Trammell Crow, Arlington agree on 99-year downtown ground lease

Arlington has tied the largest remaining patch of central downtown surface parking to a 99-year ground lease, approving an agreement that requires Trammell Crow Company to invest at least $123 million in a mixed-use project around the City Office Tower near Abram and Mesquite streets, according to Connect CRE.

The program mixes at least 390 market-rate residential units with 31,250 square feet of office, at least 8,000 square feet of restaurant and retail, and a 600-space structured garage; Trammell Crow will assemble the privately owned parcels, convey them to the city, then take the land back on a 99-year lease, while Arlington keeps ownership of the site and receives a new 31,250-square-foot Water Utilities Department office plus public parking and infrastructure.

For Trammell Crow, the Arlington agreement broadens a 2026 pipeline that has already included Houston spec industrial with Daiwa House, a second Hillsboro phase, a Grapevine hotel-and-apartment plan and a Sprouts-anchored Phoenix build-to-suit. The distinction is that the city sits on the other side of the lease, and the term runs nearly a century.

The required $123 million goes into land Arlington will own throughout the term; once the parcels are conveyed, Trammell Crow holds a leasehold rather than a fee interest, pushing the underwriting toward rent rolls and operating performance instead of a land-value exit. For Arlington, that puts its largest downtown parking parcel to work while keeping the land; for Trammell Crow, the bet is plain: if the 390 market-rate units and the office space lease up, the leasehold is worth real money, and if they do not, there is no fee interest under the building to fall back on.