volume 2 • issue 1 developing - kdc...colinas flower clock and the mustangs of las colinas. in...

A Publication of Koll Development Company (KDC)

DEVELOPINGVOLUME 2 • ISSUE 1

FOR THE FUTUREFOR THE FUTURE

SPEED TO MARKETWatch Fluor Corporation’s new headquarters race from

inspiration to completion at breakneck speed.See page 6

It is my pleasure to present you with the third issue ofDeveloping for the Future. We have created thispublication to inform our clients, friends and associatesof current and future trends in commercial real estatesemi-annually.

In this issue, we are honored to pay a special tribute toBen H. Carpenter, the founder and the guiding vision of the Las ColinasDevelopment in Irving, Texas. Mr. Carpenter passed away in March of this yearand was, without a doubt, a true leader and legacy in both the national and localreal estate development field. Among his greatest contributions was the multitudeof significant opportunities he provided so many young professionals as theyentered the real estate development field under his leadership and direction. Itwas my good fortune to have worked with Mr. Carpenter at the beginning of mycareer, and I can attest to the significant impact he made on my personal and pro-fessional life. He created a genuine thirst for excellence in those of us who had theprivilege of working with him at Las Colinas.

Also, we are fortunate in this edition to have an inspiring article on teamwork andleadership focused on Dean Smith, the NCAA All-Time Winningest Men’sBasketball Coach. He is considered one of the greatest coaches ever, in any sport.His unique insight and expertise apply beyond the basketball court to the boardroom, providing inspiration and direction to leaders in the business world.

Thanks to those who contributed to this publication. We welcome anyoneinterested in submitting an article for a future issue to contact our KDC offices formore information.

We would also like to thank all of our invited consultants and contractors who helpsupport Developing for the Future with their advertisements. Your involvementand support is greatly appreciated, and we could not have produced this piecewithout you.

I hope you find our latest issue helpful and innovative on your commercial realestate transactions.

Steve Van AmburghChief Executive OfficerKoll Development Company (KDC)

CEO’SLETTER

4 DEVELOPING FOR THE FUTURE

DEVELOPING FOR THE FUTURE 5

TABLE OF CONTENTSSpeed to Market Watch Fluor’s new headquarters race from inspiration tocompletion at breakneck speed.

Honoring an Urban VisionaryThe life and career of Ben Carpenter, legendary Texas realestate pioneer, greatly deserve a spotlight.

What’s the Big Deal?Answer: The Campus at Legacy

Moving UpWhen you have significant growth like Rent-A-Center, theonly place to go is up.

From California to Carolina3D Systems moves across the country, and KDC’s newregional office gets them there.

Teamwork: The Carolina WayFor former University of North Carolina basketball coachDean Smith, leading by example is the only way to lead.

Poised for ProgressThe Southeast is more than prepared to meet highdevelopment expectations.

Cover image by Glenn Patterson, SkyCam

6

8

1216

20

22

26

July 2005Letter of Intent Signed

AUGUST 2005Final Shell-Site Design Presented toExecutives

Building Pier Drilling Completed

Parking Garage Water Injection Begins

Revised Lobby Design Approved

Shell Building Permit DrawingsSubmitted to City

SEPTEMBER 2005Tilt Panel Construction Commences

Re-Plat Approved by City

Level 3W SOMD Poured

Amenities and AuditoriumFoundations Complete

OCTOBER 2005Shell and Sitework Drawings FormallyApproved

Building A & B Structure Completed

Roof-Top Units Installed

Auditorium Tilt Wall Panels Erected

Parking Garage Piers Complete

NOVEMBER 2005Final Interiors Drawings Issued

Elevator Equipment Received on Site

Primary Electrical Service Completed

Atrium Structural Completed

40% of Work in Place at Midway Pointof Schedule

DECEMBER 2005Building A & B Dry-In Achieved

Major Subcontractor Buy-OutCompleted

Tenant Work Underway in All AvailableAreas

Garage Structure Columns and WallsUnderway

Site Pavement Ongoing in AvailableAreas

JANUARY 2006Working in All Areas of the Project

Shirt Work Implemented in Lobby toFacilitate Schedule and SafetyConcerns

Resolved Issues With Fire DepartmentRelative to TI Work

FEBRUARY 2006Interior Punchlist Established

Receiving 1st Shipment of Furniture

Floors Receiving 1st Shipment ofFurniture

Site Paving Completed

Guard House Dry-In Achieved

Carpet Completed in All Office Areas

MARCH 2006Fixed Furniture Completed

Certificate of Occupancy Receivedfrom City

Kitchen Equipment Complete


SP

EE

D T

OM

AR

KE

T

Fluor Corp.’s “Fast-Track” Project

MONTH 6 January 2006

MONTH 2 September 2005MONTH 1 August 2005

MONTH 7 FebruaryMONTH 5 December 2005

Project Completion 8 Days Early with 10 Allowable Weather Delays


MONTH 3 October 2005 MONTH 4 November 2005

y 2006 MONTH 8 March 2006


URHONO


RBANRING AN

VISIONARYThe dynamic history of Dallas FortWorth real estate development hasproduced many legendary pioneers.But it’s Ben Carpenter who perhapsstands tallest. Because he did it hisway. Because he never settled foranything less than the very best. Hiswork was not first class, it wassuperior class. And he created thisthirst for excellence in all of thosewho worked with him.

KDC Pays Tribute to Ben H. Carpenter, Founder of Las ColinasMarch 10, 1924-March 3, 2006


The true Texas legend of Ben Carpenter willlive on not only in his peerless real estatedevelopments but deep within thoseindividuals who, in the words of RickDouglas, executive vice president of TheStaubach Company, “were made betterhuman beings and more capable profes-sionals for having learned and worked withBen Carpenter.”

