Monday, September 28, 2009

Dallas building managers react to terrorist threat

Property managers in downtown Dallas quickly implemented emergency procedures at the buildings they manage this week after learning federal agents had thwarted a potential terrorist threat at the Fountain Place skyscraper in Dallas' Central Business District.

Property managers say their quick reaction is the result of emergency procedures that were put into place after the 9/11 terrorist attacks in New York City back in 2001.

Shane Baggett, senior property manager with Comerica Bank Tower, said downtown has had an emergency response team in place for eight years.

"Dallas was really ahead of the curve," he said. "After 9/11 we put in extensive procedures."
After learning a suspect had been arrested for conspiring to plant explosives at Fountain Place in downtown Dallas, Baggett said the Comerica building closed a main gate located at the top of the building's parking entrance. The closed gate prevented visitors from entering the building without first making contact with security.

Baggett says the building already had significant security measures in place, including a policy in which all elevators are locked down at 6:30 p.m.

Baggett was not alone in heightening security procedures this week.

Dan Yates, regional manger of the Gaedeke Group — a firm with four properties in Uptown — sent a memo to all of his company’s tenants and property managers, advising them to review the federal terrorism alert levels, to update their buildings’ lists and to remain on high alert looking for anything suspicious.

Yates said property managers charged with protecting tenants and visitors need to consider whether they have “movers and shakers” in their buildings — since well-known people and businesses are more likely to become targets.

Yates said while security measures will be revisited at all properties including the four buildings his company has in Uptown, he believes this heightened state of awareness has been in place since 9/11.

Gaedeke’s property porfolio includes the following Uptown properties: One McKinney Plaza, Oak Lawn Plaza, Regency Plaza and Fitzhugh Central.

Kerri Panchuk

Dallas CBD office vacancy nears 30%

Tenant demand for office and industrial space in North Texas will remain sluggish and rents will remain flat for the rest of this year and into 2010, according to preliminary third-quarter research by Cushman & Wakefield of Texas Inc.

Demand for office space dropped 43 percent through September when compared to 2008 levels. The market recorded 7.16 million square feet leased year-to-date, compared to 12.6 million square feet leased at this time last year.

The vacancy rate for the Dallas Central Business District is approaching 30%, jumping from 26.5 percent a year ago to its current 29.1 percent. The overall office vacancy rate stands at 21.9 percent, up from 20.7 percent in September 2008.

Complicating the situation is available sublease space, which now stands at 4.5 million square feet -- an increase of 9.5 percent since the third quarter of 2008.

Despite growing vacancy rates, asking rental rates across classes reached $20.77 per square foot, up 2.2 percent over third-quarter 2008 levels. Rates saw a jump in the last quarter of 2008, with the delivery of new class A construction completions in the Preston Center, Turtle Creek/Uptown and Legacy/Frisco areas. According to the Cushman & Wakefield report, landlords of class A product are quoting average rents of $26.29 per square foot, an increase of 3.9% over the same period last year.

Office projects under construction totaled 1.4 million square feet, with about a quarter of the total being speculative. Developers are building office projects in the Turtle Creek/Uptown, Far North Central Expressway and Legacy/Frisco submarkets.

On the industrial side, overall vacancy increased to 12.4 percent from 10.1 percent a year ago. The rise was attributed to construction completions, which totaled 7.6 million square feet through September 2009, a decrease of 47.5 percent over 2008.

Speculative projects accounted for 95.2 percent of the industrial total, adding 6.1 million square feet to the market. The glut of vacant industrial space has developers holding back: Just 1 million square feet remains under construction, compared to 10.6 million square feet under construction one year ago.

Bill Hethcock

Investors lining up for Stoneleigh Residences

Auction for bankrupt project set for Oct. 13; minimum bid is $4M

More than 30 prospective investors have expressed interest in bidding on the high-profile, half-built and abandoned Stoneleigh Residences condominium tower in Uptown, according to bankruptcy court documents.

Bids are due into AP-Prescott Stoneleigh Residences LP by Oct. 9, and the auction is scheduled for Oct. 13, the documents said.

Dallas-based Hayman Woods Maple Avenue LP has set the minimum bid at $4 million. The firm is led by partners Kyle Bass and Jonas Woods, who, until he left in April 2007, was president of Hillwood Capital and the driving force behind Victory Park.

“Honestly, we think the property is valued much higher than that,” said Clay Likover, managing director of the private real estate investment fund. “If someone outbids us, we can raise our bid, and we will.”
Court documents outlining the list of prospective bidders include such companies as Harwood International, Fairfield Residential, Lincoln Property Co., Fulton Anderson Realty Advisors, Gables Residential and Matthews Southwest.

“It’s about opportunity,” said Kristian Teleki, a senior vice president with Matthews Southwest. “It’s a very, very good location.”

On May 4, AP-Prescott Stoneleigh Residences LP was forced into Chapter 11 reorganization by five creditors, the largest of which was the general contractor, Turner Construction Co. It claimed the owner of the Stoneleigh, Prescott Realty Group, had not paid for about $4.7 million of work.

Turner Construction had filed a lien valued at more than $4.7 million against Stoneleigh Residences. Various North Texas subcontractors had filed at least $3.5 million in liens against Turner Construction for work completed at the Stoneleigh.

According to court documents, there is an estimated $24 million in secured debt against the property.

The Stoneleigh Residences at 2919 Maple Ave. is part of a renovation of the historic Stoneleigh Hotel, which has an estimated project cost of more than $70 million. The hotel and residences were supposed to be built concurrently, but the hotel opened last year before work really got under way on the 21-story condo tower. A 400-space parking garage on the site was finished first, followed by work on the tower.

But in the midst of a global financial crisis that appears to have peaked last fall, the developer’s credit sources dried up and, in April, Prescott stopped work after contractors reached the 10th floor of the building, Prescott representatives told the Dallas Business Journal in May.

The 1.56-acre site is valued at $5.2 million, according to the Dallas Central Appraisal District.

“When it’s finally time to build apartments again, this will be the first site to be developed,” Likover said, estimating that Prescott spent about $30 million on the half-built condo building. The 400-space parking garage alone cost an estimated $10 million, he said. “When the world comes back, which it eventually will, Uptown Dallas is the best apartment location in the city. And you’ve got a huge head start in the development time frame and in terms of costs.”

Likover said the work that Turner Construction already has completed could mean the difference between taking two years to purchase a site and build new, versus 14 months to finish the existing structure.

The value of the Stoneleigh depends on what individual developers want to do with the site, Teleki said.

“The existing construction, that can either be a liability or an asset,” he said. “If you’re going to do exactly what was planned, then you’re a little bit closer.”
Teleki wouldn’t comment on the coming auction or whether Matthews Southwest would bid on the site. But he did say the Stoneleigh is “one of many” distressed properties in which the developer has expressed an interest.

“As an asset, it, like others, is attractive,” he said.

