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Toyota Effect: Developers Rush to Start Offices in West Plano and Frisco

One of the last empty corners in Legacy business park on the Dallas North Tollway is attracting development plans.

Stream Realty Partners is gearing up to build a 12-story office tower at the southwest corner of Tennyson Parkway and the tollway.

The company’s Platinum Tower will be next door to a five-story building Stream is constructing.

The 271,000-square-foot project is one of almost a dozen office developments in the works on the tollway in West Plano and Frisco — more than in any other area of North Texas.

“There is so much interest in this area,” said Chris Jackson, regional managing partner, Stream Realty Partners. “We plan to start construction before the end of the year.”

Developers and building investors attribute the boom in part to what they call “the Toyota effect.”

Since Toyota Motor Corp. announced last year that it would move its North American headquarters to West Plano, office developers have been scrambling to get projects going in the area.

“We’ve seen two large lease deals directly related to Toyota come through the market,” Jackson said. “It gives other businesses the confidence to locate in the same area.”

The global automaker’s 2.1 million-square-foot headquarters campus on Legacy Drive is the largest new office project in the Dallas-Fort Worth area.

Right up the road at the tollway and Headquarters Drive, Liberty Mutual Insurance will be moving into a high-rise office complex with more than 1 million square feet.

Another nearby building opening this year will house the headquarters of FedEx Office.

Together the projects are expected to house almost 12,000 workers and generate additional business in the surrounding area.

“There is going to be a Toyota multiplier up there,” said Jeff Ellerman, a vice chairman in commercial real estate firm CBRE’s Dallas office. “I’m really not concerned that we are getting too far over our skis with construction.

“It doesn’t feel like we are overbuilding.”

Already committed

More than 5 million square feet of office space is under construction or announced along the tollway in West Plano and Frisco. More than half of it is already committed to tenants who will occupy the buildings when they are done.

Developer Randy Heady is building a 170,000-square-foot office building in Frisco and plans to start a 200,000-square-foot speculative office building later this year in West Plano.

He predicts that not all the new office projects being talked about along the tollway will get built.

“We are way overannounced and not at all overbuilt,” Heady said. “It’s a hot market, and we are getting lots of calls from interested tenants.”

The development is heading north up the tollway from Legacy business park.

The Dallas Cowboys are building more than 300,000 square feet of office space in their new Frisco headquarters on Warren Parkway.

And right next door, the Frisco Station development plans to kick off a more than 200,000-square-foot office building next year.

Farther north at Lebanon Road, the mixed-use Wade Park project is also pitching office leasing deals.

Fifth tower

Granite Properties, which is building the fifth office tower in its Granite Park development, has landed tenants for the tower before it’s even finished.

The 12-story, 306,000-square-foot office project is being built near the southeast corner of the tollway and State Highway 121.

Greatbatch Inc., a medical device maker that moved to Frisco from New York, just leased more than 50,000 square feet in Granite Park V.

Other tenants are looking at the speculative high-rise.

“We have proposals out to lease three more floors,” Granite chief operating office Greg Fuller said.

He’s not yet concerned about the pace of building in the area.

“I don’t think there is too much construction going on now, but there is a whole lot more planned.”

Fuller said there is a lot of capital in the market to finance additional development — a potential worry even in a good market like Legacy.

“All of a sudden you could have a lot more space on the market.”

By: Steve Brown, The Dallas Morning News

SOURCE: The Dallas Morning News

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