Top 10 Reasons Downtown Dallas Will Succeed
Why is Downtown Dallas one of the hottest tickets around? We found 10 reasons at Bisnow’s Evolution of Downtown Dallas event on Tuesday.
1. Dallas Wants to Succeed
Olympic Property Partners’ Seth Weinstein (far right, with Winstead's Tommy Mann and Merriman Associates/Architects' Mallory Vaughan) found that people in Dallas want to help the NYC developer with his adaptive re-use plan of 1401 Elm. “Unlike New York City, where they often say ‘what are you going to do for us?’ the answer here was ‘how can we help you’?” Seth says the former office building was functionally obsolete for office, but has great bones and will feature 480 apartments and 135k SF of retail. He’s also found a way to add 900 parking spaces on what was previously document storage space. Seth thinks tenants should start moving in at the end of ’16 and the site should be completed by Q2 ’17.
2. New Skin in the Game
World Class Capital CEO Nate Paul (right, with Invesco's Joseph Tu) brought his Austin mentality to Big D when WCC acquired 717 Harwood last year. He didn’t want to poach tenants from other buildings, but follow Austin’s lead of attracting new jobs to the city. Talking to CEOs from coast to coast, he saw Dallas on their radar and worked to lure cash-flowing software companies to Downtown. They’re thriving off co-tenancy with companies that share their vision of a tech hub in a redesigned space, Nate says.
3. New Construction
Hall Financial Group’s Kim Butler (left, with CBRE/UCR's Jack Gosnell) says it’s taken almost 20 years for developer Craig Hall to see his vision come to fruition, but KPMG Plaza at Hall Arts will open this summer. It’s about 72% pre-leased with the top four floors still available, Kim says. Having new product like this tower is all about retaining and attracting talent through branding that sets tenants apart from their competition. Kim says the Arts District is gaining steam and Hall Arts is adding to the excitement with its Texas Sculpture Walk. It’s a half-acre sculpture area that will connect the CBD on Ross Avenue with the Arts District on Flora. There’s also a DART station right there.
4. You Can Do Anything Here
Newt Walker Co's Newt Walker says the sky's the limit in developing in Downtown and Uptown with few requirements in place (outside of FAA regulations with Love Field close by). But, in his more than 30 years of specializing in land sales in Downtown and Uptown, he thinks this is the highest the market has ever been. Parking is at the forefront of issues, he says, because not everyone is going to ride a bike or use public transportation. There are some parks planned on existing parking lots, but where will those cars have to go when those lots disappear, he ponders. There’s still land that’s not entitled, but he’s concerned about density and traffic and issues you can see coming three to five years out.
5. Amenities on the Rise
There's 50 new restaurants (to join the existing 350) opening in the Urban Core in the next six months. Urban amenities like the Perot Museum, the AT&T Performing Arts Center, and the redevelopment of the Farmers Market and its adjacent residential development, are all contributing to the allure of Downtown Dallas, says Downtown Dallas Inc's Kourtny Garrett. And, empty nesters are starting to join Millennials in the move to urban living. For Dallas, there are few vacant buildings left for redevelopment and there are new entertainment options on the horizon like the upcoming Alamo Drafthouse, which is under construction.
Turner Construction’s Steve Whitcraft (panel moderator, far left with the panel) has dozens of projects Downtown including 1401 Elm with Seth and KPMG Plaza at Hall Arts with Kim. Steve believes in the power of the light rail to move people around Dallas. The Dallas Area Rapid Transit is the longest light rail system in the country and is among one of the best amenities for Downtown.
7. Job Growth
JLL’s Carl Ewert (center, between Billingsley Co's Marijke Lantz and his wife, Trisha Ewert of Old Republic National Title) says job growth is key to filling buildings in the urban core. So far, Uptown landlords have been fishing for tenants in Downtown, which has been attracting smaller tenants (25k SF or smaller) from the suburbs. What the CBD is lacking are the Fortune 1000 companies, which aren’t attracted to Dallas because of the weak schools. Relos are looking for good cheap real estate to get more bang for their buck, but they’re also looking for a quality of living with a good free public school system.
8. Active Owners
With a new owner purchasing the 181k SF Adolphus Tower (an event sponsor) at 1412 Main St in Downtown earlier this year, there's new activity in the building with a lobby remodel with restaurants being added. The conference center is also getting refurbished and some spec suites will be added, as well. Henry S Miller sold the building and will continue leasing it now. Here's Don Dowell (advisor to the owner), Henry S Miller's Doug Prude and Carla Machulis with Roden Aguirre's Gary Roden. Carla tells us the tower has 7k SF floor plates with the ability to put together three full floors in a contiguous block.
9. No Shortage of New Projects
Event sponsor Merriman Associates/Architects' Sydney McStravick, Mallory and Jerry Merriman tell us MAA is involved in 18 projects Downtown including 1401 Elm with Olympic Property Partners, the Statler Hilton and 1600 Pacific, to name just a few.
10. Downtown Upgrades Continue
Event sponsor Envirophase's Jayson Boggess and Scott Bass are working several Downtown projects right now providing environmental site assessments, asbestos surveys and tank removals, among other tasks. The company is all about helping owners with demolitions and renovations, which are aplenty in Downtown today.