Dwindling commercial office space to get boost

Frisco Bridges Place, which is not expected to be complete until October 2015, is already 40 percent leased to a single tenant, said Sayres Heady with Heady Investments.

On the heels of the Heady Investments news came the January announcement of the 110-acre Wade Park development, which could potentially bring up to 3 million square feet of office space to the Lebanon Road/DNT intersection.

The overall timetable for the office space at Wade Park is unclear. While the first phase of the project is expected to be open in summer or fall 2015, developers have not yet announced if that phase will include any office space.

Developers also have not announced a timeframe for the rest of the project.

While those two major office space projects are still some time from providing the space Frisco needs, Hall Office Park, the city's largest existing office park, is providing more immediate relief with a new, eight-story, 200,000-square-foot building on the DNT. The new building at 3001 Dallas Parkway, which is set for mid-March completion, has no tenants lined up, according to Lisa Boyer, spokeswoman for Hall Office Park.

Hall Office Park, which currently has 16 buildings and nearly 2 million square feet of office space, constructs speculative buildings—buildings where the developer has not secured tenants before construction—and is gambling on the need in the market to fill the new building.

"Interestingly, none of the multitenant buildings in the park were preleased prior to opening," Boyer said. "The very first building at Hall Office Park was started at the end of 1997 and officially opened in early 1998 with not a single signed tenant. Six months later it was fully occupied and construction on the second building was underway."

Jim Gandy, Frisco Economic Development Corp. president, said there is a need for more developers to build speculative office space such as Hall Office Park's 3001 Dallas Parkway, building because companies' needs might not allow them to wait the year and a half it typically takes for a build-to-suit building to be constructed.

Companies often have an immediate need and are looking to find space within a few months, he said.

Gandy said having that lack of existing office space can cause Frisco to lose out to other cities.

Office space need

Besides Hall Office Park, the only other major office park in Frisco is Duke Bridges, which consists of three large Class A office buildings.

A fourth building, recently finished, was constructed specifically for Conifer Health Solutions. The company will occupy the entire building, Gandy said.

Frisco Square has a limited amount of office space still available, although more is master-planned for the area.

Trevor Franke with Peloton Commercial Real Estate, who handles leasing of office space in two Frisco Square buildings, said the construction of a 120,000-square-foot building and a 140,000-square-foot building in Frisco Square have been proposed, but are waiting to find "the right tenant."

While Class A office space—which includes high-end furnishings, covered parking and extensive amenities—is in low supply, so is less expensive office space.

Value office space, which is more simple space without many amenities and non-covered parking, and Class B office space, which is a step below Class A as far as furnishings and amenities, are also in demand, Gandy said.

Office space locations

Office tenants are moving in from not only throughout the state, but also from throughout the nation, Gandy said.

Companies are flocking to the Dallas/Fort Worth area looking to take advantage of major thoroughfares, access to transportation, access to airports, the moderate cost of doing business, moderate taxes and even being in the central time zone, Gandy said.

Gandy said those qualities, along with the emphasis on high quality of life standards and educational opportunities, generally give Frisco high marks from prospective companies.

City Development Services Director John Lettelleir said companies want to be on regional thoroughfares such as the DNT that have easy in-and-out access.

The city also likes planning high-occupancy buildings along such major roads because it keeps high traffic volume out of other areas of the city.