Schools: Sparks Elementary School, Pioneer Heritage Middle School, Reedy High School Nearby attractions: future Grand Park, Frisco Square Square footage: 2,217-4,881 Home value: $268,000-$581,000

Frisco, Texas Saks Fifth Avenue OFF 5th is now open

Saks Fifth Avenue OFF 5th opened its doors Aug. 11 at the Centre at Preston Ridge in Frisco, 3251 Preston Road, Ste. 400. The new 29,000-square-foot store features an on-trend selection from more than 800 brand names of clothing and accessories for women, men and kids at lower prices than Saks Fifth Avenue stores. The first 50 shoppers to arrive at the store each day through Aug. 14 will receive a treat that may contain a golden ticket. Winners can exchange their golden ticket for a $100 gift card to the store. The Frisco location is the fourth store for Saks Fifth Avenue in North Texas. The three other locations include Dallas, Grapevine and Grand Prairie. Two other off-price retailers, Nordstrom Rack and J. Crew Mercantile, are also planned for the shopping center

Macy's Is going Down

Macy’s Inc. announced Aug. 11 that it will close about 100 of its full-line department stores out of the company’s total portfolio of 728 stores, with most closing at the beginning of 2017, said Jim Sluzewski, senior vice president for corporate communications and external affairs, in a news release. “In a number of cases, stores will be closed as the value of the real estate exceeds their value to Macy’s as a retail store,” he said in the release. The company will inform its store closing decisions directly with the staff of the facilities being shut down and Macy’s associates may be offered positions in nearby stores, the release said. However, Sluzewski declined to comment on which specific stores will be closed until final decisions are made. No timeline was proposed for this announcement. The actions are part of a corporate-wide initiative to increase Macy’s profitability and shareholder value going forward, the release stated. Plans for the company also include adding products exclusive to the department store, redesigning Macy’s physical stores to highlight its high income potential departments such as fine jewelry and reallocating investments to “the company’s highest-growth-potential stores and digital businesses,” it stated.