Katherine Cromer Brock

Tuesday, September 22, 2009

The Trinity Trust and the City of Dallas Announce Major Gift and Welcome Margaret Hunt Hill Bridge Designer Santiago Calatrava

WHO: Santiago Calatrava, internationally acclaimed architect, engineer, designer and artist. He is the architect of the Margaret Hunt Hill Bridge, the first signature bridge over the Trinity River.
-Mayor of Dallas Tom Leppert and the City of Dallas Councilmembers
-City of Dallas City Manager Mary Suhm
-The Trinity Trust Foundation President Gail Thomas, Board of Directors Chair Mary McDermott Cook and supporters

WHAT:The Trinity Trust and the City of Dallas have planned a major gift announcement that coincides with a visit from Santiago Calatrava, architect of the Margaret Hunt Hill Bridge. They will also provide an opportunity to view videos on the steel arrival and to hear from the City Council and Mr. Calatrava.

With two shipments of steel at the bridge construction site, Williams Brothers Construction and Texas Department of Transportation are working with the welders from Cimolai in Italy to assemble the bridge roadway and the 400-foot center arch. The largest piece of steel weighs 70 tons, or 140,000 pounds. Once built, the Margaret Hunt Hill Bridge will connect West Dallas to Woodall Rodgers Freeway, and it will focus attention on the river with this magnificent architectural signature bridge crossing over it.

On Friday, Sept. 25, Mr. Calatrava will be a special guest for The Trinity Trust’s “Bridging the Trinity” Bridge Fair. He will be joined by National Honorary Chairs U.S. Senator Kay Bailey Hutchison and Congresswoman Eddie Bernice Johnson. Honorary Event Chairs are Mary McDermott Cook, Lyda Hill, Al Hill Jr. and Alinda Wikert. More information can be found at

WHEN: Thursday, Sept. 24, 3:00-4:00 p.m.
3:15 p.m. – Remarks and gift announcement

WHERE:The Trinity Trust, 1444 Oak Lawn Avenue, Suite 200, Dallas, TX 75207

About The Trinity Trust Foundation and The Trinity Center:
The Trinity Trust raises private funds and public awareness to implement the Balanced Vision Plan for The Trinity project in conjunction with the City of Dallas. The Trinity Trust has established The Trinity Center as the gathering place for all civic and non-profit groups working to revitalize the Trinity River in Dallas. It houses the offices of The Trinity Trust Foundation, Texas Horse Park, Groundwork Dallas and Trinity Strand Trail; and hosts meetings, workshops and events for these organizations and the Trinity Commons Foundation. The Trinity Center facilitates collaboration between these entities and the City of Dallas and encourages seamless integration of all the components of The Trinity project. More information can be found by calling 214.740.1616, by emailing, or by visiting

This fall, The Trinity Trust is sponsoring the “Suspense is Building” educational outreach campaign. Watch for distinctive billboards, backlit SmartSigns, a DART bus wrapped in the campaign's message, The Dallas Morning News ads, and area radio spots. For more information, visit

About the Trinity River Corridor Project:
The projected $2 billion Trinity River Corridor Project is the largest and most complex public works and urban development project undertaken by the City of Dallas, and is first and foremost a flood protection solution and one of the largest of its type in the nation. The project consists of five major components: flood protection, transportation, recreation, environment management, and business development. The Margaret Hunt Hill Bridge, designed by internationally known architect Santiago Calatrava, is under construction and will be completed in 2011. A second Calatrava designed bridge, the Margaret McDermott Bridge (I-30), is planned for a later date. The Trinity River Audubon Center (TRAC), a flagship location for the Texas Audubon Society, is a beautiful teaching and recreational site in the Great Trinity Forest. TRAC celebrates its first anniversary October 10-11, 2009. Gateway Parks, such as Moore Park Gateway, are under renovation, and Loop 12 Gateway is being designed. In addition, over ten miles of new trail has been completed, as is the 70-acre Lower Chain of Wetlands. For project updates and to watch the bridge progress, visit:

Monday, September 21, 2009

New Rules Ease the Restructuring of CMBS Loans

Treasury Relaxes Restrictions on Refinancing in an Effort to Stave Off Commercial-Mortgage Defaults


The Treasury, responding to the growing pain in the commercial real-estate industry, released new tax rules that make it easier for distressed property owners to restructure loans that were packaged by Wall Street firms and sold as securities.

Most in the real-estate industry, which lobbied intensely for the move, applauded the action. But some warned it has opened a Pandora's box, especially for servicers of the securities who will likely come under new pressure from borrowers and competing classes of investors.

The Fashion Show Mall in Las Vegas. The mall's owner said a lack of financing flexibility hurt it.

The move is the first round of "additional guidance" the Treasury is weighing to stave off what many fear will be a commercial real-estate crisis, according to people familiar with the matter. A Treasury spokesman declined to comment. A record of more than $150 billion of loans bundled into commercial-mortgage-backed securities, or CMBS, will come due between now and 2012. But as financing remains scarce and values of offices, strip malls, hotels and other types of commercial property continue to drop, more property owners are finding it hard to refinance debt as it matures.

Until now, tax rules have made it difficult for borrowers who are current on their payments to hold restructuring talks with the servicers of these bonds. Developers and investors complain that only those who are delinquent can talk to the servicers. Indeed, many property owners -- notably mall giant General Growth Properties Inc., now in bankruptcy protection -- have cited this lack of flexibility as one of the reasons for having to default on debt and give up properties.

The new guidance from the Treasury makes it clear discussions involving lowering the interest rate or stretching out the loan term "may occur at any time" without triggering tax consequences. In addition, the guidance allows servicers to modify loans regardless of when they mature. The servicer only has to believe there is "a significant risk of default" even if the loan is performing, the guidance states.

"A stalemate now exists on CMBS loans that are not currently in default but need modification," said Jeffrey DeBoer, chief executive of the Real Estate Roundtable, a lobbying body for property owners and investors. "Today's announcement should help break the stalemate."

But some investors holding CMBS bonds are watching nervously because loan modifications, known as "mods," mightn't always be in their best interest. CMBS have junior and senior pieces, and the senior holders may be in a better position, when a borrower defaults, to foreclose and liquidate the property rather than modify the loan. Junior holders, on the other hand, might benefit from a mod because they mightn't get their money back in a forced sale.

"The standards of care for services are to all bondholders," says Patrick Sargent, president of the Commercial Mortgage Securities Association, a trade group.

In general, servicers are required by their contracts to act in the interests of the investors and modify loans only when that can be expected to reduce losses. That puts servicers in the tricky position of trying to figure out which borrowers are basically sound and when it makes more sense to foreclose quickly.

"The biggest concern is that the guidance could open the floodgate for everyone to try to get some sort of loan modifications," said Aaron Bryson, a CMBS analyst at Barclays Capital. "There is a tremendous burden on the servicers to uphold their end of the bargain."

Still, the move by the Treasury reflects the deep concern in government and industry circles over the problems looming in the $6.5 trillion market for commercial real estate. Just as the U.S. economy is struggling to regain its footing, defaults are mounting because of credit-market turmoil, along with declining property cash flows and plunging property values.

In the meantime, the Treasury also is considering "additional guidance" aimed at fending off a potential wave of defaults as more commercial mortgages come due, the people with knowledge of the matter said. The real-estate industry has been pressing for a tax law change that would encourage more foreign investments in commercial property.

