Friday, October 31, 2008

Developers to unveil plans for huge project near North Central Expressway

Developers that own more than 80 acres on the east side of North Central Expressway in Dallas are expected to unveil plans for the property next week.

Valencia Capital Management has scheduled a briefing Nov. 6 to show off its MidtownPark project, along Manderville Lane just north of Presbyterian Hospital.

The real estate investment firm demolished a neighborhood of apartment complexes to make way for construction.

Valencia has a master plan for the redevelopment and has been trying to sell the properties to builders for about a year.

The land is zoned for 3,800 apartments, condos and townhouses, 90,000 square feet of retail and 930,000 square feet of office space.

It's along DART's light-rail line and includes frontage on North Central Expressway.

To make way for the project, Valencia plans to implode the former Holiday Inn on Central near Meadow Road on Nov. 9.

Thursday, October 30, 2008

Houston developer plans high-rise condos in Preston Center


Randall Davis is looking for about 40 people who would like to live in a high-rise condominium.

That can be tough sell in today’s housing market, but the Houston developer has an edge.

His location in Preston Center near University Park seems to be a winner with potential buyers.

“Our phone has been ringing since we recently put a sign up,” said Mr. Davis, who’s teamed up with developer Hines to work on the Douglas Avenue project.

Allie Beth Allman & Associates is marketing the project.

The nine-story Terranova building would be the first residential high-rise built in Preston Center in more than a decade.

But first Mr. Davis has to round up prospective buyers.

“We’ve already taken five ($5,000) deposits,” he said. “I’m trying to get a sales center built and open before Valentine’s Day.

“I believe that most of our buyers will come from the Park Cities,” he said. “These people are looking to move out of their four- and five-bedroom house and down size.

To drive home that point, Terranova takes its Mediterranean design cues from Highland Park Village and other historic buildings in the area, Mr. Davis said.

Planned units range in size from 1,400 to about 4,400 and sell for more than $450 per square foot.

The developers hope to begin the project next summer, and it will take more than 18 months to complete.

While several center city Dallas condo projects have been cancelled or are have been slow to attract buyers, Mr. Davis said the lack of new condo projects in the area around Northwest Highway and the Dallas North Tollway is a plus.

“This is a terrific niche opportunity,” he said. “I wouldn’t’ venture into Uptown given the fact there is a lot of product there.”

Mr. Davis has developed with Hines two condo projects in Houston.

And he is finishing up work on the luxury Sapphire condominium tower on South Padre Island.

Economist: Expect more corporate moves to Dallas-Fort Worth as economy recovers

A top local economist is telling commercial property execs to expect an increase in corporate transfers to North Texas as the U.S. economy recovers.

“Now is the time to be selling Texas,” Bernard Weinstein, director of the Center for Economic Development and Research at the University of North Texas, told members of the National Association of Industrial and Office Properties at a Wednesday breakfast. “More and more companies are going to be looking for a Sunbelt location.

“This is where you want to be when the economy turns.”

That probably won’t happen until mid 2010 or later, according to Dr. Weinstein. And along the way, Texas will suffer some downsizing.

“Sure, job growth has slowed here,” he said. ‘We may even get into negative territory some months.

“Yes, we are going to see a slowdown here, but it’s not going to be blood running in the streets as in some areas.”

After more than 30 years in the area, Dr. Weinstein has seen his share of bull and bear economies. And North Texas has continued to add population and jobs.

“Texas always benefits from a national recession,” he said. “We get a lot of economic refugees with good skill sets.

“Even if they can’t get a job right away, the prospects are better here.”

Dr. Weinstein said his calendar has been more full with the recent financial market crash and worsening U.S. economy.

“I get a lot of requests to speak when the economy is bad,” he said. ‘When the economy is good, no one wants to hear me.”

Developers to unveil plans for huge project near North Central Expressway

Developers that own more than 80 acres on the east side of North Central Expressway in Dallas are expected to unveil plans for the property next week.

Valencia Capital Management has scheduled a briefing Nov. 6 to show off its MidtownPark project, along Manderville Lane just north of Presbyterian Hospital.

The real estate investment firm demolished a neighborhood of apartment complexes to make way for construction.

Valencia has a master plan for the redevelopment and has been trying to sell the properties to builders for about a year.

The land is zoned for 3,800 apartments, condos and townhouses, 90,000 square feet of retail and 930,000 square feet of office space.

It's along DART's light-rail line and includes frontage on North Central Expressway.

To make way for the project, Valencia plans to implode the former Holiday Inn on Central near Meadow Road on Nov. 9.

