April 29, 2024 • 36 mins
Welcome back to Retail Intel with your host, Brian Sheehan! In this episode, we're joined by Bretley Roche and Jim Jamerson from Segovia Partners, a goal-oriented, dedicated and solutions-based retail brokerage firm that leverages relationships to obtain results.
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Episode Transcript
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Brian Sheehan (00:05):
Welcome to Retail Intel, the podcast where we
dive deep into the dynamic worldof commercial real estate.
I'm your host, brian Sheehan,and I'm thrilled to be your
guide on this journey throughthe bustling streets of retail,
the aisles of shopping centersand the world of property
investment.
With me today I have Brett LeeRoche and Jim Jamerson with
(00:25):
Segovia Partners.
Brett Lee is vice president andJim is executive vice president
.
Both are located in Dallas.
Brett Lee has been focused ontenant representation and
landlord representation sinceJanuary 2020.
And Jim has been focused ontenant and landlord rep work, as
well as new development, forthe past 35 years.
How have you both been Doinggreat, brian.
Bretley Roche (00:47):
Doing well.
Brian, how are you?
Brian Sheehan (00:50):
Well, welcome.
Thank you for taking the time.
I know we had tried to schedulethis around ICSC Red River in
Dallas and that was part of thereason to try to jump on with
you a couple experts located inDFW.
Before we jump into what'shappening in Dallas, tell me a
little bit about yourself andhow you both got into commercial
(01:11):
real estate, if you don't mind.
Bretley Roche (01:13):
Sure, well, I can start.
I am originally from California, born and raised.
All my family is still outthere.
I moved to Texas when I wasabout 18 years old to go to
Baylor University.
When I graduated I reallydidn't know what I wanted to do
and I ended up moving to Dallasand getting a job with Granite
(01:33):
Properties, which are officedevelopers based here in Dallas,
although they do work in fiveor six different states.
I was there for about fiveyears and I was on the property
management side of things duringthat time and while it was a
wonderful experience and a greatcompany, as those years
progressed it started to becomevery clear to me that my
(01:54):
personality and my goals weremore geared towards sales, not
to mention brokerage, and retail.
Real estate has been in myfamily.
My dad had his own retail firmin California, in the Central
Valley, for many years.
It was called PacificCommercial Realty Advisors.
He ended up opening multipleoffices in different states, so
(02:14):
it's always been something thathas been in my mind and in my
blood, so to speak.
So he was able to connect me tosomeone who knew Jennifer Frank
, who was one of the principalshere at Segovia Partners, and I
ended up joining with them rightbefore COVID about five years
ago.
At the time there was only fourbrokers, of which Jim was one,
(02:35):
and we have since then grown insize.
Jim has been a mentor to mesince day one and we formed a
really unique partnership.
From early on, he spent a lotof time training me and he
helped me to get into newdevelopment, which was a whole
nother world for me at the time.
He also introduced me to therestaurant world, which is very
(02:57):
fascinating and dynamic and onethat I've grown to love, and he
taught me the ropes, and I'vebeen shadowing him and we've now
become great partners and wefocus primarily on new
development, tenantrepresentation and, within the
tenant world, we focus primarilyon restaurants and
entertainment.
It's been very exciting, veryfun and very busy.
Brian Sheehan (03:19):
Gosh, that's a great niche for Dallas.
Jim, how about you?
How'd you get into commercialreal estate great niche for
Dallas.
Jim Jamerson (03:25):
Jim, how about you ?
How'd you get into commercialreal estate?
Well, so I got married inDenver, colorado, many years ago
and I was working for a realestate law firm as a paralegal.
And I had a friend his name isKeith Duesenberg and his family.
His grandfather invented thefamous Duesenberg car back in
the 1930s and he introduced meto the Coldwell Banker
Commercial, which is now CBREmanager in Denver, and they
(03:49):
needed someone in the retaildepartment.
So I started working there andthen, after a couple of years,
my wife is from Dallas and wekept coming down here in the
wintertime.
I love the mild winters, gottired of the snow up there, love
the people down here and lovethe Tex-Mex, and so we packed
(04:12):
everything up in the U-Haul anddrove down here after a
beautiful day of golf.
It was really kind of bizarre.
I was like why am I leavingbeautiful Colorado?
People thought I was crazy.
But I think people when theythink of Colorado they think of
Vail or a resort and they don'tthink of.
You know what it's like to workin the city?
Yeah, so I came down here tothe CBRE office.
(04:35):
You know we had a lot of bigaccents West Texas accents and I
was like when everybody wouldhang up, they'd say thank you.
I'm like when everybody wouldhang up they'd say thank you.
I'm like what does you mean?
Thank you, what?
So I had to get used to theaccents here and then I went on
to work for CBRE for many yearsand I went on to work for Chain
(04:55):
Links UCR.
That's where I got into workingon some big power center
developments as well as working,starting to work with
restaurants.
I did like 35 Panda Expressdeals, muya Burger, IHOP, people
like that and then I went towork for after the financial
crisis, I went to work for JohnEvans Company and John Evans is
very well known a broker fordoing a lot of restaurant deals,
(05:17):
so he helped teach me moreabout restaurants and I did a
bunch of deals with Dairy Queen,schlatsky's and people like
that.
So he passed away in 2019 and Iknew Jennifer Frank in Segovia
and I decided it was a good fit.
And then I met Brett Lee soonafter and she's been incredible
(05:38):
to work with.
I think she's one of the bestyoung brokers in the market,
just based on her production andwhat she can accomplish, so I
really feel blessed to work withher on a lot of projects here.
So Segovia is also part of theSightSource network.
There's 47 brokers around thecountry that we network with,
(06:00):
and so we're more of a boutiquefirm that handles a lot of big
national retail and restaurantbrands and strong locals, as
well as the shopping centerleasing and development deals.
So we have a really good nichein the market.
We just have very strong,productive brokers who really
know their stuff.
So it's been great to work here.
Brian Sheehan (06:21):
It sounds like it , and you mentioned Tex-Mex.
Yes, I have to ask.
There's a restaurant that wewere lucky enough to have a meal
at while we were there, calledthe Mexican.
Jim Jamerson (06:33):
Have you been Bredly has?
I was going to mention that,but I have not had a chance to
go over there yet.
Bretley Roche (06:38):
It's funny we were just talking about this
last night, brian about theMexican.
I've been probably a year agoand it was delicious, really
incredible experience.
I think it was 15,000 squarefeet foot space.
Brian Sheehan (06:54):
Yes, did you have a chance to eat there when you
were in town?
We did Highly recommend it toanyone listening.
If you're ever in Dallas tocheck it out, it's quite the
experience.
Well, tell me about kind of thetone and mood of the retail
market in DFW.
I mean I was there recently forICSC.
It really won just impressedwith the size and activity at
(07:17):
that event.
Just incredible amount of dealmaking and volume activity
happening in Dallas.
And while I was there I had achance to drive around to see a
number of our differentproperties, look in a few
different markets and there'sconstruction everywhere.
It seems like you could drivein any direction and see
thousands of apartments and newhomes and new retail centers
(07:42):
being developed.
So for folks that are there,experts like yourself, what's
the tone and mood there?
Bretley Roche (07:49):
Yeah, so aggressive, full steam ahead.
Everyone is very, very active.
From the tenants perspective,which I'll touch on first, the
tenants never really slowed downwhen we came out of COVID.
Obviously everyone wasrecovering, really slowed down
when we came out of COVID.
Obviously everyone wasrecovering, but it picked up
with just tremendous activityright from the get-go.
And the tenants are the onesthat are seemingly impacted the
(08:12):
most.
I mean, their rents havecontinued to climb and climb,
with inflation and land costsgetting higher and higher.
The cost of even their ownrestaurant equipment has gone up
and somehow they have justcontinued to expand and pay
those higher rents.
And a large part of that is justTexas and the geographical
(08:32):
benefit of being here, amongother things we like to call the
triangle shape, that is, dallasto Austin, to Houston, to San
Antonio.
The Texas triangle is what wecall it, and it's experiencing
historic growth numbers.