Until now, property owners and investors hoping to restructure troubled mortgages were hearing a tough message from most CMBS servicers: We can't talk to you unless you first fall behind on payments. This is because when CMBS offerings are created, the underlying mortgages are legally held by tax-free trusts. The trusts could have been forced to pay taxes if the underlying loans were modified before they became delinquent, according to the old CMBS rules. The new guidance applies to CMBS loans modified on or after Jan. 1, 2008.

In a study for The Wall Street Journal, Trepp, which tracks the commercial real-estate market, found that, year-to-date, 528 CMBS loans valued at $4.7 billion weren't able to refinance when they matured. About 75% of these loans were backed by properties that were throwing off more than enough cash to service their debt.

Commercial Real Estate Is Next Bubble to Burst: Tischman

Commercial real estate is the "second shoe" to drop in hurting the economy, Daniel Tishman, chairman and CEO of the Tishman Construction Corporation told CNBC.

"We're getting through the single housing real estate market OK but the numbers involved in commercial real estate in all sectors are staggering," Tishman said. "Trillions of dollars are involved in commercial loans. The roll over of those loans in the next 5-7 years is going to happen and the money just isn't there for refinancing."

Tishman, whose company is one of the oldest construction firms in the US, said the industry needs government help.

"The TALF (Trouble Asset Loan Facility) program is about to end and it needs to be extended," Tishman said. "The government needs to come up with some creative programs to help out the industry."

Tishman said there's a total amount of $3.4 trillion in commercial loans that needs refinancing, and many local banks are holding those loans.

"I think they (banks) are very exposed," said Tishman. "There are huge numbers of banks that could have problems (and face closings) going forward because of carrying these commercial loans."

Tishman said REITs, or real estate investment trusts, are not in as much trouble.

"Most of the current REITs are doing well," said Tishman. "They own a lot of the commercial loans but they have the ability to raise money. That will help them defer any losses."

"One property being acquired and then being lent on and lent, created this," said Tishman. "Multiple levels of returns were required and that caused the problem. I don't see values for commercial real estate coming back for two to three years."

Commercial Real Estate - JLL Experts Predict Few Changes in 2010

Though the Dallas-Fort Worth area hasn’t totally escaped the recession or its impact on commercial real estate, the area has gotten off lightly, compared to other areas of the country. Experts from Jones Lang LaSalle, including executive chairman Americas Roger Staubach hosted a panel this morning to discuss how the area fared in 2009 and what's ahead in the near-to-mid term.
Preceding the event, JLL experts Paul Whitman and Jack Crews talked with and agreed on the same thing. Namely, the bottom of the market is still a ways off, meaning 2010 probably won't be much of an improvement over 2009.

"The reason we have not hit bottom is because there are so many hundreds of billions of dollars of loans out there that have not been addressed," comments Whitman, president of JLL's Dallas office. "Many loans taken out on properties bought between 2005 and 2008 are approaching expiration. Until those have been addressed, we can't hit bottom."

"With some $1.2 trillion in debt maturing over the next four years, some of that will have to be sold," adds Crews, managing director of JLL's capital markets group. "We can't blend and extend, as they're calling it. We can't keep pushing loans. We have to face reality at some point in time."
On the investment side, despite upbeat press about banks shoring up balance sheets, liquidity still hasn't hit the market in the form of debt. "Without debt, there are no transactions to step forward," explains Crews, who is managing director of JLL's capital markets group. "We have kind of a Mexican standoff."

Adding to the standoff, he continues, are buyers and sellers who can't agree on value. "Sellers aren't over the shock of the market and are still asking too much, while buyers, who are greedy for rock-bottom prices, simply aren't willing to step up and pay," he remarks.

What this all means is asset trades will continue to be slow in the coming year, while leasing of industrial and office product will continue to be impacted. More speculative office space than industrial space has hit the market in the DFW area since 2000. On the positive side, the amount of spec office space available is nowhere near the amount that hit the market in the 1980s. Because of this, Crews and Whitman predict a few foreclosures in 2010, but nothing near to what happened to 30 years ago.

"During the decade of the 1980s, we built 134 million square feet of office space," Whitman explains. "About 30% overall of our office space today was built back then." But only 52 million square feet has been added to the total since 2010. "If you're looking for good news," Whitman comments, "it's that we don't have an abundance of things under construction when the music stops."

Crews says another interesting aspect of the Dallas-Fort Worth area that could impact investment here is perception from the outside community. During previous recessions, investors have regarded the area as "dregs of the downturn," Crews comments. But in this particular cycle, the area's fundamentals in terms of job growth and cycle and performance of existing assets is actually quote good. "We're still getting branded as not the best city to be in, but we're clearly looked at favorably in the eyes of job growth," he comments.

Crews' advice? Cooperation.

"Everyone has to work together," he comments. "If buyers remain greedy and want bottom-of-the-barrel pricing, they won't buy much."If sellers are using 2006 sales comps as an exit strategy, they won't go anywhere. It's a great time to make a great buy, but you can't do much if you're greedy."

Meanwhile, on the leasing side, Whitman suggests building owners, whether office or industrial, need to show their financial strength and ability to the market and not hide their lights under a bushel. "This is unlike any other time in that tenants are asking for a thorough understanding of financial underpinnings of a deal," he explains. "They'll steer away from buildings that are undercapitalized, or landlords who are not able to pay tenant improvements or leasing commissions."

On the other side of the coin, tenants need to take advantage of the opportunities – but cautiously. "They have to protect themselves in the unlikely event that their building will be foreclosed on," Whitman remarks. "They need to take steps to ensure they'll get the allowances to build out their spaces and so on."

Sunday, September 20, 2009

Downtown Perot Museum of Nature & Science

Renderings and a building model for the 180,000-square-foot Perot Museum of Nature & Science at Victory Park have been unveiled for public view. The $185-million project has a fall 2009 groundbreaking and is slated for an early 2013 opening.
The facility, which is being built on just under five acres at 1155 Broom St., is less like a typical museum with Doric columns adorning the front, and more like a floating cube over Victory Park; a cube blending in with the landscape and allowing a great deal of light into the spacious interior. Designed by Pritzker Prize Laureate Thom Mayne and his firm, Morphosis Architects of Los Angeles, the 14-story, 170-foot-tall building contains an acre of rolling roofscape comprised of rock and native drought-resistant grasses, five floors of public space containing 10 exhibition galleries and a children's museum and a multi-media digital cinema that can seat 300 people.

Mayne tells that the design was the culmination of a great deal of input, discussions and "desires of the client group," as he puts it. "We were completely attuned to this particular site, program and client as well as the location," says Mayne, who says the project is his first in Texas. "It's adjacent to the freeway (Woodall Rogers Expressway) and at the very end of a cultural corridor."
Mayne says his goal in the building design was to tie it to the landscape, designed by local firm Talley Associates. Another goal was that of movement and sequences; allowing visitors to move through spaces and 10 different venues, and to view new and exciting things as take their trip. On a more practical note, Mayne comments that the building's vertical design also provides future options when it comes to site expansion.
One happy surprise that came out during the design phase was the 54-foot, continuous-flow escalator in a clear tube extending outside of the building. The escalator takes visitors from the lobby atrium to the top floor, where they are faced with a view of Dallas. "That massive escalator is something that's really powerful," Mayne remarks. "It didn't come as a single move, but bit-by-bit. It was a lot of thoughts and ideas glued together until we realized what we had."