Benjamin Howard Carpenter was born onMarch 10, 1924, to a well-known Dallasfamily. His father, John W. Carpenter, was thefounder of Southland Life Insurance Co.,president of the Dallas Railway and TerminalCo., and also chairman of Texas Power & LightCo, a predecessor of TXU Corp. He now hasa major Dallas freeway bearing his name.

Mr. Carpenter grew up on his family’sHackberry Creek Ranch in Irving, known as“El Ranchito de las Colinas”, or “Little Ranchof the Hills.” He attended Highland ParkHigh School, and then studied at TheUniversity of Texas at Austin. After one year,Mr. Carpenter volunteered to join the U.S.Army and became the youngest officer evercommissioned at Fort Riley, Kansas’ cavalryschool. He served in Greece, Italy, England,France and the China-Burma-India Theaterduring World War II and was awarded theSilver Star for bold action. Following thewar, he returned to UT and graduated in1948 with a degree in business administra-

tion. He married Betty Ann Dupree, also aDallasite, that same year.

At the age of 26, Mr. Carpenter was electedto the board of directors of Southland LifeInsurance Co., and was later designatedchairman of the company’s executivecommittee. Following his father’s death in1959, he succeeded him as chairman of theboard. That same year, Mr. Carpenterdeveloped and built Dallas’ tallest skyscraperin downtown, the Southland Center, now theAdams Mark Hotel.

Mr. Carpenter’s most distinguished accom-plishment, however, was not leading one ofthe country’s largest insurance companies ordeveloping one of downtown Dallas’ largestskyscrapers. It was his vision to transform hisfamily’s El Ranchito de las Colinas into amaster-planned community that has sincebeen studied and emulated by developersacross the country.

Initially, Mr. Carpenter donated 150 acres ofhis land as a gift for the establishment of theUniversity of Dallas, which resides theretoday. He also gave an additional 10 acres tothe Irving Healthcare System. Then in the late1960s, the announcement of the construc-tion of DFW Airport was made. Mr. Carpenterknew that his ranch property was in themiddle of a development path betweenDallas and Fort Worth. His options were to let

the land appreciate and then sell it, or createa planned development that would planteconomic growth for years to come. Hemade the second choice.

On September 14, 1973, Mr. Carpenterofficially announced plans for Las Colinas —a privately-funded, 12,000 acre, master-planned community that would be balancedin commercial, residential and environmentalland use. He began by building lakes andcanals and an extensive system of walkwaysand plazas, so that regardless of what thefuture held, the area would have a certaintranquility and civility. It was a master-plannedcommunity in every sense of the word.

Jim Goodson, president and later chairman ofthe board for Southland Life Insurance Co.,worked closely with Mr. Carpenter. “The sizeand scope of the Las Colinas project requiredmost of Ben’s time,” said Goodson. “But hecontinued to be involved in Southland Life.Ben stressed doing things right, on time andeffectively.” Goodson added that he learneda great deal about managing any businessfrom Carpenter.

Building Las Colinas involved hundreds ofconsultants and thousands of employeesunder the direction of Mr. Carpenter, whofunctioned as visionary, architect, engineer,and manager of the development. His originalconcept included excavating a 95 square-foot

The Mustangs of Las Colinas

lake (named Lake Carolyn, after his sisterCarolyn Carpenter Williams) and then usingthe excavated dirt to remove the propertyfrom the Trinity Flood Plain. Mr. Carpenteralso provided land for public sculptures andlandscape features, now known as the LasColinas Flower Clock and the Mustangs ofLas Colinas.

In addition to developing the project, Mr.Carpenter assembled a dynamic marketingteam managed by Bob Bradshaw. This groupwas responsible for several corporate head-quarters relocations to Las Colinas includingAssociates, Caltex, ExxonMobil, GTE andKimberly Clark.

“Ben Carpenter is a great example of what aperson with great leadership and vision canaccomplish,” says Steve Van Amburgh, CEOof KDC, one of numerous leaders in today’sreal estate industry who began their careersunder the inspiration of Ben Carpenter.

Rick Douglas, executive vice president of TheStaubach Company and former president ofthe Las Colinas Corporation, worked closelywith Mr. Carpenter on several projects. “TheDallas landscape will benefit from the manyimprovements that were created by thebrilliance and attention to detail that is charac-teristic of Ben Carpenter's developmentsignature,” said Douglas. “What is not asreadily known as his spectacular

development projects is the larger-than-lifepositive impact Ben had on the lives of hisfriends and colleagues.”

Through the course of 30 years, LasColinas has evolved into a 12,000-acremixed use development with approximate-ly 35 million square feet of office spaceand skyscrapers (14 million of which isClass-A), rich amenities, recreationalvenues, an equestrian center, qualityschools, and abundant housing options—all in a beautiful water's edge setting. Thesize and quality of the development, inaddition to its location next to DFWInternational Airport and in the center ofthe Metroplex, have further enabled it tobe a dominant power in the North Texasreal estate market. And with more than2,000 companies in the development,including 30 Fortune 500 firms, Las Colinasis one of the most successful develop-ments in the United States.

Hugh Little, managing partner of CapitalAssociates and former president ofSouthland Investment Properties, workedwith Ben Carpenter during the developmentof Las Colinas. “The executives at Las Colinasbenefited greatly from an unbelievablyaccelerated experience of the highest qualityreal estate development in the nation,” saidLittle. “It was our great fortune to learn froman icon like Mr. Carpenter. Many of us startedour own companies and continue to embracewhat we learned at Las Colinas.”