The population within thattriangle in 2020 was 21 million.
Some other statistics about theTexas Triangle that are just
(08:56):
kind of staggering it has a GDPof 2.4 trillion, which ranks it
as the ninth largest economyamong the nations of the world,
ahead of Canada, south Korea,russia and Australia, which is
pretty fascinating.
The Metroplex is estimated.
That triangle is estimated togrow to almost 34 million people
(09:18):
in the next 77 years.
But based on the populationtrends, we're seeing that
America's three biggest metrosin 70 years are going to be DFW,
houston, austin replacing NewYork Los Angeles and Chicago.
Brian Sheehan (09:32):
Wow.
Bretley Roche (09:33):
So the state added about 660,000 new jobs in
2023.
We don't have any state incometax, but the point is Texas is
booming.
People are moving here from allover and restaurateurs and
other retailers from all overthe country are coming here
(09:53):
bringing their businesses here.
So the job growth is climbing,the demand is climbing, so it's
keeping the market really,really strong.
And with that I'll turn it overto Jim.
Jim Jamerson (10:02):
Yeah, if I could add some things to that.
So DFW is the fourth largestcity in the United States with
7.9 million people.
It could soon surpass Chicagofor third place.
Dallas has grown wealthier,with 92 million millionaires and
18 billionaires, ranking it the18th wealthiest city in the
world.
Several Fortune 500 companies,like AT&T, american Airlines,
(10:26):
are headquartered in Dallas.
Dfw is number one in populationgrowth, with 150 to 170
migration population coming in aDFW with an 8.6% growth rate.
It's also number one in jobgrowth, with 134,000 new jobs
created last year and 19corporate headquarters relocated
(10:47):
to Dallas last year alone, andmany from California.
So the current trends which isinteresting, if you take the
current migration trends and youextrapolate out to 75 years and
the turn of the century, theyear 2100, which I don't think
I'll be around to see that butDallas-Fort Worth will be the
largest city in the country with33 million residents, houston
(11:09):
will be number two with 31million and Austin number three
with 30 million.
So there's a developerdescribed DFW right now as like
Southern California in the 70sand 80s.
It's just, it's about toexplode and there's just,
there's no barriers to growth.
We can grow in all differentdirections and so we're just
starting to see phenomenalgrowth here.
(11:31):
That's incredible.
Brian Sheehan (11:32):
I mean you mentioned some of the reasons
behind that growth.
Are there any other things thatstand out in your mind of
what's really concentrating somuch growth and development
activity in DFW and that TexasTriangle?
Jim Jamerson (11:46):
Yeah, I think we just have a lot of pro-growth
policies.
I mean there's no corporateincome tax, there's no state
income tax, very low franchisetaxes.
The property taxes are a littlehigher.
You do have a fairly high salestax but it's a very affordable
cost of living.
But it's very affordable costof living and affordable housing
(12:12):
compared to the East Coast andWest Coast, so it's just a very
pro-business.
A lot of incentives given tocorporate headquarters to
relocate to Texas, so it's justfairly nice weather, although
three months of the year it'spretty hot.
So there's a lot of reasons anda very just a really strong,
dynamic economy, verydiversified in Dallas, fort
Worth, transportation,hospitality and real estate.
(12:34):
There's just major industriesthat are growing exponentially
here right now.
Brian Sheehan (12:41):
You mentioned aggressive a couple of times and
I'm thinking about on my recentvisit in the market when you
tour, it's just so impressivehow many different retailers are
there.
It seems like the retailcapital is of the US and, with
the accounts that I talk toconstantly, if you ask them
(13:03):
where they're growing, wherethey're planning to grow, almost
all of them mention DFW, whoare some of the most aggressive
retailers you're seeing in theDFW market.
Jim Jamerson (13:13):
Yeah, I think I'll get started.
I was going to talk about thegroceries stores and the big box
concepts.
Things have really slowed downin recent years on the grocery
store segment expanding, but nowit's just on fire and that's
partly due to the fact thatgrocers are flush with cash I
(13:34):
mean coming out of COVID like,for example, kroger made over $2
billion in profit in 2022.
And as well as inflation, Ithink grocery stores love
inflation because they havebetter margins for them.
So right now I'll just give yousome information on what I know
.
So Target, the broker forTarget, told me they're working
(13:54):
on 15 deals in Texas and theyjust opened their prototype up
in Prosper.
Costco is opened in Aubrey,texas.
It's under construction inSalina and working more deals.
After being very slow to grow,walmart has been kind of on hold
for years.
They're starting to put landunder contract for their
(14:16):
superstore and they plan tobuild out 150 new store openings
.
Heb out of San Antonio.
They land banked about 25grocery sites over many years
and now they're on fire, openingseveral stores a year.
Their stores are averaging well.
Their first store opened doingabout 6 million a week and now
(14:37):
they're averaging about 4million.
I think there'll be somecannibalization when they open
more, but it's still prettyphenomenal how well HEB is doing
so.
They're going crazy.
Tom Thumb is opening four newstores this year and getting
ready to sign up three moredeals and they're working on
many more deals in the pipelineand they have been very slow to
very, not that very active.
(14:57):
And then, in addition, lowe'sand Home Depot are doing deals
again.
Lowe's in particular is veryaggressive and in fact there's a
brand new large format grocerystore that I can't announce yet.
They have not announcedpublicly, but they're lining up
eight new deals in themarketplace before they make an
announcement.
So I mean that alone is prettyincredible.
(15:20):
Never seen it like that in thismarket, never seen that much
activity from the grocer.
Brian Sheehan (15:24):
The fact that you've got all that activity
with those established publiclytraded companies, in addition to
having new entrants into themarket who are going to open
close to double digit stores,it's just incredible.
Bretley Roche (15:39):
Yeah, and I'll chime in a little bit there.
So obviously Jim did a greatjob describing all the grocers
and they obviously drive all theretail around it.
Wherever they plant their flag,the four corners and miles
surrounding them, you know,begin to get grabbed up, gobbled
up, develop.
Tenants are rushing there.
We see a lot of fast casualrestaurants expanding right now.
(16:01):
There's a lot of coffeeconcepts.
White Rhino Coffee is a localgroup.
I think they've done eight to10 deals.
They typically do end capdrive-thru but they have gone in
some downtown uptown locations.
Another coffee company, dunnBrothers Coffee, is doing end
cap drive-thrus.
Black Rock Coffee is expandingaggressively.
The Caddy Roll Company is anIndian fusion shawarma type
(16:25):
concept out of London.
They're very well known in NewYork City.
They are starting to expandhere.
Take inline space.
They're looking for downtownlocations, franchise model.
There's also your traditionalusers that we're seeing
aggressively expanding right nowMcDonald's Salad Go users that
we're seeing aggressivelyexpanding right now McDonald's
Salad Go Water Burger, which hasa new prototype.
(16:46):
They're doing some end capdrive-thrus which is new for
them.
Costa Vida, freddy's, popeye's,bojangles, portillo's all those
users, just to name a few, areall looking for pad deals,
freestanding buildings to buyand they're looking at many,
many more, looking all over themarket, many of them trying to
be close to these grocers aswell.
Brian Sheehan (17:05):
That's incredible .
Are there any new concepts?
Jim Jamerson (17:09):
Yeah, let's just talk about some of the
restaurants, the fine dining,because you talked about the
Mexican.
But there's a New York Timesarticle last summer that came
out and they call Dallas the newDubai for the restaurant scene.
It used to be Dallas is allabout Tex-Mex and barbecue.
Well, there's some fabulousrestaurants that are just opened
(17:30):
or that have signed deals inDallas.
I'll just go through some ofthem.
I think we're starting to seerestaurants that were only in
places like Las Vegas and Miamicoming into Dallas.
That's due to the growth andthe wealth in Dallas.
Major food group out of New Yorkhas a famous restaurant called
Carbone that opened in thedesign district.
There are only five in theworld.
(17:51):
They're in Vegas, hong Kong,miami and Doha, so that was
pretty spectacular when theycame in.
