Toyota Financial Services to Anchor New Mass Timber Office Building in Frisco

This story was originally published at Dallas Business Journal.

Toyota Financial Services (TFS), a prominent division of the global automotive giant Toyota, has made a substantial commitment to the burgeoning commercial real estate market in Frisco, Texas. The company has secured a lease for the entirety of the newly constructed "Offices at Southstone Yards" building, a 242,000-square-foot property developed by Dallas-based Crow Holdings. This move, anticipated to be completed by the end of the year, will accommodate approximately 1,000 TFS employees. The lease agreement, finalized on November 7th, is particularly significant as it represents the largest office lease transaction in the Dallas-Fort Worth (DFW) area over the past two years.

The "Offices at Southstone Yards" building, located at 4401 Cirrus Way in Frisco, constitutes the initial phase of the expansive 45-acre mixed-use development known as Southstone Yards. This ambitious project is set to include a diverse array of retail spaces, restaurants, a hotel, and over 1,000 urban living units upon its full completion. A distinctive feature of the "Offices at Southstone Yards" is its mass timber construction, a design choice that offers potential benefits for the well-being and productivity of its occupants. This significant lease underscores the continued attractiveness of the Frisco market for major corporations and hints at a potential resurgence in the broader DFW office market, which has been navigating the shifts brought about by the pandemic.

The selection of Toyota Financial Services as the anchor tenant for the "Offices at Southstone Yards" is a notable achievement for the development and the Frisco commercial landscape. As a financially sound and reputable entity, TFS lends credibility to the project, enhancing its appeal to other businesses and potential residents within the mixed-use environment. This suggests that Crow Holdings has successfully positioned Southstone Yards as a premier destination for high-caliber companies seeking modern and sustainable office spaces. The sheer size of the lease, the largest in the DFW region in the last two years, indicates a potential shift in market sentiment. Despite the increasing prevalence of remote work policies, major corporations are still making substantial investments in physical office spaces, particularly in developments that offer compelling amenities and strategic locations, such as Southstone Yards. This development could be an early indicator of renewed confidence and increased leasing activity within the wider DFW office market.

The lease agreement secures the entirety of the 242,000-square-foot "Offices at Southstone Yards" for TFS, with occupancy planned by the end of the year. This new Frisco location will house approximately 1,000 employees of TFS. The transaction is particularly noteworthy as it represents the largest office lease in the DFW area in the past two years, according to reports from CoStar News. Representing the landlord, Crow Holdings, in this significant deal were Trey Smith, Jackie Marshall, and Ben Davis of CBRE, a prominent commercial real estate services firm. Scott Cooke, the President and CEO of TFS, noted that this new facility will complement their existing operations at the nearby Toyota North America Headquarters, indicating an expansion of their footprint within the North Texas region. Cody Armbrister, a Senior Managing Director at Crow Holdings Development, emphasized that the commitment from a company of Toyota Financial Services' caliber validates their vision for creating distinctive office spaces that prioritize sustainability and the employee experience.

The "Offices at Southstone Yards" building is strategically located at 4401 Cirrus Way in Frisco, Texas, 75034. This seven-story structure is classified as a Class A office building, signifying high-quality construction and amenities. The architectural design was a collaborative effort between Duda Paine Architects and Gensler. Construction of the building was finalized in the spring of the previous year. Notably, this building holds the distinction of being the first multi-tenant mass timber office building in North Texas and ranks among the largest mass timber office buildings in the United States. The design incorporates features such as 11-foot or taller windows and ceilings, creating bright and spacious interiors. Employees of TFS will benefit from amenities including a fitness and wellness center, meeting spaces, and private terraces on each floor. The property also provides access to three acres of parkland and features 11,000 square feet of retail space on the ground floor, including three on-site food options. Additional amenities include a conference center and an expansive fitness facility. The building also boasts market-leading air quality and ample natural daylight, contributing to a healthier work environment.

Embracing biophilic design principles, the building incorporates natural materials and elements to foster a connection between occupants and the natural world. The structural framework of floors two through seven utilizes southern yellow pine, while the building's core and the first-floor podium are constructed with concrete. This state-of-the-art office building is designed to achieve LEED, Fitwel, and WiredScore certifications, reflecting its commitment to sustainability, occupant health, and technological infrastructure. The strategic emphasis on "trophy class timber," "wellness," and "biophilic design" indicates a deliberate effort to position the building as a highly desirable workspace.

The use of mass timber in office building construction offers several advantages, particularly concerning employee well-being and productivity. Compared to traditional materials, mass timber is a more sustainable option with a lower environmental impact. It also exhibits a high strength-to-weight ratio and good fire resistance. The exposed wooden elements create a warm and inviting atmosphere, fostering a connection to nature. Research indicates that biophilic elements in the workplace can improve employee satisfaction, reduce absenteeism, enhance concentration, and increase productivity. Studies have also suggested that working in spaces with timber interiors can lower stress levels and positively influence worker productivity.

Southstone Yards, the larger development encompassing the "Offices at Southstone Yards," is situated on a 45-acre site at the northeast corner of Spring Creek Parkway and State Highway 121 in Frisco. This mixed-use project is planned to include retail outlets, restaurants, a hotel, and over 1,000 urban living units. The next phase of development, undertaken by Rosewood Property Co., will involve the construction of 382 apartments and a parking garage. The development also features three acres of park space for community events. Future plans include a second office building, totaling 338,000 square feet.

Frisco has established itself as a significant hub for development within the DFW metroplex, already home to prominent projects such as The Star and the Fields development. The city's skyline is expected to continue its transformation with new office complexes. Major mixed-use projects underway or planned include the $3 billion Frisco Railhead, the 2,500-acre Fields project, and Firefly Park. The simultaneous development of these projects establishes Frisco as a major growth area within the DFW region, attracting businesses and residents.

The lease agreement between TFS and Crow Holdings signals a potentially positive shift in the DFW commercial real estate market. There are indications that Dallas's office market is beginning to rebound, with increased return-to-office mandates. While the overall market is still experiencing rising vacancy rates, there is a clear trend of tenants preferring newer, amenity-rich properties in suburban submarkets like Frisco. The "flight to quality" trend indicates that companies are willing to invest in premium office spaces.

In conclusion, Toyota Financial Services' decision to lease the "Offices at Southstone Yards" represents a significant development for the Frisco and DFW commercial real estate markets. This lease highlights the appeal of high-quality, amenity-rich office spaces with sustainable design elements. As Frisco continues its rapid growth and the DFW office market shows encouraging signs of recovery, this development is strategically positioned to contribute to the region's economic vitality.