Tuesday, May 27, 2008

Staubach, JLL Merger Talks Pick Up Again

The on-off rumor that Staubach Co. is poised to merge with Jones Lang LaSalle has surfaced once again. Well-placed industry sources say it is still rumor at this time, but aren't discounting that it won't turn to fact at some point.

A spokeswoman for Jones Lang LaSalle Inc. in Chicago says there is no comment from its camp because it constitutes a material transaction. JLL's corporate policy bars commenting on material transactions until finalized. An interview request is pending with Dallas-based Staubach's corporate chief, who was unavailable by GlobeSt.com's early afternoon deadline. Neither company has arbitrarily dismissed the inquiry as purely rumor.

The long-standing merger rumor has been surfacing periodically in the market for nearly two years. Some market watchers say the catalysts have been the 2007 corporate shifts by Roger Staubach and a value-building move earlier this year when Staubach gave up stock to Century 21 franchisees so they'd convert their operations into branch offices.

Of course, JLL's buying mode this year lends more credence to the street talk than previous market chatter. Earlier this month, JLL completed the acquisition of Kempber's Holding GmbH, a Germany-based retail company. In a May 6 filing with the SEC, JLL, which signed the merger agreement in January, reported the deal made it the largest property advisory business in Germany, picking up offices in Leipzig, Cologne and Hannover. In April, JLL bought Leechiu & Associates, an agency business in the Philippines, and a 10% stake in Alkas, a Turkish-based commercial real estate firm. According to the SEC filing, the triple play cost $134.2 million.

Incap Unveils Full Scope of $2B Plan for Dallas


With 300 acres of entitled land now ready for development, Incap Fund is pulling the cloak of secrecy off its plan after two years of market speculation and limited details. The $2-billion build-out is a vision to reshape the landscape of Oak Cliff.

"We had a blank canvas for master planning," says Alan McDonald, managing director of Dallas-based Incap. "Now we're starting to take offers on this." Incap has divided the assemblage into four districts, investing $240 million into the land acquisitions, scraping roughly 2,000 apartments and prepping the dirt for resale, he tells GlobeSt.com.

Incap has nearly 100 acres of the ready-to-go mixed-use land under contract or under negotiation, with closings set to start in July. The dirt is bringing $30 per sf to $35 per sf, McDonald says.
First out of the chute will be an 8.93-acre sale to Dallas-based Sky Modern Homes, which will develop 96 zero-lot line homes and row houses as the third phase for its Kessler Woods, according to McDonald. The developer is getting the sites of the Acorn Tree Apartments and Gulf Latin Church along West Davis Street.

In October, McDonald says Gus Woehr of Dallas will buy four acres for an 80-unit residential project. Woehr's site once held the Kings Highway Apartments in the city's oldest conservation district.

Closing in November will be 4.3 acres that once held the Chateau Crete Apartments along Stevens Forest Drive. McDonald says the development partnership is Beck/Holley, with Dallas-based Beck Group at the forefront of the deal.

Another 10.15 acres near Methodist Hospital will be sold in November to a national homebuilder. The hospital controls another 5.44 acres, also earmarked for development. McDonald says he can't release the homebuilder's name due to a confidentiality clause, but the build-out plan calls for 200 multifamily units, 200 senior housing apartments, 150,000 sf of medical office and 150,000 sf of retail.

A 4.9-acre site at 1836 W. Davis St., once Cliffwood Apartments, is being marketed to retail developers for $32 per sf. McDonald says the vision is to create another eclectic shopping district like Knox-Travis. Another 5.34-acre tract along Cedar Hill Drive also is being marketed.

The lion's share of Incap's land assemblage is earmarked for a sustainable mixed-use urban campus spanning 100 acres. Marketing begins next month. The Westmoreland urban campus tentatively calls for 200 single-family lots, 400 townhouses, 1,800 condos in mid-rise towers, 4,800 apartments, 450,000 sf of retail and possibly 30,000 sf of office space atop some street retail.

The urban campus is "the largest undeveloped tract in the inner city," McDonald says. And, he quickly points out that it's just 3.5 miles from Downtown and Uptown.

