FORT WORTH-Hillwood Properties is betting its diversification of available commercial space on the ground will carry it through the long wait for the nation’s economic recovery. The locally based firm, responsible for a $33-billion economic engine in the region, is adding some new stories to its line-up to further strengthen its position.
Michael Berry, president of Hillwood Properties, said the firm’s eight-member property management staff is being marketed for third-party assignments to Hillwood’s 200-employer base at AllianceTexas as one of the changing stories. The group presently oversees 12 million square feet for Hillwood and one corporate user, Bell Helicopter Inc. “We’re looking at how to do it for other people,” Berry told GlobeSt.com. “It makes sense. Why not look at it.”
Berry was the keynote speaker at yesterday’s monthly luncheon meeting of BOMA Fort Worth, where he brought more than 100 members up to date on Hillwood’s strategy for weathering the economic storm. Hillwood recently has completed $160 million of office, industrial, retail and apartment construction at AllianceTexas, according to Berry.
“In this period we’re going into, we’re not building for awhile,” Berry said. “How do we remake ourselves in this time? We are trying to put together compelling stories, not a real estate pitch but an operating pitch.”
Berry said the 2.5 million square feet of new and empty industrial space could be the most that the 17,000-acre mixed-use development has ever had in its 20-year history. In addition, there is retail space to fill along with apartments and some office space. But if Dallas/Fort Worth holds true to its history, he said the region will be a benefactor of the nation’s downturn because businesses of all types will look to North Texas to streamline operations, much like Daimler Financial Services Americas has done.
Berry forewarned that there will be little or no ground-up construction likely to start for 12 months, allowing time for the nation’s capital markets to recover and Hillwood’s empty space to fill. “Even in our market, I can’t imagine you’re going to see much new construction,” he said.
As for what Hillwood’s built of late, Berry said he’s glad it delivered when it did, including Alliance Town Center, which is having its grand opening Saturday. “If we were trying to start that project today, we wouldn’t be building it. I am glad we are where we are today,” he said.
Alliance Town Center’s 500,000-square-foot phase one is 85% leased, with more than 20 tenants already open at the intersection of Interstate 35 and Heritage Trace Parkway. “Alliance Town Center continues to be a very strong performer, defying national retail trends,” said Terry Montesi, founding partner of Fort Worth-based Trademark Property Co. and Hillwood’s development partner. At build-out, the mixed-use development will have 1.5 million square feet.
Berry confirmed Deloitte LLP is still moving ahead on its AllianceTexas project and Fidelity Investments Inc. is on track to deliver its 600,000-square-foot expansion in mid-2009 at its Westlake campus. But, he did acknowledge that many other employers are in “a freeze mode.”
“What we are seeing in this market is we are outperforming the rest of the country in this down cycle. The Fort Worth and Tarrant County advantage is going to be key for us going forward,” Berry said. “I won’t project how long or how deep this will be. I do think this is a different and deeper down cycle than I can remember.”