Owners Are Underselling Downtown Retail
If a restaurant can’t afford to pay $40/SF in a top 10 downtown market, it shouldn’t be there, says Alto West managing partner Mike Sarimsakci. He spilled the beans on how he’s turned around 211 N Ervay at Bisnow’s Dallas Construction & Development event Thursday at The Berkshire at Preston Center.
Mike (center, between Alto West’s Jose Quesada, Nile Tuzun, and Emre Terazi and Velocis’ Lauren Zeien) says retailers and restaurants paying $15/SF won’t survive. He has a foreign furniture retailer taking around 7k SF, a café and a 7-Eleven next-generation store all paying $40/SF. It’s important to Dallas and its redevelopment to have these kinds of businesses Downtown, Mike says. He’s also a big proponent of adding more art to Downtown. Half of the eighth floor of 211 N Ervay is dedicated to an art gallery. But, it needs to be accessible to all levels of income, he says.
More than 250 gathered as Mike laid out what Downtown needs to be more livable. First, he says, the landscape is lacking. There are no trees on Elm Street and in the summer, the only shade pedestrians have is under the building awnings. Additionally, Mike says, the streets need to be narrowed (slowing those speeding buses that buzz him when he’s walking) and bike lanes are needed. Young, high-tech entrepreneurs want to ride their bikes to work. News tip from Mike: watch for more development. He just tied up a big parcel of land behind City Hall and hopes to build four towers there, in addition to his project at 500 S Ervay, which will convert the space to 240 residences and a 270-room Marriott.
The first panel: (moderator) Munsch Hardt Kopf & Harr shareholder Bob Voelker, Mike and HRI Properties VP Hal Fairbanks. HRI is converting the 32-story 1600 Pacific office tower into a Hilton Garden Inn hotel with 186 residential units. Hal says HRI is working closely with the TIF board in designing the ground floor and streetscapes of the former LTV building. HRI has agreed to use the lobby as a cross block access, encouraging people to walk through it. He plans on bringing in a local restaurateur rather than have a hotel-operated restaurant, too.
We caught panelist USA infrastructure Investments principal Paul Cheng (right) taking advantage of the speed networking after the event. Paul, who is partnering in the development of One Uptown (a 198-unit 20-story high-rise on the old Hard Rock Café site at McKinney and Routh), says the size of land for new developments is shrinking. This project is on less than an acre (37k SF to be precise). But, he says, it works because it has three streets bordering the site. He also says tenants are spending more on their spaces. The two restaurants taking the project's bottom two floors are investing $10M of their own money to finish out the 20k SF.
Our second panel: UCR EVP Jack Gosnell, GL Seaman & Co’s Mary Miano (moderator), Cadence McShane Construction president Will Hodges and Paul. Will says developers and their construction companies are having to get creative on how to push density because land is getting scarce in areas like Uptown. There’s also the struggle of rising construction costs up-ending pro formas. The playbook on how to put together deals is changing, he says.
Jack says residential population drives everything. Now that Downtown has more than 10,000 residents, the retailers and restaurateurs are clamoring to look at the spaces. Years ago, he couldn’t get these people to answer the phone. He’s had every major grocer take a ride through Downtown and the boxes are looking, too. If you put a pin in Neiman Marcus and draw a circle a mile around, there’s 35,000 people in that space. The growth is starting to happen, it’s just a slow process, he says.
The Berkshire at Preston Center (5950 Berkshire Ln) hosted the event to showcase its 14k SF vacant sixth floor. Here's Transwestern's Jack Eimer, Kathy Czorniak, Scott Walker and Melissa Garcia showing off the view. The building is owned by BPC Corp and was renovated last year.
We snapped sponsor DPR Construction’s Jeff Parsons, Dan Hansen and Peter Read. The trio tells us they’re in the middle of working on multiple projects including building for HCA and Alcon. They’re also doing a renovation at Children’s Medical Center Dallas on two full floors including two new PICU suites with 48 patient beds, support space, on-call rooms, a children’s play room and a treatment room.
Event sponsor BURY has grown into a full service design and engineering consulting firm offering clients a full suite of services including engineering, landscape architecture, planning, construction administration, surveying and sustainable solutions. The firm's services touch a broad range of market sectors and boast a unique project portfolio.
We snapped Hunt Construction’s Andrew Schendle with event sponsor The Real Estate Council’s Amy Stovall. Amy tells us TREC is gearing up for its annual membership meeting on Jan. 14 at the Belo Mansion. TREC offers a wide range of programs and fundraisers along with unlimited opportunities for involvement.
Following the event on Thursday, we had some savvy networkers stick around to give speed networking a try. Never done it? It's like speed dating, but you never give anyone a fake phone number. Participants gave our first DFW speed networking effort a big thumbs-up.
Our sponsor WLS Lighting Systems used the French lighting balloon product by Airstar to light the Bisnow Dallas Networking Event in October. Space Lighting, an affiliate company of WLS, is located in Deep Ellum and has a multitude of cool event lighting products to help spice up, and light up, outdoor gatherings. Come back Monday for more exciting event coverage.