Sunday, March 09, 2008

Developers break ground on two-tower Uptown project

$200 million complex will have office space, luxury apartments

Construction is getting under way on what will be one of the biggest projects yet in Dallas' hot Uptown market.

Granite Properties Developers Granite Properties and Gables Residential are breaking ground on the two-tower development at Akard Street and McKinney Avenue.

The $200 million complex will include 361,000 square feet of office space in one high-rise and 296 luxury apartments in an adjoining tower. The development will contain retail space and a fitness center for the apartments on the lower floors.

Granite announced plans for the development last summer and has been moving ahead with the deal.

This week, construction barriers are going up and site preparation is starting.

"The real work starts in about two weeks," said Granite chief operating officer Greg Fuller. "We have to do some utility work and get rid of an old building there first."

The large tract just north of Woodall Rodgers Freeway is now occupied by surface parking and a vacant commercial building. It's one of the last large development sites along Woodall Rodgers.

Because of the scope of the project, the first tenants won't move into Granite's development until March 2010.

Mr. Fuller said he anticipates the Uptown office market should still be strong then.

"Because we are building two large towers, there is a long lead time," he said. "It's hard to look out that far.

"But the supply and demand balance down there is still good."

More than 1.6 million square feet of office space is already being built in Uptown, but almost 70 percent of that is preleased, said broker Joel Pustmueller with Peloton Real Estate Partners.

"I wouldn't have guessed two years ago the market could handle this many new buildings, but now I think it can," Mr. Pustmueller said.

"I think Granite will do fine."

The 24-story residential tower and a 20-story office building will be just east of the El Fenix restaurant and across Woodall Rodgers from Hunt Consolidated's new headquarters tower.

Architecture firm Good Fulton & Farrell designed the project.

The development will be Granite's first foray into the central Dallas market.

The company has built projects in West Plano, Farmers Branch and Irving.