A 2nd Billion Dollar Frisco, Texas Real Estate Project

Construction is underway on many of the developments along US 380, especially on the Prosper side of the highway. Frisco, on the other hand, has only planned developments that have not started construction. According to commercial real estate agents,
real estate investors and city officials, US 380 has been talked about for a long time as being the next major corridor for commercial development. In March, Frisco City Council set its top 10 priorities for 2016, which included winning the US 380 battle. This means attracting more development to the Frisco side of the highway. Frisco City Council Member Bob Allen said luring Stonebriar Centre to Frisco’s side of SH 121 was a catalyst for Frisco. “Overnight it took the city in a different direction and gave it an investment,” Allen said. “US 380 is the same thing, and it would be great for us to take advantage of that location. Whichever [city] gets the biggest draw for revenue from outside the community is the one that will benefit the most from it.” Rex Real Estate owner Rex Glendenning said US 380 is just now beginning to experience the growth SH 121 has already experienced in the past decade. “We finally have enough rooftops up in the Prosper area and the North Frisco area to facilitate the retail growth and retail demand along US 380,” Glendenning said. When Dallas attorney and real estate investor Donald Godwin bought his first tract of land along US 380 in 1991, he said he envisioned development along the highway that would go from Denton to McKinney. Godwin now owns about 400 acres of land at the US 380 and Dallas North Tollway intersection. Godwin’s land is for sale, and he said a substantial number of buyers are interested. “There is a lot of current activity on the Prosper side, but I believe personally that’s going to change in the coming months and certainly this time next year,” Godwin said. “We’re going to start seeing development on both sides of US 380.” Why not Frisco? Although plenty of land is still available to develop along US 380, development announcements on the Prosper side of US 380 are becoming much more frequent than the Frisco side. Some of Prosper’s established developments include a Kroger grocery store and Windsong Ranch, a 2,030-acre master-planned community. Other projects are under construction. In Frisco, one commercial development with a Wal-Mart Supercenter and a mixed-use development are planned at FM 423. A movie theater will also soon be under construction at the DNT. Glendenning said it might seem that a lot more activity is happening on the Prosper side than the Frisco side, but that is because Prosper is playing catch-up. “Prosper has been retail starved until Kroger opened in Prosper this year, its first grocery store,” he said. “So it’s been a catch-up campaign for Prosper to get retail that’s been nonexistent until now.” Glendenning said Frisco has always had retail options readily available elsewhere in the city, so it had no need to put a rush on the developments the way Prosper has. Allen said Frisco has already made the investment in roads and infrastructure along US 380 to attract developers. He said it was important that the city have utilities such as water and sewer lines in place so the land would be ready for any potential developers. “We’re looking for development partners to do things [on US 380],” Allen said. “We’re no different than other cities, but the difference is that we have made an upfront investment, and we are prepared to move quickly when those opportunities present themselves.” Frisco Director of Development Services John Lettelleir said the city is actively pursuing development opportunities for US 380 now that the infrastructure is in place. “There is always friendly competition for retail [with other cities] and that does become challenging along the borders where retailers are seeking the best deal,” Lettelleir said. Frisco development In 2015, City Council approved plans for a Wal-Mart Supercenter to anchor a commercial development at US 380 and FM 423. The development includes fast-food restaurants, a convenience store, a bank and retail buildings. The Wal-Mart is expected to open in 2017. In March, the City Council approved a mixed-used development called Frisco Crossing. The 83-acre development on the southwest corner of US 380 and FM 423 is planned to have retail, restaurants and residential space. Lettelleir said he expects the project to break ground sometime next year. Frisco North was one of the first developments planned for the Frisco side of US 380. The project was intended to be a 320-acre mixed-use development at the southwest corner of US 380 and the DNT with Cinemark Theatre anchoring the project. Frisco City Council approved the plans for the project in 2012, but the original developer, Forest City Inc., pulled out of the project in 2013. The property has remained without a developer since. Because Cinemark still owns the property for the new theater on the land, it plans to continue the project. Construction on the theater is expected to begin later this year. According to the city’s development reports, there are still plans for three retail buildings within that same property. Prosper development and growth Earlier this year, Kroger opened its first store in Prosper at the intersection of Preston Road and Prosper Trail. Kroger recently broke ground on a second location at the intersection of US 380 and Gee Road near the Windsong Ranch community in Prosper. A third Kroger location in Prosper is planned on US 380 at Custer Road. Lowe’s Home Improvement is under construction at the same location at Custer Road. A Wal-Mart Supercenter is under construction at the northeast corner of US 380 and Preston Road also in Prosper. This site is part of the mixed-use development The Gates of Prosper by Jerry Jones-owned Blue Star Land Co. development firm. The development is planned to accommodate more than 570,000 square feet of retail and restaurant space on the 93 acres. Texas Health Resources is building a 65,000-square-foot health care campus in Prosper on US 380 west of the DNT. The Home Depot submitted a zoning application to develop a store on the northwest corner of US 380 and Windsong Ranch Parkway in Prosper. John Webb, Prosper director of development services, said based on the attractive market along Preston Road, US 380 and the future extension of the DNT, Prosper is expected to experience a growth rate similar to Frisco’s. “But we anticipate our build-out population to be around 72,000—much less than Frisco,” Webb said. “Unlike Frisco, we will be a lower-density community with less focus on the high-density residential developments as seen in Frisco.” When Prosper’s comprehensive plan was adopted in 2012, it was anticipated that the US 380 corridor would attract major commercial development that would benefit the town, Webb said.

