Richardson's Telecom Corridor lands some of North Texas' biggest office deals in 2018

Richardson's Telecom Corridor has been one of the hottest office markets in North Texas this year.

 

Three years ago, when State Farm Insurance moved into its huge new campus at the CityLine development on Bush Turnpike, the insurer left behind about a million square feet of empty offices in a handful of nearby buildings.

 

Other corporate moves out of the Telecom Corridor added to the vacant space.

 

But almost 750,000 square feet of major leases this year have gobbled up a lot of the surplus office inventory in Richardson.

 

Steward Health, Goldman Sachs, Genpact, Infosys, Raytheon and other companies have recently taken large blocks of space in the Telecom Corridor.

 

"We have seen a lot of positive things in the market, and there is more to come," said Clint Madison of Cushman & Wakefield. "Richardson has had a good year."

 

Madison and Trey Smith are leasing the 2400 N. Glenville office center, a four-building campus just east of North Central Expressway.

 

The 400,000-square-foot complex until recently housed operations for telecom firm Verizon. In 2015, Fort Worth-based Q Real Estate Holdings LLC bought the buildings and remodeled them for new tenants.

 

More than 75 percent of the project is now leased to tenants including Insurica, CalAmp, BAL Global and Infosys.

 

"The type of tenants we have seen are just not all tech," Madison said. "We are getting a pretty good diversity."

 

To land the new leases, Q Real Estate redid the campus' lobby areas, adding lounges, conference centers and other amenities for workers.

 

On the lower level, an outside plaza area got a total makeover, and a new fitness facility and training center were built. The food service area also got a redo.

 

"We spent a lot of money," said Tommy Ellis, director of Q Real Estate. "The building infrastructure systems were old and tired and at an end of their useful life."

 

We added a lot of amenities that you have to have to compete today."

 

 

Even with the renovations, Ellis said his project can offer more affordable workspaces than newer buildings in Plano and Frisco.

 

Steward Health Care leased 300,000 square feet of office space in Richardson's Galatyn Commons campus. (Shaban Athuman/Staff Photographer)

 

"Richardson is not up to the Legacy business park price point," he said. "We can offer higher-end back office space to tenants who are price-sensitive."

 

The Richardson buildings that have had the most success attracting new tenants are properties that have gotten a reboot, said John Jacobs of Richardson's Economic Development Partnership.

 

"Every single one of the buildings that has leased up was refurbished," Jacobs said. 'That's been key to getting them leased — the owners invested in their properties.

 

"We saw where tenants paid more to be in those buildings."

 

That's been true at Galatyn Commons, an 800,000-square-foot Richardson office campus that was home to one of State Farm's previous locations.

 

Before the insurance company moved out, California-based Spear Street Capital acquired the four-building project and did a multimillion-dollar renovation.

 

Galatyn Commons signed major leases this year with Steward Health, Raytheon and Goldman Sachs. In 2017, the project landed the large headquarters for Service King Collision Repair Centers.

 

 

 

 "We are now 100 percent occupied," said Russ Johnson of Peloton Commercial Real Estate, which is one of the leasing agents for the building. "Spear Street did a great job of renovating the property and adding amenities, and it works.

 

"Richardson is now on the map for bigger companies and corporations to consider," Johnson said. "It's being recognized that there is a great workforce in the area."

 

The two-building Lakeside office campus in Richardson, which was acquired in 2015 by Dallas' Cawley Partners and GEM Realty Capital of Chicago, is also filling up.

 

Built originally to house telecom firm Nortel Networks, the buildings are now home to apartment industry firm RealPage and other tenants and are 73 percent leased, according to developer Bill Cawley.

 

 

Even with the successes, Richardson still has big blocks of empty office space left to fill.

 

Tech firm Samsung is moving its operations to Plano and will leave behind a large vacant Telecom Corridor building.

 

And developer KDC is still hunting a tenant for the 140,000-square-foot 2323 Central office campus it has remodeled on the west side of U.S. Highway 75.

 

"There is still a ways to go," said Jacobs. "I'm surprised we aren't leasing more."It's been a very good year for Richardson," he said. "We are pleased not only with the quantity but the quality of the tenants we have gotten."

 

 

To read this article on The Dallas Morning News website, click here.