McDonald says Incap's tracts aren't contiguous like other massive redevelopments that he's undertaken in Dallas. "But, the unique part of these tracts is they are in the most fabulous neighborhoods in the city and the oldest ones in the city," he says. Many surrounding homes were built in the 1920s and 1930s. "They are little jewel boxes," he says. In the past five years, he says the various neighborhoods have transitioned from an aging population to the Gen Y age crowd, spawning eclectic emerging pockets like the Bishop Arts District.

Incap's land bank is situated within the 589-acre Davis Garden District Tax Increment Financing District. McDonald labels it a "new generation TIF" because it is so broad-based and focused on residential redevelopment, including affordable and seniors housing, unlike TIFs of Downtown and Uptown. Interstate 30 is Incap's northern boundary; Davis Street, southern; Methodist Hospital, eastern; and Pinnacle Park, western.

But for the veteran McDonald, the assemblage is another opportunity for him to reshape a Dallas neighborhood like he did with projects in Uptown and Knox-Travis.He says the second-story view from all the assembled tracts will be the city skyline, the Trinity River and the to-be-built Calatrava bridge trio. "That's the view corridor from every single site on the second floor," McDonald stresses, "and it's unobstructed because of the Trinity River's flow. The river is coming back with the Calatrava bridges and town lake plan and it connects to the original neighborhood that was the birth of Dallas."

Developer offers details on St. Regis hotel plan in Uptown


Landowners asking for a zoning change on a prime Uptown tract are showing details of what they plan to build on the Katy Trail site.

Los Angeles based Foch Investments/Development is seeking city approval to construct a hotel and condo tower at Cedar Springs Road and Carlisle Street that would be 103 feet taller than current zoning will allow.

In return for the taller building, the landowner says it will move the building farther away from the Katy Trail with a landscaped buffer.

The hotel would be operated by St. Regis Hotels.

Foch Investments' zoning request has drawn opposition from critics who want the real estate firm to be held to current zoning requirements.

The City Plan Commission turned down the height increase.

The Dallas City Council will consider the request next week.

The property owner has responded that lowering the height of the building to current standards will require that it take up more of the site and sit much closer to the Katy Trail.

The taller, 24-story building – designed by architects BOKA Powell LLC – would cost about $200 million and contain 150 hotel rooms plus 70 to 80 condos.

Foch Investments says it has operating agreements and financing in place for the project, which would open in late 2010 or early 2011.

"We will break ground at the end of the year or no later than first quarter of next year," Foch principal David Thurman said.

"Our deal is signed and confirmed with St. Regis with our existing zoning."

Thursday, May 22, 2008

Dallas Gives Final Nod to 1,000-Key Hotel Site


Clearing yet another hurdle for a convention center hotel, Dallas City Council yesterday agreed to buy an 8.34-acre parking lot from Chavez Properties, which has been waiting 20 years for the deal to gel. The seller tentatively has penciled June 19 as the closing date.

The clock has been ticking on a land option since mid-February when council plunked down $500,000 of earnest money for the Young Street lot. The 8.34-acre lot, which generates $800,000 annually, is being sold for $109.32 per sf. Council will finance the acquisition by issuing $42 million of certificates of obligation, which also got approved at yesterday's meeting.

Meanwhile, council and its team have narrowed the list of developers to Austin-based FaulknerUSA and Woodbine Development Corp., Matthews Southwest and Hamilton Properties Corp., all from Dallas. The two proposed operators are Irving, TX-based Omni Hotels Inc. and Marriott International Inc. of Bethesda, MD. A decision could be made by mid-June.

"By buying this property before the deal's done, they're going to do well," Michael H. Anderson, the Dallas partner of Cincinnati-based Chavez Properties, tells GlobeSt.com, likening the process to buying a lot and then picking a homebuilder. Council, just like others in the US, is betting on the 1,000-room convention center hotel to generate more bookings, translating into more tourism dollars for the general coffer. The city's dream house tentatively is carrying a $400-million to $500-million all-in development tab, according to Anderson.

The win didn't come easily. As would be expected, the opposition camp presented competing sites. Chavez's 1,500-space parking lot, though, sits at the front door of the convention center. "Any other location would have made it a no-deal. It's a monopolistic location," Anderson says. "There has been a lot of sensationalism. The opposition has been very, very vocal."