Mr. Carpenter also was involved in many pro-fessional organizations and honored for hisgreat works. He was awarded a medal by theNational Sculpture Society for designing thefamous ‘Mustangs of Las Colinas’, theworld's largest equestrian sculpture; and Mr.Carpenter was the first president of the TrinityRiver Authority. Later in his life, after sufferingfrom heart disease, he gave $1 million towhat is now the St. Paul Foundation foradvanced heart research in honor of thephysicians who helped treat him.

Ben Carpenter’s name and legacy will be forever listed among Dallas greats such as Stanley Marcus, Trammell Crow, Fred Florence, John Stemmons, andR.L. Thornton.

“Dallas and the state of Texas will greatly missBen Carpenter,” said Goodson. “He truly lefthis imprint in our community. We are largerand stronger because he was here.”

Steve Van Amburgh added, “I am proud thatBen Carpenter’s legacy to Las Colinas will liveon forever and am most appreciative for theopportunities he gave me to be involved ineven a small part of such an outstanding,world-class development.”

Las ColinasA BalancedMaster-plannedDevelopment

Total land area of 12,000 acres

30 Fortune 500 firms

35 million sq. ft. office space

1.3 million sq. ft. retail space

3,400 Single-family homes

10,600 Multi-family units

Over 20 hotels, totaling 3,845 rooms

A great corporate neighborhoodthat includes such well-knowncompanies as ExxonMobil,Nokia, Fluor, Verizon, Citigroup,Kimberly Clark and Sprint, just toname a few.

Ben Carpenter (fourth from left) andhis son John Carpenter (far right)were the vision and leadership in thedevelopment of Las Colinas.


A young Ben Carpenter receives theSilver Star medal for bravery in battle.


WHAT’S THE


DEAL?Find a need and fill it. This time-honored key to businesssuccess wholeheartedly applies to The Campus at Legacy fromthe perspective of everyone involved. It’s a colossal deal thatoffers solutions to everyone around the table.

The seller of The Campus at Legacy, EDS, achieved its goal of2005 in realigning its real estate portfolio to focus on its corebusiness. KDC’s purchase of the 107-acre, 1.2-million-square-foot corporate campus from EDS in Plano, Texas, demon-

strates the development company’s versatility in providingreal estate solutions to corporate America. The next occupantin this milestone transaction has yet to be determined, but thepotential benefits of The Campus at Legacy are inspiring. Afterall, The Campus at Legacy offers the largest block of spaceavailable in Dallas/Fort Worth, not to mention a bulls-eyelocation within the master-planned Legacy development, oneof the nation’s premier business parks.

It’s The Campus at Legacy, But “BIG” Is Only the Beginning


KDC’s purchase of The Campus at Legacy in third-quarter 2005was part of a larger, 2.75-million-square-foot portfolio of officebuildings and warehouses from EDS. (The EDS headquartersbuilding, data center and undeveloped EDS-owned land in Legacywere not part of the package.) The $217 million deal was one oflast year’s largest private transactions involving multiple officeproperties worldwide.

“KDC specializes in custom-tailored real estate solutions,” said BillRafkin, KDC senior vice president, investments. “In addition to thesolution we provided to EDS, The Campus at Legacy will enable usto offer new tenant solutions that are simply unmatched in thismarket. This new business environment is exactly what corporateAmerica needs. It’s giving us the opportunity to exercise ourcreative juices, and the results are going to be spectacular.”

Redevelopment and RebrandingThe first phase of redevelopment is under way, with the newlyrenamed campus beginning to assume its own distinctive identity.

“Our goal with the redevelopment is to rebrand the property as anentirely separate, self-sufficient campus,” said John Brownlee,senior vice president of KDC and director of leasing. “We’ve begunopening up the views by removing security gates and barriersaround the perimeter, creating a fresh, welcoming feel.”

The main entry is being redeveloped and enhanced with four 25-foot light towers, an architectural feature that will be repeatedaround the property’s edges to define and identify it. “When youdrive by any of the entrances, you’ll know that you’ve arrived at TheCampus at Legacy,” Brownlee said.

Other Phase I activity includes circulation and parkingimprovements as well as landscaping updates using low-maintenance grasses and plants.

The campus is home to three 400,000-square-foot buildings,all in excellent condition, with large, efficient floor plates.“These are battleship buildings, built ahead of their time,”Brownlee said.


Each building has its own parking garage and 25,000-square-foot, fully appointed cafeteria featuring a glass-walledseating area with views of landscaped common areas. Inone building, a marketing center has been set up, but therest of the office space will not be modified prior to signingnew tenants.

“We’ll offer a menu of options and let our new tenant complete thecanvas with their long-term vision,” Brownlee said. “From aninvestment standpoint, we can afford to be very competitive on thecost of modifying the campus to suit specific tenant needs. Wecan add parking, office space, a centralized amenity center or datacenter. We can even change the look of the building if that’s apriority. Flexibility is a top selling point at The Campus at Legacy,ranking right up there with location, size and amenities.”

Corporate Campus HeavenWith some 35 acres of land per building, the campus’ flexibilitymakes it a long-term solution for one or more growing companies.

Abundant green space, shaded walking trails, and apicturesque lake contribute to the park-like setting. Maturetrees are so plentiful that KDC is in the process of donatingsome to neighboring developments.

The campus is equipped with one of the largest technologysupport infrastructures anywhere, with dual-feed power and a vastfiber optic network powerful enough to run a small city.Underground, concrete-encased power and communications linesensure service reliability.

In addition to EDS, The Campus at Legacy’s corporate neighborsinclude major companies such as Pepsico, JCPenney, CadburySchweppes Americas Beverages, Computer Associates,Countrywide Home Loans and Ericsson. “Many of our corporateneighbors own their properties, and being surrounded by usersthat are stakeholders really adds to the stability and value ofLegacy,” Brownlee said.