Just a couple of years ago,brettley and I are working with
a local brunch concept called360 Brunch House and it's a
really cool breakfast place witha vibe of a dinner place and
sometimes they turn it into anightclub with a DJ on the
(18:12):
weekends, but it's only open forbreakfast and lunch.
But they have like veryexpensive $30 cocktails, a very
extensive cocktail menu andexpensive, very elevated brunch
items like Eggs Benedict withcaviar, and we've done four
deals with them and they'relooking to expand beyond VFW.
And then you mentioned theMexican.
(18:33):
So they have a $250 margaritacalled Pancho Vila and actually
they have a tequila sommelier.
So I don't know if you had that, brian, if you had to step up
and pay that for your margarita.
Brian Sheehan (18:47):
I did not have either of those.
Jim Jamerson (18:50):
But Komodo out of Miami.
They're an Asian sushi concept.
They opened in Deep Ellum about18 months ago.
That's a 25,000 square footrestaurant and founded Miami.
Then STK Steakhouse is owned byone group out of Denver,
colorado.
They opened in Uptown recentlyand they're creating a new term
(19:11):
for dining.
It's called Vibe Dining.
So that's where later in theevening the lights kind of turn
low, a DJ turns up the music anda younger crowd turns it into a
more of a party.
So this is becoming popular inmore places in Dallas and
Houston.
So it's a new little buzzword.
And then there's some new dealsthat have been signed.
The Catch is under constructionin Uptown.
(19:32):
They operate in Las Vegas inthe Aria Hotel.
They're in New York City, laand Aspen and a lot of
celebrities are seen in theVegas catch.
Same with Delilah.
Delilah is from Las Vegas.
They signed a deal in thedesign district.
It's a very fancy supper club,1950s decor with live music.
(19:53):
Again, you'll see a lot ofcelebrities there.
They're in the wind in LasVegas.
There's a famous Canadianrestaurant that's just opened in
Dallas called Joey's, and theyopened in North Park Mall just
recently and they're only inCalifornia and Seattle but
they've come to Dallas Monarchis part of the Maple Hospitality
out of Chicago and they have astunning view of the 45th floor
(20:15):
of a downtown skyscraper.
Many people order a whole kingcrab that serves eight people
and costs $1,000.
So that's the kind of moneythat's being thrown around at
these restaurants.
And then, lastly, in myneighborhood in the Knox
District, there's a new MrCharles restaurant that opened
up.
That's a really cool, swankyrestaurant.
(20:36):
With the Knox District they'repouring billions of dollars in
new development.
They're building a newmixed-use project with 100,000
square feet of new retail andrestaurants going in there.
It's right next to HighlandPark and a great area.
Anyway, I could go on, but it'spretty amazing.
This is just in the last threeor four years these restaurants
(20:56):
have come in or signed up, soit's really changing the whole
restaurant scene in Dallas-FortWorth.
Brian Sheehan (21:02):
Well, it's a great time to go out to eat in
Dallas.
You mentioned so many excitingconcepts that are expanding in
the market.
You talked about the KnoxDistrict.
What are the fastest growingmarkets in Dallas?
Bretley Roche (21:16):
Before we jump to that, would you mind if I touch
on entertainment a little bit?
I'll be brief.
Brian Sheehan (21:22):
Yeah, please do.
Bretley Roche (21:23):
The entertainment segment is a very new,
fast-growing market here in DFW,as I think it is really across
the country.
I recently attended theEntertainment Evolution
Experience Convention it was inLos Angeles a couple of weeks
ago and got to interact and meetwith a ton of new entertainment
concepts, and a lot of them areeither already here in Dallas
(21:45):
or they're on their way, and soI thought it would be
interesting to just touch on acouple of those.
So there's a new concept calledBat Box out of Monterey, mexico
, which is an immersive.
It is a baseball experience butit's a simulation.
It is a baseball experience butit's a simulation.
F1 Arcade, which is F1 drivingthrough a simulation.
Both of those have recentlysigned deals here in North
(22:07):
Dallas and they're planning toexpand on a national level.
Toka Social is a new soccerconcept that is like Topgolf but
for soccer, and it is comingout of London.
They've opened their firststore in London.
It's a lot of celebritiesfrequently go there.
(22:29):
They garner 25,000 guests permonth when they first opened,
and they're looking at Dallas astheir first ever US location,
which is pretty incredible whenyou think of all the cities they
could choose from.
There's also a lot of otherconcepts.
I want to touch on.
High Five Entertainment out ofAustin recently signed a deal
and Allen beat the bomb, whichis a team-building experience.
They have locations in Houstonand they're headed to DFW next
(22:51):
looking at sites Andretti's,go-kart's, ground Control,
trampoline is doing a couple ofdeals here as well as in
Oklahoma City.
Boulder Adventure is expandingand then also separately but
also in the entertainment realm,is pickleball, which is I think
it is the fastest growing sport, or it was recently, and
(23:13):
there's they're expanding veryaggressively here in Texas and
across the country.
We represent the Pickler, whichis a group out of Utah, salt
Lake City.
They've signed almost 300franchisees nationally in the
last six months and there's morecoming.
We have signed a couple ofdeals with them here and it was
eye-opening because they, likeother entertainment users, are
(23:36):
kind of new to landlords.
Landlords don't understandthese users for their big boxes
and they question will theseusers be around in five years?
Is this just a fad?
And so there is an educationcomponent when you're working
with entertainment andrecreational users like this
that we're seeing more and moreof because the landscape is
(23:57):
changing and big boxes aretransitioning from typical
apparel to more of entertainmentand recreation and landlords
really need to be educated onthe users and make sure they can
be there.
But as it becomes more and morecommon for these types of
groups to do deals, it's gettinga little bit easier.
Chicken and Pickle is anentertainment pickleball concept
(24:18):
that opened at Grand Prairie in2021.
It has a lot of food andbeverage, whereas the Pickler is
strictly a pickleball club.
They've combined pickleball andshuffleboard and drinking and
food and it has just donetremendously well.
It's got a lot of publicity.
That's come its way.
One of the reasons so many ofthese concepts are interested in
(24:39):
coming to DFW is because thecities are very welcoming and
they typically are open tooffering incentives to many
users in different ways to get aconcept like that for their
municipalities.
So it's a welcoming environmentin most of the cities.
Brian Sheehan (24:55):
It's so exciting to hear about all these new.
So exciting to hear about allthese new really interesting
entertainment concepts and it'sfascinating if you go back to
you know Topgolf was sort of anoriginator in this use category
and now either people that wereassociated with Topgolf have
spun off and kind of doing theirown thing, but to hear that you
(25:16):
know BatBox is a Mexicanbaseball simulator concept is
great.
I think about a lot of the golffocused simulator driven
concepts that are growingrapidly.
We see a lot of deal activitywith them.
But this is this is a greatrundown of all these incredible
concepts across different usecategories.
Obviously entertainment fun,but the differentiation that's
(25:41):
happening in that space isreally interesting.
Bretley Roche (25:43):
Yeah, it's pretty incredible.
It's a fun time to be inbrokerage, I think anywhere in
the country, but especially herein Texas.
Jim Jamerson (25:49):
Yeah, so Brettley and I are working with the city
of Wiley to do a bigentertainment project and it's
going to be a public-privatepartnership.
So, as she mentioned, some ofthese concepts require
significant dollars to help themand they look for the cities.
So we're designing a plan on100 acres of parkland in the
city and the city is going tohelp fund some of these
(26:12):
entertainment users.
So we're kind of just gettingstarted and I think that's very
important to mention as to whyDallas is on their hit list for
a lot of these concepts.
That's incredible.
Brian Sheehan (26:25):
So maybe we can transition just thinking about
the different markets that aregrowing there.
You mentioned Wiley.
We talked about the KnoxDistrict.
What are some of the fastestgrowing markets in DFW and
what's behind the growth inthose places?
Jim Jamerson (26:39):
Yeah, I guess I would say up in the north.
So right now Frisco is on fire.
It's filling in.
There's a major sports, lots ofmajor sports facilities in
Frisco.
There's a Cowboys star facilitywith a big development around
it.