Wednesday, October 29, 2008

For Now: Property markets frozen

Commercial real estate buyers not biting at current prices

Turmoil in the credit markets and economic weakness has virtually frozen the commercial property markets, with buyers reluctant to commit as prices fall and sellers refusing to deal unless forced to by financing constraints, a panel of real estate financiers said Wednesday.With vacancies predicted to rise for nearly all property types and rents expected to fall, office, retail, hotel and industrial holdings are likely to drop in value in the coming year, making it difficult to underwrite any transactions, the panel of experts said at a meeting of the Urban Land Institute here.
"It's like a time out: Nobody wants to do anything until they can see with a little more clarity," said Michael Fascitelli, president of Vornado Realty Trust.

"It is very hard to operate in this environment of volatility we're seeing. It's like we've been hit with a 100-year flood 15 times in the last two months."
Vornado, a publicly traded real estate investment trust that owns more than 100 million square feet of property, has lost about $10 billion in market capitalization in the last year as REIT shares have been battered by the spreading financial crisis.
"I don't think this is a blip. We've gone far past a blip," said Randy Reiff, senior managing director for J.P. Morgan in New York. "We're in a protracted, massive restructuring of our capital markets. Even the lenders who are out lending are slowing down right now. And that is only the people who are accustomed to high-risk, opportunistic investing who don't believe they have to buy at the bottom."
"The only people talking are those facing the situation where they have to refinance maturing debt or hand back the keys" to the lender, he said.
Mark Gibson, executive managing director of Holliday Fenoglio Fowler L.P. in Dallas, who represents property buyers, said there is capital available for commercial real estate. But the buyers simply do not like the prices they see today. With equity requirements up to 45%, the commercial property market is not that competitive with other fixed-income options today, he said.
"That is why the sale market is down 75% in 2008. We have a significant bid-ask gap," Gibson said. "The buy side is essentially discounting the future totally, figuring on declining rents, tenant improvement [costs] doubling and lease-up times doubling or tripling. Buyers are planning for the worst and hoping for the best and if the best happens they are saying 'it is all mine and not the seller's.'"
John Kukral, president of Northwood Investors in Greenwich, Conn., said his firm is putting out offers on properties, based on the declining fortunes in the commercial realty markets, but that "nobody is willing to take them -- yet."
And sellers sense the buyers are trying to capitalize on the "fear factor," said Shelton Getter, managing director with BlackRock Realty in Boston. "The sellers are saying 'let's just wait for some normalcy to return to the market.'"
Things are not likely to perk up in 2009. Reiff warned that the waning economy is likely to spawn more business consolidation, pushing "massive amounts of space" back on the market.
"We haven't started to see the impact of a lot of this," he said. "We're looking at higher vacancy rates across the board and I think rents are going to have to come down because of it."
Kukral warned that many investors were pulling out of the market entirely, including several of his Middle East clients. Pension funds, too, are looking for loopholes that would let them out of investment deals they have already subscribed to, he said.
The panel's consensus for real estate investment opportunity in 2009: Distressed debt.
"There are going to be a lot of workouts and a lot of restructuring," Fascitelli said. "We're in a horrific recession."
By Steve Kerch, MarketWatch

Monday, October 20, 2008

Construction starts on Main Street Garden in downtown Dallas

After years of squabbles, negotiations and eminent domain proceedings, the first of four planned downtown Dallas parks – Main Street Garden – is now under construction.

"This is a huge step for downtown and all of Dallas," Mayor Tom Leppert said Friday during a groundbreaking ceremony on the park site, bounded by Main, Harwood, Commerce and St. Paul streets. "This is going to be a very, very special park."

The 1.75-acre, $17.4 million park is slated to open a year from now. Planned amenities include a cafe, fountain, playground, dog run, benches, chairs and tables.

Getting to this point hasn't been easy.

The city this decade found itself condemning buildings and wrangling with historic preservation officials en route to securing ownership of the city block on which the park will sit.

But by last year, Dallas City Hall had obtained the necessary parcels and permits to begin construction of Main Street Garden, which is primarily funded through the city's 2003 and 2006 bond programs.

"This is a dream come true," City Manager Mary Suhm said, "and a dream a long time coming."

Thursday, October 16, 2008

Zoning sought for medical high-rise near Presbyterian Hospital

A developer is seeking a zoning change to build a high-rise medical building and retail space across the street from Presbyterian Hospital of Dallas on land now occupied by a shopping center.

The building site that Koll Development Co. hopes to use is adjacent to a light-rail station.

The property is part of the Corner Shopping Center, which occupies the northeast corner of North Central Expressway and Walnut Hill Lane.

According to filings with the city of Dallas' development services department, Koll wants to build a 12-story, 250,000-square-foot medical office building with parking and ground-floor retail at Walnut Hill and Manderville lanes.