Mayne goes on to say this is the way he rolls as an architect; he doesn't go into a project with preconceived notions or ideas. Rather, he works with the site, the program and listens to clients before setting out things on paper. For him, design is more of a collective process, a "manifestation of dialogue," as he puts it.

The Perot Museum is interesting in that it's a relevant project for the day and age. "These days, nature and science are such relevant topics, with concerns over the environment and sustainability," Mayne remarks. "The living thing and its environment are thought of as singular. It's a terrific time to explore this topic, and the building tries to do that."

Wednesday, September 16, 2009


Dallas, Sept. 15, 2009—The Dallas Center for the Performing Arts and AT&T announced a naming agreement today for the AT&T Performing Arts Center. Opening Oct. 12, the Center will serve as a multi-venue arts and entertainment center for music, opera, theatre, dance and more, and will be equipped with cutting edge communications technology.

“Our relationship with AT&T, the global leader in communications, will place us at the forefront of the performing arts world in utilizing cutting edge technology to enhance our patrons’ experiences at the Center," said Mark Nerenhausen, president and CEO of the AT&T Performing Arts Center. “AT&T not only provides vital support that advances the Center’s educational, cultural and civic mission, but also frees us to focus our energies on programming, raising capital funds, building our endowment and raising funds toward programming and operations.

“AT&T’s involvement ensures that when the AT&T Performing Arts Center opens in October it will become a cornerstone of our cultural community and an economic and cultural catalyst for the region,” Nerenhausen said. “AT&T has a long tradition of supporting the communities in which it operates, and, on behalf of the people of North Texas, I would like to thank AT&T for continuing this tradition with its visionary support.”

The Center will be one of the most technologically advanced performing arts venues in the country, equipped with AT&T Wi-Fi service and complimentary Internet access to patrons. AT&T will also offer unique mobile applications to AT&T wireless subscribers.

The Center will mark its grand opening with a weeklong celebration beginning Oct.12, featuring a variety of indoor and outdoor performances, concerts and architecture forums that are free and open to the public, including a free outdoor concert featuring David Sanborn on Friday, Oct. 16. A special community open house called “Spotlight Sunday” will take place on Sunday, October 18th with free performances from 11 a.m. to 8 p.m in the Winspear Opera House and in the AT&T Performing Arts Center’s Sammons Park. The Center is expected to offer a variety of free performances and concerts appealing to a broad audience throughout its seasons.

“We are honored to be a part of this incredible facility, which will serve people of many backgrounds and nationalities throughout the region,” said Cathy Coughlin, senior executive vice president and global marketing officer for AT&T. “Our commitment to innovation and desire to connect people to their passions is a perfect match with an organization that fosters the creation of new art and provides experiences which knit communities together. We look forward to seeing an increased participation in the arts in our new hometown, a place where many of our employees live, work, and contribute to the community.”

The Center will house the Winspear Opera House, the Dee and Charles Wyly Theatre, Annette Strauss Artist Square, City Performance Hall and the Elaine D. and Charles A. Sammons Park, a 10-acre park that unifies the venues. These facilities will provide state-of-the-art performance spaces for five resident companies: The Dallas Opera, Dallas Theater Center, Texas Ballet Theater, Dallas Black Dance Theatre and Anita N. Martinez Ballet Folklorico. TITAS, the Dallas presenter of the world’s most highly acclaimed touring music and dance companies, will also present its season at the Center. In addition, the Center will present the Lexus Broadway Series, JAZZ ROOTS, the Brinker International Forum, concerts, lectures, films and many other programs.

For more information on the AT&T Performing Arts Center, please visit

The AT&T Performing Arts Center, a new multi-venue Center for music, opera, theatre and dance will open in October 2009, completing the 25-year vision of the Dallas Arts District. The Center will provide multi-state-of-the-art facilities woven together by an urban park covering more than ten acres to create a dynamic cultural destination that will be unparalleled in the world. The Center will feature the following:

The Margot and Bill Winspear Opera House, designed in a modern horseshoe configuration, will seat 2,200 (with capacity up to 2,300), designed by Foster + Partners.
The Dee and Charles Wyly Theatre will serve as a gateway to the Dallas Arts District from the downtown Dallas business center and will seat 600, designed by REX/OMA, Joshua Prince-Ramus (partner in charge) and Rem Koolhaas.

The completely new Annette Strauss Artist Square will be the Center’s outdoor entertainment venue, designed by Foster + Partners.
The City Performance Hall will provide main stage production space for many of Dallas’ smaller performing arts organizations, designed by Skidmore, Owings & Merrill.

The Elaine D. and Charles A. Sammons Park will unify the venues within a lush urban oasis and will create a dynamic cultural destination in downtown Dallas, designed by Michel Desvigne.

Two underground parking areas that will accommodate more than 850 vehicles.
The Dallas Fort Worth Lexus Dealer Association is the title sponsor of the Center’s Lexus Broadway Series, the official vehicle of the Center and its resident companies, the official valet sponsor and the naming rights holder for the Center’s two underground parking areas. More information on the AT&T Performing Arts Center is available at

Maria May
AT&T Performing Arts Center

Defaults Could Jump-Start Stalled Distressed Buying Opportunities

Despite rapid deterioration of commercial real estate fundamentals, equity investors have been frustrated with the lack of distressed buying opportunities. However, according to the third-quarter PricewaterhouseCoopers' Korpacz Real Estate Investor Survey, investors anticipate near-term defaults combined with looming due dates on commercial mortgage-backed securities (CMBS) maturities to jump-start distressed buying opportunities during the next year.

While some investors are looking to the $153 billion of CMBS loans due in 2012 to spur buying opportunities, commercial banks account for a much greater percentage of the total looming debt and could provide distressed sales sooner than 2012.

“It appears many banks are playing a ‘timing game’ attempting to replenish their capital reserves in anticipation that the economic recovery will bolster property values. This may be a risky proposition given that commercial real estate's performance often lags what happens in the economy and in this game, the banks can ultimately lose,” said Susan Smith, director of the real estate advisory practice for PricewaterhouseCoopers and editor-in-chief of the survey.

So far, the de-leveraging of the commercial real estate industry has disappointed many investors who have been waiting patiently to acquire quality, stable assets at distressed pricing.

“Investors seem surprised at the lack of quality buying opportunities given the problems in the financial markets and the continued weakening of the industry's fundamentals,” said Smith. “Some investors sense that near-term defaults with commercial banks will allow them to acquire quality assets at steep discounts, as banks may no longer be able to continue to ‘pretend and extend’ troubled loans and would be forced to place assets up for sale.”

Surveyed investors believe the massive amount of leverage used to fuel the buying frenzy during the peak of the cycle in 2006-2007 will greatly increase the number of commercial properties for sale primarily due to owners who are unable to cover their debt service obligations and incapable of refinancing.

If such buying opportunities do come to fruition, the next challenge for investors will likely be asset pricing. The report cites that a bid-ask pricing gap still exists across all property sectors and geographies. In addition, the unraveling of the debt markets appears to be keeping offering bids from buyers low.

Information about subscribing to PricewaterhouseCoopers' Korpacz Real Estate Investor Survey can be found at

Commercial Real Estate Delinquency Rates Climb

Delinquency rates for commercial real estate loans continued to rise in the second quarter, the Mortgage Bankers Association (MBA) says in a new report.