There are professional soccerfields and now the PGA has just
relocated their headquartersfrom Florida and built two
(27:02):
championship golf courses and a500-room Omni Hotel attached to
it and it's surrounded by 2,500acres of land called the Fields
Development and they're going tohave homes, commercial and a
new Fields West Lifestyle Centerthat'll have great restaurants
and apparel groups like TommyBahama.
It'd be similar to the LegacyWest in Plano.
(27:28):
So if you keep going north ofFrisco, prosper and Salina are
the next major suburban marketsthat are exploding.
So if you look at Prosper, ithas over 39,000 people and at
Buildout it'll be about 72,000.
And it's getting there veryquickly.
And just north of Prosper,salina, which has the same land
size as Frisco or a little bitmore land than Frisco, and they
(27:52):
are the fastest growing city inTexas right now.
If you look at the numbers realquick, in 2022, they have
41,000 people and by 2027, it'ssupposed to double to 84,000.
Costco approved a deal inSalina when they only had 26,000
population just due to theexplosive growth that they saw
coming.
(28:12):
There's been a lot of landflipping in Salina.
There's some big investors whohave been buying land and
flipping it after rezoning.
There's lots of large equitypartners coming in giving them
millions of dollars, big REITsand private funds.
For example, there's a 30-acretract in Salina zone multifamily
with some prime pads and twoand a half years ago it sold for
(28:36):
$6 a foot.
Then it flipped to $10 a footand then last year it sold for
$15 a foot within like 18 months.
So you know, the prices havegone up so fast, so quickly,
that it's hard to do that kindof land flipping.
Now the prices are kind ofbeyond what they should be at
some of these intersections, butthat's pretty amazing growth.
Brian Sheehan (28:58):
Jim, on that Salina site were there any
improvements that were happening?
Were they getting throughentitlements yes, or is that
just speculation?
Jim Jamerson (29:07):
Yeah, so it got entitled for multifamily in that
process.
I don't know which buyer put onthe entitlements, but I think
that's why it kept going up invalue was because it was
entitled.
Incredible, yeah.
So then also some other marketsthe Melissa Anna Sherman market
up along I-75 are seeing majorgrowth spurts.
(29:30):
Anna has 3,000 apartments inthe pipeline and they plan to
double their population in fiveyears from 25,000 to 50,000
people.
And then Mansfield is a reallyhot market, south part of Dallas
, very to 50,000 people.
And then Mansfield is a reallyhot market, the south part of
Dallas, very high incomes,80,000 population quickly going
to about 120,000.
So those are some of thehottest markets we've seen the
(29:51):
suburban markets and McKinney,of course.
Mckinney has always been a hotmarket and it's getting built
out, though.
Do you have anything to add tothat, Brett?
Bretley Roche (30:00):
No, I think you covered it very well.
There's a lot of growingmarkets, but I think, as Jim
said, we're seeing most of itkind of in that north due, north
, northeast, if you're lookingat the DFW map as a whole, which
you foresee a point in timewhen South Dallas those close in
(30:27):
suburbs start to take off andexperience the same kind of
growth.
Jim Jamerson (30:33):
Yes, definitely.
There's all kinds ofredevelopment occurring in South
Dallas around Redbird Mall andthere's growth in Lancaster.
So, yes, midlothian, the southof Mansfield is growing
Oxyhatchee, so yes, it's goingto just continue to grow and
fill in in all directions.
Brian Sheehan (30:52):
That's incredible .
What are some of the biggestchallenges doing business in DFW
?
I mean, it sounds like a verybusiness-friendly climate,
environment generally, and whileI was there, I met with some
folks from the city of Anna Annaand we were talking about, as
you mentioned, how many unitsare planned for that market and
they talked about the challengeof providing the infrastructure
(31:15):
needed in a timely fashion tosupport all that development.
But what are you guys findingare some of the bigger
challenges doing business downthere?
Bretley Roche (31:22):
Yeah, well, I think you're correct.
It is a great market to dobusiness.
There really isn't a lot ofnegatives.
I think that we're very, veryfortunate to be here from a
business perspective.
But the challenges like in manyparts of the country right now,
at least on the tenant sidewould be just a very tight
markets, lack of inventory.
You know, if you'rerepresenting a tenant basically
(31:44):
anywhere in the metro,especially in a desirable area
where your tenants are probablygoing to want to be, it's just
incredibly competitive and it'svery much still a landlord's
market because of the 97% leasespace.
There's just no availability.
So I've had some not so funnystories of multiple occasions
where we've had leases at thefinish line partially executed
(32:08):
by tenant.
Checks have been sent andlandlord changes their mind the
last minute because they get abetter offer and they just tear
up the lease and they have kindof all the power right now to do
that because they know thatthere is another tenant waiting
behind your tenant to take thespace who can probably pay more.
So that's a challenge.
I don't think it's necessarilyunique to Dallas, but it is
(32:30):
something we encounter.
Jim Jamerson (32:32):
Yeah.
Bretley Roche (32:32):
And Jim, do you have anything else you would add
?
Jim Jamerson (32:35):
Yeah.
So I think some of thedevelopers are working their way
around the high interest ratesand the high construction costs
by either we have a developerclient who has his own
construction company he canbuild shopping centers for
cheaper than most and then themultifamily guys.
They're either going for HUDloans where they can just put
down 15% and get lower rates.
(32:55):
We have one group that'spartnering with a huge REIT.
It's multifamily equity partnerand they fund the land and
construction out of cash andthen they'll put financing on it
later, which is really ideal inthis environment.
So we're still seeing peoplefiguring it out and getting
stuff built.
(33:16):
There's just been a slowdown ofnew construction and now I think
, with all these grocery storedeals being done, I think we're
going to see supply increase onretail space and things will
stabilize, especially with someof the rents as well, because
we've seen 20 to 30% increasesin rents 20 to 30% year over
year, I would say in the lasttwo years Incredible.
(33:36):
We're still seeing a lot ofdevelopers coming in from
California and other places.
We're seeing concepts coming infrom California.
There's a whiskey bar conceptin San Francisco that I met with
in 2019.
They said the cost of wageshave gotten so high that it's
like seven times the labor costsin Dallas for restaurants than
(33:57):
it is in San Francisco at thetime, and then minimum wage in
California was just raised to$20 an hour.
Brian Sheehan (34:04):
Labor costs in California are seven times what
they would be in Dallas.
Jim Jamerson (34:07):
Correct, correct, yes, wow.
And minimum wage has just goneup to $20 an hour in California.
So the lower volume of fastfood users like KFC are going to
end up closing like 10locations in Southern California
because of it.
So that's why people say whydon't we come to Texas?
Brian Sheehan (34:30):
We have cheaper rents, less regulation, more
affordable labor costs Anythingelse we should know about the
restaurant scene in Dallas.
Bretley Roche (34:34):
Yeah, I mean I think we've covered a lot of it.
I would say there isn't a lotto do in Dallas from an outdoors
perspective, and this is comingfrom someone who grew up in
California and so I think thatpeople in Dallas they go eat and
they drink and they shop and soit's just a great environment
for those types of users and therestaurants do very well for
the most part because of it.
Now it's competitive becausethere's so many of the same
(34:56):
concepts here, so you have to beone of the best to do well over
a long period.
But across the board, generallyspeaking, restaurants are going
to do well.
Good concepts are going tothrive here.
Brian Sheehan (35:06):
Yeah, that makes sense.
Well, Bradley and Jim, it wasgreat speaking with you today.
Thank you for helping toeducate me and our audience on
the exciting things that arehappening in the DFW commercial
real estate market.
It really is an incredible timeto be involved in commercial
real estate in and around Dallas.
Bretley Roche (35:25):
Thank you so much for having us, Brian.
Jim Jamerson (35:28):
Thank you.
Brian Sheehan (35:30):
Whether you're an aspiring real estate mogul, a
seasoned pro or simply curiousabout the places where we shop,
dine and work, this podcast isyour all-access pass to the
world of commercial real estate.
You can connect with me onLinkedIn If you're interested in
being a part of Retail Intel.
Send us a message tonationalaccounts at
(35:51):
phillipsedisoncom.
