Dallas’ leading commercial real estate developer, KDC, has joined forces with a Canadian real estate giant and a long-time partner from Dallas to launch a new company that could expand its business significantly.
Toronto-based Cadillac Fairview has acquired a 50% stake in KDC, which has built large local projects such as Planos Legacy West and the CityLine development in Richardson.
Cadillac Fairview is owned by the Ontario Teachers’ Pension Plan and has more than $ 36 billion in assets under management in the Americas and the UK.
As part of the new project with KDC, Cadillac Fairview and Dallas’ Compatriot Capital have combined a new $ 800 million fund for further mixed-use developments and campus projects in the United States.
“We have five or six options that are already at the forefront,” said KDC CEO Steve Van Amburgh. “With the pandemic behind us, we wanted to close the transaction as quickly as possible.
“We are very excited about what lies ahead,” he said. “It will allow a really solid team of people to grow the business.”
KDC currently has more than $ 1.1 billion worth of commercial projects under development in Denver, Nashville, San Antonio, and Raleigh, NC
The developer also has two high-rise projects in the uptown neighborhood of Dallas on the way – one on McKinney Avenue and one on Woodall Rodgers Freeway.
Van Amburgh said the alternative to the deal with Cadillac Fairview and Compatriot is to continue development piece by piece.
“It’s really difficult when you talk about the dollars that go into big mixed-use projects,” he said. “We will be capitalized for a long time and be able to finance large projects internally.
“Across our business, we have six very large – over 1 million square feet – mixed-use projects,” said Van Amburgh. “The equity it would take to do all of this is likely over $ 500 million.”
The development potential for the company is even greater when it comes to project financing.
“We thought there would be somewhere between $ 2 billion and $ 3 billion in assets with very conservative leverage,” said Van Amburgh.
Cadillac Fairview was a major player in the Dallas real estate market in the 1980s, building some of the tallest skyscrapers downtown. The huge real estate company is currently expanding into Europe and Asia.
Cadillac Fairview also works with Dallas-based Lincoln Property Co. on housing projects.
“We are excited to partner with KDC and Compatriot given their reputation, commitment to quality assets and longstanding client relationships,” said Duncan Osborne, executive vice president of investments at Cadillac Fairview, in a statement. “We are also excited about the prospect of bringing new partners together and believe that Cadillac Fairview’s existing strategic partnership with the residential division of Lincoln Property Co. can play a unique role as we seek mixed uses and our shared expertise maximize to grow KDC. “
KDC has worked with Compatriot Capital, a division of Dallas’ Sammons Enterprises, for the past 12 years.
“This partnership represents a shared vision to build a leader in the development and ownership of office and mixed-use real estate, an asset class that is particularly dynamic and exciting in today’s economy,” said Mark Van Kirk, President of Compatriot Capital, in a statement.
KDC – originally Koll Development Co. – has been in business for more than 30 years. The Dallas partners took control of the company in 2004.
The company has built 145 commercial projects totaling 36 million square feet and valued at over $ 9 billion statewide.
KDC’s customer list includes Toyota, State Farm Insurance, JPMorgan Chase, Raytheon, Pioneer Natural Resources, Liberty Mutual Insurance, Frost Bank, Citigroup, Blue Cross Blue Shield of Texas, and Baylor Scott & White Health.
The sale to Cadillac Fairview marks KDC’s first major change of ownership in nearly two decades.
“If they wanted to give us the capital, they also wanted to invest in the platform,” said Van Amburgh. “We will continue to run and operate the company as we are now – no changes other than that we are positively recapitalized.”
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KDC developments include the JPMorgan Chase campus in Plano, which is part of the $ 3 billion Legacy West development.(Jason Janik / special article)
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