The nearby Legacy Town Center, the heart of the Legacydevelopment, features urban-style living, upscale retail shops,restaurants, hotels and a movie theater, all in a pedestrian-friendly environment.

A wide range of housing options and outstanding schools can befound throughout Plano and other nearby communities. Legacyemployers also enjoy access to a highly educated and skilledworkforce. Located just 25 minutes from both Dallas/Fort WorthInternational Airport and Dallas Love Field and surrounded by newthoroughfares in every direction, The Campus at Legacy is ideallypositioned in the region’s highest growth area. “This is corporatecampus heaven,” Brownlee said. “And with its 1.2 million squarefeet, The Campus at Legacy is the largest block of available realestate in DFW, making it a perfect fit for this thriving area.”

For more information, visit www.TheCampusAtLegacy.com.


R E N T - A - C E N T E R ’ S T R E M E N D O U S G R O W T H M E A N S M O V I N

MOVIN


N G I N T O A L A R G E R , M O R E E F F I C I E N T C O R P O R AT E H O M E

NG UP

In the world of commercial real estatedevelopment, relationships are built ontrust, performance and teamwork. ForKDC, terms such as “partnership” and“synergy” are more than catchwords —they are essential components of theprocess, the heart of KDC’s success,and what has enabled the dynamicgrowth of the company.

“Developing strong, long-term relation-ships as we strive to insure our clients’complete satisfaction has always beenour priority,” said Mike Rosamond,senior vice president of KDC.“Business partnerships are the singlemost important aspect of thecommercial real estate industry today,and it is critical to cultivate and growthem for future business.”

The most recent evidence thatreinforces this philosophy was theselection of KDC to develop Rent-A-Center’s new 175,000-square-footcorporate headquarters in LegacyBusiness Park in Plano, Texas. Theselection came after more than a year ofworking with Rent-A-Center officials and

was a result of KDC’s previous relation-ship with not only Rent-A-Center, butalso the real estate brokers, existing andadjacent property owners, and officialsfrom various municipalities, accordingto Rosamond and Tobin Grove,president of KDC.

“Jim Lob, Michelle Donaldson andDelores Wood-Euart with The TrammellCrow Company were representing Rent-A-Center, and because of our existingrelationship with them, KDC was invitedto make a preliminary submittal,” Grovesaid. “The relationship was not onlywith the Trammell Crow representa-tives, but also with EDS, who ownsLegacy Park, and with the city andcounty officials in Plano, Frisco andCollin County.”

Grove added that after a thoroughinterview process, Rent-A-Centernarrowed their selection of potentialdevelopers to a short list and KDCwas ultimately selected to join theteam. KDC was able to partner withRent-A-Center and The TrammellCrow Company to assist in siteselection and municipality incentive

negotiations. Within a relatively shorttime frame, KDC had agreed upon andcontracted for the site and enteredinto agreements with the design andconstruction team members.

Another relationship that ultimatelytipped the scale in KDC’s favor wasthe company’s relationship with SallyBeauty Company. KDC had recentlycompleted Sally’s new headquarters,and senior officials at both Sally andRent-A-Center had a long andcooperative relationship. Rent-A-Center officials consulted SallyBeauty Officials on the process ofdeveloping a new headquarters.“Rent-A-Center toured Sally’s head-quarters and were really pleased withour processes, procedures andultimately the outcome, so that justhelped further our cause,” Grove said.

When making decisions about thedesign and feel of their new head-quarters, Rent-A-Center officialscarefully analyzed other corporatefacilities to determine what wouldwork best, Rosamond said.


“They looked at examples at every end of the scale and were verycareful about assessing their needs in terms of the quality of theproject and the appeal to employees,” said Jim Lob of Trammell CrowCo. “They wanted to make sure the new facility met or exceeded thestandards of other buildings in Legacy Park to establish a Class-Apresence, but did not want to go overboard.” They also leaned heavilyon KDC for advice about many of these decisions, he added.

The decision to build or lease was a difficult one for Rent-A-Center.“After culling through more than 80 different options, including buyingor leasing an existing building, we decided that building our ownfacility would better suit our long-term needs,” said Rent-A-CenterCEO Mark Speese. The company had outgrown its old 115,000-square-foot building, also situated within Legacy, which it hadoccupied since 1998.

“Due to Rent-A-Center’s tremendous growth, their existing buildinghad become inefficient for the number of employees utilizing thespace. It was a six-story building, and they had people scattered onseveral different floors and were literally spending the day riding upand down the elevators. What we find in low-rise corporate campusesis that people tend to work more efficiently. Rent-A-Center desired aunified campus and the synergy of having everybody together, whichis what we are developing for them.” Grove said.

Construction of Rent-A-Center’s new corporate home, which will belocated on Headquarters Drive at Parkwood Boulevard within LegacyBusiness Park, began in December 2005 with completion slated forDecember 2006. The three-story facility will initially house approxi-mately 450 employees with capacity up to 700 employees, and will

feature amenities such as structured parking, afitness center and a food service facility. A datacenter to support the firm’s 2,800 retail operationswill also be located on site.

“The U-Shape building will feature a courtyard ‘park-like’ area, which will be located in the middle of thefacility, formed by the parking garage and twowings. It will be heavily landscaped, and will alsohave a covered outdoor dining/smoking area thatstands away from the building by 40 or 50 feet,”Rosamond said.

KDC is also planning to donate more than two dozenSavannah hollies to Rent-A-Center that will beremoved from a building that KDC recentlypurchased and replanted on Rent-A-Center’s newcampus. The trees were planted 20 years ago whenthe other buildings were developed, and are nowovercrowded, risking their health, Rosamond said.“They’re really nice trees, and even though they’relarge, they can be moved a short distance and stillsurvive. This gives us the opportunity to save thetrees and reuse them within the city of Plano and forour client,” Rosamond said.