Anderson admits that critics pointed to the land assessment--$7.5 million. But, he points out that was levied in January 2007. The cost of dirt, like other commodities, doesn't remain flat, particularly urban infill, revenue-producing sites, he says.

Anderson says there were no real dark moments when he thought it would crater, like it did four years ago. "It was going to happen all the time," he says.

Anderson and A.C. Gonzalez, assistant city manager, worked through due diligence on a handshake until the purchase option went into play. "What is really cool," Anderson says, "is they are doing it like a business." And like all real estate development deals, interest costs can be the biggest expense. "Can you think of a better time for a city to be borrowing big money for a major project," he says. "Now is the best time in the world to be borrowing long-term capital. And with the size of a site like this, you can do anything you want."

Monday, May 19, 2008

Thompson Banks Two New Uptown Buildings

Setting the tone for future value-add buys, Thompson National Properties LLC, acting for the $250-million Bruin Fund, has bought two neighboring class B office buildings in Uptown/Turtle Creek. The buildings, ticketed for extensive renovation, are assessed at nearly $10 million.

Thompson's new chief investment officer and president of the newly created Middle East fund, Darrell Betts,, had been marketing the buildings for Grubb & Ellis Co. along with former partner, Scot Farber in Dallas for locally based Resdeco Real Estate Development. The just-bought buildings are the 80,227-sf Oakwood Tower at 3626 N. Hall St. and 53,812-sf One Lee Park West at 3303 Lee Pkwy. The larger building is 94% leased; the smaller one, 92%.

Darryll Goodman, senior vice president in Las Vegas for the Irvine, CA-based Thompson National Properties, tells GlobeSt.com that there is considerable lease rollover in the next three years so the game plan is to renovate and bump rents to market rate. Although there's the obvious risk of move-outs, he says "it's a loyal tenant base." He estimates in-place rents are 30% below market rate.

The new team in charge of leasing and management, Holt Lunsford Commercial of Dallas, is quoting $21 per sf plus electric as the pre-renovation rate. Bids are now being solicited for the upgrades.

Goodman says the anticipated hold is three to five years. Both positioned on highly valuable land, the nine-story Oakwood Tower, built in 1972, sits on 0.8 acres while the five-story One Lee Park West, delivering in 1964, is positioned on 0.6 acres. Based on previous value-add sales in the submarket, the deal most likely hovered $100 per sf. Resdeco bought Oakwood in June 1987 and the other building in December 1991.

"The buildings have great bones, but they need some freshening," Goodman says. And that is the going-forward strategy whether it's in Dallas or elsewhere, according to Goodman, who came on board in April from Thompson's former camp at Grubb & Ellis Realty Investors Inc. of Santa Ana, CA. He's not sure about the quota for Dallas, but it is one million sf of acquisitions in the next 12 months in his homeport of Las Vegas.

"We're being very, very aggressive," Goodman says. "Every market we find an opportunity like this, we're going to go and buy. These are extremely well located in Turtle Creek--it's the Beverly Hills of Dallas." Financing was arranged by Adam Levinson of Cohen Financial through Grandbridge Real Estate Capital LLC.

Thursday, May 15, 2008

METROPLEX GOOD PLACE TO BUILD EQUITY

When it comes to building equity, the Metroplex is among the top five markets expected to do well over the next four years. Or so says the Center for Economic and Policy Research and National Low Income Housing Coalition.

According to the center’s recent study, a person who buys a house priced at 75 percent of the median for the DFW area could gain more than $80,000 in equity four years from now.

Mark Dotzour, chief economist with the Real Estate Center at Texas A&M University, said that while the study confirms the relative strength of the Texas housing market, he would advise against using the projections of any study as the basis for homebuying.

