8 Reasons Why Downtown’s The Next Big Thing (Again)
Traditionally, Downtown has been viewed as a one-dimensional office center. That’s changing as new owners are revamping existing towers and creating a multi-faceted city center. Here’s a look at what’s driving the rebirth.
1) Landmark Projects
Downtown Dallas, Inc. CEO John Crawford credits landmark projects with being a catalyst for the Downtown revival. To start, there’s the Omni convention center hotel, the Margaret Hunt Hill Bridge, the Farmers Market, the Perot Museum (pictured) and Klyde Warren Park. “We proved that Downtown has become a place to go, rather than a place to go through,” John tells us. Part of the goal to revamp the urban core was to create destinations for people to come and enjoy the area.
2) Residential Boom
There’s 5,000 units under construction in the urban core and John (left, speaking at a Bisnow event with Beck Venture’s Scott Beck) believes the larger downtown area (including the Design District, Victory, Uptown, and all of the 15 different neighborhoods that touch on Downtown and are already home to more than 40,000 residents) will hit 50,000 by 2017. Once that critical figure is reached, even more development will follow, he tells us.
3) Office Redevelopment
At the top of the list is the $100M Thanksgiving Tower (1601 Elm St, pictured) renovations, which will include 16k SF of retail space on the ground floor. Alto 211 at 211 N Ervay has undergone improvements and is filling up with tech startups and entrepreneurial firms. Big D’s tallest tower, Bank of America Plaza, is getting a $15M facelift in the common areas and had a new exterior lighting system installed last year. The Belo building (now called 400 S Record) was acquired and is being updated. Chase Tower is getting modernized technology and a new health club, among many other projects in the works.
4) New Life from New Owners
One thing almost all of the office redevelopments have in common is new ownership. Thanksgiving Tower was acquired last summer by Woods Capital, Alto West acquired 500 S Ervay and 211 N Ervay, 1401 Elm St was purchased by a JV of BDRC and Olympic Property Partners, and the list goes on. The most recent deal was completed this week when FAQ Capital (the real estate investment division of Hoque Global) purchased the Adolphus Tower (pictured), 1412 Main St. FAQ Capital bought the 181k SF tower from Henry S. Miller with plans to completely renovate it with a new exterior design, color scheme and lighting that encompasses the building's architectural heritage while renovating the lobby and mechanical systems. The first floor will feature a new restaurant and retail along Main and Akard. Hoque Global’s Mike Hoque can be credited with some of Downtown’s first successful restaurants with Dallas Chop House, Dallas Fish Market and Wild Salsa on Main Street, John tells us. Mike also has a new restaurant coming: Oven and Cellar. (HSM’s Darrell Hurmis and UCR’s Jonathan Diamond brokered the deal).
Without the cooperation of the City of Dallas, Downtown wouldn’t be seeing this revitalization, John says. Public-private partnerships and TIF funding have resulted in hundreds of millions of dollars to make these projects work, he tells us. DDI serves as a conduit between the public and private sectors, but the City Council has stepped up to the challenge. Legislation changes last year in Austin have also benefited Downtown projects with tax credits (federal tax credits were already in place) on historic redevelopments. Projects like 1600 Pacific, the Statler Hilton (pictured) and 1700 Pacific will all likely use some tax credits. New Orleans-based HRI Properties – with a specialization in revamping historic buildings – bought 1600 Pacific least year with plans for an $80M renovation for a mixed-use project with residential units and a Hilton Garden Inn Hotel.
6) Room to Grow
Downtown also still has a lot of land to develop, John says. “You’ll start seeing more of that in Downtown rather than redevelopment, because we’re running out of buildings,” he tells us. The first one started in this cycle is the KPMG Plaza at Hall Arts (pictured) by developer Craig Hall. But, John says there are major assemblages of land just waiting for the right time to get started. Developer Tim Headington (who created the highly successful Joule Hotel) has a major land holdings in surface parking lots at Field and Ross, for one. Spire has 13 acres adjacent to the Arts District. JP Morgan has an entire city block bordered by Ross, San Jacinto, Harwood and Olive, and Trammell Crow Co bought the old Chase site at Woodall Rogers and Pearl. Alto West also gathered a big parcel of land behind City Hall and hopes to build four towers there.
7) Mixed-Use On the Way
The plethora of mixed-use projects on the way will only add to Downtown’s appeal as a destination for visitors and to lure new residents and tenants. Among some of the biggest projects underway is The Olympic at 1401 Elm St (pictured). The block-sized project – tagged to cost around $170M – will include 150k SF of retail as well as office space, parking and luxury apartments in the now-vacant 52-story building. The Statler Hilton is undergoing a $175M rebirth by Centurion American Development Group for multifamily, restaurants, office and a hotel. The 1M SF One Main Place at 1201 Main St bought by New Orleans-based KFK Group is ripe for a mixed-use upgrade with office, retail and potentially hotel or residential.
8) Hotels & Entertainment
There are 10 new hotels coming to Downtown within the next 18 to 24 months including 1700 Commerce, Saint Elm and Dream. Retail and entertainment is another growing sector with the FortyFiveTen and Joule expansion on Main Street, Alamo Draft House and new restaurant clusters at the Omni and Dallas Famers Market. There’s also an emergence of entrepreneurs like Serj coffeehouse and bookstore, Kettledrum Allie boutique and Volver salon that are getting in on the ground-floor action.