Looking beyond the numbers in the Metroplex At face value, spec development in theMetroplex seems a little dicey with the looming specter of over development and vacancy rates around 17% according to Cushman & Wakefield's mid-year market stats. But Kensington Capital president Roy Norwood will tell you to look beyond the numbers and to look north to Plano and development spurred by the new President George Bush Tollway, which is an east-west connector north of the Lyndon B. Johnson Freeway.
Dallas-based Kensington Capital has closed a $37.8 millionloan for Park Center, a 250,000 sq. ft., Class-A development at the intersection of the North Dallas Tollway and Park Boulevard in Plano. Kensington arranged the capital for Cincinnati-based North American Properties. Kensington has also arranged an interim land loan and a joint venture take-out commitment for Park Center.
While Dallas' overall absorption figures are relatively stagnant - 2.8 million sq. ft. mid year 1999 compared to 3.3 million sq. ft. mid year 1998 - Norwood points to 1.8 million sq. ft. of new, Class-A space absorbed in the northern suburbs last year. Norwood says there are two primary reasons for successful absorption of new, Class-A space: tenants cannot obtain expansion space in the buildings they occupy; and the lure of expanded technological capabilities and higher parking ratios make new space a powerful tenant draw.
"Basically, a whole new office submarket has developed at the intersection of the Tollway and Park," Norwood says. "As Dallas has grown, the LBJ and the Tollway have become gridlocked. We saw the new North Dallas emerging six or seven miles to the north."