LAS VEGAS, NV--(Marketwired - May 21, 2014) - JLL (NYSE: JLL) -- The oil industry growth in North Dakota's Bakken area has fueled an epic economic expansion in the city of Williston and its surrounding communities. While the area has seemingly no shortage of natural resources to tap, the region is sorely lacking in progressive mixed-use amenities to support the undeniable short- and long-term viability now present in the region. Enter international real estate company, Stropiq, betting big on the future of Williston with a bold vision designed to bridge the region's resource gap with "Williston Crossing," a truly institutional-quality, mixed-use urban development project. At completion, the $500-million, open-air project will encompass approximately 1 million square feet of retail, entertainment and hotel space, with a mix of office and multifamily options resting on a 219-acre land site.
Stropiq is tapping into JLL's retail development expertise to introduce the potential of the development to the retail industry at the International Council of Shopping Center's (ICSC) real estate conference (ReCon) in Las Vegas this week. Larry Jensen and Donn Fuller are leading the JLL team on the pre-development marketing efforts, with Kimli Cross and Chad Macy spearheading the pre-lease of the retail components.
"Williston is the center of the oil movement, but its retail infrastructure is seriously lacking and that represents an unprecedented upside opportunity," said Larry Jensen, Senior Director of Retail Development at JLL. "We aim to secure retailer anchors to meet the consumer demand that is at an all-time high in this region. This development will be the first large-scale program positioned to develop a viable community resource to serve local and future needs. With no other comparable retail development in 125-mile-radius, we expect it will soon become the No. 1 retail destination. That fact that this transformation is happening in the United States, in this day and age is almost unbelievable."
Williston Economic Development Executive Director Tom Rolfstad agrees that the development is entering the market at the perfect time to capture early adopter momentum as western North Dakota transitions from a sparsely populated region where farming and ranching were the primary industries, to one of the world's major oilfields. From a relatively insignificant position as the 9th highest oil producing U.S. state in 2006, North Dakota passed Alaska in mid-2012 to become number two after Texas. It is no coincidence that in the five years from 2008 to 2013 the civilian labor force in Williams County, of which Williston is the county seat and primary population center, increased from under 15,000 to almost 50,000.
"People tend to think this is something that happens quickly and is over, but Williston is an example of a new technology changing the way things are done forever," Rolfstad explains. "Think of what offshore drilling has done, and continues to do, for Norway starting only in the 1970s. Now, apply that model to recent innovations in extraction technologies, and you have the North Dakota story. This is an industry, not a boom, and it's going to last a long time."
Rapid expansion in the petroleum sector has led to unprecedented regional growth. Rolfstad says, the Bakken Shale currently has approximately 8,000 operating wells, and is adding about 2,100 per year. Given the multiple oil formations under the Williston area, and the trend towards situating multiple wells in one location and accessing surrounding territory via horizontal drilling, the latest thinking is that there could be 140,000 more wells to be drilled. He says completion times are indeed getting shorter, but there are decades of drilling ahead of us, and after, each well can produce for upwards of 40 years.
The area's population is also growing at a swift pace -- nearly nine percent per year through 2017 -- and will continue to grow to 159,000 over the next 10 years. According to Rolfstad, "Each oil well leads to between one and three permanent production jobs. Drilling requires manpower, and that workforce is here today. Production requires manpower as well -- in fact a similar number of workers -- with a key difference being that this workforce can settle down in one place for an entire career. That's where we are headed."
Stropiq is counting on the oil industry's long-term viability to sustain Williston's economy. The company's principals Terry Olin and Ellen Simone Weyrauch, have decades of real estate development and finance experience in such diverse international markets as Russia, Canada, Mexico, and Scandinavia. They created Stropiq, the developer of the project and external manager of the company that owns the Williston development site.
"We have the equity capital in place, and the fee simple land interest, to launch the development of this site now," said Stropiq co-founder Terry Olin, who as an alumni of North Dakota State University, is signaling his return back to his roots after 20 years abroad by creating a world class development in what, until recently, was America's least visited state.
A pioneering approach to real estate is nothing new for the Stropiq founders. In 2003, Olin was a founder of EPH, the first publicly traded Russia-focused property company. EPH invested in excess of $500 million in Russian real estate, owning and developing landmark properties in Moscow and St. Petersburg. Weyrauch, a German citizen, who led single-asset, portfolio, and cross-border hotel financings totaling over $600 million as a real estate banker before joining EPH, was most recently the company's Managing Director. Now, the duo will apply their global experience to what they see as another emerging market, but one which is fortuitously situated within the United States borders.
Since September 2013 Stropiq has invested $20 million in Williston projects, which according to the company's principals is only the start -- both in terms of capital and time of involvement.
"Our approach is rooted in our long-term interest in developing and operating the center," said Weyrauch. "While pure land developers are filling a need in the area, our approach is a bit different. We have not come to Williston with the intention of being here just long enough to rezone land, improve it, and exit. Williston Crossing will be improving the quality of life in western North Dakota for many decades to come, and we intend to be the stewards of this development for the long haul."
Olin added, "We know the area, its fundamentals and are ready to commit long-term to the project and the area. We are not uncomfortable backing our view by shouldering risk for our prospective tenants. We believe our commitment will strike the right chord with both prospective tenants and the local government and we will be able to provide the area with an asset it clearly needs."
The Williston Crossing site is situated near the planned interchange of US Highway 2 and Highway 85 (the "crossing" in the project's "Williston Crossing" name) and just five miles from the proposed new Williston airport in Western North Dakota. The projected trade area for the project encompasses four counties in North Dakota and seven counties in Montana and can be expected to draw shoppers from nearby Canada as well.
Projected ground-breaking is scheduled for March 2015 with completion scheduled as early as April 2017.
JLL's Retail Group serves as the industry's leader in retail real estate services. The firm's more than 850 dedicated retail experts in the Americas partner with investors and occupiers around the globe to support and shape investment and site selection strategies. Its retail specialists provide independent and expert advice to clients, backed by industry-leading research that delivers maximum value throughout the entire lifecycle of an asset or lease. The firm has more than 80 retail brokerage experts spanning 20 major markets, representing more than 100 retail clients. As the largest third party retail property manager in the United States, JLL's retail portfolio has 305 centers, totaling 65.7 million square feet under management in regional malls, lifestyle centers, grocery-anchored centers, power centers, central business districts, transportation facilities and mixed-use projects.
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About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of $4 billion, JLL has more than 200 corporate offices and operates in 75 countries worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3 billion square feet and completed $99 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $48.0 billion of real estate assets under management. For further information, visit www.jll.com.