Saturday, May 10, 2008

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