The delinquency rate on loans held in commercial mortgage-backed securities (CMBS) and at least 30 days past due rose from 1.85% to 3.89% between the first and second quarters. Meanwhile, the delinquency rate on loans held or insured by Fannie Mae and at least 60 days past due rose from 0.34% to 0.51%, MBA notes.

Capmark’s Troubles Highlight Plight of Many CRE Lenders

With more than $1.6 billion in second-quarter losses and plans to sell off its most viable business operations, Capmark Financial Group Inc. provides a painful example of the turmoil plaguing many large lenders to the commercial real estate industry.

In its second-quarter report published earlier this month, the Horsham, Pa.-based commercial real estate finance company disclosed an agreement to sell its mortgage banking origination and servicing businesses to Berkadia III, a partnership owned by Warren Buffett’s Berkshire Hathaway Inc., and Leucadia National Corp., for $450 million. Later that week, rating agencies lowered Capmark’s credit ratings to reflect the company’s likelihood of defaulting on its cumbersome debt. -Matt Hudgins

D-FW economic, housing markets among top in U.S., analysis finds

The Dallas-Fort Worth area has one of the strongest economic and housing markets in the country, according to a just-released analysis.

D-FW ranked fourth in a second-quarter economic comparison of 100 U.S. cities that was released Tuesday by the Brookings Institution. Austin was at the head of the list of cities with the strongest-performing economies.

And D-FW ranked third among markets with the best home price performance, the study found.

The quarterly report ranks the country's largest metropolitan areas based on employment, unemployment, economic output, home prices and home foreclosure rates.

"Several metro areas showed signs of beginning to recover from the recession, and the rate of economic decline slowed in many more," the study says.

"Twenty metro areas, including Albuquerque, Baltimore, Bridgeport, Conn., Charlotte, Dallas and Seattle, posted at least small increases in economic output in the second quarter of 2009 compared to the first quarter."

The D-FW area ranked 11th nationally in the comparison of gross economic production – up 0.1 percent from the first quarter.

And the area has had a 1.9 percent drop in total employment since the peak of the economy in mid-2008. That compares with a 4.1 percent nationwide decline, the Brookings study said.

The best news in the local report card was in the housing sector.

Local home prices, when adjusted for inflation, have increased in the D-FW area 3.8 percent during the last year, Brookings researchers estimate. That's the third-best performance in the country, behind Houston and Wichita, Kan.

The Brookings Institution report is the latest in a series of recent economic report cards that suggest that the recession is waning in North Texas.

Other data also suggest that the housing market decline here is bottoming.

1. Austin
2. Baton Rouge, La.
3. Columbia, S.C.
4. Dallas-Fort Worth
5. Des Moines, Iowa
6. El Paso
7. Harrisburg, Pa.
8. Honolulu
9. Houston
10. Jackson, Miss.
SOURCE: Brookings Institution

Based on one-year change adjusted for inflation:
Houston 4.9%
Wichita, Kan. 4.2%
Dallas-Ft. W. 3.8%
Buffalo, N.Y. 3.7%
Pittsburgh 3.7%
Columbia, S.C. 3.5%
Syracuse, N.Y. 3.4%
Baton Rouge, La 3.3%
Rochester, N.Y. 3.1%
San Antonio 3.1%

Huge North Dallas redevelopment project may face foreclosure

One of the most ambitious redevelopment projects on the drawing boards for North Dallas is facing foreclosure.

Lenders have scheduled a forced sale for early next month on 42 acres at the northwest corner of North Central Expressway and Walnut Hill Lane owned by developer Provident Realty Advisors.

Development site
The recently cleared hillside property was to be the site of an urban village of housing, retail and office space.

But work on the huge project – originally estimated to cost between $300 million and $400 million – stalled early this year when the credit crunch cut off funds for most real estate development.

Now lender Wachovia Bank wants to sell the land to recoup debt of more than $40 million, according to foreclosure filings obtained by Foreclosure Listing Service, an Addison-based reporting firm.

The sprawling tract north of NorthPark Center shopping mall was previously the site of the aging Lakeside apartment complex.

Provident Realty bought the complex and tore it down after a long zoning battle to replace the fire-prone buildings with a new mixed-use development.

Provident Realty got permission to build about 175,000 square feet of specialty restaurant and retail space, 1,100 apartment units, a small office building and a 104-home luxury residential village.

The site is a few blocks from a commuter rail station and is on one of the region's busiest thoroughfares.

In February, Provident Realty officials said the project was on hold while it attempted to secure financing.

Provident officers did not return phone calls Tuesday about the possible foreclosure.

The posting is one of the largest pending land foreclosures in years. "No, I can't think of a bigger one in recent times," said George Roddy, president of Foreclosure Listing Service.

Not all foreclosure filings result in a sale of the property. Many times the borrower and lender renegotiate the debt or agree to delay the foreclosures.

Neighborhood groups that have negotiated for years with builders to get the property rezoned were stunned to hear that the land could be taken over by lenders.

"I'm shocked," said David Westbrook, president of the Meadows Neighborhood Association. "Actually, I shouldn't be surprised in today's economic environment.

"We thought they would put it on hold to wait for the economy to recover."

Westbrook said homeowners in the area fought hard to keep the property from being used for large discount retailers or high-rise buildings.

"It's going to be even more important now that we got that zoning in place," he said. "We want to get some high-quality retail in there – nothing big-box."
Steve Brown/DMN

Taking Downtown Investment a Step Further…Implementation and Realization

Today Mayor Tom Leppert announced the details of an effort that has been in the works for the last several months, through cooperation of the City, DOWNTOWNDALLAS and the Dallas Regional Chamber. Called “Bold Moves”, the initiative is a unique, multiphase CEO-to-CEO business to business recruitment effort.
Bold Moves aggressively targets CEOs primarily from California and the Northeast corridor whose businesses are feeling the effects of the poor economy, tax increases and excess regulation. The “Make a Bold Move” campaign highlights the benefits of moving to Dallas and how the bold move of relocating headquarters will create positive change in a company. The campaign elements include videos, direct marketing, e-mail, iPhones and an invitation-only Web site. To check out a preview visit

From the creative brain trust at TM Advertising, the attention-grabber of the campaign is a branded iPhone. It’s the first point of contact that a CEO will have with Dallas and is loaded contact information of Dallas business leaders. Every application on the phone has Dallas content (phone contacts, photos, news, maps, weather, real estate, restaurants and entertainment). It also contains engaging, short videos of Dallas CEOs who have moved their companies to downtown Dallas, and voice-mail messages from these CEOs.

But this is even more than a marketing campaign. Meaningful economic data is provided on the web site, driving home the value statement that Dallas is clearly positioned to provide added value and benefits for relocation. The site is programmed with customizable data, comparing a particular target CEO’s city to Dallas. Furthermore, the list of CEO’s who have received the information was the result of a highly targeted filtering system, resulting in a list of real prospects. This is no ‘shoot in the dark’ campaign.

