Behind the Deal: 1201 Main Purchase
Downtown’s rebirth continues: 1201 Main was picked up by New Orleans-based KFK Group. (Every day is Mardi Gras when it's a day that you're bought by a company from the Big Easy.) What was the appeal?
KFK Group’s Nick Malone tells us they're banking on the investment around the 32-story, 1M SF tower, bought out of foreclosure last week. It's near the recently purchased Thanksgiving Tower, 2100 Ross, and Comerica Bank Tower. Nick tells us there’s a return of population to the urban core and a lot of potential growth. KFK’s hitting the market at a good time, with the DART rail and the Downtown Dallas 360 plan coming to fruition, plus the Farmer’s Market, West End, and the Arts District.
Step one is renovating the 1968 building (designed by Skidmore Owings & Merrill) to its “original glory.” The building is 65% occupied, with Bank of America taking the biggest chunk. KFK was looking for a way to diversify its portfolio, Nick tells us, which is made up largely of hotels, restaurants, and apartments. “We’re jumping in and it’s a not a small undertaking at 1M SF.” There’s a lot of work to be done, but Dallas is just a 90-minute flight from the New Orleans, he says. JLL EVP Joel Austin will handle property management. Transwestern’s Blair Huddleston, Fletcher Cordell, and Duane Henley will handle office leasing, and Transwestern’s Steve Williamson will handle the retail leasing.
Nick tells us he sees a lot of similarities between the struggles with occupancy in downtown Dallas and what happened in New Orleans after Katrina. (If everything's bigger in Texas, then shouldn't we be The Bigger Easy?) KFK's urban focus and historic rehabilitation expertise made this project was appealing, he says. KFK’s track record includes launching the first major post-Katrina residential project in the New Orleans area, the $70M 233 unit redevelopment of the former Krauss department store at 1201 Canal St, next to the French Quarter. And, now that Mardi Gras is over, Nick feels safe to return home for a few beignets.