The zoning request says the building will be used for "general medical and clinical office space and ancillary services such as outpatient surgery and diagnostic imaging centers, medical research, laboratory and pharmacy space."

Koll officials couldn't be reached for more details about the project.

City staff recommended approval of the zoning request, which is scheduled to be taken up by the City Plan Commission today.

Koll is one of the Dallas area's busiest commercial builders.

The firm specializes in corporate office complexes and has built multiple projects in Las Colinas and Plano's Legacy business park.

Koll is building a 1 million-square-foot headquarters for Blue Cross Blue Shield of Texas in Richardson.

Baylor Adds Its Ninth Floor at CBD Tower


DALLAS-Baylor Health Care System is adding a conference center and media room to its stack of office space in the Downtown. In a co-terminus pact with its 254,000-sf master lease, the hospital owner has grabbed the 23,431-sf second story to take its stack to nine full floors in Bryan Tower.
The second floor, empty for a couple years, will be ready to use in early first quarter 2009. Baylor's expansion at 2001 Bryan St. drives the 1.1-million-sf high rise to 85% occupancy. "This is the highest it's been since we've owned the building," Jon Ruff, senior vice president of Houston-based Spire Realty Group LP, tells GlobeSt.com. And, he adds that an existing tenant is negotiating to add the 35th floor, the only opening in the 40-story building, to expand its office. The talks, though, are still in the early stages, he cautions.

Spire acquired Bryan Tower in late 1996 when occupancy was 15% and dipped to 8% in the following year. By 2000, Spire had completed a massive overhaul and began re-tenanting the class A space. Today's rate is quoted at $18 per sf plus electric.
Ruff says all rolls for this year have been bed down. With 100% occupancy within sight, he emphasizes that Spire is a long-term holder. "We have no plans of selling," he says.
Dallas-based Baylor has part of its administrative team in the Bryan Tower space. The master lease has many years left on its term, according to Ruff. He points out the building's second floor is a mezzanine level that has some retail shops and easy street access that makes it ideal for a conference center. Baylor's broker Chris Hermann, senior vice president for CB Richard Ellis in Dallas, and Spire's team, managing directors Matt Craft and Jon McNeil with Jones Lang LaSalle took the deal across the finish line in just a few months of talks.

Retailers Christen Shops in $1B MXD's Phase One


ALLEN, TX-MGHerring Group, capping four years of hard work, has started the parade of stores for the first phase of the $1-billion, three-million-sf mixed-use development in the far northern tier. As the Village at Allen's first shops get christened in back-to-back soft openings, crews are hard at work on its phase two and a 1.4-million-sf sister, the Village at Fairview.
As would be expected, it's been a mix of trials and triumphs as the Dallas-based developer assembled 400 acres at the junction of Stacy Road and US Hwy. 75 in two suburban cities for one of the largest mixed-use projects now being built in the US. Gar Herring, president of the development group, tells GlobeSt.com that the biggest challenge was revising the master plan after construction started in March 2007 when Minneapolis-based Target Corp. put in its dibs for a spot in the line-up. And his top accomplishment was a complex agreement with Phoenix-based Global Entertainment Corp. and the city for the $52.6-million Allen Events Center.

The all-star retail cast is using the dual projects as springboards for prototype stores and the largest formats in their line-ups. "They are putting their best foot forward to be creative and make showcase stores," Herring says. "Almost every major retailer we worked with has come back to do their largest prototype or No. 1 prototype."

Target's largest format store will open in March 2009. Macy's plans to build a 120,000-sf store and Dillard's will add a 200,000-sf box. The next groundbreaking is Oct. 23 when JC Penney Co. starts its first LEED-certified design--a 110,000-sf store in the Village at Fairview.
The Village at Allen's line-up targets more everyday needs while its sister will have higher end shops and white linen-tablecloth restaurants. Herring says more than one million sf of retail has been reserved on both sides of Stacy Road.

"We've not had anyone fall out for economic reasons or re-trade so we are fortunate," Herring says. "But, we do recognize it's a different world out there and we are adjusting our plans accordingly." He says the adjustment is focused on marketing and not rent concessions. "We've been very fortunate to hold to our rent pro forma," he confides.

Herring explains that the staggered soft openings have helped the marketing plan. "It keeps the momentum rolling and building," he says.

Today, Toys "R" Us and Babies "R" Us will cut the ribbon on an 80,000-sf combo, a first for North Texas, and TJ Maxx opens Friday. Next week, Dick's Sporting Goods will open a bi-level 80,000-sf store. Best Buy opened two weeks ago. Uncle Julio's, a regional Mexican restaurant that opened last week, still has a one-hour wait for dinner seats. Seven more stores will open before the month ends and six more in November. The run continues through March 8, 2009, when phase two opens. A 220-room Courtyard by Marriott delivers in fall 2009 and the 6,275-seat Allen Events Center opens in November 2009. Also coming is 500,000 sf of office. At the Village at Fairview, its first stores are penciled for Aug. 5, 2009 openings.