When the Rent-A-Center building is complete KDCwill have developed or re-developed more than 2.4million square feet in Plano’s Legacy Business Park.



From Californiato Carolina

If the first few weeks of operations are any indicator of budding business promise,KDC’s new Charlotte, N.C. regional office may look ahead to a bright future. Just daysafter opening the new Carolinas office in October 2005, KDC was already in therunning to build the new global headquarters for California-based 3D SystemsCorporation. A few weeks later, KDC officials announced it had landed the deal.

“We started interviewing for the projecta few days after opening the newoffice,” said Larry Wilson, president ofKDC – Carolinas office. “The timing wasperfect because we really wanted tohave an early win to establish credibilityin the market place.”

KDC is currently developing the state-of-the-art facility for 3D Systems, aleading provider of rapid 3-D printing,prototyping and manufacturingsolutions, in Waterford Business Park inRock Hill, S.C., 25 miles south ofCharlotte. The 80,000-square-footcorporate headquarters will combinecorporate functions, primary researchand development activities, and allother key support functions.

Relocating from its current head-quarters in Valencia, Calif., 3DSystems chose the Charlotte area forits new home after a multi-citysearch that involved the evaluationof 50 potential locations.

“After evaluating each city, 3D Systemssettled on three finalists -- Nashville,Greenville, S.C. and the Charlotte area,”

Wilson said. “Chris Skibinski with TheStaubach Company represented 3D inits efforts, and following a series ofintense interviews and meetings, KDCwas selected from a roster ofcompeting developers.

“KDC was ultimately selected becausewe demonstrated creativity in ourapproach to formulating a deal thatresponded to 3D’s specific needs, aswell as our understanding of thedevelopment process, particularly onbuild-to-suits,” Wilson said. “We werealso very responsive in structuring abusiness deal that worked well withtheir schedule constraints, designdesires and budget.”

KDC also had previous experience inprojects similar to 3D Systems’ plans,and Wilson had already worked withMerriman Schmitt/Architects, theselected architect, and ChoateConstruction Company, the contractor.

“This project is an exciting endeavor forus. This is the first build-to-suit that ournew regional office has developed,making it a true milestone for both 3D

and KDC,” said Steve Van Amburgh,KDC’s chief executive officer. “The factthat 3D had the confidence in our teamto build their new corporate homemakes a significant statement.”

Built to house approximately 180employees by September 2006, themodern, high-tech facility will be singlestory with high walls. The building isdesigned to allow for natural lightingwith its massive windows and floor-to-ceiling glass entrance, showcasingviews of Waterford Golf Club. The focalpoint of the building will be a centralrapid manufacturing center in whichthree-dimensional printers will createproducts to be shipped to customers.The building will also house a cyber caféand fitness center.

“The design is very elegant, inviting andcreated with the needs of theemployees in mind,” Wilson said. “Itfunctions well from both a workflowstandpoint, and as an environment inwhich 3D can market its products.”



TEAMWORKTHE CAROLINA WAY

WORK HARD, WORK SMART, WORK TOGETHER

Dean Smith, college basketball’swinningest coach, is considered one ofthe greatest coaches ever, in any sport.

The accolades could continue for severalmore paragraphs, but if you ask “The Deanof College Basketball” what he considers hisgreatest accomplishment, he would tell youthat 96 percent of his players graduated.

These are statistics of a proven winner, aproven leader.

--------------------Begin a conversation with Coach Smithabout leadership and he immediately reciteshis mission statement, “Play hard, playsmart, play together.”

“I started it in the early ’80s because wewere expected to win,” he states. “I didn’twant people to say, ‘Gee we’ve got to win.’We’ve always talked about playingunselfishly since Day One. Obviously,playing as hard as you can is something youcan control, and you can control playingunselfishly. It’s our job to make you executeproperly and if you don’t, you come sit down(on the bench). I have a little more power ashead coach, just as a leader in business.”

Although Smith’s 879 victories solidified hislegendary status, his philosophy was neverabout winning, but more about the process.“What we tried to do is not talk a great dealabout winning,” Smith explains. “We tried totalk more about the process more than theresult. For instance, play unselfishly, playwith great effort, these are things you cancontrol. Then hope you execute welloffensively and defensively, and then if youdo those things winning will come. Peopletalk too much about winning. They would dobetter to talk about the process, rather thanthe result.”

However, for Smith’s players, this processwas even deeper. It began in one-on-onemeetings with each player. In thesemeetings the coach reinforced to theplayers that he truly cared about them, onand off the court. In his book, The CarolinaWay, Smith writes,

The best leaders in any profession careabout the people they lead, and thepeople that are being led know when thecaring is genuine.

It is this caring that Smith says defines aneffective leader. “I would hope that, numberone, they (the players) know I really careabout them, that should be a given,” hesays. “We do what’s best for the individualout of season, but once we’re in season wedo what’s best for the team. For them totrust the fact you’re trying to help them.”

One of Koll Development Company’s own,Senior Vice-President John Brownlee,experienced this bond between coach andplayer firsthand. Brownlee was a reservecenter on Smith’s 1982 national champi-onship team, and soaked in the leadershipprinciples of his coach. “Coach Smith leadsby example and taught us how to conductourselves both on and off the court,”Brownlee remembers. “He is a leader thatinstills tremendous confidence that you aregoing to be successful. No matter how farbehind we were or how little timeremained — we knew he had prepared usfor any situation and that we wouldovercome any obstacle.”

Smith’s co-author of The Carolina Way, JohnKilgo, may have put it best: “Coach Smithhas the greatest leadership skills of anyperson I’ve ever met. He gave credit forsuccess to his players while he took respon-sibility for losses. He gave the limelight to hisplayers while he stayed as much in thebackground as he could. Such conduct onthe part of a leader is appreciated by thosewho follow him; thus, Carolina’s playersalways played hard, smart and unselfishly,because they saw their coach lead in thesame manner.”