Labor market drives urban living in Frisco

When it comes to new apartment development in the Dallas-Fort Worth area, Frisco is one of the hot spots, according to information from Axiometrics, a Dallas-based research company with a focus on apartment real estate. As of July 18, the Uptown Dallas market had the most apartment development in the area, with 3,073 new units to open this year, followed by the Collin County and Richardson markets. Frisco has 1,727 new units that are either up for lease or will be up for lease later this year as well as an additional 1,580 units under construction, bringing the total to 3,307 new units that will be open within the next few years. Labor market drives urban living in FriscoAMLI Frisco Crossing near the Dallas North Tollway and Gaylord Parkway is contributing 325 units to that total. The complex’s community manager Ashley Dodds said she is not worried about filling up those units. Frisco’s apartment occupancy rate is 95.7 percent. “We definitely think there’s enough demand, especially with all of the development in the area,” Dodds said. “We recently just completed a project in West Plano that’s about three miles down the road. That was the fastest lease up in AMLI history. We stabilized in about seven and a half months.” This multifamily development growth is being spurred by job growth in the area, said John Lettelleir, Frisco director of development services. Many new apartments in Frisco are concentrated in or near the $5 Billion Mile and other mixed-use developments where new jobs will be located, he said. “When I’m talking about jobs, I’m thinking of these mixed-use urban centers, such as Frisco Station, Wade Park,” Lettelleir said. “This is where you have the office component, but you also have the residential component.” Labor market drives urban living in FriscoThe apartment trend Most apartments coming into Frisco are urban-living units, which are on average denser than traditional garden-style apartments and are typically placed on a street grid with the building adjacent to the sidewalk. Urban-living apartments also have parking garages, whereas garden-style apartments have surface parking. These types of apartments can typically be found in mixed-use developments, such as Frisco Square. The demographics driving the urban-living development are young, single professionals and senior citizens. The similarity between both groups is that neither have children, said Tim Nelson, Realtor and Frisco City Council member. FRS-2016-08-01-01-3“Those with kids are usually looking for something else with a little bit more space, a little bit more flexibility, parks, backyards, play sets, pools,” Nelson said. “…We have quite a diverse inventory of that type of space. But if you think about it, for someone who’s single in this town, there aren’t really a lot of options.” Single professionals are moving to Frisco for the jobs available, whereas senior citizens are downgrading from a single-family home to an apartment often to be closer to family, Nelson said. Apartment developer JPI, which is building the 424-unit Jefferson Stonebriar project at Warren Parkway and Ohio Drive, decided to build in Frisco because of the job growth in the area. “The $5 Billion Mile and Legacy Business Park developments have solidified Frisco as one of the highest job density areas in Dallas-Fort Worth, especially with the corporate relocations of Toyota, FedEx and Liberty Mutual, among others, which alone are forecast to bring over 9,000 new jobs to the area,” said Matt Brendel, JPI’s senior vice president and development partner. Many new mixed-use developments and office parks, such as the developments within the $5 Billion Mile, are including multifamily living in their plans, Lettelleir said. Existing office developments, such as Hall Park, are also looking to add multifamily living. “The office parks of yesteryear were where people would come in the morning, they would leave in the evening and then it’s dead,” he said. “The labor market is desiring to be in these types of urban, mixed-use areas. Not everybody, but most of them are, and companies are taking note of that.” The average rent in urban-living apartments is typically one of the most expensive because it costs more to produce one of these complexes, Lettelleir said. The current average rent for established apartments in Frisco is $1,249 per month, according to Axiometrics. For the new apartments up for lease this year, the average rent will be $1,446 per month. Urban-living effects Frisco City Council member Will Sowell said he has had concerns in the past with the density that apartments can create in the city, adding that he sees single-family home development as more of a priority. Do you think more apartments should be built in Frisco? Yes, any type of apartment Yes, but only urban-living apartments No, there are too many already View ResultsVOTE However, he said urban-living apartments do make sense within certain developments, such as along the $5 Billion Mile. “We certainly need to provide opportunities for great and unique living spaces in Frisco for people who are searching for jobs in Frisco, who may be younger and not quite ready to buy a house,” Sowell said. “I think we all recognize that. But I do think that we need to make sure that we moderate that versus single-family.” Urban-living apartments have one of the highest assessed values when it comes to property taxes, Lettelleir said. Assessed values of urban-living complexes are on average about $5.4 million per acre while garden-style apartments are assessed at about $1.5 million per acre. The property values generate extra money for the city, Lettelleir said. Urban-living apartments could also have a positive effect on the business community, said Tony Felker, Frisco Chamber of Commerce president. Multistory urban-living complexes can be built to have the first floor dedicated to commercial space, which can draw restaurants, retailers and office space. These apartments can also house the workforce for companies moving to the area or already established in the area, providing employees easy access to work, Felker said. “I hear a lot of people saying having an apartment where they can live, work and play is a good thing,” he said. “As we’re looking at the workforce coming into town and looking for places for them to live, urban living is going to be a good option for them.” Urban-living apartments can pose both a problem and solution for transportation. The higher density of the complexes could lead to more road congestion as more people move in. Lettelleir said to manage congestion, the city needs to look into traffic management solutions. One thing that helps is to make sure these developments are concentrated along major highways, such as the Dallas North Tollway, so minor thoroughfares are not overwhelmed with traffic, he said. “It’s not a simple fix,” Lettelleir said. “What it comes down to is when everybody wants to use the road at the same time, you’re going to have a traffic problem.” On the other hand, urban-living developments could ease congestion by allowing residents the option to not use a car as often, Nelson said. Having a multifamily complex where residents can walk to work or retail and dining options may reduce the need for a car or lead people to share vehicles, he said. “I fundamentally believe that in my lifetime here, there will be people who won’t own cars,” Nelson said. “They’ll share cars. We already have cars that can drive themselves basically. You have Uber. People are going to be able to just get cars on demand.” Though the residential aspect of Frisco has been known for its single-family housing, not everyone wants to live in a house, which is why the city is focusing on providing more diverse housing options, Nelson said. “[Frisco] is not going to stay a town of 150,000. It’s not going to stay a town of 200,000. It sure as heck isn’t going to stay that town of 25,000 when I first moved here,” he said. “You have to understand that that’s a natural progression of the city. And we are a city; we’re not a town. I think we’re doing our best to do it right.”