One of the biggest real estate developments in Dallas-Fort Worth is hiding in plane sight.
DFW International Airport serves 69 million passengers a year and provides thousands of North Texas jobs. The airport that once bragged that it was bigger than Manhattan is also a growing giant in the real estate development sector.
Developers working on land leased from the airport are building hundreds of millions of dollars in warehouse, commercial and hotel projects at DFW Airport.
“We have 2,400 acres that have been constructed on from 2005 to present,” said John Terrell, DFW Airport’s vice president of commercial development. “We currently have under construction or about to start construction on additional 1,000 acres — 15 million square feet in 26 buildings.
“That’s staggering when you think about it.”
The pace of building at DFW Airport has accelerated with a new warehouse and commercial development near State Highway 183 at the south end of the airport property.
At the same time, the airport is pushing ahead with designs for an even larger — almost 1,000 acres — mixed-use project at its north end in Grapevine.
“There isn’t a better location in North Texas than DFW Airport,” Terrell recently told a gathering of local real estate agents. “We have 18,000 acres of land right in the center of the metropolitan area.”
Back when DFW Airport opened in 1974, local passengers complained that it was in the middle of nowhere. Now the world’s fourth-busiest air hub, DFW Airport is smack in the middle of one of the fastest-growing metro areas in North America.
The location is midway between Dallas and Fort Worth, which made it an ideal spot for an airport and makes it a choice site for commercial building, too. And fortunately for the airport, it has a lot of land to use for something besides landing jets.
“You have to give credit to the leaders of Dallas and Fort Worth when this was all coming into play and the amount of land that they acquired,” Terrell said. “We have about 6,000 total acres in commercial development that we’ve been given to figure out how to bring that to the market and generate additional revenues.
“You do not want to leave that land vacant when it can be generating incredible opportunities.”
Terrell said that developers leasing airport land have already built almost 24 million square feet — equivalent to about 20 downtown Dallas skyscrapers.
“Our gross development square footage is about five times the square footage in all of the terminals combined,” he said. And that’s not counting some big projects on the way.
One of the airport’s largest current developments is the 600-acre Passport Park at State Highway 183 and Valley View Lane.
“It’s got industrial and mixed-use on the east half of the park — 300 acres already under construction,” Terrell said. “The entire 300 acres has already been leased.”
Developers including Trammell Crow Co., Bandera Ventures, Dalfen Industrial and Seefried Industrial Properties are building almost 7 million square feet of warehouses in the project on the north side of Highway 183.
Real estate brokers say that international candy maker Mars has leased almost 1.5 million square feet in a Passport Park building now under construction.
The west side of the development — another 300 acres — is being reserved for more industrial, corporate office, retail and hotel construction.
A new Hyatt Hotel will start in the project early next year.
Thanks to the construction at Passport Park and other sites around the airport, the DFW Airport market is the top warehouse building district in North Texas with more than 6 million square feet of construction in the third quarter, according to Cushman & Wakefield.
So far this year, net leasing in the airport industrial market has topped 2 million square feet, with most of the buildings still under construction.
“DFW Airport opening up the south side of the airport for industrial development has caused the surge in construction,” said Cushman & Wakefield executive managing director Nathan Orbin. “The interest in the south side of the airport has been strong.
“Tenants are attracted to this location due to the proximity to warehouse labor and being located in the middle of the metroplex,” Orbin said.
Dalfen Industrial CEO Sean Dalfen said Passport Park attracted his firm with a three-building warehouse project of more than 1.2 million square feet in the works.
“It’s an ideal last-mile location for the D-FW metroplex,” Dalfen said. “You have exceptional access to both blue- and white-collar workforce in the surrounding areas.
“There’s easy access to key transport corridors,” he said. “Our project is adjacent to one of the world’s busiest airports.”
At the north end of the airport at the corner of State Highways 114 and 121, DFW Airport planners are designing another huge mixed-use project they call the North Destination District. Planned for more than 900 acres of vacant land near a new commuter rail stop, the project is envisioned to include corporate offices, hotels, retail and other construction.
Terrell said the property was one of the sites offered to digital retailer Amazon as a location for HQ2, its planned second headquarters.
“We are in talks with the city of Grapevine about what can be built there,” he said.
The Grapevine property is just east of about 200 acres of industrial park built on the airport property in Coppell.
“We have more than 3 .5 million square feet of Amazon warehouses just in that location,” Terrell said.
DFW Airport is retaining all of its real estate and leases the building sites to developers.
“We do not sell land,” he said. “On the commercial development side alone, we generate over $47 million a year in just our land leasing.
“Nothing that we do is subsidized by the airport — it has to prove itself on financial pro forma that it’s going to make sense.”
Terrell said the airport has done long-range planning to decide how to best develop its remaining properties.
“We have done an entire study about how we should develop this acreage that is nine miles north to south and seven miles across in the middle of the Metroplex.”