--------------------Smith’s personal goal after every game wasto be pleased, win or lose, that the team hadplayed well. He admits that task was difficultat times, and the goal was certainly a hardone to reach. “I really wanted to feel that way,but somehow I never got quite to the pointwhere when we played really well and lost …I was down a little bit, but I would have likedto treat it like a win, but could never do that,”he admits. “Of course on the other side ofthe ledger, if we lose and learn from it, then itturns out to be something better.”

Something better, Smith says, becauseleaders should know how to bringthemselves back from defeat. “As aleader, I’m certainly not going to blamethe players. I think that’s very importantfor leadership. If you do what I’m saying,the losses are on me, the wins are yours.I really believe in that.”

Smith also believes in practice, rituals andchange — traits, he says, that can be utilizedin athletics and business.

Practice: “I think practice is essential …that’s where everything comes together. Ican’t imagine if I didn’t practice. It’s highlyorganized with goals coming from that.”

Rituals: “I think rituals are importantwhether it be basketball, an organization orfamily. Rituals are team building —standing and cheering the guy coming offthe court, thanking a player for the pass. Iwanted the writers and fans to recognizethat effort.”

Change: “Why do people fear change?They’re comfortable in what they’re doing.Our personnel changed from year to year,probably more than most teams. We triedto use our personnel correctly. When itchanges, does that require a leader?Probably.”

--------------------Smith’s most famous player, MichaelJordan, was a vital part of this CarolinaWay. Although known as a greatindividual player in high school, Smithquickly molded Number 23 into thequintessential team player. “I’ve saidbefore how well he listened,” Smithremembers. “The first day at practicewe were working on a drill — a drill hedid the opposite way in high school. Icorrected him and grabbed him afterpractice and said you’ll have this in 2 or3 weeks. The next day in practice weran the same drill and he had it down.Right away that impressed me that helistened and he changed.”

He won 879 games in 36 seasons at the University of North Carolina, themost in NCAA Division I history. His teams won the national championship in1982 and 1993, played in 11 Final Fours, made 23 consecutive NCAAtournament appearances, and won 13 Atlantic Coast ConferenceTournaments and 17 ACC regular season titles. He coached the UnitedStates Olympic team to a gold medal in 1976.


--------------------Smith’s book The Carolina Way, a NewYork Times Business Best Seller, issubtitled Leadership Lessons from aLife in Coaching. Smith states in theintroduction that leaders have thesetraits in common:

• a sound strategy for their teamsor businesses

• knowledge of the importance ofrecruiting good people who wish toimprove their personal skills andbelieve in the companies’ philosophy

• lead by example, whether they like itor not

• adapt to changing conditions• honor their commitments, admit

their mistakes, take responsibility fortheir failures

Smith remarks, “I’ve never heard so muchabout leadership until the last few years, noteven when I was coaching. I don’t knowwhere it started.”

And despite all the records, the accolades,his own books and books written about him,did Smith ever think of himself as a leader?“No, I never thought of myself that way,” headmits. “Coaching can be consideredleadership, as far as the head coach, but Ididn’t think of it in those terms. I know I wasboss and had very loyal assistants, andplayers who were loyal and could play.”

That loyalty has not been lost on KDC’sBrownlee some 25 years later: “CoachSmith is often recognized for being aninnovator and for his incredible success.What sometimes goes unnoticed are thelife skills he teaches — being on time,hard work, proper preparation, treatingothers with respect, and always doingthe right thing.

“He has had a tremendous impact on my lifeand when I am faced with a real dilemma, Iask myself, ‘What would Coach Smith do?’and the right answer becomes clear.”

And those closest to him agree.

“Of course, any business leader would besmart to emulate Coach Smith’s style,” co-author and personal friend Kilgo says. “Hewas loyal and got loyalty in return; he washonest and his players knew howimportant it was to be that way with him;he was punctual and expected his playersto be; he wasn’t afraid to change in themiddle of the stream if change was calledfor; he was flexible and innovative; he wasthe best at letting a player define his ownrole and then helping the playerunderstand and embrace it.

“He was competitive, tough, fair, and neverbroke rules. He gave his best each time outand then looked ahead, didn’t dwell on thepast. Had he not been a coach, he could

have been a great professor, businessleader, minister or politician.”

--------------------Despite retiring in 1997, Smith is still acoach, a leader whose voice is heard loudand clear throughout the athletic andbusiness worlds. His former players andfollowers are his team now.

“There is something magic about teamplay,” Smith says. “Somehow a team doesbetter when they really like each other, getalong together, and have good leadership.”

And as the team at Koll DevelopmentCompany already knows, every day in thebusiness world is a game day. With thatsaid, and to adapt Smith’s missionstatement to the business world — Workhard, Work smart, Work together — andsuccess will come!

Article written by David Daly. The Carolina Wayby Dean Smith and Gerald D. Bell with John Kilgo isavailable from Penguin Books.

David Daly is an award-winning television producerand writer based in Chapel Hill, North Carolina. Hewas student basketball manager at the University ofNorth Carolina under Dean Smith from 1979-82.


Dean Smith celebrates the 1993 NCAAchampionship.

Coach Smith with former assistant and current head coach, Roy Williams. Williams ledCarolina to the NCAA Championship in 2005.


