The New Dallas

Corporate migration is changing Dallas, pushing building owners and companies to develop more employee-centric workplace design strategies.

Many corporate executives have Dallas all wrong, said Frank McCafferty, longtime co-branch manager in Dallas for Savills, the real estate consultancy. They believe companies move to Dallas to find cheap land, low rents and inexpensive labor, which is an outdated perception of the city’s appeal, he said during an industry discussion hosted by LPA earlier this year.

“It’s not even remotely the case anymore,” McCafferty told the audience. Companies are moving to Dallas for the friendly business climate, low taxes and a better lifestyle for their employees. Price is “almost always the last part of the conversation,” he said. “Right now, it is all about how to recruit and retain the best work force.”

In many ways, the business-friendly appeal of the Dallas-Ft. Worth region has never been stronger. Companies are moving to the region in unprecedented numbers, changing the corporate landscape and creating new demands on developers and building owners. At the same time, company executives have been forced to rethink their strategies and approaches to office design, as the market evolves at a rapid pace.

In a competitive landscape, the industry is looking for design elements that will inspire and engage a new generation of Dallas employees.

“We’re trying to find new ways to energize and attract workers,” says Teresa Rodriguez, Managing Director of LPA’s Dallas office. “There are many opportunities here, but the expectations of companies are much higher than ever before.”

The New Dallas 2

A Different City

In some ways, the new Dallas is not that much different than the old Dallas, says LPA Dallas Studio Director Craig Drone, who has worked as an architect in the city for more than 20 years. “Dallas has always been a city of people from somewhere else,” Drone says. It is a city that appreciates art and design, but it is driven by a dollar-value approach. “Frivolity is not something people are interested in,” he says.

Today, Dallas-Ft. Worth is one of the fastest growing regions in the United States. More than 1 million people have moved to the area since 2010, according to U.S. Census Bureau data. DFW led the country in job growth in 2018, adding 116,400 positions, the Bureau of Labor Statistics reports. Once considered an old guard city, Dallas was named the top city to watch in the Urban Land Institute’s latest Emerging Trends report.

The demographics of the new Dallas are much different than old Dallas. Oil and transportation are old Dallas; technology and Wall Street accountants are new Dallas. Outside the traditional Texas industries, professional and business services were the biggest job gainers in 2018, according to Bureau of Labor Statistics data.

Catalyst Quarter 3 2019 The New Dallas

Many of the companies moving to the Metroplex and North Dallas are from California—either setting up a branch office or new corporate headquarters. Last year, two Fortune 500 companies—McKesson and Core-Mark—announced plans to move their primary headquarters to North Texas. The “Californization” of Dallas is a common topic of discussion. “There is a huge link between the two states and how they are conducting business,” Rodriguez says.

However, despite a cost of living dramatically lower than many areas of California, employers often face resistance convincing employees to move to Texas, Monica Van Berkel, Senior V.P. of Human Resources for CalAmp, said at the LPA event. Even after the benefits are explained—affordable housing, no state taxes, cheap gas, attractive relocation packages—only a small percentage typically embrace the transfer, said Van Berkel.

To help ease the transition for both employees and customers, LPA worked with CalAmp to create a “standard footprint” for all its offices, including Dallas. Common elements from office-to-office help extend the values of the company and create comfortable, familiar settings. LPA was “instrumental in helping us design the brand that is common across all facilities,” Van Berkel said.

The New Dallas 1

New Goals

In many ways, the new generation of Dallas employees is demanding more from their work environment, Drone says. Amenities are important, but there is a deeper connection to the workplace. There is more interest in outdoor spaces. Environments need to be flexible and encourage collaboration. Healthy living and more food choices are an important part of the mix.

“There is more focus on the quality of life,” Drone says.

The challenge is to create workplace environments that help entice employees, while easing the transition. Companies want an office with Dallas style, but that concept is changing. Finding that balance between the old and new, in a way that feels authentic to the staff and visitors, is one of the key tasks for office designers.

For the Dallas office of Roofstock, an Oakland, California-based real estate investment company, the goal was to reflect the company’s California roots, while still making it a Texas office. Benching systems and communal seating areas were used throughout the 28th floor space, developing collaborative zones. Local art, exposed brick and concrete floors contribute to a gritty, industrial look.

“We wanted to bring a California vibe, but inject that Texas flair,” Rodriguez says.

The Roofstock office also has some surprises. A “speakeasy” can be accessed through a hidden door, creating a lounge area with cowhide seats that helps makes the office unique and special to employees and clients.

Office design should reflect a real understanding of what people need to be productive, LPA Design Director Rick D’Amato told the audience at the Dallas event. “That is not just about furniture,” he said. “People want to be part of something bigger than themselves,” D’Amato said.

The New Dallas 3

A Race for Tenants

Despite the corporate migration, Dallas remains a hyper-competitive market for landlords. The office vacancy rate is about 20 percent, which is largely due “to deliveries exceeding absorption,” a phenomenon which is fading as new construction slows and absorption continues to grow, according to JLL, the real estate consultancy. In the first quarter of 2019, more than 1 million square feet of space was leased, the consultancy reports.

Much of the largest high-profile corporation relocations have occurred in the cities north of Dallas, including Frisco and Plano, where large-scale corporate parks have attracted companies like Toyota and Liberty Mutual Insurance.

But shifts are occurring, with central Dallas looking more attractive, in part to modern office environments. “Current office design and recruiting trends will continue to benefit urban areas such as Uptown, the Urban Center in Las Colinas and Legacy,” JLL notes in a recent report.

The growth is across many different sectors and property types. More than 1 million square feet of medical office space was added in 2018. The amount of co-working space in the region grew by 20 percent in 2018, to almost 2.5 million square feet, CBRE reports.

Co-working companies have “changed the execution of offices,” requiring more flexibility and external amenities, Drone says. More than ever, buildings need to standout and create the type of efficient live, work, play environments that attract young companies, he says.

The New Dallas 4

The Future

Dallas has been through boom and bust periods in the past, most famously in the 1980s when the oil market crashed. That era produced significant opportunity for developers and companies to buy properties and re-create the city, says Gary Blanton, a Regional Studio Director at LPA’s Dallas office. Today, the city is full of aging buildings constructed in past glory days, that once again represent a significant opportunity, he says

“There are a lot of aging buildings that are looking for strategies to make them competitive in this market,” Blanton says.

Building owners are reimaging their facilities and adding amenities, such as collaborative spaces, fitness and wellness centers, outdoor works areas, comfortable break rooms, coffee shops and other features that make an office more convenient and attractive to people, Blanton says. They are recognizing that companies and their employees want to work in sustainable environments that reflect their own priorities.

“We’re really focusing design around the cultural imperatives and what people are valuing more and more,” Blanton says.

As Dallas and the Metroplex takes the next step, offices will increasingly represent something more than simply a space where people work, D’Amato says. Office designs will need to reflect brand identity and corporate missions in new ways, creating spaces that are important to people.

“It’s all about understanding who you are as a company, and designing to that,” D’Amato said. “And that’s how we can change the future.”

This story originally appeared in Catalyst Issue 3 2019. Subscribe today to receive Catalyst, a quarterly publication that takes a deep dive into design ideas, industry leaders and initiatives.