If you want to hear more aboutnew and exciting expanding
brands, keep tuning in to RetailIntel.
Don't forget to subscribe,follow, like and repost.
Talk to you next time.
Welcome to Retail Intel, the podcast where we
dive deep into the dynamic worldof commercial real estate.
I'm your host, brian Sheehan,and I'm thrilled to be your
guide on this journey throughthe bustling streets of retail,
the aisles of shopping centersand the world of property
investment.
With me today I have Brett LeeRoche and Jim Jamerson with
(00:25):
Segovia Partners.
Brett Lee is vice president andJim is executive vice president
.
Both are located in Dallas.
Brett Lee has been focused ontenant representation and
landlord representation sinceJanuary 2020.
And Jim has been focused ontenant and landlord rep work, as
well as new development, forthe past 35 years.
How have you both been Doinggreat, brian.
Bretley Roche (00:47):
Doing well.
Brian, how are you?
Brian Sheehan (00:50):
Well, welcome.
Thank you for taking the time.
I know we had tried to schedulethis around ICSC Red River in
Dallas and that was part of thereason to try to jump on with
you a couple experts located inDFW.
Before we jump into what'shappening in Dallas, tell me a
little bit about yourself andhow you both got into commercial
(01:11):
real estate, if you don't mind.
Bretley Roche (01:13):
Sure, well, I can start.
I am originally from California, born and raised.
All my family is still outthere.
I moved to Texas when I wasabout 18 years old to go to
Baylor University.
When I graduated I reallydidn't know what I wanted to do
and I ended up moving to Dallasand getting a job with Granite
(01:33):
Properties, which are officedevelopers based here in Dallas,
although they do work in fiveor six different states.
I was there for about fiveyears and I was on the property
management side of things duringthat time and while it was a
wonderful experience and a greatcompany, as those years
progressed it started to becomevery clear to me that my
(01:54):
personality and my goals weremore geared towards sales, not
to mention brokerage, and retail.
Real estate has been in myfamily.
My dad had his own retail firmin California, in the Central
Valley, for many years.
It was called PacificCommercial Realty Advisors.
He ended up opening multipleoffices in different states, so
(02:14):
it's always been something thathas been in my mind and in my
blood, so to speak.
So he was able to connect me tosomeone who knew Jennifer Frank
, who was one of the principalshere at Segovia Partners, and I
ended up joining with them rightbefore COVID about five years
ago.
At the time there was only fourbrokers, of which Jim was one,
(02:35):
and we have since then grown insize.
Jim has been a mentor to mesince day one and we formed a
really unique partnership.
From early on, he spent a lotof time training me and he
helped me to get into newdevelopment, which was a whole
nother world for me at the time.
He also introduced me to therestaurant world, which is very
(02:57):
fascinating and dynamic and onethat I've grown to love, and he
taught me the ropes, and I'vebeen shadowing him and we've now
become great partners and wefocus primarily on new
development, tenantrepresentation and, within the
tenant world, we focus primarilyon restaurants and
entertainment.
It's been very exciting, veryfun and very busy.
Brian Sheehan (03:19):
Gosh, that's a great niche for Dallas.
Jim, how about you?
How'd you get into commercialreal estate great niche for
Dallas.
Jim Jamerson (03:25):
Jim, how about you ?
How'd you get into commercialreal estate?
Well, so I got married inDenver, colorado, many years ago
and I was working for a realestate law firm as a paralegal.
And I had a friend his name isKeith Duesenberg and his family.
His grandfather invented thefamous Duesenberg car back in
the 1930s and he introduced meto the Coldwell Banker
Commercial, which is now CBREmanager in Denver, and they
(03:49):
needed someone in the retaildepartment.
So I started working there andthen, after a couple of years,
my wife is from Dallas and wekept coming down here in the
wintertime.
I love the mild winters, gottired of the snow up there, love
the people down here and lovethe Tex-Mex, and so we packed
(04:12):
everything up in the U-Haul anddrove down here after a
beautiful day of golf.
It was really kind of bizarre.
I was like why am I leavingbeautiful Colorado?
People thought I was crazy.
But I think people when theythink of Colorado they think of
Vail or a resort and they don'tthink of.
You know what it's like to workin the city?
Yeah, so I came down here tothe CBRE office.
(04:35):
You know we had a lot of bigaccents West Texas accents and I
was like when everybody wouldhang up, they'd say thank you.
I'm like when everybody wouldhang up they'd say thank you.
I'm like what does you mean?
Thank you, what?
So I had to get used to theaccents here and then I went on
to work for CBRE for many yearsand I went on to work for Chain
(04:55):
Links UCR.
That's where I got into workingon some big power center
developments as well as working,starting to work with
restaurants.
I did like 35 Panda Expressdeals, muya Burger, IHOP, people
like that and then I went towork for after the financial
crisis, I went to work for JohnEvans Company and John Evans is
very well known a broker fordoing a lot of restaurant deals,
(05:17):
so he helped teach me moreabout restaurants and I did a
bunch of deals with Dairy Queen,schlatsky's and people like
that.
So he passed away in 2019 and Iknew Jennifer Frank in Segovia
and I decided it was a good fit.
And then I met Brett Lee soonafter and she's been incredible
(05:38):
to work with.
I think she's one of the bestyoung brokers in the market,
just based on her production andwhat she can accomplish, so I
really feel blessed to work withher on a lot of projects here.
So Segovia is also part of theSightSource network.
There's 47 brokers around thecountry that we network with,
(06:00):
and so we're more of a boutiquefirm that handles a lot of big
national retail and restaurantbrands and strong locals, as
well as the shopping centerleasing and development deals.
So we have a really good nichein the market.
We just have very strong,productive brokers who really
know their stuff.
So it's been great to work here.
Brian Sheehan (06:21):
It sounds like it , and you mentioned Tex-Mex.
Yes, I have to ask.
There's a restaurant that wewere lucky enough to have a meal
at while we were there, calledthe Mexican.
Jim Jamerson (06:33):
Have you been Bredly has?
I was going to mention that,but I have not had a chance to
go over there yet.
Bretley Roche (06:38):
It's funny we were just talking about this
last night, brian about theMexican.
I've been probably a year agoand it was delicious, really
incredible experience.
I think it was 15,000 squarefeet foot space.
Brian Sheehan (06:54):
Yes, did you have a chance to eat there when you
were in town?
We did Highly recommend it toanyone listening.
If you're ever in Dallas tocheck it out, it's quite the
experience.
Well, tell me about kind of thetone and mood of the retail
market in DFW.
I mean I was there recently forICSC.
It really won just impressedwith the size and activity at
(07:17):
that event.
Just incredible amount of dealmaking and volume activity
happening in Dallas.
And while I was there I had achance to drive around to see a
number of our differentproperties, look in a few
different markets and there'sconstruction everywhere.
It seems like you could drivein any direction and see
thousands of apartments and newhomes and new retail centers
(07:42):
being developed.
So for folks that are there,experts like yourself, what's
the tone and mood there?
Bretley Roche (07:49):
Yeah, so aggressive, full steam ahead.
Everyone is very, very active.
From the tenants perspective,which I'll touch on first, the
tenants never really slowed downwhen we came out of COVID.
Obviously everyone wasrecovering, really slowed down
when we came out of COVID.
Obviously everyone wasrecovering, but it picked up
with just tremendous activityright from the get-go.
And the tenants are the onesthat are seemingly impacted the
(08:12):
most.
I mean, their rents havecontinued to climb and climb,
with inflation and land costsgetting higher and higher.
The cost of even their ownrestaurant equipment has gone up
and somehow they have justcontinued to expand and pay
those higher rents.
And a large part of that is justTexas and the geographical
(08:32):
benefit of being here, amongother things we like to call the
triangle shape, that is, dallasto Austin, to Houston, to San
Antonio.
The Texas triangle is what wecall it, and it's experiencing
historic growth numbers.
The population within thattriangle in 2020 was 21 million.
Some other statistics about theTexas Triangle that are just
(08:56):
kind of staggering it has a GDPof 2.4 trillion, which ranks it
as the ninth largest economyamong the nations of the world,
ahead of Canada, south Korea,russia and Australia, which is
pretty fascinating.