Some of our favorite stats:

North Texas’ $300 billion annual economy is larger than that of many European nations – A relocation to Dallas can help companies not only survive, but thrive in today’s new global economy.
Texas created more new jobs in 2008 than all other 49 states combined
Texas is the only state other than Georgia and North Dakota that is cutting taxes this year
The business and tax climate in Dallas and breadth of critical labor and infrastructure provide a ripe environment for major corporations to thrive.
Dallas is the #3 Most popular destination for business travel in the United States
Dallas is in the top 5 media markets in the US
Dallas is centrally located with most US cities a few hours away. Travel can be quick, trips can be brief.
For the fourth year in a row, Chief Executive Magazine has ranked Texas the #1 place to do business (February 2009).
Dallas, with a population of 6,300,006 (as of July 2008), was the number one metropolitan area in population growth in the nation last year according to a March 2009 U.S. Census Bureau release.
For companies that operate nationally, yet are anchored on the east or west coast and/or in high cost locations, Dallas is ideal given its central location, with most major US cities 4 or less hours away by air .
The initiative will run through 2010.

Wyly Theatre
On a similar note, the move of a million-dollar plus corporation headquarters doesn’t signify a single, one-time investment. That’s just the beginning of the economic benefits that unfold to our city.On

The AT&T naming announcement that came today for the Dallas Performing Arts Center is a prime example. Their contribution will fund the future annual operations of the world-class venues that create the center, like the Winspear Opera House and Wyly Theatre, opening in October. During the opening week, hundreds of thousands of journalists, visitors and performers from around the world will be experiencing our city and coming back for more for years to come. This benefits both businesses (private and public) and consumers.

The AT&T Performing Arts Center will showcase some of AT&T’s newest and most advanced mobile and internet technologies to further visitors’ experiences at the center, from text messaging and free wi-fi to mobile apps for AT&T users – another consumer benefit.

Having an economic driver company like AT&T call Dallas their home, can only enhance Dallas’ vitality in competing in national and international markets – from business to consumer levels. A sense of pride and ownership of their new home is part of a corporate relocation package and a driving force of getting their name out there to its constituents, partners, neighbors and friends. That’s something all of us Texans and Dallas-ites can relate to and appreciate.
-Kourtny and Kristy

City of Dallas and the Dallas Regional Chamber launch a BOLD effort to recruit corporations to Dallas

Mayor Tom Leppert announced the details of an effort that has been in the works for the last several months, through cooperation of the City, DOWNTOWNDALLAS and the Dallas Regional Chamber. Called “Bold Moves”, the initiative is a unique, multiphase CEO-to-CEO business to business recruitment effort.

Bold Moves aggressively targets CEOs primarily from California and the Northeast corridor whose businesses are feeling the effects of the poor economy, tax increases and excess regulation. The “Make a Bold Move” campaign highlights the benefits of moving to Dallas and how the bold move of relocating headquarters will create positive change in a company. The campaign elements include videos, direct marketing, e-mail, iPhones and an invitation-only Web site.

Meaningful economic data is provided on the site, driving home the value statement that Dallas is clearly positioned to provide added value and benefits for relocation. The site is programmed with customizable data, comparing a particular target CEO’s city to Dallas . Furthermore, the list of CEO’s who have received the information was the result of a highly targeted filtering system, resulting in a list of real prospects.

Also today, DOWNTOWNDALLAS member and multi-billion dollar company, AT&T furthered their stamp on their new home in Downtown Dallas by the naming announcement of the former Dallas Center for Performing Arts, to now the AT&T Performing Arts Center. This contribution will fund the future annual operations of the world-class venues that make up the Center.

“We are so excited about AT&T’s commitment to the Arts District,” said Veletta Forsythe Lill, Executive Director of The Dallas Arts District at DOWNTOWNDALLAS. “Their sponsorship helps ensure accessibility and sustainability in arts programming for Dallas. We think it is the perfect match.”
Last year AT&T moved their national headquarters from San Antonio to Downtown Dallas and have since showed the benefits of their corporate presence in our city to Dallas consumers and businesses alike.

This investment from a great city and Downtown business partner shows the importance of public and private partnerships to bring further economic development to Downtown.

Tuesday, September 15, 2009

Downtown Hotel Groundbreaking Ceremony Today

Whether rain or shine, please join us for a momentous occasion in Dallas' history.
Groundbreaking Ceremony
Omni Dallas Convention Center Hotel
September 15, 2009 4 p.m. arrival; ceremony starts
promptly at 4:30 p.m.

800 Young Street • Dallas, TX 75202
Rain location: Dallas Convention Center, Hall D
Followed by a reception hosted by the Dallas Convention Center

Parking available at Lot C on Lamar Street.
If you have not already sent your RSVP, please click here or call 972.871.5608.

Friday, September 11, 2009

Downtown Uptown Park & Link Breaking Ground NOW!

A little more than four years after the concept was formally introduced, developers are finally ready to launch construction on the $100-million Woodall Rodgers Park, a development geared to link Dallas’ uptown area to the CBD. Thanks to the inclusion of funds from the American Recovery and Reinvestment Act of 2009, ground will officially break on the 5.2-acre parcel spanning the multi-lane Woodall Rodgers Freeway at Pearl St. on Sept. 14.
The keynote speaker at the event will be Tony Jones, chancellor of the School of the Art Institute of Chicago. Jones will discuss how Millennium Park changed Chicago’s landscape, much as those behind the Woodall Rodgers Park hope the project will do the same thing for Dallas.

Linda Owen, president and CEO of fund-raising arm Woodall Rodgers Park Foundation tells that the development will provide a connection between two areas of the city currently divided by the concrete moat that is Woodall Rodgers. She says now is a good time to work on the project; as the development nears its end, the economy should be improving, and could “hopefully jump-start development along the Woodall Rodgers corridor,” Owen comments.

She acknowledges that raising money over the years for the project had been a challenge. Though organizations such as The Real Estate Council kicked in seed money at the start to develop the plan, but the pre-development phase expenses had to be funded up front.
However a credit facility with JP Morgan Chase Bank and stimulus funds from the American Reinvestment and Recovery Act, also known as the “bailout” meant the construction phase could start that much sooner. The first phase, Owen says, will involve building the basics for the infrastructure, a deck that can support future trees, lawns, sidewalks and other amenities. That phase has an estimated completion of 2011. Archer Western is the contractor on the project, under the auspices of the Texas Department of Transportation.

Following the infrastructure’s completion, Owen continues, would be the park improvements and amenities including dog and children’s parks and cafes. The goal is to complete the amenities by 2012, but a great deal depends on how much money is raised. “We’ve raised close to $80 million without anyone seeing the dirt flying,” Owen comments. “We’re optimistic that as people see construction underway, they’ll be excited about helping us realize the full potential of the park.”

Thursday, September 10, 2009

First Distressed Assets Conference on Tap

DALLAS-With the growing number of distressed assets hitting the marketplace, advice, counsel and wisdom needs to enter into how to take advantage of the opportunities. This is the main purpose of the first annual RealShare Distressed Assets, which will take place on Sept. 14: to provide attendees with information to help them make their way through the distressed asset market.

The conference will take place from 7 a.m. to 5:30 p.m. at the Adolphus Hotel in downtown Dallas, and is presented by RealShare, in conjunction with Real Estate Forum and According to RealShare Conference producer Jason Young, the physical conference, which is national in breadth, was an outgrowth of a RealShare/GlobeSt-produced webinar that aired earlier this year.

