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Texas Business Park Lures Core-Mark HQ

San Francisco-Based Company Plans to Relocate in 2019 to Home Region of New Chief Executive
September 10, 2018
Solana Business Park will accommodate Core-Mark Holding Co.'s headquarters next year.

When Solana Business Park in North Texas was conceived in the 1980s to appeal to thousands of high-tech IBM employees, then-developer Maguire Thomas Partners built modern-angled, colorful buildings to appeal to transplants from the West Coast. Aesthetics aside, it also helps when the chief executive lives nearby.

The design allure may still be in play, even after three decades, with the business park landing the headquarters of a Fortune 500 firm now based in California.

Core-Mark Holding Co., a tobacco and food distributor with deep roots in San Francisco, completed plans to relocate and hire up to 100 employees at 1500 Solana Blvd. on Westlake's side of Solana Business Park, which also spans the town of Southlake, Texas. The company will occupy a portion of the first floor in Building 6 and a full floor in Building 3.

"The move will take place during the first half of 2019," said Core-Mark Chief Executive and President Scott McPherson.

The chief executive may be as important a factor as the West Coast design in luring Core-Mark to the Dallas area at any rate: McPherson lives near Westlake in the Dallas-Fort Worth area and took over the helm of the company this year from retiring chief executive Thomas Perkins.

McPherson discussed the company's desire to move in a quarterly earnings report for investors last month. Terms of the lease totaling about 25,000 square feet were not immediately available.

McPherson cited rising costs tied to business operations in California and Texas' central location in the United States as the primary drivers behind the search for a new site. He did not mention to investors on the call that he lives near the new headquarters site.

"While San Francisco is our longtime home, the business has expanded dramatically over the years," McPherson said. "Dallas offers a better operating cost, lower taxes and is a central location for what is now a nationwide business. Being closer to our customers and more central to our divisions will create cost and efficiency for us."

The company confirmed the chief executive lives nearby and added that about 20 percent of the company's corporate team plans to relocate to be near the new headquarters. About 15 percent of the corporate team will instead be allowed to work from alternative locations in California. The company plans to hire at least 50 people in the region for jobs ranging from entry level to director level.

With the corporate relocation, Core-Mark, which delivers tobacco and food products to convenience stores and other retailers, will also sit in close proximity to its 200,000-square-foot North Texas distribution center at 6401 Will Rogers Blvd. in Fort Worth. According to CoStar data, Core-Mark has a lease for 138,000 square feet of industrial space in the building.

The cost savings could also help bolster Core-Mark's bottom line. On last month's quarterly earnings call, McPherson said even though company sales grew about 11 percent year-over-year to $4.2 billion, those sales were moderated by declining cigarette carton sales.

Westlake town officials, who are based in Solana Business Park, have been working with Core-Mark for most of this year, answering questions and showing off the space. Core-Mark's decision to land in Westlake was for a variety of reasons, said Town Manager Tom Bryner.

"One part of the draw to Westlake is the town's proximity to Dallas-Fort Worth Airport," Bryner said. "We are 15-20 minutes away from the north entrance of the airport, which was a big factor for them. They were also impressed with the natural beauty of Westlake. We have an extensive trail system and offer residents a total quality of life."

At the time of the deal, Solana Business Park, which is owned by New York-based Blackstone Group, was roughly 48 percent leased. Blackstone, in partnership with Equity Office, has been working to lease up the office park after a major tenant, CoreLogic, left the property to relocate into a nearby build-to-suit office building in Cypress Waters.

Last year, the town of Westlake moved into Building 7 in Solana Business Park. The decision came a few years after Blackstone and Equity Office put $50 million into upgrading the property.

Core-Mark is the latest West Coast company to relocate to the Lone Star state. Four years ago, the movement gained momentum with Toyota North America's decision to relocate and consolidate its North American operations in Plano, a suburban city north of Dallas. Since then, companies such as Jamba Juice, Farmers Brothers Co. and Jacobs Engineering have joined in the migration.

For the record:

Landlord: JLL’s Jeff Eckert, Blake Shipley, Jay Bailey and Frank Taylor represented the landlord, Equity Office and Blackstone Group in the deal.

Candace Carlisle, Dallas-Fort Worth Reporter  CoStar Group   
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