Poised for PrThe Southeast’s Development

Forecast Is Mostly SunnyDevelopers and brokers in the southeastern United States are feeling optimistic.Some feel the relief of having weathered a storm. The first few years of the 21stcentury presented unprecedented challenges — the demise of the dot-com boom,the pervasive effects of 9/11 — but today the outlook is bright as companies areeager to reap the benefits of the region’s considerable attributes.


ogressAn appealing climate, an educatedworkforce and a desirable quality of lifehave always attracted commercial andresidential relocators to markets such asAtlanta, Charlotte and Raleigh-Durham.Those assets, inherent to the area, areeven more irresistible when combinedwith the current economic revival. Themarch to the Southeast is back on.

Office vacancy levels are finally dropping.Rents are starting to show signs of tickingup. Service-oriented tenants are enthusiasti-cally replacing the void left by manufactur-ing-based industries. Healthy job growthand changing needs are driving the demandfor new, more sophisticated space.

The Southeast is ready to deliver.

Opportunity in AtlantaAfter several years of minimal officedevelopment, pockets of Atlanta areseeing renewed interest and activity.

“There’s been asteady increase

in the health ofthe Atlanta

office market,” noted Duncan Gibbs,senior vice president of The StaubachCompany. “But Atlanta has always beenabout location, and the momentum variesfrom one submarket to the next. I’ve seenwell-located Class B properties that arepriced higher than trophy properties inpoorly located areas.”

The urban submarkets are leading thedevelopment wave right now, accordingto Sam Holmes, vice chairman of CBRichard Ellis. “There’s more pent-updemand and less available existingspace in Midtown and Buckhead, sothat’s where we’re seeing the interest.There are a number of Midtownbuildings in the pre-development stages.There’s only one under construction inBuckhead, but others are fighting to bethe next building up.”

A surplus of sublease space created bypast corporate downsizing is beingabsorbed due to consolidations andincoming tenants in financial services,law firms and wireless telecommunica-tions. The overall vacancy rate in theAtlanta office market was 17.3 percent atthe end of 2005, a 1.6 percentage pointdecrease over the previous year (source:CoStar Property).

A shortage of large spaces and a pre-ponderance of capital are drivingspeculative development in the Atlantamarket, Gibbs said. “There’s a lot of


capital chasing real estate. Also, somemay be developing ahead of projectedhigher construction prices.”

In the higher-density markets such asBuckhead and Midtown, Gibbs said manybuildings are becoming functionallyobsolete and are being torn down. Theland underneath has become morevaluable for new condominiumdevelopment than for office sites. “Onceagain, this is being driven by the capitalmarket,” he explained. “I have seriousconcerns about the market being able toabsorb all the condominiums being built,but I’m not concerned that thespeculative office development willcreate vacancies that will shift out ofproportion to demand.”

“Atlanta has always been a speculativetown,” Gibbs added. “This market nevergets to single digits vacancies before anew building is delivered. Tenants in ourmarket are reticent to commit to a buildingthey can’t see, feel, touch and walk into, sothe development community has alwaysbeen building ahead of the curve.”

Speculative office space under con-struction at the end of fourth quarter2005 totaled 3,527,790 square feet,compared to 2,047,342 a year earlier(source: CoStar Property). Among thenotable 2005 deliveries, occupancyalready is in the 90 percent range.

Holmes noted that, historically, Atlantahas not been a significant pre-leasingtown, but recent pre-leasing activity inprojects under way has been uncharac-teristically strong.

Speculative suburban development may notbe far behind the urban wave, he added.

Gibbs pointed to one cloud looming overthe Atlanta forecast: “The big-picturechallenge with Atlanta in general is the

effect of mergers and acquisitions of late.A case in point would be the proposedacquisition of BellSouth by AT&T. Thepotential impact on job losses and theoffice community could be significant.”

In the meantime, though, commercial realestate professionals focus on the current,known facts. Atlanta is hot. Young. Vibrant.

“We’re very excited in Atlanta because wethink we’re in for a great couple of years,”Holmes said. “This has always been aplace where corporate America wants todo business. We also have a very diverseand multi-faceted local economy. Sothere’s good news on the horizon for well-regarded development firms like KollDevelopment Company. I think there aregoing to be opportunities here for themthat are going to be profitable.”

Banking on CharlotteIt’s great to be the landlord of a Class Abuilding in Uptown Charlotte, whereoccupancy is at an enviable 94 percent,noted Chase Monroe, partner withKeystone Partners.

Class B and C buildings are starting to fillup, too, he added, with vacancy rates inthe nine to 15 percent range andexpected to continue dropping. Thenorthern suburbs still carry significantvacancies, while the suburban Ballatynemarket is going gangbusters withspeculative building.

“North Carolina suffered job losses dueto the demise of industries like furniture,textiles and apparel,” said Larry Wilson,president of KDC’s new Carolinas office.“While a lot of people view that asnegative, it is actually making usvery attractive to large corporateusers that see a sizable availableworkforce with solid education,background and experience.”

Companies from the Northeast andMidwest are also choosing North Carolinafor its substantially lower building, rent andlabor costs, Wilson noted.

The financial industry put Charlotte onthe map and helped attract ancillarygroups such as law and accountingfirms and call centers. The city’s thrivingfinancial district is home to two of thenation’s largest banks — Bank ofAmerica and Wachovia — as well asother regional banking and financialservices companies.

“Because of the big banks that occupythe majority of the space in Uptown,Charlotte was insulated a bit from thetough times that hit in 2001 and 2002,”Monroe said. “The banks helped keepour levels from dropping in the CBD asthey might have in other cities that werevery tech-oriented. There are also othercompanies that are being attracted herebecause of what the banks havebrought: the people and the way of life.The private sector of Charlotte is veryinvolved in every aspect of thecommunity and the growth of the city.This has really helped to ensure that it’sa very viable place for a long time.”

