COMMERCIAL REAL ESTATE: A DIZZYING PACE

The construction and development of commercial real estate in North Texas is accelerating, locally with about six million square feet to come in downtown Dallas, one and a half million square feet around LBJ Freeway, and more than two million around downtown Fort Worth over the next 18 to 24 months. Another two million are scheduled for the mid-cities and Dallas/Fort Worth Airport.

In Dallas, non-residential permits ranged up to $830 million, a 78-percent increase over 1977. In Fort Worth, non-residential climbed 30 percent to $237.2 million for the same period, according to M/PF Research’s president, Ron Witten. Obviously, the market has recovered from the 1974 recession, when new office space stood vacant for 12 to 18 months.

Average prices vary from around $8.50 a square foot in north Dallas and southwest Fort Worth to $11 in downtown Dallas and $10 in downtown Fort Worth, according to a survey of office-building management companies, including Swearingen Dunaway Realtors, Cold-well-Banker, Henry S. Miller, Hank Dickerson Company, and Cushman-Wakefield.

Rents are expected to escalate $1 or $2 per square foot over the next year, until the new space is built and completely leased. There is, however, some speculation that Dallas may be overbuilt by 1981. And looking at all of the new office space going in downtown, that speculation may be justified. Here’s a partial list of projects in various stages of development:

●Plaza of the Americas, developed byToddie Lee Wynne Jr. and Clyde C.Jackson, both veteran entreprenuers inDallas. Saudi Research and DevelopmentCorporation, through a subsidiary, is ageneral partner in the ownership anddevelopment of the 5.5-acre site, whichwill house two 25-story office towers with1.2 million square feet of office space.Plans include restaurants, retail space,and banking facilities surrounding a15-story enclosed atrium park with an ice-skating rink.

●A 32-story office building, as yet unnamed, developed by Harlan Crow.Forty-five percent of the planned spacehas already been leased, according toobservers. The new building will be in theneighborhood of 2001 Bryan Tower. The industry currently refers to it as “Harlan’s building.”

●The Dallas Centre, a skyscraper being built just east ofthe Republic Bank Tower.Veteran developer Vincent A.Carrozza of Carrozza Investments Ltd. is the primemover behind this one.

●Hunt Properties has proposed a major high-rise next tothe NBC Building. Expected totop 35 floors.

●The empty space betweenthe Southland Life Buildingand the Sheraton Hotel is expected to be filled with a newbuilding that will almost double Southland’s size.

Do these grandiose projects represent foolishness or foresight? Not surprisingly, Henry S. Miller Jr. votes for the latter. “Investors and developers have been willing to take calculated risks in anticipation of future growth. Since we have facilities, we are able to attract business that is willing to relocate to this area.”

Certainly Las Colinas in Irving is an excellent example of farsighted development. Ben Carpenter, founder and board chairman of Southland Life Insurance, has spent millions of dollars since the Sixties to develop his Las Colinas tract into one of the premier residential and office communities in the area. Present construction includes a new country club (in addition to Las Colinas Country Club), and two high-rise office buildings with a total of 450,000 square feet and IBM as a major tenant.

There is little land left to develop along Central Expressway in Dallas, save the stretch between Park Lane and Walnut Hill. On the east side of the Expressway, Trammell Crow has bought NorthPark Inn and is developing Caruth Fashion Center, which will be made up of small exclusive shops. Slightly north along the frontage road, there are two new office buildings, strip-shopping, and new apartments going up. The entire area has been “hot” for more than 10 years, and these additions are expected to enhance its prestige.

An area expected to beat North Central Expressway in prestige is bounded by Dallas Parkway, LBJ Freeway, and Belt Line Road, where Prestonwood shopping center is located. Already announced and under construction are five hotels (within three miles of one another) and at least six new office buildings.

Barney Giles, of Duval-Giles Co., believes the growth and development of this area will parallel the same silk stocking type of retailing and commercial businesses that presently surround the Post Oak Shopping Center in Houston.

Robert Sakowitz, president of Houston’s Sakowitz Inc. and one of Post Oak’s original retailers, agrees. He is building a free-standing store across from Prestonwood, in a center called Sakowitz Village on the Parkway. Bob Sakowitz has been looking for a Dallas location for 15 years and believes this shopping, office, and residential area could be just as exciting as Post Oak.

Dal-Mac is going to be the primary developer of the Great Southwest Airport, which is expected to be the largest single development in Tarrant County over the next 15 years.

Industrial growth, defined as new buildings for distribution and warehousing, is accelerating, but confined to a loop beginning at the Dallas Parkway Quadrant, arcing around to the D/FW Airport, and extending southward to I-30.

In summary, the Metroplex is developing its commercial real estate at a faster-than-fast pace. But then the high stakes gamblers in this area know more than how to fold’em or hold’em – they play towin big. The happy ending to this story isthat in Dallas and Fort Worth they usually do.