By Barbra Murray
KDC, a leading corporate build-to-suit office development, and investment firm and retail REIT Seritage Growth Properties are combining their respective expertise for the good of the Dallas office market. The companies just formed a partnership for the creation of as much as 1 million square feet of premier office accommodations within the sprawling Dallas Midtown mixed-use redevelopment. The office project’s anticipated price tag is $800 million.
KDC and Seritage’s two-tower office project—one component of the 23-arce-mixed-use destination Seritage is planning at Dallas Midtown—will sprout up on a site that had been home to a Sears store at the former Valley View Mall. All the details have not yet been hammered out; however, Bill Guthrey, partner and senior vice president with KDC, told Commercial Property Executive, “the office buildings will be driven by the corporate user and each could easily be 500,000 square feet.”
The onetime Sears site will also feature anchor retail and entertainment space, and like the office buildings, the size of these offerings will be dictated by demand. The vision, Guthrey added, includes plans for roughly 200,000 square feet of retail, restaurant, and entertainment space; approximately 800 luxury residential units; and a hotel with at least 200 keys.
THE RIGHT PLACE, THE RIGHT TIME
Timing is everything, and then there are the three golden rules of real estate: location, location, location. KDC and Seritage’s office project ticks all the boxes. “The redevelopment of Interstate 635, fronting the property, now allows for 285,000 cars a day to travel the highway, and provides access to employees,” Guthrey said. “In addition, no new office projects have been built along this corridor of I-635 for 30 years, so there is pent-up demand for well-located, state-of-the-art office projects in a mixed-use environment. Employers and employees also seeking highly amenitized neighborhoods and this project meets the demand.”
The Dallas office sector in general is being bolstered by the jobs market. According to a third quarter report by commercial real estate services firm JLL, job gains that put Dallas toward the top of all U.S. markets continue in a range of industries, fueling all sectors.
KDC and Seritage’s next step for their office project is a site plan application, which the partners expect to file with the City of Dallas in the near future.
Photo courtesy of Seritage, KDC