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JVP Development starts spec office project in Frisco after cost surge
The 115,000-square-foot, four-story building is budgeted at nearly $36.9 million, following a more than 50% rise in estimated costs since the company’s 2023 estimate.
Dallas-Fort Worth is standing out for speculative office construction amid industry-wide headwinds like higher interest rates and construction costs, and JVP Development is placing its own capital into a new Frisco project.
Bisnow reports the company has broken ground in early July on a 115,000-square-foot Class-A building at Lebanon Road and Parkwood Boulevard as part of its $3B The Mix development along the Dallas North Tollway. The company is self-financing the project and is working to lease the space, with leasing head Ed Hogan saying it has not yet signed any tenants.
JVP is betting on leasing demand it has seen in the Frisco area, describing the decision as calculated based on positive absorption rates, rent growth, and strong demand. The office project is expected to cost nearly $36.9 million, based on a city of Frisco permit issued in April.
The cost figure also reflects a sharp increase, with the permit cost more than 51% higher than a $24.4 million estimate JVP filed for a similar-sized building at the location in 2023. Hogan said the company is confident it can hit the returns it needs, but the project offers no assurances it will recoup costs given the typical reliance of spec development on financing and equity to manage lease-up risk.