The Metroplex is estimated.
That triangle is estimated togrow to almost 34 million people
(09:18):
in the next 77 years.
But based on the populationtrends, we're seeing that
America's three biggest metrosin 70 years are going to be DFW,
houston, austin replacing NewYork Los Angeles and Chicago.
Brian Sheehan (09:32):
Wow.
Bretley Roche (09:33):
So the state added about 660,000 new jobs in
2023.
We don't have any state incometax, but the point is Texas is
booming.
People are moving here from allover and restaurateurs and
other retailers from all overthe country are coming here
(09:53):
bringing their businesses here.
So the job growth is climbing,the demand is climbing, so it's
keeping the market really,really strong.
And with that I'll turn it overto Jim.
Jim Jamerson (10:02):
Yeah, if I could add some things to that.
So DFW is the fourth largestcity in the United States with
7.9 million people.
It could soon surpass Chicagofor third place.
Dallas has grown wealthier,with 92 million millionaires and
18 billionaires, ranking it the18th wealthiest city in the
world.
Several Fortune 500 companies,like AT&T, american Airlines,
(10:26):
are headquartered in Dallas.
Dfw is number one in populationgrowth, with 150 to 170
migration population coming in aDFW with an 8.6% growth rate.
It's also number one in jobgrowth, with 134,000 new jobs
created last year and 19corporate headquarters relocated
(10:47):
to Dallas last year alone, andmany from California.
So the current trends which isinteresting, if you take the
current migration trends and youextrapolate out to 75 years and
the turn of the century, theyear 2100, which I don't think
I'll be around to see that butDallas-Fort Worth will be the
largest city in the country with33 million residents, houston
(11:09):
will be number two with 31million and Austin number three
with 30 million.
So there's a developerdescribed DFW right now as like
Southern California in the 70sand 80s.
It's just, it's about toexplode and there's just,
there's no barriers to growth.
We can grow in all differentdirections and so we're just
starting to see phenomenalgrowth here.
(11:31):
That's incredible.
Brian Sheehan (11:32):
I mean you mentioned some of the reasons
behind that growth.
Are there any other things thatstand out in your mind of
what's really concentrating somuch growth and development
activity in DFW and that TexasTriangle?
Jim Jamerson (11:46):
Yeah, I think we just have a lot of pro-growth
policies.
I mean there's no corporateincome tax, there's no state
income tax, very low franchisetaxes.
The property taxes are a littlehigher.
You do have a fairly high salestax but it's a very affordable
cost of living.
But it's very affordable costof living and affordable housing
(12:12):
compared to the East Coast andWest Coast, so it's just a very
pro-business.
A lot of incentives given tocorporate headquarters to
relocate to Texas, so it's justfairly nice weather, although
three months of the year it'spretty hot.
So there's a lot of reasons anda very just a really strong,
dynamic economy, verydiversified in Dallas, fort
Worth, transportation,hospitality and real estate.
(12:34):
There's just major industriesthat are growing exponentially
here right now.
Brian Sheehan (12:41):
You mentioned aggressive a couple of times and
I'm thinking about on my recentvisit in the market when you
tour, it's just so impressivehow many different retailers are
there.
It seems like the retailcapital is of the US and, with
the accounts that I talk toconstantly, if you ask them
(13:03):
where they're growing, wherethey're planning to grow, almost
all of them mention DFW, whoare some of the most aggressive
retailers you're seeing in theDFW market.
Jim Jamerson (13:13):
Yeah, I think I'll get started.
I was going to talk about thegroceries stores and the big box
concepts.
Things have really slowed downin recent years on the grocery
store segment expanding, but nowit's just on fire and that's
partly due to the fact thatgrocers are flush with cash I
(13:34):
mean coming out of COVID like,for example, kroger made over $2
billion in profit in 2022.
And as well as inflation, Ithink grocery stores love
inflation because they havebetter margins for them.
So right now I'll just give yousome information on what I know
.
So Target, the broker forTarget, told me they're working
(13:54):
on 15 deals in Texas and theyjust opened their prototype up
in Prosper.
Costco is opened in Aubrey,texas.
It's under construction inSalina and working more deals.
After being very slow to grow,walmart has been kind of on hold
for years.
They're starting to put landunder contract for their
(14:16):
superstore and they plan tobuild out 150 new store openings
.
Heb out of San Antonio.
They land banked about 25grocery sites over many years
and now they're on fire, openingseveral stores a year.
Their stores are averaging well.
Their first store opened doingabout 6 million a week and now
(14:37):
they're averaging about 4million.
I think there'll be somecannibalization when they open
more, but it's still prettyphenomenal how well HEB is doing
so.
They're going crazy.
Tom Thumb is opening four newstores this year and getting
ready to sign up three moredeals and they're working on
many more deals in the pipelineand they have been very slow to
very, not that very active.
(14:57):
And then, in addition, lowe'sand Home Depot are doing deals
again.
Lowe's in particular is veryaggressive and in fact there's a
brand new large format grocerystore that I can't announce yet.
They have not announcedpublicly, but they're lining up
eight new deals in themarketplace before they make an
announcement.
So I mean that alone is prettyincredible.
(15:20):
Never seen it like that in thismarket, never seen that much
activity from the grocer.
Brian Sheehan (15:24):
The fact that you've got all that activity
with those established publiclytraded companies, in addition to
having new entrants into themarket who are going to open
close to double digit stores,it's just incredible.
Bretley Roche (15:39):
Yeah, and I'll chime in a little bit there.
So obviously Jim did a greatjob describing all the grocers
and they obviously drive all theretail around it.
Wherever they plant their flag,the four corners and miles
surrounding them, you know,begin to get grabbed up, gobbled
up, develop.
Tenants are rushing there.
We see a lot of fast casualrestaurants expanding right now.
(16:01):
There's a lot of coffeeconcepts.
White Rhino Coffee is a localgroup.
I think they've done eight to10 deals.
They typically do end capdrive-thru but they have gone in
some downtown uptown locations.
Another coffee company, dunnBrothers Coffee, is doing end
cap drive-thrus.
Black Rock Coffee is expandingaggressively.
The Caddy Roll Company is anIndian fusion shawarma type
(16:25):
concept out of London.
They're very well known in NewYork City.
They are starting to expandhere.
Take inline space.
They're looking for downtownlocations, franchise model.
There's also your traditionalusers that we're seeing
aggressively expanding right nowMcDonald's Salad Go users that
we're seeing aggressivelyexpanding right now McDonald's
Salad Go Water Burger, which hasa new prototype.
(16:46):
They're doing some end capdrive-thrus which is new for
them.
Costa Vida, freddy's, popeye's,bojangles, portillo's all those
users, just to name a few, areall looking for pad deals,
freestanding buildings to buyand they're looking at many,
many more, looking all over themarket, many of them trying to
be close to these grocers aswell.
Brian Sheehan (17:05):
That's incredible .
Are there any new concepts?
Jim Jamerson (17:09):
Yeah, let's just talk about some of the
restaurants, the fine dining,because you talked about the
Mexican.
But there's a New York Timesarticle last summer that came
out and they call Dallas the newDubai for the restaurant scene.
It used to be Dallas is allabout Tex-Mex and barbecue.
Well, there's some fabulousrestaurants that are just opened
(17:30):
or that have signed deals inDallas.
I'll just go through some ofthem.
I think we're starting to seerestaurants that were only in
places like Las Vegas and Miamicoming into Dallas.
That's due to the growth andthe wealth in Dallas.
Major food group out of New Yorkhas a famous restaurant called
Carbone that opened in thedesign district.
There are only five in theworld.
(17:51):
They're in Vegas, hong Kong,miami and Doha, so that was
pretty spectacular when theycame in.
Just a couple of years ago,brettley and I are working with
a local brunch concept called360 Brunch House and it's a
really cool breakfast place witha vibe of a dinner place and
sometimes they turn it into anightclub with a DJ on the
(18:12):
weekends, but it's only open forbreakfast and lunch.