"I hope they are right, but my guess is they might be overstating it a little bit," Dotzour said. Dallas Morning News

Saturday, May 10, 2008

Developers plan apartment projects near Dallas Farmers Market

Developers are sizing up two key tracts near the Dallas Farmers Market, planning to construct hundreds of apartments.
California-based Legacy Partners has contracted to purchase about seven acres at Central Expressway and Interstate 30.
"We are going to build 460 apartment units," said Spencer Stuart, who heads Legacy Partners' Dallas regional office. "We think that is a real up-and-coming area."
It would be the largest development in that area since Houston-based Camden Property Trust built its Farmers Market rental community in 1999. The project was expanded in 2004.
Apartment builder Trammell Crow Residential is negotiating to purchase a four-acre tract on Pearl Street for more apartments.
Crow Residential officials said it was too early to talk about plans for the vacant property, which is just north of the Farmers Market sheds.
The city of Dallas is investing in the future of the historic produce market, having committed about $10 million toward improvements in the complex, which dates to the 1940s.
The addition of hundreds more residents to the area should add to customer traffic at the market, which has been lagging in recent years.
Property in the area has been selling for between $30 and $40 per square foot.
"We looked at land one mile away at more than $100," Mr. Stuart said.
Legacy Partners – which is finishing up a large apartment community in Richardson's Telecom Corridor – is planning an urban-style rental complex on the Farmers Market site that will be aimed at younger renters.
"This is going to be ... a lot different than anything down there," Mr. Stuart said.
By STEVE BROWN / The Dallas Morning News

Victory developer shifting focus from condos to office space

The developer of Dallas' big Victory complex is shifting gears for the next phase of construction.
Ross Perot Jr. said Friday that his firm Hillwood will delay work on more high-rise condominiums and hotel rooms to focus on additional office space.
The office buildings at Victory are more than 80 percent leased, including one still under construction.
"We have a couple more office buildings on the fast track to keep up with these tenants," Mr. Perot told a downtown business meeting on Friday. "What's working in Victory today is office."
Hillwood has postponed construction of Victory's next big hotel and condo project. The 43-story skyscraper was to include a Mandarin Oriental Hotel, luxury condominiums, office space and retail.
It was scheduled to open next year.
But Mr. Perot said, "Our hotel and condos are on the slow track at the moment."
"You don't want to introduce that until people feel better than they do," he said.
Lenders are also reluctant to finance additional luxury hotel and condominium development, Mr. Perot said, speaking to the National Association of Real Estate Editors.
Sales of luxury condos have slowed since last year because of the slump in the housing market and higher costs charged for financing affluent homes.
And there are worries that with the slowdown in the economy, demand for hotel rooms might soften.
Mr. Perot said that most of the condominiums that have been built at Victory have done well.
He said that only about 16 units remain in the two W Hotel condo towers. And only four or five units are available in the neighboring Terrance condo building.
The 150-unit House condo tower under construction in Victory won't open until the end of this year and is about 40 percent presold, he said.
Hillwood is still planning to locate a boutique grocery story in the ground floor of the 28-story House building, which Mr. Perot said his firm will subsidize. "That's our amenity for the neighborhood," he said.
So far, he said the buyers of condominiums at Victory have been a diverse group, ranging from a West Texas ranching family that wanted a "weekend place" in Dallas to the recently retired chairman of Texas Instruments, Tom Engibous.
There are five families with children and several couples in their 70s and 80s, Mr. Perot said.
"It's a very eclectic group," he said.
Hillwood and its partner, Houston developer Hines, are building a 20-story office tower at Victory whose tenants include Ernst & Young, Haynes & Boone LLP and PlainsCapital Bank. The building is 84 percent leased, Mr. Perot said.
There are plans for a twin tower next door.
And some of the next office buildings at Victory may not be speculative, multitenant projects.
"We have office clients that want to own the buildings, and we will let them," Mr. Perot said.
10:10 PM CDT on Friday, May 9, 2008
By STEVE BROWN / The Dallas Morning News