With 300 people having attended that webinar, "we realized our readership appreciates hearing about those topics, and thought it would be a good idea to translate this to a full-day conference," Young tells

Furthermore, Dallas was selected as a location because of its convenience to East and West Coast speakers and attendees. Young says the initial thought was to put the conference in an area with the highest rate of distressed assets hitting the market. But those were areas, he explained, that were already the site of tons of conferences about the topic.
"People are so exasperated with the distressed asset movement and so buffeted by conferences about distressed assets, it made more sense to put it in Dallas, which hasn't really experienced that yet," Young explains.

The speakers will present expertise on topics ranging from opportunities in distressed assets and restructured finance, to how to find debt and equity in the current environment, to working with special servicers, to appraising distressed asset value. Also on the agenda is expert advice from lenders as to what types of assets might be making a comeback.

Young anticipates more than 200 people will show to hear the national take on distressed assets, to get some useful advice and, of course, to network. "This is a fine network opportunity for any real estate executive involved with distressed assets to meet and network with attendees and speakers," he adds. For more information about Real Share Distressed Assets, or to register

by Amy Wolff Sorter

Westmount Realty Capital Announces

Sale of Five Downtown Dallas Buildings

Buyers own The Joule Hotel and Charlie Palmer Restaurant which are surrounded
by the recently-acquired buildings.
DALLAS – September 9, 2009 –Dallas-based Westmount Realty Capital javascript:void(0)announced today the sale of five buildings in downtown Dallas to 1600 Main Street Holdings , L.P., an affiliate of the Joule Hotel. On the same block as the flagship Neiman-Marcus, the five buildings surrounding The Joule Hotel and Charlie Palmer Restaurant
represent all the buildings on Commerce Street between Neiman Marcus and the Magnolia Hotel, as well as an 8-story building at 1604 Main Street, situated between the Joule Hotel and Neiman Marcus.
The properties sold by Westmount are:
• 1417-19 Commerce Street, a 11,450 square foot former restaurant built in 1932 and purchased by Westmount in 1997;
• 1503 Commerce Street, an 8,400 square foot former restaurant acquired by Westmount in 1997;
• 1505 Commerce Street, an office building built in 1900 and purchased by Westmount in 2005;
• 1511 Commerce Street, a 15,000 square foot former retail/office built in 1928, now carrying a historical designation and acquired by Westmount in 1995; and
• 1604 Main Street, a 47,724 square foot former retail/office built in 1914 and purchased by Westmount in 1996 from Neiman-Marcus.
Until selling to the Joule Hotel in 2003 and 2006, Westmount also owned 1530 Main Street and 1524 Main Street buildings which now, respectively, house the Joule Hotel and Charlie Palmer Restaurant.
“As a big believer that well chosen, downtown Dallas properties held great investment prospects, Westmount diligently worked from 1995 until 2005 assembling this portfolio,” said Cliff Booth, chief executive officer of Westmount.
“Westmount had contemplated doing a large scale redevelopment ourselves on this block. Considering the strong interest expressed by the buyer, the extension of the likely development time frame caused by current market conditions and the price we were able to negotiate with the purchaser, we are very pleased with this transaction,” Booth added.
“Given that world famous Neiman Marcus’ flagship store is the anchor of the neighborhood, we believed that this block had potential to be the very center of a downtown Dallas renaissance,” Booth added. “With the recently relocated AT&T headquarters nearby, as well as new and redeveloping hospitality, entertainment, retail and residential interests, the prospects for this block are as promising as ever.”

Friday, September 04, 2009

Law firm buys North Dallas building

A Dallas law firm will move its office from downtown to a building along the Dallas North Tollway.
Law firm Jaime Barron PC purchased the five-story, 35,000-square-foot Inwood Plaza building through Lutador LLC, an affiliated entity. The law firm will occupy 11,000 square feet on the building's third floor and lease the rest of the building located at 12240 Inwood Road, founder Jaime Barron said.
Space will lease for $15.50 plus electricity, according to Luis Pina of Accent Commercial Real Estate, the company that will handle leasing in the building. About 15,000 square feet is available for lease, Pina said.
Jaime Barron PC will move next month from 5415 Maple Ave. in Dallas.
"We were looking for a building in a central location to our client base, who come from all corners of the Dallas-Fort Worth Metroplex, and this was the most central point," Barron said. "It has easy access to the tollway and other major streets."
Bill Knopick and Jonathan Diamond with the Corporate Services Division of The Weitzman Group negotiated the sale. The Dallas Business Journal

2-building office complex on Turtle Creek in Dallas is purchased

The CEO of a local homebuilding company has purchased a two-building office complex on Turtle Creek in Dallas with plans to hold the property for a future residential high-rise project.

Randall Van Wolfswinkel, CEO of First Texas Homes, bought the former Republic Insurance buildings at 2727 Turtle Creek Blvd. from an affiliate of Trammell Crow Residential. Crow Residential had owned the 5.5-acre property since 2005 and had designed two residential towers for it.

But the recession and housing downturn put an end to those plans.

"I've always liked that property and thought it was a primo site," Van Wolfswinkel said. "It has great views and is next to the Mansion on Turtle Creek.

"We think Dallas needs a high-end luxury residential building on that property – but not right now, of course."

Terms of the purchase were not disclosed, but Van Wolfswinkel said, "We got it at a price we thought was a very good buy."

The property is valued for tax purposes at $13.8 million.

The two office buildings, which are still partly occupied, were constructed in 1956 and 1977 and contain more than 200,000 square feet. There's also an adjoining parking garage.

Real estate broker Newt Walker negotiated the sale.

"I sold it to Trammell Crow Residential three years ago, and they decided they wanted to get out of the property," he said. - Steve Brown/DMN

Tuesday, September 01, 2009

The House: Why These Luxury Residences aren’t Selling

A lousy economy, a tough housing market, and the Victory Park problems are all wreaking havoc on the luxury condominium residences of the House.

Let’s start off by saying that the House is simply outstanding. In terms of luxury surroundings and upscale services and amenities, it is unsurpassed.

The Magnificence of the House

Rising 28 stories into the Dallas skyline, The House features one, two and three-bedroom condominium residences priced from $399,900.

The architecture and exterior designs, which were designed Elkus Manfredi, are a lesson in perfection, while the stunning interiors, designed by Philippe Starck and Yoo, speak of exquisite taste and design sense.

Just some of the residence finishes found throughout the House include limestone bathrooms, gleaming, hardwood floors, high-end appliance packages, soaring ceilings and breathtaking views of the Dallas skyline.

Perhaps the only thing that surpasses the outstanding residences of the House are the outstanding services and amenities.

Just some of the services and amenities afforded to the residents of the House include: a 130-foot lap pool; a dog park; a fitness center, complete with Italian-designed fitness equipment; a conference room; and a guest suite.

The location of the House seems to be nearly perfect, as well, as it is comfortably situated smack dab in the middle of Victory Park, near the American Airlines Center, the W Hotel and Condominiums and the House of Blues.

Victory Park and its Flaws

But perhaps it is the Victory Park location that has hurt the sale of the House.