Wednesday, October 15, 2008

KBA North America Will Move its U.S. Headquarters to Dallas

KBA North America Inc., an international printing press manufacturer, is relocating its U.S. headquarters from Vermont to the Dallas area.

The company plans to lease 70,000 square feet of office and industrial space and will have 100 employees in the area after the move in mid-2009.

Laughlin Commercial Realty Group said Wednesday that it has been hired to find a new location for KBA.

The real estate firm said it is evaluating several office options for the relocating company.

KBA looked at several cities before picking D-FW.

“The D-FW area handily met or exceeded all of KBA’s relocation requirements,” Laughlin Commercial Realty’s Rosanne Meier said in a statement. “KBA clients can now travel easily from anywhere in the U.S. to D-FW to view KBA press demonstrations.”

KBA North America is a unit of Koenig & Bauer AG, which is based in Germany.

Downtown Dallas' Sheraton Hotel to Get $11M Redo

Walton Construction Co. said Wednesday that it will begin work next month on an $11 million remodeling of the Sheraton hotel in downtown Dallas.

The hotel – formerly the Adam’s Mark – is at Live Oak Avenue and Pearl Street.

Work will begin in November to upgrade the hotel’s public area. The construction will be done in phases and is set for completion in May 2009.

The 1,840-room hotel was recently acquired by The Chartres Lodging Group. The new owners have said they will spend about $87 million to upgrade the three building complex.

$45 million project planned for Fort Worth Avenue

Developers have tied up a prime tract on Fort Worth Avenue west of downtown Dallas where they plan to construct a retail and residential project.

The 6.5-acre site, which includes frontage on busy Interstate 30, is across the street from the popular Belmont Hotel.

Real estate investor Brent Jackson has teamed up with shopping center developer Drexel Realty Partners to work on the project, which is to be anchored by a specialty grocer.

"Fort Worth Avenue is emerging as the gateway to this area of Dallas," Mr. Jackson said Tuesday. "I live over there, and I saw a void for a grocer and other retail.

"This site provides that opportunity."

The $45 million project will include about 100,000 square feet of retail and restaurant space.

"On top of that, we will have a minimum of 60 to 70 lofts," said Mr. Jackson, who previously worked with P.O'B Montgomery & Co. and Swearingen Realty Group.

San Antonio's award-winning Lake/Flato Architects and Good Fulton & Farrell of Dallas will design the development, which is planned to be environmentally friendly. Washington, D.C.-based Food Partners is helping to secure an organic grocer for the project.

Mr. Jackson said he plans to close land purchases by the end of the year.

"We don't want to make a commitment on something we can't deliver on," he said. "We feel this is an opportunity to really transform this entire corridor."

Neighborhood groups that have been pushing to revitalize the area just across the Trinity River from downtown are enthusiastic about the proposal.

Scott Griggs of Fort Worth Avenue Development Group said the project will help with "a long-held community vision by bringing retail and increased residential density in a manner that connects our community."

"We couldn't have asked for a better project," Mr. Griggs said. "Now we all need to work together to make it happen."

Capital One Commercial Inks 10-Year CBD Lease


After nearly four months of negotiations, Capital One Bank Commercial has signed a 10-year lease for the 1.2-million-sf Plaza of the Americas' south tower, taking the 23,840-sf top floor as its regional office and a 2,392-sf retail spot at ground level. Move-in is set for early in the first quarter.

Hunter Blanks, Charlie Morris and Lauren Walker with Colliers International in Dallas led the search, which began in April and quickly zeroed in on the Plaza of the Americas' south tower at 600 N. Pearl St. in the Downtown. Carla Machulis and Joel Pustmueller with Peloton Real Estate Partners, represented the joint venture owner, Blackstone Group of New York City and European investors.

Blanks tells GlobeSt.com that the retail location wasn't required, "but it was a major consideration." He says there were 11 office options initially identified in the Downtown, with the list "quickly" being shortened to five. In June, Plaza of the Americas emerged as "where they wanted to be," he says. Capital One's commercial group is led by area president Kent Eastman, who also is chairman of this year's United Way drive in Greater Dallas.

According to Blanks, ingress and egress for its 80 employees topped Capital One's priority list followed by the potential for a retail location and amenities for staff and clients. The senior tenant rep says the Q1 move will closely coincide with the commercial group's lease expiration at the Princeton at 14651 N. Dallas Pkwy. in North Dallas. "It's a positive for the city that Capital One wanted to have a presence in the Downtown," he says, pointing out that the McLean, VA-based bank's regional group's primary office is a campus in Plano.