Thursday, May 08, 2008

112-Unit Complex Sells in TIF District

Capturing a spot in the heart of a redevelopment corridor, a private local investor has purchased the 112-unit Mill Run Apartments in Oak Cliff. The 95%-leased complex, marketed for $3.2 million, went to the highest of three offers.
The three-building complex takes up four acres at 2732 W. Colorado Blvd. The new owner, who also has properties in upscale Oak Lawn, "saw people were talking about that area and thought it was a good area to buy in," Sam Pettigrew, vice president of Cantrell Cos. in Dallas, tells GlobeSt.com. "He will hold it for awhile and see what happens to the area." He adds the buyer is digging in for a three- to five-year hold.
The deal sweetener is nearby apartment projects already are earmarked as teardowns. In a true value-add play for the present and future, Pettigrew says the new owner is planning to push rents $20 per month across the board since the in-place rates are below market. One-bedroom units are $630 per month; two-bedrooms, $730. Units range from 570 sf to 960 sf in four floor plans.
Harshaw Asset Management Co. of Dallas has owned the 19-year-old complex since 1989. Harshaw owns other multifamily properties, but it's not its core business. "He thought it was a good time sell and focus on the mobile home business," Pettigrew says. He and Cantrell senior associate Elliott Carpenter partnered on the sale.
The tract size and list price work out to $18.37 per sf for the dirt, which has a hard corner positioning and flanked by retail and other multifamily complexes. Recently, Dallas City Council created two new tax increment financing districts in the neighborhood, including Fort Worth Avenue, which is one block away.
About 70 miles northeast, Pettigrew sold another class C complex, the 129-unit Ponderosa Apartments at 2224 Live Oak St. in Commerce. The 60%-leased asset went to Fontaine Management Inc. of Gretna, LA, which two more properties in nearby Greenville and scores of others between Texas and its home base. The seller, banking $1.6 million from the sale, is a private investor from El Paso.
"He did a quick 10-day inspection and went hard with a six-figure earnest money," Pettigrew says. The deal included an adjacent 16,902-sf tract of raw land.
The complex, developed from 1965-76, has a 17-unit density on the 7.5-acre tract. The one-, two- and three-bedroom apartments, ranging from 450 sf to 1,050 sf, are bringing in $460 to $750 per month.
Pettigrew says the buyer, though, is facing deferred maintenance unlike Oak Cliff's buyer. In addition, Ponderosa's new owner is planning a full overhaul, inside and out, according to the broker.