The seat of Mecklenburg County,Charlotte has seen dramatic residentialgrowth and was estimated the 37thlargest metro area in the country lastyear (source: Metropolitan StatisticalAreas as defined by the U.S. CensusBureau). It is the largest city betweenWashington, D.C., and Dallas.

Charlotte’s quality of life has put it at thetop of the list for many relocatingcompanies. In addition to enjoying thebenefits of a supportive private sector,the family-oriented community offerssuch amenities as pro basketball andfootball, minor league hockey andbaseball, cultural arts groups and thenew U.S. National Whitewater Center,an outdoor recreation and environmen-tal learning center opening this summer.

The office development forecast ispromising, with Wachovia’s new, in-progress office tower leading the way at750,000 to 950,000 square feet.

The biggest threat to Charlotte’s brightoutlook is the powerful economicincentive program offered just a few milesaway, in South Carolina. Two majorcompanies recently relocated from thepremier suburban Charlotte market to takeadvantage of tax savings across the stateline. A California company, 3D SystemsCorp., also recently selected Rock Hill,S.C., as the home of its new global head-


quarters. It was a coup for the KDC’sCarolinas office, which won the build-to-suitproject, but a loss for Charlotte and NorthCarolina. “Trying to figure out the bestavenue for how to compete is on the screenof the economic development folks inCharlotte and Mecklenburg County everyday,” Monroe said.

Diversification inRaleigh-DurhamThe suburbs trump downtown in theRaleigh-Durham market, where theworld’s largest research park is home tomore than 136 organizations specializingin such trendsetting fields as biotechnol-ogy, pharmaceuticals, environmentalscience and microelectronics.

In addition to Research Triangle Park and itshigh-profile tenants, the area’s tenant baseis undergoing a diversification with thearrival of more service-oriented companies.A solid concentration of major universitiesplus Raleigh’s status as the state capital addup to what Barney Earles of CB Richard Ellisdescribes as a “fairly unique market.”

“Raleigh also has a very strongfoundation from the real estateperspective, with rents that would beseen as competitive by firms from NewYork, Boston, Chicago or Atlanta, and apretty good portfolio of space,” he said.

Vacancy has hovered around the 14 percentmark for several years, following a high ofnearly 20 percent in 2000 when thetelecomm and technology downturnresulted in a local slump. “We had dot-comsclosing their doors and telecom firmsdownsizing, so at one point my group hadclose to a million square feet of subleasespace,” said Earles, adding that very little ofthat space remains.

Although the vacancy rate remains nearthe 14 percent mark, most of theavailable space is too small for some ofthe larger prospective tenants. Thoseseeking more than 40,000 square feetmay need to consider a new building or abuild-to-suit. Functional obsolescenceand location issues are some of the otherfactors driving the need for new con-struction.

Developers are responding.

Earles said he predicts a continuedtrend toward “relatively reasonableabsorption, as well as more and moredevelopers looking at opportunities todevelop the land that they’ve had undercontrol for some time. We also see newdevelopers entering this market, and alot of demand-driven buildings being

proposed where we have tenants thatwill occupy 60,000 to 100,000 or200,000 square feet.”

A Room with aDifferent ViewSpace needs and usage are evolving.

“A lot of companies are looking at spacedifferently,” CB Richard Ellis’ Sam Holmessaid. “For example, for some tenantstechnology has changed to the point whereit would be hard for them to stay where theyare because of the expense of rewiring andre-networking.”

Companies also are becoming moresophisticated and efficient in how they useand divide space. “Sometimes, even if thereis existing space available, a companymight prefer to be in a new building wherethey can define their space from scratch. Orthey may find that their changing needsmake their current space difficult to be inlong term, and that it’s more efficient to bein a new building,” Holmes said.

KDC’s Wilson added that increasingrental rates and land and constructioncosts are resulting in users consideringrent per employee rather than the moretraditional rent per square foot ratio.Larger floor plates and more efficientspace is taking priority, reducing theoverall cost per employee.

“They’re also looking for operating effi-ciencies such as raised computerflooring and underfloor air as well ashigher ceilings and more glass to lightthe modular arrangements that are takingthe place of partitioned offices,” he said.“Amenities such as food service, healthfacilities and laundry drop-off, which helpcompanies compete for top employees,also may require new construction.”

Wilson cites KDC’s Intellicenter in Atlantaas an example of a building that meetsthe demands of these times. “We are thefirst ones in a number of these marketsto promote that type of product,” he said.

OpeningPocketbooksWhile corporate America has enjoyedsolid earnings in recent years,investments in new facilities and realestate have been few and far betweenin the Southeast.

“We’re seeing job growth, and they’rejust beginning to open up theirpocketbooks,” Wilson said. “I believethat, over the next 18 to 30 months,we’ll see many new facilities beingconstructed and existing facilitiesbeing expanded.”


502.423.7272 866.423.7523 (toll free)www.ipipublishing.com

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To find out how your company can have a publication that leaves a lasting impression,contact Aran Jackson directly at 502.423.7272 or [email protected].

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Koll Development Company (KDC), one of America’s leading commercial real

estate firms, provides a full range of commercial real estate services including

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offices nationwide to serve its clients.

In the last five years, KDC has built or bought over $2 billion of real estate

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866.869.1700www.kolldevelopment.com

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sale-leaseback transaction.”

–Gideon YuTreasurer and SVP Finance, Yahoo! Inc.

“Thanks to Staubach, RadioShack

saved millions building a new

state-of-the-art campus headquarters.”

– Nina PettyVice President Real Estate, RadioShack Corporation

“Thanks to Staubach Retail, Wachovia’s

presence in Texas has grown dramatically.

They helped us get to 100 retail branches

in only 18 months.”

– Ben JenkinsPresident, Wachovia’s General Bank

“Thanks to Staubach, we saved millions

upgrading to more space – and got a great

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