When it comes to corporate headquarters, few North Texas cities do better than Irving-Las Colinas, an inner ring submarket northwest of Dallas.
Of the 24 Fortune 500 companies headquartered in North Texas, 10 are located in Irving-Las Colinas. The region also has the most Fortune 1000 corporate offices per capita in Texas, according to its Economic Development Partnership. And just yesterday, the city approved $31 million in incentive funds to land the Wells Fargo Regional Office Center, which will house up to 5,000 workers in 800,000 square feet of new office space in the inner city. of Las Colinas by the end of 2026.
Courtesy of the Irving Economic Development Partnership
The Las Colinas Urban Center has the highest concentration of office space in North Texas.
Beth Bowman, president and CEO of the partnership as well as the city’s chamber of commerce, said earning the unofficial moniker of headquarters was an intentional decision outlined in the city’s five-year strategic plan, which is up for renewal. This year.
“We didn’t just stumble upon it – it was very helpful and intentional,” she said. “For the past five years, the team from the Chamber, City, Convention and Visitors Bureau, and Las Colinas Association has been focused on recruiting and maintaining corporate headquarters in Irving-Las Colinas.”
The Submarket offers many of the same benefits as the rest of the Metroplex, including a business-friendly environment, access to a diverse and educated workforce, and a variety of nearby transit options. But a unique advantage to Irving-Las Colinas is that it’s home to the Dallas Fort Worth International Airport, which is a big draw for business, said Leander Johnson, vice president of brokerage and investments at Koa Partners.
“When you have the option of being able to fly anywhere in the country in four hours – we have a number of options to fly international direct to anywhere in the world – I think that’s going to be appealing to a lot of C – senior executives and many companies,” he said.
Irving-Las Colinas offers competitive rental rates for its offices, which could be another reason for its success, JLL general manager Torrey Littlejohn said. The average asking price per square foot in Las Colinas was $29.99 per square foot in the second quarter, which is lower than other DFW submarkets.
“It’s priced slightly lower than Plano/Legacy, but can still deliver the suburban benefits of that market while offering a wide variety of office products to choose from,” Littlejohn said in an email. “These include several mixed-use developments that provide the amenities tenants are drawn to.”
Unlike other North Texas cities that use sales tax to foot the bill, Irving’s economic development efforts are funded through the city’s general fund, in addition to revenue from several incremental funding areas. tax and public improvement districts. A large part of the Wells Fargo deal is made up of TIF funds, which will be used to repay $19 million of the company’s $436 million development costs. The other $12 million in property tax refunds are funded by an economic development grant.
Courtesy of the Irving Economic Development Partnership
The Wells Fargo regional hub will be built on Lake Carolyn, a 220-acre lake in the urban center of Las Colinas.
“The way I see it, it’s a massive return on investment, to say the least,” Council Member Brad M. LaMorgese said ahead of the Aug. 4 approval, noting that the development is expected to increase the assessed value of the area by $200 million. .
Incentives are a way for the city to land business, but Bowman said they’re used sparingly. In fiscal year 2020-21, the EDP approved nine incentive agreements that created 460 new jobs, $154 million in new capital investments and 825,000 square feet of new office buildings, under the most budget recent.
The following fiscal year, the city allocated $23.8 million for incentives, and Bowman said less than 13% of EDP-hired companies received those funds. Caterpillar Inc., a global manufacturer of construction and mining equipment, announced in June that it would move its headquarters from Illinois to Irving-Las Colinas. A company spokesperson told Peoria Public Radio that the company did not seek or receive any inducements related to his move.
“We believe it is in the company’s strategic interest to make this decision, which supports Caterpillar’s profitable growth strategy as we help our customers build a better, more sustainable world,” said the president. -General Manager Jim Umpleby in a statement.
Despite its ability to pull household names, the submarket is not without its challenges. The lack of move-in ready office space has been a deal breaker in the past, and Bowman said it was a bitter pill to swallow. Developing strategies to encourage more speculative office development will be part of the city’s conversation around its revised strategic plan, she said.
“I wish we had more spec buildings ready to meet demand,” she said. “There’s a deadline that has to be met, so when we’re not able to meet that deadline, it kind of stings.”
About 30% of Las Colinas’ 32.6 million square feet of office space is currently available, according to a second-quarter report from CBRE. Most of this vacancy is concentrated in Class B spaces, which also have a vacancy rate of around 30%. Irving-Las Colinas has not been immune to the flight-to-quality trend seen in the Metroplex, Johnson said, and many developers are responding by upgrading lower-tier properties.
“The average age of office stock in Las Colinas is around 25 years old,” he said. “The thing is, when you have ownership groups that are willing to invest, it becomes less difficult.”
The departure of Exxon Mobil Corp. will open more offices in Irving-Las Colinas by mid-2023. The company announced earlier this year plans to move its headquarters to Houston, leaving its 365K SF headquarters in Las Colinas up for grabs. The company cited operational efficiency as the reason for the move.
“We greatly value our long history at Irving and appreciate the strong bonds we have developed in the North Texas community,” President and CEO Darren Woods said in a statement. “Closer collaboration and the new, streamlined business model will enable the company to increase shareholder value and position ExxonMobil for success in the energy transition.”
While it’s disappointing to lose a business or miss a deal, Bowman said she strives to see the bright side of every loss. There are 714 acres left for commercial development in Irving-Las Colinas and about 1 million square feet of new office space under construction in the second quarter of this year, according to CBRE. These plots and projects represent the next frontier of opportunity for the submarket, Bowman said.
“We are going to win as a community, and we are going to lose as a community,” she said. “When we lose, it gives us the opportunity to reflect. In this reflection, we continue to delve into our plan and focus on the laser to achieve that plan.