Tuesday, May 06, 2008

The Heritage at the Stoneleigh Opens New Sales Center

Heritage Residents Will Have Full Access to Amenities from Landmark Stoneleigh Hotel & Spa
With its just-opened sales center, The Heritage at the Stoneleigh can now proudly present the unique appeal of living in a luxurious, contemporary residence enhanced by the personal services and amenities of an adjacent, legendary, restored and modernized boutique hotel. The Heritage sales center is located inside The Stoneleigh Hotel and Spa at 2927 Maple Avenue in Dallas, Texas.
Along with the hotel, The Heritage tower shares 2.5 acres in enticing Uptown, an urban oasis noted for its tree-lined streets, galleries, restaurants and easy access to the landscaped 3.5-mile Katy Trail.
By visiting this new center, aspiring urban dwellers will be enlightened that this paired residential tower and celebrated landmark hotel, nestled in its vibrant Uptown neighborhood offers an incomparable lifestyle.
Newly modified floor plans, as well as enhancements in amenities and finishes offer extra buyer appeal and help further distinguish this urban residential choice which plans a late 2009 opening. Prices range from the $400,000’s to $3 million plus. For more information, visit www.heritagedallas.com. To schedule a private appointment before the public offering, call 214-530-2021 or e-mail sales@heritagedallas.com.
“The Heritage is a lifestyle offering that presents future residents with the opportunity to be a part of a real, enviable neighborhood while partaking in the amenities of the historic Stoneleigh Hotel that has a spirited sophistication and soul,” said Jud Pankey, chief executive officer of Prescott Realty Group, which co-owns the residences and hotel with Apollo Real Estate Advisors in New York. “Heritage residents will have the opportunity to elevate their service experience by purchasing a residence while also enjoying the unique historic charms and modern elegance of the neighboring hotel and its award-winning chef.”
“The Heritage at The Stoneleigh offers a compelling lifestyle for people who want to connect to the vitality and sophistication of urban Dallas, but can’t imagine life without a green neighborhood surrounding them,” said Al Coker. “We are pleased to have the opportunity to help buyers envision The Heritage’s unique offering which pairs luxurious residences and gracious hotel in their own colorful neighborhood.”
“We are also pleased that we have been able to inspire and influence modifications to floor plans and amenities which will make the residences that much more appealing,” added Coker. “Even though incorporating these changes into the construction schedule may cause a temporary delay in construction, we believe the changes will make the residences more distinctive and will be worth the wait in the long run. Sometimes it’s the little things that make the biggest difference, and your home should be no exception.”
The Heritage will echo the classic architectural detailing of The Stoneleigh Hotel & Spa, which will be separated from the residences by a beautifully landscaped courtyard. It will offer one-, two-, and three-bedroom homes and penthouse suites, with floor plans ranging from 1,200 to just under 4,000 square feet.
The Heritage residents will benefit from the finest personal services and amenities, including housekeeping, linen service, dry cleaning and private-entrance arrival with valet parking. Other amenities include a fitness center, wine room, outdoor dining area, library, club room and business center.
The well-appointed condominiums will be designed in a sophisticated "modern traditional" style and feature preferred Viking kitchen appliances and Kohler baths. Each home boasts an expansive terrace overlooking Dallas' stunning downtown skyline or its charming Turtle Creek or Uptown neighborhoods.
The 22nd floor of The Heritage will house an array of exclusive resident amenities to ensure a lifestyle comparable with estate living. From the Constellation Club for private parties, and the outdoor terrace, with its stunning views of Dallas' skyline to a wine room, billiard room, catering kitchen, and card room, every facet of a sophisticated lifestyle is accommodated. The building's lobby and common areas will be adorned by an impressive collection of original artwork honoring Texas' best artists.
The Heritage features its own resort pool with negative-edge waterfall and a lush private park for exclusive resident use, including an expansive, European-style open lawn perfect for hosting croquet or garden parties.