Machulis says Capital One's lease nudges occupancy to 85% in the two towers, with the 527,980-sf south tower getting its top floor lighted for the first time in six years. The class A office space was on the market for $20 per sf plus electric with $36 per sf as a tenant-improvement allowance. Finish-out construction will start in November.

Capital One will be the first retail bank for the 100,000 sf of restaurants and shop space in the landmark complex. "We talked to several banks in the past couple of years," Pustmueller says. "We were waiting for the right one to land. The truth is this is kind of a win-win for the tenant and the landlord as well."

Pustmueller points out talks were underway as the global financial crisis heated up, but it didn't delay the decision. "But, we're superstitious and nothing's done till it's done," he emphasizes.

Tuesday, October 14, 2008

Dallas-Based Vintage Interests Buys Four Industrial Properties

A Dallas-based commercial real estate investor is beefing up its building portfolio with the purchase of four North Texas industrial properties.

Vintage Interests acquired the buildings, which total 182,141 square feet, in three separate transactions.

With the latest purchase “we have closed over 20 deals in the last two years,” said Rusty Perry, founder of Vintage Interests.

The company now owns more than 2 million square feet of commercial properties.

The private investor has taken advantage of the competitive pricing and reduced deal volume in the market to increase its holdings.

“While many of our competitors are on the sidelines, unable to obtain financing or secure equity commitments, we are able to snatch up some great investments” Mr. Perry said. “Executing on deals like this is not hard for us, as we have dedicated equity and three to four lenders that like our program and remain willing to lend on these types of deals.”

The latest building purchases are located in the Valwood Industrial Park, Dallas’ Brookhollow district and in Allen.

Two of the buildings are fully-leased warehouses located at 1275 and 1321 Roundtable Drive in Dallas and were acquired from First Industrial, a real estate investment trust.

Vintage also purchased an 80 percent-leased warehouse at 2210 Hutton in Carrollton. And the investor acquired the 90 percent-leased Allen Business Center, located at 8 Prestige Circle in Allen.

Mr. Perry said that Vintage Interests plans to increase its acquisition program going into 2009.

“The shakeup in the financial markets will undoubtedly create opportunities for investors like us which have discretionary equity to invest, and lenders in tow,” he said.

The just-completed transactions were brokered by Blake Anderson with Grubb & Ellis, Larry Leon with CB Richard Ellis and Garrett Sherman with Investment Real Estate. Holiday, Fenoglio, Fowler LP arranged debt financing for the transactions.

Vintage Interests was founded in 2006 by Mr. Perry and includes partners Jeffrey Ellerman and Brett Landes.

Allen Group Secures Bridge Loan for Part of Dallas Logistics Hub

Investment banker Holliday Fenoglio Fowler LP said Tuesday that it has arranged a $20 million bridge loan to recapitalize part of the 6,000-acre Dallas Logistics Hub.

Developer Allen Group secured the financing for the 1,031-acre portion of the project from American Bank of Texas.

“Despite a complex transaction and a historic level of disruption in the capital markets, they never waivered in their focus or in their commitment to this deal,” Holliday Fenoglio Fowler’s HFF John Ahmed said in a statement.

The land is located near Union Pacific Railroad’s Southern Dallas Intermodal Terminal and a similar terminal planned by Burlington Northern Santa Fe.

The Dallas Logistics Hub is planned to eventually contain 60 million square feet of industrial office and retail developments.

DOWNTOWN HOTSPOT

40 companies with 6,000 jobs have moved to downtown Dallas in the last year, bringing net office leasing in the area to nearly 1.5 million sf so far in 2008.
Companies relocating to the downtown area are coming not only from other cities but from locations within Dallas. Tenet Healthcare will soon move from north Dallas to Fountain Place, while AT&T’s head office will move here from San Antonio.
The latest relocation announcement came Monday from Capital One Bank. The bank will put its new regional office in the Plaza of the Americas.

Medical Group Leases 47,436 SF


Dealmakers are keeping the identity under wraps of a new two-floor tenant for the 404,324-sf Lakeside Square in the Park Central submarket. Sources tell GlobeSt.com that the 47,436-sf newcomer will be an affiliate of Blue Cross Blue Shield of Texas Inc.

CB Richard Ellis' Dallas team of vice president Celeste Fowden and senior associate Burson Holman represent the three-year owner, Younan Properties Inc. of Los Angeles. Daniel T. Paterson, president of locally based Swearingen Realty Group LLC, was the tenant rep.

