How’d They Do It: Statler Hilton Deal
A cold call landed Henry S. Miller Brokerage's Multifamily associates Darden Orand, Andrew Doster, and EVP Lew Wood with the listing for the historic Statler-Hilton last summer. (No word on whether anyone wants to buy Statler and Waldorf, the two old balcony guys from the Muppets.) Now, a year later, the vacant 600k SF 20-story hotel building (built in '56 as a 1,000-room Hilton hotel) and the old 131k SF public library (built in '55) at the southeast corner of St. Paul and Commerce streets, have been sold. And they're being prepped for a rebirth as a mixed-use hotel with residential units, parking, and retail.
Even with Lew’s experience with historic buildings (while heading Pan American Capital, he converted about a half dozen downtown Dallas/Deep Ellum factories and buildings into multifamily: Murray Lofts, Mitchell Lofts, Farm & Ranch Lofts, Continental Lofts, and Urban Woods Townhomes) it took about a half-dozen calls before he connected with the seller, Ricchi Dallas Investments CEO Leobardo Trevino. After landing the assignment, there was never a price tag attached to the sale. “We put it out to a select group of about 10 investors because we knew how complicated it would be,” Lew says.
Every group contacted made an offer, Andrew says. All were substantial players with Centurion American Development Group having the strongest final offer. (The amount was undisclosed). All of that was done by last August and the deal just closed late last month. It was at the title company for 10 months because a number of things had to happen before the buyer would pull the trigger, Lew says. The single biggest issue: getting the TIF funding ($46M from the City of Dallas) approved. There were also the historical aspects, federal historical credits, state historical credits, and so forth.
Within the next six months, the buyer is going to demolish the buildings’ interiors down to the concrete floors and walls and do the environmental remediation. (For anyone who ever played with Legos you know that's the fun part.) There’s no set-in-stone plan for the project, but it will include a substantial number of hotel rooms (no hotel operator has been announced) and probably 200 residential units on top of the hotel. There will also be retail, restaurant, and ballroom space. Merriman & Associates will design. A target opening is slated for 2017.