Texas Real Estate Business

OCT 2017

Texas Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in Texas.

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www.REBusinessOnline.com Texas Real Estate Business • October 2017 • 37 people living within a one-day truck drive. Imported goods come here from the West Coast, get unloaded into our warehouses and are then distributed to the north, east and south. For all those reasons, it just makes logistical sense to be here. Billingsley: In addition to the tradi- tional drivers, extreme weather events along the coasts — which seem to be happening more frequently — pro- vide incentive for companies to move to central locations, such as Dallas. Wesson: There are several fac- tors that we constantly cite as selling points for new industrial tenants eye- ing the Dallas market. They include a pro-business environment, the ab- sence of state income tax, access to a world-class airport, a well-developed transportation network and the rela- tively low costs of living and of leas- ing space compared to other markets. Tanghongs: Sim- ply put, the Dallas area is a great mar- ket for industrial tenants. We are cen- trally located with a large inland port that receives vol- umes of containers from the Los Angeles-Long Beach port. TREB: It seems like there's an in- creasingly high volume of big-foot- print deals happening in Dallas to- day. To what central factors do you attribute this aspect of the market's trends? Berger: The trend behind larger deals has actually been going on for decades. CBRE has done an interest- ing report on this. New technology and building design provides the op- portunity to create greater efficiencies through utilization of larger facilities. Billingsley: There are tremendous economies of scale to be gained when developing large buildings. These benefits can be passed on directly to tenants in the form of reduced rents, so there are strong incentives for all parties to pursue larger develop- ments. Wesson: It is simply more effi- cient and less costly to operate a 750,000-square-foot warehouse than to operate three or four smaller ones that total roughly the same size. This new approach to logistics is largely a result of the "Amazon effect." Tanghongs: Along with our central location and favorable climate, ten- ants can service nine to 10 states from Dallas, so it makes logistical sense as a distribution hub. This factor plays a key role in attracting the large users to the market. TREB: Where are your clients like- ly to be able to find more than 100,000 square feet of contiguous space? Berger: There are literally more than 150 industrial space options available in the DFW area that could potentially meet that requirement. The challenge is in the details. Each user has its own set of geographical, configura- tion, specification and timing require- ments. While there is no shortage of these spaces in the market as a whole, finding the space that best serves an individual user can be challenging. Billingsley: The newer industrial buildings coming on line tend to be larger and therefore better able to ac- commodate tenants seeking spaces in the 100,000-square-foot range. The Northwest Dallas submarket in par- ticular has a healthy supply of this new product. Wesson: Finding spaces in the neighborhood of 100,000 square feet is relatively easy, depending on ten- ants' preferred submarkets. How- ever, if you are looking for even big- ger spaces — say, something in the 500,000-square-foot range — you will be forced to look in South Dallas, Fort Worth, South Arlington or near the DFW Airport area. Tanghongs: While there is a robust supply of 100,000-square-foot spaces throughout DFW, tenants tend to look at the labor supplies in individual submarkets when addressing these real estate needs. n To move your business forward, contact: Alex Buecking, Regional Executive at 720-904-4022 Amber Rao, Multifamily at 214-540-9120 Joe Schmidt, Commercial at 214-414-2585 Life Company Multifamily Houston, Texas $4.5 Million Fannie Mae Freddie Mac Fannie Mae Genoa Way Seniors Housing Dallas, Texas $63.1 Million The Tradition at Lovers Lane – Part I Affordable – 3 Locations San Antonio, Texas $96.5 Million Harmony Housing Student Housing – 3 Locations Corpus Christi and College Station, Texas $57 Million Vesper Holdings CMBS Multifamily Houston, Texas $30.7 Million Freddie Mac Fannie Mae Fannie Mae Broadstone Park West Retail Oklahoma City, Oklahoma $86.5 Million The Outlet Shoppes at Oklahoma City Multifamily Cypress, Texas $33.2 Million North Haven Apartments Multifamily Nassau Bay, Texas $29 Million Voyager at the Space Center key.com/rec Banking products and services are offered by KeyBank National Association. All credit, loan and leasing products subject to credit approval. Key.com is a federally registered service mark of KeyCorp. ©2017 KeyCorp. KeyBank is Member FDIC. 170911-289483 Take your business to the next level. George Tanghongs Lee & Associates

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