The hospitalization carrier's affiliate will turn on lights Dec. 1 on floors five and six in the 16-story tower at 12377 Merit Dr. According to a CBRE press release, talks went full circle within 60 days.

Blue Cross Blue Shield leases the 154,329-sf Greenway III at 2400 Lakeside Blvd. It's also watching a one-million-sf campus campus rise at 1001 E. Lookout Dr. in Richardson.

The long-term lease edges Lakeside Square's occupancy to 93%. Leasing velocity, year to date, is hovering 177,000 sf, with the class A asset's quoted rate now at $19.50 per sf plus electric.

Off-Market Deal Moves 87,292-SF Uptown Deed


With its eye on boutique office buildings, M West Holdings LLC has pulled an 87,292-sf asset in Uptown from the portfolio of Behringer Harvard partnership in an off-market transaction. The deal, including financing, was bed down in a two-month turn.

Stacey Davis, vice president for the Los Angeles-based buyer, credits CB Richard Ellis' executive managing director Gary Carr in Dallas with putting 4245 N. Central Expwy. on M West's desk. "He put two and two together," Davis says, pointing out that M West's eye is only on Uptown-Turtle Creek and Preston Center office buildings.

Behringer Harvard Short-Term Opportunity Fund I LP held the 22-year-old building in a partnership with Behringer Harvard Holdings, taking 62.5% of the ownership interest at acquisition in August 2004 and investing $3.5 million in equity. The partners paid $7.7 million for the building.

In an SEC filing, Behringer Harvard says the sale price represents a loss to the fund, but is predicated on the average of two appraisals, which is $8.9 million. "While the identified third-party purchaser is also offering a price higher than the average of the two appraisals, it is still substantially less than the purchase price Behringer Harvard Holdings is paying to the partnership," it reports, noting that its $12-million payout was 34.8% higher than the average of the two appraised values.

M West is starting out with 87% occupancy in the seven-story, class B office building. Davis tells GlobeSt.com that 12% of the leases will roll before 2011, 23% in 2011 and 54% through 2012. "There's upside in the rents," he emphasizes, adding the average lease is 4,000 sf. Nathan Durham of PM Realty Group in Dallas has been brought on board to lease the asset with a quoted rate of $21 per sf plus electric.

In the fund's SEC filing, it reports falling short of leasing expectations for its acquisition strategy. Capital One was seated on the first floor, but two large tenants didn't re-up as Behringer Harvard had expected. Today's roster also includes BGO Architects and the McCarthey Co.

Nonetheless, the asset was attractive to the fund for the same reasons as M West: a prominent location near Downtown Dallas in a performing submarket. Behringer Harvard concluded that increased tenant-improvement costs and unexpected capital expenditures for the partnership have increased its basis in the 86.4%-leased building "to the point where its general partners believe that it is unlikely that the partnership will be able to sell the building for a price that will result in a cash-on-cash gain."

Davis points out that M West is a long-term holder, which is why it's focused on Uptown and Preston Center, the two best performing office submarkets in the city. "We can feed off the sticker shock in Uptown proper," he says. "We feel like the building presents well. It's got a good place in the market along Central Expressway." And, the tenant profile is similar to 3500 Oak Lawn, a 101,000-sf class B office building that M West bought in January 2006 and is now prepping for a renovation.

The building will be re-branded to 4245 Uptown to take advantage of its 0.64-acre irreplaceable location at the corner of Fitzhugh Avenue and North Central Expressway, Karl Slovin, M West's president, says in a press release.

Behringer Harvard's point man was senior vice president Michael Westfall. "Despite all of the current market turmoil, M West Holdings stepped up to the plate and closed the transaction," he says in the release.

Davis says the purchase was underwritten for five years although M West is a long-term holder. The deal crossed the finish line with a three-year floating-rate loan from New York City-based Citigroup.

With the deal now closed, Davis says the search has picked up again for more office deeds in M West's favored submarkets. "We like what's going on there for long-term holders," he says.

Hyatt completed Classic Residence Renovation in North Dallas

Hyatt Corp. said Monday that it has completed a $2 million renovation of its Classic Residence by Hyatt senior housing community in North Dallas.

The high-rise building located near North Central Expressway and Walnut Hill Lane was opened in 1989 and has 144 senior residences.

Improvements to the building include a remodeled central atrium, dining rooms and a new bar area.

3 Architecture of Dallas was the architect Highland Builders was the general contractor.

Capital One Bank Opening New Regional Office in Downtown Dallas

Capital One is locating a new regional office in downtown Dallas.

The Virginia-based financial firm is putting its commercial banking headquarters for the area in the Plaza of the Americas complex on Pearl Street.