The Heritage residents will also have full access to all of the luxury amenities at The Stoneleigh, including the 5,200-square-foot, full-service Stoneleigh Spa. Certain to be a favorite resident benefit, is the promise of room service provided by the hotel's signature restaurant, Bolla, which serves fresh modern Italian cuisine by chef David Bull, a 2007 James Beard nominee for "Best Chef in the Southwest" and Iron Chef challenger. The Stoneleigh Hotel & Spa originally opened in 1923 and has hosted celebrated guests such as Judy Garland, Katherine Hepburn, Bob Hope, Elvis Presley, Andy Warhol and Frank Lloyd Wright. The elegant hotel recently underwent a $36-million renovation with the assistance of the talented Managing Director, John Langston, and renowned hotelier Jeff Trigger. The Heritage residents will have direct access to the hotel through a climate-controlled underground tunnel providing increased ease and privacy or across the beautifully landscape courtyard.
About The Stoneleigh Hotel & Spa
Re-opened March 2008 after a $36-million renovation and restoration, the award-winning Stoneleigh Hotel & Spa is a legendary, 170-room, Art-Deco hotel on a tree-lined street in the beautiful Uptown residential district of Dallas. First opened in 1923, The Stoneleigh Hotel & Spa restoration maintains the landmark hotel’s period-style architecture while updating it with modern comforts and amenities. Within the 12-story hotel is a myriad of guest room styles and layouts designed by Forrest+Perkins. Among them are nine Tribute Suites to legendary past visitors such as Elvis Presley and Judy Garland, as well as opulent Penthouse Suites designed by Carleton Varney of the renowned Dorothy Draper Company. A new restaurant, Bolla, offers innovative modern Italian cuisine created by Iron Chef-challenger and James Beard-award nominee, David Bull. There is also a new 5,200 square-foot luxury spa and fitness center. Interiors feature works by some of the state’s most talented artists, while a magnificent Grand Salon on the top floor presents Dallas in panorama. The Stoneleigh Hotel & Spa is a member of Preferred Hotels & Resorts and Historic Hotels of America. www.stoneleighhotel.com
About Prescott Realty Group
Employing twenty years of unprecedented real estate expertise, Dallas-based Prescott Realty Group specializes in the development of mixed-use, urban infill projects and infrastructure rich settings. Since the company started in 1996, Prescott has been a prime contributor and quiet leader in transit, mixed-use developments and residential projects providing people with live, work, and play environments. Prescott has recently hit the fore-front of the real estate industry under its ownership of the newly renovated historic and award-winning Stoneleigh Hotel & Spa, The Heritage residences, University Crossing and its development of Lake Highlands Town Center, Dallas’ largest transit-oriented development. Through Prescott’s signature strategy, personnel, execution, and community impact, they have reason to celebrate their influential experience and notable tradition.
About Al Coker & Associates
Al Coker & Associates is a one-stop shop real estate marketing firm that specializes in high-end urban residential projects. Combining over 30 years of unsurpassed regional and national experience, Al Coker & Associates has delivered highly successful results in the marketing and sales of over $1 billion in high-value condominium and townhome developments. They have crafted the on-site marketing campaigns for some of the regions most prominent condominium projects, including high-rise, mid-rise, mixed-use and townhome developments. Their expertise includes handling new sales at on site sales centers with company-staffed, project dedicated sales people.
About La Corsha Hospitality Group
La Corsha Hospitality Group is an Austin, Texas-based hotel management and consulting company. The company was founded in July 2006 by 25-plus year hotel industry veteran Jeff Trigger. Trigger and his associates have an extensive background that specializes in repositioning and restoring historic hotel properties. His signature world-class work can be seen in the properties he's previously overseen transformations of, including downtown Austin's The Driskill Hotel, in Dallas hotels like The Mansion on Turtle Creek and The Adolphus Hotel. Trigger has been named to the list of "Best Hotel Managers in The World" by Leaders Magazine and listed as a "General Manager of The Year" by Business Traveler Magazine.
About Apollo Real Estate Advisors
Apollo Real Estate Advisors is a leading international real estate fund manager that has been investing in the United States since 1993 and globally since 1995. Headquartered in New York, with offices in Atlanta, Chicago, Los Angeles, London and Mumbai, Apollo has a team of more than 55 investment professionals focused on generating returns for its investors. Apollo pursues a range of real estate investments that offer the opportunity for highly attractive risk-adjusted returns, whether through its opportunistic funds, value added funds or its mezzanine loan business. Apollo has overseen the investment of several real estate funds and joint ventures, through which it has invested over $8 billion in more than 450 transactions with an aggregate value in excess of $30 billion. Apollo's investors consist of leading global government and corporate pension funds, insurance companies, endowments and high net worth individuals.

