April 7, 2023 By Steve Brown, Real Estate Editor New apartments, hotel, retail and park put new spin on suburban work center. Craig Hall built the biggest office park in Frisco, with workplaces for more than 10,000 people. While his Hall Park was a roaring success, the developer worried about the future of the project […]
April 7, 2023
By Steve Brown, Real Estate Editor
New apartments, hotel, retail and park put new spin on suburban work center. Craig Hall built the biggest office park in Frisco, with workplaces for more than 10,000 people. While his Hall Park was a roaring success, the developer worried about the future of the project unless there was more than just a place to work. “In 2015, I realized that office parks were going to go the way of shopping malls,” Hall said. “If we didn’t become mixed-use, we would be obsolete. We have to have more.” Hall will soon find out if he was right.
The developer is spending more than a half billion dollars to turn his almost three-decade-old Hall Park office center into the kind of mixed-use environment he believes companies want. “We have done what we think is going to be a real game-changing mixed-use aspect to what we originally had as an office park,” Hall said. “When we are done it will hopefully be a place where people can live, work and play.” Construction started in 2021 just west of the Dallas North Tollway on three high-rise buildings that will add apartments, a luxury hotel and new offices surrounding an almost six-acre public park. Restaurants will overlook the park, which will feature bright sculptures. It took about two years just to get the necessary zoning.
“Some people were resistant to it. I think when they see what we are doing, they are all going to be very happy,” Hall said. To make room for the new buildings, developer Hall Group is removing some older structures to increase density. The 162-acre business park has offices in more than a dozen buildings.“We tore down two buildings that were 100% full” to construct the mixed-use towers, Hall said. “Now we are tearing down parking garages and building more density.” Hall thinks it will take almost 20 years to build what’s planned in Frisco.
“Basically, we are going to triple the size of what we have now,” he said. “We have about 3 million square feet now going to about 9 million square feet.” The first of the new Hall Park buildings start opening in late summer, including a 19-story luxury apartment high-rise, 16-story office building and 224-room hotel. It’s the biggest such project in suburban Dallas. “The apartments will be finished in August and September of this year,” Hall said. “The office will be late this year and the hotel will be early next year.” Hall Group plans to eventually have more than 2,000 residential units at Hall Park.
“It will all be mostly high-rise,” Hall said. “We are working on designs right now” for the next apartment building. He said his leasing team is already seeing interest from potential office tenants. “We are getting some pretty good size out-of-town stuff.” New office projects packed with amenities like the Hall Park project stand out in a market where fewer leases are being signed. “We’re very confident about the direction we are going,” Hall said. Office demand in North Texas and across the country has dipped since the pandemic sent workers home.
“During the pandemic, it took those trends and ideas that pure office was going to fade away and it accelerated that faster than I would have ever guessed,” Hall said. “We are bifurcating the older and newer buildings. It will become clear there is a big difference with buildings in the right location with the right amenities.” Older buildings with few of the features employers are using to lure workers back to the office were struggling before soaring mortgage rates added more pressure, Hall said. “You have a declining market (for older buildings) that we are in nationwide,” he said. “I think it’s a 10-year train wreck. A lot of owners are handing keys back already but it’s going to get worse.”
High mortgage rates will make it impossible for some office owners to refinance when their current loans come due. Tighter lending will keep others from making the upgrades they need to attract tenants. Hall doesn’t compare current credit conditions to what he saw in previous cycles. “This is not nearly as bad. In ‘08 and ‘09 we had a financial crisis. In the mid-1980s we had a massive oversupply,” he said.