A more than 100-year-old Downtown Dallas landmark is set to be transformed from a hotel into a mixed-use project with income-restricted apartments.
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Sycamore Development has a deal in place to buy and renovate the 29-story Magnolia Building at a total cost of $200M, The Dallas Morning News reported. The developer will cut the hotel's room count in half to 160 and add 130 mixed-income apartments.
Renovations planned for the building include a new main lobby and amenities for hotel guests and apartment tenants, according to a filing with the Texas Department of Licensing and Regulation. Sycamore Development expects to spend $90M on the renovations, the filing stated, with work slated to last into 2028.
“This redevelopment gives us the unique opportunity to honor the building’s rich history while reimagining it as a place that welcomes a broader community with mixed-income housing and hospitality,” Sycamore Development owner Jess Krochtengel told the DMN. “We’re excited to create a vibrant hub that reflects the energy of downtown Dallas and strengthens its future.”
Sycamore Development is also turning the former Cabana Hotel in the Dallas Design District into mixed-income housing. The firm started work last year on that property, which hosted rock 'n' roll royalty like The Beatles, Jimi Hendrix and Led Zeppelin in its heyday.
The Magnolia Building opened in 1922 as the headquarters of Magnolia Petroleum Co. and the tallest high-rise west of the Mississippi River. Its iconic, neon-outlined Pegasus sign was added in 1934.
The property was converted into a hotel in the late 1990s and was purchased by Grapevine-based investment firm NewcrestImage in 2021. The firm flirted with a $200M makeover that would have added three stories to the building, but that never materialized.
Once Sycamore Development closes on the purchase of the building, it could start renovations during the first quarter of next year.
The project will receive $20M in housing tax credits from the Texas Department of Housing and Community Affairs over the next 10 years. Sycamore Development also has state and federal historic tax credits it plans to use on the project. Additionally, the firm will seek funding from Dallas’ tax increment financing district and city incentives.
The apartments are planned to be a mix of studio, one-bedroom and two-bedroom units, with just 59 to be rented at market rates.
The first two floors of the building would feature the hotel lobby and its amenities. The third floor would house the lobby and amenities for the apartments, with the multifamily units occupying the fourth through 16th floors. The hotel rooms would be on floors 17 and up. Separate elevators would be designated for the tenants and hotel guests.
Davidson Bogel Real Estate’s Jake Milner and Scott Lake are representing Sycamore Development in the deal with NewcrestImage.
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