Land prices in downtown Dallas vary widely

More than two years ago, the owners of the historic Masonic Temple and two adjoining buildings on the southeast side of downtown put their properties up for sale.
With an asking price of close to $3.5 million, or less than $40 per square foot, the deal includes almost 2.5 acres of land and the buildings that sit on it.
So far there have been lots of tire kickers but no takers.
That's not the case a few blocks down Young Street, where the city of Dallas is preparing to pay $42 million – or about $110 per square foot – for a vacant 8.5-acre tract. The surface parking lots are adjacent to the Dallas Convention Center and would be used for a new hotel.
The City Council could approve the purchase this month.
This disparity of pricing from one end of Young Street to the other is indicative of the downtown Dallas market.
From block to block, land costs can vary dramatically. And as with any real estate, the price ultimately depends on what someone is willing to pay.
Like any neighborhood, downtown has extremes.
"Look at the Arts District and then go down near Interstate 30 and look at the soup kitchen lines," said veteran Dallas real estate broker Mike Turner. "It's just not the same."
Recent sales on the north side of downtown near Woodall Rodgers and in the West End have been $100 per square foot or higher.
On the south side, near the convention center or Farmers Market, land is trading for $45 per square foot and less, real estate brokers say.
"Arguably the land between Ross Avenue and Woodall Rodgers should be worth more than down by the Convention Center," said real estate broker Newt Walker.
City officials say they used uptown prices in part to value the convention hotel land.
But often the price of real estate downtown is based on what the buyer wants to do with the property.
"If the city were not there saying they are going to do a Convention Center hotel, the highest and best use of that property is still a parking lot," Mr. Walker said.
Based on that use alone, he estimates that the property would sell for no more than $60 per square foot.
Valuing real estate in the central business district – an area where few properties change hands – can be a challenge.
Not public
In Texas, property sales prices are not public information. Buyers and sellers jealously guard values in hopes of holding down tax liabilities. And private appraisals can vary for the same parcel.
Last year, the Dallas Central Appraisal District estimated for tax purposes that the convention hotel tract was worth $7.5 million. The appraisal district just increased its valuation to $36.5 million.
The city has based its purchase price on independent appraisals.
At a recent City Council meeting, an executive with Dallas real estate investment firm Crow Holdings presented two other appraisals – one for $29 million, another for $33 million. The Crow family owns the Hilton Anatole hotel and opposes public funding for the convention hotel.
"If the city is overpaying, at the end of the day that's the price if they want it," Mr. Walker said.
Downtown property owners and real estate brokers aren't likely to complain if the city overpays. So much the better for values, the thinking goes.
Recent sales
Most of the recent land sales downtown "have been in the better markets," said Dallas real estate appraiser Chuck Dannis. "In the core areas, prices are running close to $100 per square foot."
Mr. Dannis says the price the city has offered for the convention hotel site on Young Street doesn't reflect recent sales prices on the south side of downtown.
But he says the large size and planned use are factors that could drive up the price.
"That would be one of the biggest land sales we've seen downtown in a long time," Mr. Dannis said.
Cincinnati-based Chavez Properties Dallas III LP, which hopes to sell the site to the city, paid less than $25 per square foot in the early 1990s. The land has been used for parking lots.
Timing is key
"Everybody thinks that in real estate it's location, location, location," Mr. Dannis said. "But timing is just as important."
Downtown land prices are still nowhere near what they were two decades ago.
During the 1980s real estate boom, property downtown topped more than $350 per square foot as developers competed for prime spots.
A few years later, during the depths of the real estate crash, land in the heart of the central business district traded for less than $30 per square foot.
A 4.5-acre building site on the north edge of downtown at Woodall Rodgers and Field Street sold for about $175 per square foot in 1985. It traded for close to $25 per square foot in the early 1990s.
Just last year, a developer bought the land for about $100 per square foot – still well below the peak.
"It will be a long time before we see prices like we had in the 1980s," predicted real estate broker David Glasscock, who's been trying to sell a prime site on Ross Avenue for close to $125 a square foot.
Even on downtown's busy north side, some recent trades on the periphery have been less than $100 per square foot, Mr. Glasscock said.
"Generally the farther south you get, the cheaper the land is because of accessibility," he said.
In the south
Recent sales on the south side of the convention center have ranged from about $25 to $45 per square foot. And across Interstate 30 in the Cedars neighborhood, it's even lower.
"I don't know of anything over here that has sold for much more than $20 per square foot," said developer and landowner Jack Matthews.
The farther north you go in downtown, the higher the prices.
Developer John Sughrue – part of the team that's working on the Museum Tower condominium high-rise – estimates that land in Arts District would sell for near $150 per square foot. "If you could buy it," he said.
Some tracts on Ross Avenue near North Central Expressway recently sold for between $85 and $100 per square foot.
Property prices are higher in Uptown than downtown.
A block on McKinney Avenue near Fairmount Street sold in 2005 for almost $150 per square foot. It's now back on the market.
More recently, another block on McKinney near Akard Street traded for about $110 per square foot.
Brokers and landowners say that land prices downtown probably have peaked for this cycle, because of the credit crunch that's making it hard to finance commercial properties.
"We're looking at deals right now where we can't get financing," Mr. Turner said.

By STEVE BROWN / The Dallas Morning News

Lehman Bros. Report: Oil Bust in the Cards

Is $120 oil even real? Not if you ask the Saudis, or even Lehman Bros.
The investment bank’s oil expert said this week that the oil boom is due to bust. Economic growth across the globe will slow just as new refineries kick in, raising supply.
Recession or not, a U.S. slowdown will slacken demand sharply, right as new oil hits the market.
"Supply is outpacing demand growth,” said Michael Waldron, Lehman’s oil strategist.
"Inventories have been building since the beginning of the year. We have pretty significant projects starting soon in Saudi Arabia, and large off-shore fields in Nigeria,” he said.
Lehman is now predicting prices at $83 a barrel in 2009 and as low as $70 in 2010.
Although some years off, Brazil too has found as much as 8 billion barrels of light oil and gas offshore. The South American giant’s president says his country might well join OPEC when the Tupi field begins to pump, in 2011.
In addition, Middle Eastern sovereign wealth funds have pushed up the oil price by investing billions of their oil gains, ironically, in commodities index funds.