But they have like veryexpensive $30 cocktails, a very
extensive cocktail menu andexpensive, very elevated brunch
items like Eggs Benedict withcaviar, and we've done four
deals with them and they'relooking to expand beyond VFW.
And then you mentioned theMexican.
(18:33):
So they have a $250 margaritacalled Pancho Vila and actually
they have a tequila sommelier.
So I don't know if you had that, brian, if you had to step up
and pay that for your margarita.
Brian Sheehan (18:47):
I did not have either of those.
Jim Jamerson (18:50):
But Komodo out of Miami.
They're an Asian sushi concept.
They opened in Deep Ellum about18 months ago.
That's a 25,000 square footrestaurant and founded Miami.
Then STK Steakhouse is owned byone group out of Denver,
colorado.
They opened in Uptown recentlyand they're creating a new term
(19:11):
for dining.
It's called Vibe Dining.
So that's where later in theevening the lights kind of turn
low, a DJ turns up the music anda younger crowd turns it into a
more of a party.
So this is becoming popular inmore places in Dallas and
Houston.
So it's a new little buzzword.
And then there's some new dealsthat have been signed.
The Catch is under constructionin Uptown.
(19:32):
They operate in Las Vegas inthe Aria Hotel.
They're in New York City, laand Aspen and a lot of
celebrities are seen in theVegas catch.
Same with Delilah.
Delilah is from Las Vegas.
They signed a deal in thedesign district.
It's a very fancy supper club,1950s decor with live music.
(19:53):
Again, you'll see a lot ofcelebrities there.
They're in the wind in LasVegas.
There's a famous Canadianrestaurant that's just opened in
Dallas called Joey's, and theyopened in North Park Mall just
recently and they're only inCalifornia and Seattle but
they've come to Dallas Monarchis part of the Maple Hospitality
out of Chicago and they have astunning view of the 45th floor
(20:15):
of a downtown skyscraper.
Many people order a whole kingcrab that serves eight people
and costs $1,000.
So that's the kind of moneythat's being thrown around at
these restaurants.
And then, lastly, in myneighborhood in the Knox
District, there's a new MrCharles restaurant that opened
up.
That's a really cool, swankyrestaurant.
(20:36):
With the Knox District they'repouring billions of dollars in
new development.
They're building a newmixed-use project with 100,000
square feet of new retail andrestaurants going in there.
It's right next to HighlandPark and a great area.
Anyway, I could go on, but it'spretty amazing.
This is just in the last threeor four years these restaurants
(20:56):
have come in or signed up, soit's really changing the whole
restaurant scene in Dallas-FortWorth.
Brian Sheehan (21:02):
Well, it's a great time to go out to eat in
Dallas.
You mentioned so many excitingconcepts that are expanding in
the market.
You talked about the KnoxDistrict.
What are the fastest growingmarkets in Dallas?
Bretley Roche (21:16):
Before we jump to that, would you mind if I touch
on entertainment a little bit?
I'll be brief.
Brian Sheehan (21:22):
Yeah, please do.
Bretley Roche (21:23):
The entertainment segment is a very new,
fast-growing market here in DFW,as I think it is really across
the country.
I recently attended theEntertainment Evolution
Experience Convention it was inLos Angeles a couple of weeks
ago and got to interact and meetwith a ton of new entertainment
concepts, and a lot of them areeither already here in Dallas
(21:45):
or they're on their way, and soI thought it would be
interesting to just touch on acouple of those.
So there's a new concept calledBat Box out of Monterey, mexico
, which is an immersive.
It is a baseball experience butit's a simulation.
It is a baseball experience butit's a simulation.
F1 Arcade, which is F1 drivingthrough a simulation.
Both of those have recentlysigned deals here in North
(22:07):
Dallas and they're planning toexpand on a national level.
Toka Social is a new soccerconcept that is like Topgolf but
for soccer, and it is comingout of London.
They've opened their firststore in London.
It's a lot of celebritiesfrequently go there.
(22:29):
They garner 25,000 guests permonth when they first opened,
and they're looking at Dallas astheir first ever US location,
which is pretty incredible whenyou think of all the cities they
could choose from.
There's also a lot of otherconcepts.
I want to touch on.
High Five Entertainment out ofAustin recently signed a deal
and Allen beat the bomb, whichis a team-building experience.
They have locations in Houstonand they're headed to DFW next
(22:51):
looking at sites Andretti's,go-kart's, ground Control,
trampoline is doing a couple ofdeals here as well as in
Oklahoma City.
Boulder Adventure is expandingand then also separately but
also in the entertainment realm,is pickleball, which is I think
it is the fastest growing sport, or it was recently, and
(23:13):
there's they're expanding veryaggressively here in Texas and
across the country.
We represent the Pickler, whichis a group out of Utah, salt
Lake City.
They've signed almost 300franchisees nationally in the
last six months and there's morecoming.
We have signed a couple ofdeals with them here and it was
eye-opening because they, likeother entertainment users, are
(23:36):
kind of new to landlords.
Landlords don't understandthese users for their big boxes
and they question will theseusers be around in five years?
Is this just a fad?
And so there is an educationcomponent when you're working
with entertainment andrecreational users like this
that we're seeing more and moreof because the landscape is
(23:57):
changing and big boxes aretransitioning from typical
apparel to more of entertainmentand recreation and landlords
really need to be educated onthe users and make sure they can
be there.
But as it becomes more and morecommon for these types of
groups to do deals, it's gettinga little bit easier.
Chicken and Pickle is anentertainment pickleball concept
(24:18):
that opened at Grand Prairie in2021.
It has a lot of food andbeverage, whereas the Pickler is
strictly a pickleball club.
They've combined pickleball andshuffleboard and drinking and
food and it has just donetremendously well.
It's got a lot of publicity.
That's come its way.
One of the reasons so many ofthese concepts are interested in
(24:39):
coming to DFW is because thecities are very welcoming and
they typically are open tooffering incentives to many
users in different ways to get aconcept like that for their
municipalities.
So it's a welcoming environmentin most of the cities.
Brian Sheehan (24:55):
It's so exciting to hear about all these new.
So exciting to hear about allthese new really interesting
entertainment concepts and it'sfascinating if you go back to
you know Topgolf was sort of anoriginator in this use category
and now either people that wereassociated with Topgolf have
spun off and kind of doing theirown thing, but to hear that you
(25:16):
know BatBox is a Mexicanbaseball simulator concept is
great.
I think about a lot of the golffocused simulator driven
concepts that are growingrapidly.
We see a lot of deal activitywith them.
But this is this is a greatrundown of all these incredible
concepts across different usecategories.
Obviously entertainment fun,but the differentiation that's
(25:41):
happening in that space isreally interesting.
Bretley Roche (25:43):
Yeah, it's pretty incredible.
It's a fun time to be inbrokerage, I think anywhere in
the country, but especially herein Texas.
Jim Jamerson (25:49):
Yeah, so Brettley and I are working with the city
of Wiley to do a bigentertainment project and it's
going to be a public-privatepartnership.
So, as she mentioned, some ofthese concepts require
significant dollars to help themand they look for the cities.
So we're designing a plan on100 acres of parkland in the
city and the city is going tohelp fund some of these
(26:12):
entertainment users.
So we're kind of just gettingstarted and I think that's very
important to mention as to whyDallas is on their hit list for
a lot of these concepts.
That's incredible.
Brian Sheehan (26:25):
So maybe we can transition just thinking about
the different markets that aregrowing there.
You mentioned Wiley.
We talked about the KnoxDistrict.
What are some of the fastestgrowing markets in DFW and
what's behind the growth inthose places?
Jim Jamerson (26:39):
Yeah, I guess I would say up in the north.
So right now Frisco is on fire.
It's filling in.
There's a major sports, lots ofmajor sports facilities in
Frisco.
There's a Cowboys star facilitywith a big development around
it.
There are professional soccerfields and now the PGA has just
relocated their headquartersfrom Florida and built two
(27:02):
championship golf courses and a500-room Omni Hotel attached to
it and it's surrounded by 2,500acres of land called the Fields
Development and they're going tohave homes, commercial and a
new Fields West Lifestyle Centerthat'll have great restaurants
and apparel groups like TommyBahama.
