June 9, 2022
Twin Sister Developers in Texas Try Retail Spin to Find Industrial Tenants
By Candace Carlisle, CoStar News, June 8, 2022
M2G Ventures Signs Two New Industrial Tenants in Dallas Business Park Being Curated Like a Shopping Mall
Twin sister developers behind Fort Worth, Texas-based M2G Ventures, a firm with a history of reimagining industrial space, has signed two new industrial tenants at what one sister calls the investment and development firm’s “flagship property” as the pair takes a page out of the retail landlord handbook and curates the property’s tenants.
The new leases totaling 136,020 square feet of space have brought investment to the urban industrial business park, called Proto Park, a nearly 250,000-square-foot property at 3200 Irving Blvd. in Dallas, less than 6 miles northwest of downtown. It also brings in the right mix of curated tenants that complement existing industrial tenants at the business park, said twin sisters and M2G Ventures co-founders Jessica Miller Essl and Susan Gruppi.
“Our background is in mixed-use real estate, and we apply principals from all the asset classes to create places where tenants want to be,” Essl told CoStar News in an interview. “We don’t turn that off and hope to use every lever we have at our disposal with each property in our portfolio. Proto Park is representative of everything we do in one project.”
Essl says they have been “really picky” about the industrial tenants leasing space within Proto Park, and that is expected to help keep the property a sustainable part of the firm’s real estate portfolio over the long haul, she said. With the two new leases, signed by Dynasty Spirits and Taxila Stone, the tenants are making what Essl said is a substantial investment in their spaces. She declined to disclose the specifics of the tenant improvements.
“We could’ve been 100% leased 12 months ago and multiple times since then,” Essl said. “But we are looking for a type of tenant that meets our investment strategy. We don’t want to lease the park to the masses and slam them in to park their goods and pick them up with a 53-foot truck; we’ve taken a more merchandising approach to industrial space.
“It’s taken even more focus and we’ve had to be super disciplined because the industrial market is so hot,” she added.
The two leases bring Proto Park to 81% leased, with only one 46,378-square-foot space left to lease. Essl says she expects the facility to be completely leased before the end of the summer. Generally, Essl said industrial tenants are seeking to recruit and retain workers, just like office tenants, by leasing space in easily accessible areas and putting in heating and air-conditioning systems.
For tenants, this is no small feat, with construction costs rising 20% to 30% for interior finishes in the last year and a half, she said.
And the industrial market shows no signs of slowing down. “This is a hot market,” Essl said.
Once M2G Ventures buys a property, the firm typically makes significant capital improvements. That was the case after the firm bought Proto Park in September 2020, transforming the 9-acre property, giving the 1960s brick warehouse a new modern design and a new brand identity.
The first two tenants to sign leases at the redesigned complex include Dynasty Spirits, the maker of Greenhouse gins, botanical vodkas and ready-to-drink seltzers, and Taxila Stone, a regional supplier of granite, quartz, marble and quartzite that houses its flagship showroom at the property.
Hari Polavarapu, CEO of Taxila Stone, said Proto Park offered the wholesale distributor a space encouraging “innovation and collaboration,” which is difficult to find in industrial settings. He said the industrial park gives the company the place needed to continue building its brand nationally.
Essl said she was unable to disclose the construction budget of each company’s improvements to the property, but she said both will have a “high-quality finish-out.” She said M2G Ventures plans to continue to buy aging industrial properties, adding its “secret sauce” is to come up with buildings that are a bit outside of the traditional industrial box.
For the Record
Newmark’s Scott Hobbs and Kim Lyon represented Dynasty Spirits. Harrison Putt of Mercer Co. and Bo Puckett with Holt Lunsford Commercial represented Taxila Stone. In both leases, Jason Moser and Hanes Chatham of Stream Realty Partners represented the landlord, M2G Ventures.