About 80 workers will start out in the office, which is designed to grow.

"Most of the people coming down here now work in Far North Dallas near the Galleria," Kent Eastman, Capital One Bank's area president, said Monday. "Capital One Bank is committed to this market and the vibrancy of downtown Dallas.

"We want to be a part of that."

The bank will lease about 24,000 square feet of office space in the project, as well as space for a branch bank in the retail atrium.

Workers will move downtown in early 2009.

Friday, October 10, 2008

Condo Plan Emerges for East Dallas Tract


A local condo developer is planning a 26-unit project beside the former St. Andrew Kim Catholic Church, which is owned by an investor from Los Angeles who's eyeing a conversion to residential and commercial space. St. Kim Flats, now on the drawing board, isn't expected to break ground until late 2009.

St. Kim's Development LLC acquired the 29,000-sf tract beside the church at 2712 Swiss Ave. in November 2007, getting a spot within walking distance of Baylor Medical Center. Philomena Hu, division manager of Dallas-based Mayse & Associates Inc. is St. Kim Flats' lead architect. In today's world, Hu says construction costs would hit $5 million, but that certainly could change by the time work begins.

Hu tells GlobeSt.com that the density formula would allow the developer to put in 30 units without rezoning, but St. Kim Flats is being designed with three penthouse-size condos, one of which will have a private elevator, so the count was lowered to 26 to accommodate the premium component. "Density is really critical to condo projects, more so than any other project," Hu says.

Under design is a podium-style building with 23 one- and two-bedroom units ranging from 1,000 sf to 1,300 sf and three 2,200-sf condos. St. Kim Flats, with views of the Downtown skyline, will have three floors of condos, with common elevators, and perched atop a parking level. The brick-and-stone exterior is being designed with a warehouse-style facade to fit into the East Dallas neighborhood without being obtrusive, according to Hu. The Mayse design team includes Dan Kazachki, senior project manager, and Justin Chitwood, an architectural intern.

Hu says the site was carved from the church property before it was sold to the California investor, who is planning to live in the church and hopes to open an outreach center in the existing fellowship hall. Hu says the condo developer opted to put the St. Kim name on his project to maintain the historical integrity of the site.

Hu says the project's construction documents are only 25% complete so groundbreaking most likely won't be until late 2009. The site is part of a $2-billion redevelopment being undertaken by Dallas-based Incap Fund, which is backing St. Kim Flats.

Historic Parkland Hospital Building Nears Debut as Office Complex

Work is wrapping up on one of the most extensive landmark building redevelopments ever in Dallas.

Crow Holdings has turned the historic Parkland Hospital building on Maple Avenue into a corporate office complex.

And along with restoring the original 1913 hospital buildings, construction is under way on an adjoining office campus.

"My guess is we'll move into the building the first week of December," said Crow Holdings chief executive Harlan Crow as he toured the building this week. "Everyone is happy to see this building get redone."

The complex of brick medical buildings at Maple and Oak Lawn avenues had been derelict for almost a decade when Crow Holdings bought the property in 2006.

County-owned Parkland Memorial Hospital moved out of the buildings in the 1950s to newer digs on Harry Hines Boulevard.

After tearing down some additions to the old complex, the real estate and investment firm has renovated the 53,000-square-foot historic building and tacked on more than 16,000 square feet in a modern glass and steel addition on the west side.

The old buildings and land cost more than $16 million. Crow Holdings isn't saying how much the entire redevelopment will cost.

"If we had torn the building down and rebuilt a clone, it would have been a lot cheaper," Mr. Crow said. "After the time it was built, they had redone the interior several times.

"The inside was really utilitarian," he said. "The outside was more grand."

Crow Holdings painstakingly restored the outside of the Georgian-style brick building, repairing or exactly duplicating elements.

Even the new double-glazed windows facing Maple were made with old-style wavy glass that looks like the original.

"We replicated things as exactly as we could and still did things that were energy-efficient," Mr. Crow said.

The old Parkland project has already gotten honors for energy-saving construction.

Inside, wood, stone and plaster decorative finishes in the old building are in keeping with the landmark.

The two-story-tall addition in back – designed by Dallas architects Good Fulton & Farrell, which has done the entire project – is contemporary, with a wall of glass looking toward the Dallas Market Center.

"The interiors in the old part of the building will be traditional, and in the new part it will be modern," Mr. Crow said. "Preservationists like the fact that the old is old and the new is new, and you can tell the difference."

Development of the rest of the 8.3-acre site will also combine historic architecture and new designs.

Construction is under way to remodel the adjoining Nurses Quarters building, which was built in 1925.

And behind that, work crews are building a 40,000-square-foot Georgian-style office building called Woodlawn Hall.