It'd be similar to the LegacyWest in Plano.
(27:28):
So if you keep going north ofFrisco, prosper and Salina are
the next major suburban marketsthat are exploding.
So if you look at Prosper, ithas over 39,000 people and at
Buildout it'll be about 72,000.
And it's getting there veryquickly.
And just north of Prosper,salina, which has the same land
size as Frisco or a little bitmore land than Frisco, and they
(27:52):
are the fastest growing city inTexas right now.
If you look at the numbers realquick, in 2022, they have
41,000 people and by 2027, it'ssupposed to double to 84,000.
Costco approved a deal inSalina when they only had 26,000
population just due to theexplosive growth that they saw
coming.
(28:12):
There's been a lot of landflipping in Salina.
There's some big investors whohave been buying land and
flipping it after rezoning.
There's lots of large equitypartners coming in giving them
millions of dollars, big REITsand private funds.
For example, there's a 30-acretract in Salina zone multifamily
with some prime pads and twoand a half years ago it sold for
(28:36):
$6 a foot.
Then it flipped to $10 a footand then last year it sold for
$15 a foot within like 18 months.
So you know, the prices havegone up so fast, so quickly,
that it's hard to do that kindof land flipping.
Now the prices are kind ofbeyond what they should be at
some of these intersections, butthat's pretty amazing growth.
Brian Sheehan (28:58):
Jim, on that Salina site were there any
improvements that were happening?
Were they getting throughentitlements yes, or is that
just speculation?
Jim Jamerson (29:07):
Yeah, so it got entitled for multifamily in that
process.
I don't know which buyer put onthe entitlements, but I think
that's why it kept going up invalue was because it was
entitled.
Incredible, yeah.
So then also some other marketsthe Melissa Anna Sherman market
up along I-75 are seeing majorgrowth spurts.
(29:30):
Anna has 3,000 apartments inthe pipeline and they plan to
double their population in fiveyears from 25,000 to 50,000
people.
And then Mansfield is a reallyhot market, south part of Dallas
, very to 50,000 people.
And then Mansfield is a reallyhot market, the south part of
Dallas, very high incomes,80,000 population quickly going
to about 120,000.
So those are some of thehottest markets we've seen the
(29:51):
suburban markets and McKinney,of course.
Mckinney has always been a hotmarket and it's getting built
out, though.
Do you have anything to add tothat, Brett?
Bretley Roche (30:00):
No, I think you covered it very well.
There's a lot of growingmarkets, but I think, as Jim
said, we're seeing most of itkind of in that north due, north
, northeast, if you're lookingat the DFW map as a whole, which
you foresee a point in timewhen South Dallas those close in
(30:27):
suburbs start to take off andexperience the same kind of
growth.
Jim Jamerson (30:33):
Yes, definitely.
There's all kinds ofredevelopment occurring in South
Dallas around Redbird Mall andthere's growth in Lancaster.
So, yes, midlothian, the southof Mansfield is growing
Oxyhatchee, so yes, it's goingto just continue to grow and
fill in in all directions.
Brian Sheehan (30:52):
That's incredible .
What are some of the biggestchallenges doing business in DFW
?
I mean, it sounds like a verybusiness-friendly climate,
environment generally, and whileI was there, I met with some
folks from the city of Anna Annaand we were talking about, as
you mentioned, how many unitsare planned for that market and
they talked about the challengeof providing the infrastructure
(31:15):
needed in a timely fashion tosupport all that development.
But what are you guys findingare some of the bigger
challenges doing business downthere?
Bretley Roche (31:22):
Yeah, well, I think you're correct.
It is a great market to dobusiness.
There really isn't a lot ofnegatives.
I think that we're very, veryfortunate to be here from a
business perspective.
But the challenges like in manyparts of the country right now,
at least on the tenant sidewould be just a very tight
markets, lack of inventory.
You know, if you'rerepresenting a tenant basically
(31:44):
anywhere in the metro,especially in a desirable area
where your tenants are probablygoing to want to be, it's just
incredibly competitive and it'svery much still a landlord's
market because of the 97% leasespace.
There's just no availability.
So I've had some not so funnystories of multiple occasions
where we've had leases at thefinish line partially executed
(32:08):
by tenant.
Checks have been sent andlandlord changes their mind the
last minute because they get abetter offer and they just tear
up the lease and they have kindof all the power right now to do
that because they know thatthere is another tenant waiting
behind your tenant to take thespace who can probably pay more.
So that's a challenge.
I don't think it's necessarilyunique to Dallas, but it is
(32:30):
something we encounter.
Jim Jamerson (32:32):
Yeah.
Bretley Roche (32:32):
And Jim, do you have anything else you would add
?
Jim Jamerson (32:35):
Yeah.
So I think some of thedevelopers are working their way
around the high interest ratesand the high construction costs
by either we have a developerclient who has his own
construction company he canbuild shopping centers for
cheaper than most and then themultifamily guys.
They're either going for HUDloans where they can just put
down 15% and get lower rates.
(32:55):
We have one group that'spartnering with a huge REIT.
It's multifamily equity partnerand they fund the land and
construction out of cash andthen they'll put financing on it
later, which is really ideal inthis environment.
So we're still seeing peoplefiguring it out and getting
stuff built.
(33:16):
There's just been a slowdown ofnew construction and now I think
, with all these grocery storedeals being done, I think we're
going to see supply increase onretail space and things will
stabilize, especially with someof the rents as well, because
we've seen 20 to 30% increasesin rents 20 to 30% year over
year, I would say in the lasttwo years Incredible.
(33:36):
We're still seeing a lot ofdevelopers coming in from
California and other places.
We're seeing concepts coming infrom California.
There's a whiskey bar conceptin San Francisco that I met with
in 2019.
They said the cost of wageshave gotten so high that it's
like seven times the labor costsin Dallas for restaurants than
(33:57):
it is in San Francisco at thetime, and then minimum wage in
California was just raised to$20 an hour.
Brian Sheehan (34:04):
Labor costs in California are seven times what
they would be in Dallas.
Jim Jamerson (34:07):
Correct, correct, yes, wow.
And minimum wage has just goneup to $20 an hour in California.
So the lower volume of fastfood users like KFC are going to
end up closing like 10locations in Southern California
because of it.
So that's why people say whydon't we come to Texas?
Brian Sheehan (34:30):
We have cheaper rents, less regulation, more
affordable labor costs Anythingelse we should know about the
restaurant scene in Dallas.
Bretley Roche (34:34):
Yeah, I mean I think we've covered a lot of it.
I would say there isn't a lotto do in Dallas from an outdoors
perspective, and this is comingfrom someone who grew up in
California and so I think thatpeople in Dallas they go eat and
they drink and they shop and soit's just a great environment
for those types of users and therestaurants do very well for
the most part because of it.
Now it's competitive becausethere's so many of the same
(34:56):
concepts here, so you have to beone of the best to do well over
a long period.
But across the board, generallyspeaking, restaurants are going
to do well.
Good concepts are going tothrive here.
Brian Sheehan (35:06):
Yeah, that makes sense.
Well, Bradley and Jim, it wasgreat speaking with you today.
Thank you for helping toeducate me and our audience on
the exciting things that arehappening in the DFW commercial
real estate market.
It really is an incredible timeto be involved in commercial
real estate in and around Dallas.
Bretley Roche (35:25):
Thank you so much for having us, Brian.
Jim Jamerson (35:28):
Thank you.
Brian Sheehan (35:30):
Whether you're an aspiring real estate mogul, a
seasoned pro or simply curiousabout the places where we shop,
dine and work, this podcast isyour all-access pass to the
world of commercial real estate.
You can connect with me onLinkedIn If you're interested in
being a part of Retail Intel.
Send us a message tonationalaccounts at
(35:51):
phillipsedisoncom.
If you want to hear more aboutnew and exciting expanding
brands, keep tuning in to RetailIntel.
Don't forget to subscribe,follow, like and repost.
Talk to you next time.
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