Thursday, August 04, 2005

Downtown & Uptown Real Estate News

Going up: Dallas developing the luxe life

DALLAS (Dallasnews.com) - It all starts with views. The downtown skyline, with its neon halos and pinstripes, and to the west the Trinity River, not much to look at now but if the lakes and Calatrava bridges get built, another Central Park. To the east is Turtle Creek, our little river walk, and beyond that Oak Lawn, settled yet trendy. A corner unit buys you two views, a penthouse the panorama. Then come the amenities. Doorman, concierge, valet and fitness center are all part of the package. But there's more: balcony fireplace, wine cooler, built-in espresso machine, European appliances that look like furniture, slate floors, flamed granite countertops.

Need somebody to walk your dog or water your plants? No problem. Bed turned down and a chocolate on your pillow? Can be arranged.

Welcome to the strutting, glittering world of Dallas luxury high-rise living, where people who have everything they need are free to focus on everything they want, where the distinction between needs and wants barely exists.

For the past 50 years, high-rise living in Dallas has generally meant a row of discreet towers along Turtle Creek, set off by fountains and manicured gardens and filled with empty nesters from the suburbs and old-money couples from the Park Cities. Many residences were essentially vertical versions of the houses the owners left behind, right down to the furniture and even the number of rooms.

No more. The old demographics and many of the old assumptions are dead. A dozen high-rise apartment and condo buildings are open or under construction in Uptown, the bubble of new wealth just north of downtown, with another dozen or so in the pipeline. That's more than 1,300 units, which are being snapped up by doctors and stockbrokers in their 20s and early 30s, young marrieds, gay couples, itinerant CEOs in need of a pied-à-terre and retirees who've had it with mowers and mulch. Some are their only homes, others are weekend pads or part of a boxed set of residences spread across several continents.

"It all turns on lifestyle rather than traditional real estate," says Marty Collins, president of Gatehouse Capital, co-developer of the W Dallas. "It's not so much about location. It's not priced by the pound. People are buying brands that express themselves, and there are a lot of them out there who want to get their tortilla soup at 3 a.m. and are willing to pay for it."

Financial means

The main constant is money, lots of it, together with a lofty sense of entitlement. Luxury high-rise condos start around $500 a square foot – extravagant by Dallas standards but only a quarter or third of those in New York and San Francisco – with some penthouses going for $7 million or more. Rents range from $1,225 to $11,800 per month – on a par with Manhattan. The corner store is Stanley Korshak, the neighborhood restaurants Nobu and Dragonfly. Even the toy cars on the leasing center models are Porsches and Lamborghinis.

Sharon Quist, a Dallas real estate broker in her mid-50s, has opted for the traditional elegance of the Residences at Ritz Carlton, with their crown moldings and rich mahogany paneling.
"It's got a prestigious name, and Dallas people are always impressed by prestige," she explains. "If the world collapsed tomorrow I know I could still get my money out."

Michael Rimlawi, a 34-year-old back surgeon, is less interested in prestige than buzz, so he's selling his downtown condo for a one-bedroom pad at the W Dallas, where he'll be surrounded by fashionable restaurants and clubs wrapped in metal and glass and super-sized electronic jewelry.


"I work hard, and when I'm not working, I want to have fun," Dr. Rimlawi says. "It will be a weekend place in the middle of the scene. And if I get bored with it in a few years, I can always sell it."

Amenities are luring Dan Levine, 48, an investment counselor, to Azure, the hip baby boomer alternative to the aggressively urban W and the sedate Ritz.

Push-button palace

"Press a button and your drapes disappear," he says, "Press another button and your car is waiting for you at the front door. I can sit on my balcony with two fireplaces and look out at the skyline and all the other projects."

It is tempting to dismiss the luxury high-rise boom as just another fad of the overprivileged, an architectural version of the Hummer craze, except that it is happening all over the country and for reasons other than irrational exuberance.

Interest rates have been historically low for five years, making even pricey condos seem like solid investments. And among skittish investors, real estate has resurfaced as an attractive alternative to the volatile stock market.


"If you've been burned in the market two or three times in the last decade," says Dallas financial consultant Mike Puls, "seen all your gains disappear in a few months, then you start looking for other places to put your money."

In part, the luxury high-rise boom reveals the astonishing amount of disposable income in America now, the result of a generation of tax cutting and stock market advances. Not only is there a widening gap between rich and poor, but between rich and super-rich. Several recent economic studies have shown that the top 0.1 percent of wage earners account for nearly 8 percent of the nation's income. And some of that bounty is going into ever-more-opulent accommodations.

Back to the city

At another level, this trend represents the gradual rediscovery of the American city, not everywhere or powerfully enough to reverse six decades of suburban flight, but sufficient to entice members of the potent investor class to take another look. Downtown housing is surging in Boston, Chicago, Los Angeles and many other cities, and many of the buyers who are snapping up condos in Dallas are emigrating from these places. Eighty percent of the residents at the Mondrian, an apartment building, are from outside Texas. At the Azure and the Ritz Carlton, the figure is 20 percent to 25 percent.

"The people who are moving into Azure are very sophisticated about urban living," says its developer, Gabriel Barbier-Mueller. "They've looked at high-rise condos in Chicago and Vancouver. They've researched the architects. They're willing to pay the price, but they also know what they're buying."

Pros and cons

Mr. Puls likewise sees many pluses in the Uptown boom, along with some big risks.
"Dallas is still at the bottom of the curve, and buying at the bottom is an intriguing proposition for investors. But you could also be buying a ticket on the Titanic. Things always change. Interest rates could spike, consumer confidence could tank, there could be another terrorist attack. Then all bets are off."

Among the possible Titanics is Las Vegas, a delirious speculator's market with some 80 condo towers in the works, where owners can make a quick $200,000 just by flipping their pads. For people who sometimes drop that much at the tables over a weekend, buying a condo is just another big bet instead of an investment in a community.

Dallas is not that kind of place. Speculators are here, developers agree, but not the way they are in Vegas, Miami or Honolulu.

"Things will change here, but not in that way," insists Mr. Collins. "For people who've been going to New York and L.A., those 'A' customers, it's a large, branded, off-the-grid venue. For folks from Arkansas and Louisiana, it's a new local destination."

But a destination is not the same thing as a neighborhood. On this score, Uptown still has a ways to go. It is crisscrossed with broad, high-speed roads that are a boon at rush hour and a nightmare at other times. It has limited services (gas stations, dry cleaners, grocery stores) and almost no parks or green space. Sidewalks seem more like novelties than basic infrastructure.

Although all the new projects are promoting the "walking life," anyone who might want to stroll from the Azure to the Arts District or from the W to the McKinney Avenue Contemporary should bring along an organ donor card. These public amenities distinguish neighborhoods from mere developments; without them, the result is a cluster of vertical gated communities.
So Uptown is still something of a frontier boomtown, a settlement more than a neighborhood, promising but immature – a virtual place for the really, really privileged.

E-mail ddillon@dallasnews.com

Image inset:
DANNY GAWLOWSKI/DMN Images of luxury and relaxation encircle the construction site of the W Dallas Victory Hotel and Residences.