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With COVID-19 no longer a global public health emergency, many companies in the U.S. began implementing return-to-office policies last year, whether full or part-time. But when we look at the figures, this decision was met with resistance. Up 190 basis points year-over-year, the national vacancy rate was 18.2 percent in November, according to a CommercialEdge report.
However, data from the same source shows that despite high vacancy rates, developers in some areas of the country continued to work on their projects unabated. As of November, more than 6.1 million square feet of office space was under construction in Dallas across 28 properties, accounting for 1.8 percent of existing stock.
Ryan Tower is 50 percent preleased to a global tax services, software and technology firm. Image courtesy of Ryan Cos.
One of the largest projects underway in the metro is Ryan Cos.’ Ryan Tower. The developer recently topped out the 23-story, 409,000-square-foot office high-rise in Plano, Texas, with completion expected by the third quarter of this year. Acore Capital is providing at least $125 million in construction financing for the project, according to Collin County records. The multi-tenant office building is already preleased to Ryan LLC, a global tax services, software and technology firm with no affiliation to Ryan Cos., which will occupy half of the property.
Healthy food options, access to fitness amenities and proximity to outdoor green space are some of the aspects that employees consider when deciding to go back to the office, according to Hank Biddle. Image courtesy of Ryan Cos.
Commercial Property Executive asked Ryan Cos. Development Manager Hank Biddle to reveal details about the Gensler-designed project, particularly about the features that will make employees want to return to the office.
News about Ryan Tower broke in 2021, when the pandemic was heavily disrupting CRE markets. To what extent has the health crisis impacted the project’s trajectory?
Biddle: The pandemic created uncertainty in both capital markets and office usage by tenants. Fortunately, we have great partners in design, construction and financing that enabled us to counteract some of that uncertainty, particularly in areas such as creating an efficient and appealing design for the building and being thoughtful when it came to material selections in the face of supply chain issues.
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Were there any changes/adaptations to the initial project plan along the way?
Biddle: We worked closely with Gensler through the design process to land on the plan we proceeded with, which included enhancing the design of the tower to accommodate the projected escalations in commodity pricing related to steel, aluminum and concrete. Our construction team and the design team thoroughly reviewed plans to devise creative solutions without sacrificing the quality of Ryan Tower.
As credit conditions became increasingly restrictive over the past couple of years, were there any difficulties in securing project financing?
Biddle: As companies explore and plan to bring employees back to the office, our financial partners ACORE Capital and Koch Real Estate saw a great opportunity to help us deliver a Class AA office space. They worked with us through the challenges of COVID-19, inflation and rising interest rates, and we’re thankful for their partnership.
“The office buildings of the future will need to draw employees back by being a destination for collaboration, mentorship, culture and growth, while incorporating employee wellness.”
Hank Biddle, Real Estate Development Manager, Ryan Cos.
Wellness and health interest has increased significantly lately. Tell us more about the Fitwel certification you’re pursuing at Ryan Tower.
Ryan Tower is located at the intersection of State Highway 121 and Windrose Avenue. Image by Drone Brothers, courtesy of Ryan Cos.
Biddle: Fitwel is a certification that emphasizes the wellbeing of people in the building by encouraging walking to nearby amenities, incorporating abundant natural light and focusing on mental and physical health through fitness and outdoor amenities. We believe these factors are important to our tenants and their employees, especially in light of the increased focus on health and wellness.
In your view, how can employers encourage people to return to working from the office in a world where remote work has become more prevalent and accepted?
Biddle: The office buildings of the future will need to draw employees back by being a destination for collaboration, mentorship, culture and growth, while incorporating employee wellness. Ryan Tower was designed to offer ample collaboration space and connectivity for employees to work together and propel their company’s growth and culture. We’re also learning that healthy food options, access to fitness amenities and having proximity to outdoor green space are other elements employees desire as they consider going back to the office.
Ryan LLC has already preleased half of the tower, but have discussions commenced with prospective tenants for the remaining of the property?
Biddle: Although the leasing market has been challenging, we remain confident that Class AA offices will attract tenants who are planning to bring their employees back to the office.
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How does this project benefit stakeholders and the Legacy West community?
Biddle: We’re committed to creating places for people to thrive. Among some of our core values are excellence, integrity and stewardship. We believe Ryan Tower will represent our values by not only being fully integrated into the communities we work and live in but remain as a best-in-class building at Legacy West for many years to come.
How does the workplace of the future look like in Legacy West?
The 23-story office tower is expected to be completed by the third quarter of this year. Image by Drone Brothers, courtesy of Ryan Cos.
Biddle: I believe we’re going to see an employee-centric approach to the workplace. Even though employees most likely won’t be back in the office five days a week, they’ll want access to better options. This includes healthier food options, accessible outdoor spaces and proximity to retail and restaurants.
As more people move to the suburbs north of Dallas and head back to the office, Legacy West provides employers a way to incentivize their employees. It offers high quality amenities that are a short commute away from those who call Plano and suburbs north of Dallas home.
Can you share any details about your plans in the Metroplex?
Biddle: Having entered the Dallas market a little over five years ago, we’re continuing to build our foundation as we take on projects. Learning to navigate projects with new partners and vendors, especially during challenging times over the last few years, was the biggest lesson for us. While Ryan Cos. has decades of experience throughout the country, growing our Dallas office has required clear communication and collaboration, especially when we’re working with new people inside and outside the company. By continuing to build relationships within this market and maximizing our experience and national footprint, I have no doubt that we’ll be able to continue to grow our presence.
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