Stream Realty’s Power Surge
Executives Chris Jackson and Dan Harris on what’s next in key office markets, the firm’s expansion strategy and the impact of COVID-19.
Stream Realty Partners turns 25 this year, and the milestone coincides with stepped-up activity across the firm’s diverse business lines. In June, Dallas-based Stream unveiled plans to develop a 325,000-square-foot mixed-use project in Charlotte, N.C., in a joint venture with The Durban Group. Meanwhile, Stream was also awarded leasing and management responsibilities for Campbell Centre, an 870,000-square-foot Class A property in Dallas’ Central Corridor.
On the industrial side, Stream represented Clarion Partners and Crow Holdings in leasing a 1 million-square-foot distribution center in Fort Worth to HomeGoods, the off-price household furnishings retailer. Stream’s investment management business comprises some $2 billion in assets through commingled funds, joint ventures and wholly owned properties.
The company is also on the move geographically. Earlier this year, Stream expanded to Nashville, the latest addition to a coast-to-coast footprint that ranges from Atlanta and Dallas to Los Angeles. Chris Jackson, who has served as president since early 2020, and Dan Harris, managing director for office tenant representation, recently talked to Commercial Property Executive about office market trends, the impact of COVID-19 and company strategy.
Stream Realty Partners was recently tapped to lease and manage Campbell Centre, an 870,000-square-foot, Class A office property in Dallas’ Central Expressway Corridor. Photo courtesy of Stream Realty
What trends are you seeing right now in the office markets where Stream is active? For example, how about Austin, Dallas, Los Angeles and your other locations—what’s standing out right now?
Harris: Dallas and other core markets that Stream has a significant presence in continue to rebound. Albeit slowly, with increased cases of COVID-19, most companies have a plan to re-integrate into the office. Be it a hybrid work-from-home/in office, or 100 percent back to the office, steps are being taken to reintegrate. None of our clients have abolished their plans for their office, but many are in a talent and employee retention war as employees seek roles that match their desired setup.
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For a real-time scenario, Preston Center—a Dallas submarket that encompasses some 5 million square feet of office space—is seeing a distinct flight-to-quality trend and vacancy is tight. Occupiers are having to compete for newly delivered space—a trend that has not trickled down to other cities, but we anticipate that this may take place over the next year.
How are end-user expectations changing?
Dan Harris, Stream Realty, Managing Director
Harris: Flight to quality trend and employee retention war. Companies are universally acknowledging there is a fight to keep talent and get new talent. Buildings are honing … amenities and services to remain competitive in the marketplace. There is the non-tangible flexibility of the workforce and what competitors are seeing from employment options.
What are the factors that are driving occupier demand?
Harris: Term commitments. We are still coming out of a pandemic. We are still unsure of how companies will rebound. Long-term commitments may have been standard course of business pre-COVID-19, but they are now under more scrutiny.
READ ALSO: Demand for Specialty Product Boosts Office Sector
In the conversations I’m having with CEOs about their real estate needs, the leverage the tenant creates is more substantial now.
To what extent will occupier needs likely drive either new development or significant owner investment in upgrading office properties?
Harris: There have been major modifications from a sanitary standpoint. But very few buildings and/or spaces are being rebuilt or … reconfigured to accommodate the pandemic. I see our country and states addressing it in other ways, like vaccinations and new protocols and processes to address crisis situations like the pandemic.
Stream Realty arranged a lease with HomeGoods for a 1 million-square-foot distribution center at Carter Park East in Fort Worth, Texas. Stream represented the owners, Clarion Partners and Crow Holdings. Rendering courtesy of Stream Realty
Recently Stream announced that it is establishing a presence in Nashville. What is the attraction of that city’s office market?
Jackson: Stream opens additional offices in markets that are emerging and/or have strong urban financial centers. Nashville has proven to be an emerging market with its strong job market and talent pool, as well as its pro-business approach to development.
Essentially, it’s the strong market fundamentals: a strong commercial real estate market, growing population, diversified economy, reasonable cost of living (and) low taxes. (Other factors include):
- The city’s ability to attract institutional capital because of the excellent real estate opportunities here.
- The city’s longstanding positive national reputation.
- Most importantly, Stream opens an office only if we can identify a leader that is the perfect culture fit, aligning with our core values (Nice. Smart. Honest. Passionate), which we found with Rob Lowe.
Would you consider future expansion into other office markets? If so, which ones and why?
Chris Jackson, Stream Realty, President
Jackson: Absolutely. Our key to expansion is analyzing high-level migration trends and the work with our clients to identify the next market. Florida, Phoenix, New York City, San Francisco and Salt Lake City (could be in the mix).
We will only open an office if we have the right talent to open it. We want to hire the best and brightest. We won’t open an office just to open it.
What’s your view of the opportunities and challenges for the coworking market, and how does that figure into the Rapid Offices solution?
Jackson: Clients are currently faced with this challenge of having to change. If are our clients are moving to Nashville, we go there and make it happen. If our clients need to figure out remote vs. flexible workspace, we are going to help them devise a real estate portfolio plan to support that (through the company’s Rapid Offices platform). If they need to develop a smart building, we are going to leverage our insight across the platform to ensure it’s done right, i.e. RiverSouth, Trammell Crow etc.
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