Another office building planned along the Dallas North Tollway will blend traditional and modern glass architecture.

All of the buildings will be on a similar scale to the historic hospital complex.

"We were permitted to go up to 20 stories but chose to keep it low and not very dense," Mr. Crow said.

That's a switch for Mr. Crow, son of legendary Dallas developer Trammell Crow, who got his start in the real estate business developing downtown skyscrapers.

"I remember the days in the 1980s when we built Chase Tower and the Trammell Crow center downtown," he said. "This historic project was as much fun but, of course, very different."

Wednesday, October 08, 2008

Clark Consulting Moving Corporate Offices to Downtown Dallas Office

Clark Consulting, a risk management and financing solutions firm, said Wednesday that it has relocated its corporate offices from Chicago into its existing downtown Dallas office.

The company now has more 250 people working in its operation at 2100 Ross Avenue.

Clark said it will relocate approximately 11 employees and is in process of staffing approximately 65 positions in Dallas related to the move.

“The relocation of our corporate headquarters to Dallas is a clear indication of our belief that the Dallas-Forth Worth area is a growing, vital region that is an attractive location for our financial-services business,” Kurt Laning, president of Clark Consulting, said in an announcement.

The company has had operations in the Dallas area for more than 20 years.

Clark Consulting has been in business since 1967 and designs benefit plans and administered assets for its corporate and banking clients.

The company is a subsidiary of AEGON, an international life insurance and pension group.

Monday, October 06, 2008

Mixed-Use Development Project Slated for Construction in Uptown


Granite Properties and Gables Residential have teamed up for a $200 million commercial and residential project in Dallas' Uptown district. Situated on over just two acres, this project will consist of two towers: Granite Properties’ Class AA Office Tower and a high-rise apartment building by Gables Residential. The exterior of the buildings will feature concrete and stone with aluminum finishes.

Perhaps the most exciting aspect of these dual towers is the convergence of the two towers on the seventh floor via a one-acre, beautifully landscaped haven. Called the amenity deck, this urban oasis boasts a 4,000 square foot fitness center, an outdoor, infinity-edge swimming pool and a gorgeous, park-like setting which overlooks Victory Park and downtown.

Facts about the Granite Properties Office Tower:

* Located at 1717 McKinney Avenue (at the Northwest intersection of McKinney Avenue and North Akard Street)
* Nineteen stories of office space on top of six levels of parking and retail space
* 361,524 square feet of available space to rent, including 15,000 square feet of retail and restaurant space
* Will bring an abundance of useful Dallas commercial real estate to the Uptown area.

Fact about the Gables Residential Tower:

* Located at 1700 Cedar Springs and Akard Streets
* Twenty stories of living space over six floors of parking
* Residences are expected to have ten-foot ceilings, eight-foot doors and an abundance of windows.
* 292 units with balconies
* Views of uptown, downtown, and the future Woodall Rogers Park and Calatrava Bridge

The two-tower project is expected to be completed by March 2010. The architect on the project is Good Fulton & Farrell and the general contractor is Austin Commercial.

Granite Properties is a privately held commercial real estate company with offices in Dallas, Houston, Atlanta and Denver. Gables Residential is a private real estate investment trust, which owns, develops and manages multifamily residential projects in Florida, Georgia, Tennessee, Texas, Southern California and Washington, D.C.

Thursday, October 02, 2008

Apartment, Retail Complex Planned in Dallas’ Southwestern Medical District


A Flower Mound-based developer plans to build an apartment and retail complex in Dallas’ Southwestern Medical District.

Mockingbird Properties’ project will be at the northeast corner of Butler and Redfield streets, just a block from the UT Southwestern Medical Center on Harry Hines Boulevard.

Called the Butler, the complex will have 460 apartments. And the rental community will have space set aside for retail tenants, including a small grocer.

Developer Mitchell Vexler said in an announcement that the project “will provide convenient housing with the most desirable amenities for employees working in the Medical District.”

Mockingbird Properties estimates that about 13,000 people work in the area at medical facilities including Parkland Hospital, Children’s Medical Center and UT Southwestern Medical Center.

And Parkland is seeking public funding to build a vast new hospital in the area.

At the same time, construction of DART’s new light rail line through the neighborhood will connect the area with downtown and other locations by next year.

Developers are lining up to provide new housing in the area.

Trammell Crow Residential is building a 400-unit rental complex on Medical District Drive between Harry Hines and Maple Avenue.

Southlake-based developer and investor Realty Capital Corp. is building an apartment community that includes redevelopment of an old commercial building on Maple just north of Inwood.

The 260-unit Cityville apartment and retail complex opened last year on Medical District Drive across from the new DART station.