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DALLAS-Principal Financial Group and Holt Lunsford Commercial have started dirt work on the new gateway retail component of a 300-acre industrial park in southwest Dallas. The 87-acre gateway fronting Interstate 30 calls for 650,000 sf of new light-industrial product on its rear tracts.

The behind-the-scenes plan for the past five years has been to level the playing field so the five-million-sf Turnpike Distribution Center, of which Principal owns 2.8 million sf, could stay competitive with its neighbor Pinnacle Park, developed in the mid-1990s with direct interstate access. “We were a very easy feeding ground for tenants to move out of Turnpike to Pinnacle Park,” John Gorman with Dallas-based Holt Lunsford tells GlobeSt.com. “We are no longer a feeding ground.”

Gorman started working the plan in August 2001. “It’s very rewarding to see the fruits of our labor coming into its own,” he says. The Principal-Holt Lunsford initiative has resulted in a new interchange at Cockrell Hill Road and infrastructure upgrades of interior roads in the vintage industrial park. But now, it’s time to roll out the underlying reason for the hefty investment–a 100,000-sf shopping center with nine pad sites on 35 acres and 650,000 sf of light-industrial space on 52 acres.

“We have the opportunity to create a whole new front door,” Gorman says, “and a whole new image for an aging park. And the 650,000 sf gives us the opportunity to work with our existing tenant base to hopefully keep them instead of losing them to Pinnacle Park.”

Principal is marking its first retail development in at least a decade in Dallas/Fort Worth. Meanwhile, its local JV partner is breaking into the retail sector with the Pinnacle Pointe project, which will be delivering in first quarter 2007. Brian Sandfort with the Des Moines-based Principal says the retail development that’s gone up in recent years on the south side of the interstate at Pinnacle Park’s doorstep did so well that the decision was made to play off the momentum for its side of the freeway.

With pad sites on both sides of Cockrell Hill Road, the Pinnacle Pointe center has been jumpstarted by Conn’s Inc., an appliance and electronics retailer from Houston, and Framingham, MA-based Staples Inc., preleasing 30,000 sf and 20,327 sf respectively.The Fort Worth-based Woodmont Co.’s Greg Rabin and Jennifer Frank represented Conn’s and Staples. Additional starter fuel has been added by an International House of Pancakes franchisee ground leasing a one-acre pad site.

The JV has Darrell Hernandez and J.D. Robertson with United Commercial Realty/ChainLinks in Dallas marketing the retail space with quotes ranging from the low teens to roughly $23 per sf. Robertson says restaurant deals are working for three pad sites plus several junior anchors and shop retailers are starting to eye the project. “The perception is definitely starting to shift and we’re able to announce the anchors,” he says. “It’s really picking up momentum as the weeks pass.” O’Brien & Associates Inc. of Dallas designed Pinnacle Pointe; Spring Valley Construction Co., also local, will build it. Sandfort says the walls should be going up in September.

Sandfort says the JV has discussed extending the retail footprint deeper into its land and maybe adding a hotel site. But those are decisions for the future, much like the start of the light-industrial trio, which is laid out for 500,000-sf, 100,000-sf and 50,000-sf buildings. “It’s two to three years out unless something breaks,” he says, citing a build-to-suit could jumpstart that work or a market-driven need for spec.

Principal’s owned its 220-acre share of Turnpike Distribution Center nearly 20 years. The balance of the Trammell Crow development is owned by locally based Billingsley Co., led by Lucy Crow Billingsley. Principal seeded the repositioning plan with a $1.2-million, refundable advance to Dallas County for its half of the $2.4-million interchange project with the City of Dallas so that the road could be ready before 2007, according to Gorman. That project wrapped up in November 2004, but then Principal leased the land to the Texas Department of Transportation through Dec. 31, 2005 to stockpile 340,000 cubic yards of dirt from a $100-million, eight-lane project from the Downtown west to Loop 12.

Despite the inherent hurdles for a project of this magnitude, Sandfort says Principal stayed the course so it could expand its Turnpike portfolio that, despite its age, has seven warehouses with 30-foot clear heights. “We looked at it, what’s been going on and we thought it was a good opportunity,” he says.

As the road work pushed to completion, Principal bought 84 acres from TXI, which had a concrete manufacturing plant on the land, and three acres from a local investment group. “It’s going to bring a whole new life into that park and complement the overall work of I-30 and Pinnacle Park,” Gorman says. “It’s starting to take shape. It’s looking like a real development.”

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