Victory Park, hailed by some as Dallas’ best achievement, is a sprawling, 75-acre community that was originally the brainchild of Ross Perot. He envisioned upscale dining and shopping, and equally upscale residences.

Victory Park’s location was also masterfully designed, as it is ideally located near all, major areas of Dallas, including the Arts District, Turtle Creek, Uptown and, of course, downtown Dallas.

However, it seems that Victory Park in all its splendor has turned many potential residents and visitors away with its almost too high-end offerings.

The result is that many of the marvelous residences of Victory Park, including the House, are not filling up quite as quickly as expected.

The developers of Victory Park seem to have taken note of this flaw in its design, and have subsequently begun bringing more economical venues here.

As the developers begin to realize the importance of more popular retailers and restaurants, Victory Park will soon become the premier destination for Dallas residents, thereby helping the overall success of the House.

Downtown Progress Report

I’ve come to realize that sometimes over here at DOWNTOWNDALLAS we get so caught up in DOING, that we neglect to TELL you about all of the progress being made Downtown on a weekly basis. News abounds on the big things like the Trinity, Woodall Rodgers Park and Convention Center Hotel, but what about the day to day issues that collectively make just as great of an impact? Robert Wilonsky, over at Unfair Park helped us out on Friday by giving readers a few tidbits of Downtown news to chew on over the weekend. And now with a blog of our very own (!), I just can’t help but to add a few more details as my first contribution.

Main Street District FOCUS Retail Initiative– Indeed, we cheered in June when the Dallas City Council approved an additional ~$1.5 million for retail development in the core of Downtown. These funds complement the previous retail investment in the district that has turned on ground floor space and brought tenants like Jos.A.Bank. DOWNTOWNDALLAS, as the “marketing and leasing partner” with the City, will administer and manage the FOCUS program with guidance and recruitment assistance from Neiman Marcus. As of the hour we are in the process of meeting with landlords in the qualifying blocks, creating an implementation plan, and per Karl Zavitkovsky’s comment, together we will evaluate each deal on a case-by-case basis, then take to Council. Details of the program after the jump. However, one clarification to previous news coverage – the tenants listed represent just some of the targets we are aiming for on a national basis. The overarching goal is to create a diverse district of national, regional, local and service retail that is unique to Downtown.

Downtown Area Plan – The City’s effort (with cooperative management by DOWNTOWNDALLAS) to create an Area Plan for Downtown is being led by Moore Iacofano Goltsman, Inc. out of Berkeley, CA (authors of such notable Downtown plans as Downtown Denver and Downtown Los Angeles) and local sub consultants URS, DeShazo, Tang & Associates and Brown & Co. While we have experienced great success Downtown in building vibrant “nodes” over the last decade (Uptown, the Arts District, Main Street, Victory Park – and those emerging like the Farmer’s Market, rebirth of Deep Ellum, and the Trinity), we have fallen behind on building connectivity, both in the physical and emotional sense. One primary goal of the Plan – build these connections.

Furthermore, stacks of “plans” and “strategies” are piling up (Parks Master Plan, CBD Comprehensive Transportation Plan, Inside the Loop, Trinity, D2, Streetcar – believe me, our office is the hub) along with projects moving forward from the 2006 capital improvement bond election. While each individual plan is critical, an urgent need has emerged to synthesize these efforts, and ensure implementation moves forward with one cohesive vision. Therein lies another goal – guarantee all of the moving pieces are being planned in such a way that will maximize development potential and provide the most optimum quality of life for residents, employees and visitors.

The end product, to be delivered next summer, will be a “manual” (for lack of a more eloquent word) for the next five to ten years of Downtown vitalization. Our entire makeup has shifted from a ‘dead after 5pm’ environment, to one that has been humanized, evidenced by two of my favorite anecdotal marks of success – the emergence of the hot dog guy and our urban dog population. Yes, we’ve made it, my friends! Well, we’re at least peeking over the tipping point. This Plan will help us, as Downtown managers, continue to push beyond the curve.

Many more “goals”, “strategies” and “needs” are being assessed – diversity of housing, recreational space, streetlife…even (yes!) the tunnels. But before the outline is formalized, I hope you will save the date for October 12 (time and location TBD), when DOWNTOWNDALLAS and the City will hold a community forum to garner your input on important elements of the Plan.

The Hamiltons – The two-man catalyst for Downtown’s redevelopment (Overstatement? I think not!) will open their latest project, Aloft, this week. As for their work on the Atmos block, like many projects Downtown, let’s all keep hoping for lenders to start opening their pocket books again soon.

Videoboards – Last, but not least, we anticipate installation of video boards to begin just after the first of the year. Enough said.

More on these, and other topics from me to come at least weekly so you can follow the daily grind here at the DOWNTOWNDALLAS world headquarters…


Developers take more than a passing interest in tollway real estate

When the Westin Galleria opened in 1981, its location on the Dallas North Tollway was considered far north.

The Dallas North Tollway, seen from the top of the newly renovated Westin Galleria hotel, brings more than a passing interest to the corridor. Office projects and an apartment complex are among the latest additions.
"Now we are centrally located for a large market area," said John Everett, general manager of the hotel, which just completed a multimillion-dollar renovation.
"All the public space – all 21 stories – were taken down to the concrete, redesigned and refinished," Everett said.
The just-completed $60 million Westin redo is one of a string of new projects along the Dallas North Tollway – a real estate market that has matured over the last decade.
Since the late 1970s, the stretch of the tollway between LBJ Freeway and Plano has been one of the region's hottest real estate markets.
"It's amazing what the toll road has meant for Dallas' north expansion," said Greg Biggs, executive director of real estate service firm Cushman & Wakefield of Texas.
"And it's hard to beat having your sign along the tollway if you are a corporation."
While new business districts in Frisco and the Telecom Corridor have been major competitors for tenants looking farther north, a tollway address is still a big draw for developers and investors.
Everett said the Westin renovation is already paying off.
"We couldn't have timed it better because as we came out of the renovation this year we've seen huge surges in our market share," he said.
Developer SNK Realty has also had a positive response to its apartment complex that's about to open on the tollway and Addison Circle Drive. The Allegro rental community is one of the most high-profile new projects along the tollway.
"Traffic and leasing activity have been good," said developer Hal Watson. "We've leased 21 units so far, and we expect our first residents to move in on June 1st."
Apartments in the four-story, 272-unit project will rent from $995 to $2,240 a month.
The $28 million Allegro is one of two new apartment communities facing the tollway south of State Highway 121.
Developer Billingsley Co. is also building a 550-unit complex at the southeast corner of the tollway and State Highway 190 that will open in late August. The Gramercy apartments are across from a park.
"There's not a lot of new product in the area, and we have never built anything so super-visible," said developer Lucy Billingsley. "The rest of the product in that area is a totally different generation.
"This is going to be very much an urban project."
Greg Willett, an apartment market analyst with M/PF YieldStar Inc., said occupancy levels along the tollway south of Highway 190 are a little better than the area average. But rents haven't fared as well.
"While that area doesn't have the new supply challenges seen elsewhere, move-outs have been significant," he said.
Office projects
Developers have just finished two office projects along the tollway.
Heady Investments' 196,000-square-foot Park Centre V building in Plano just opened.
"We feel fortunate because we have 50,000 square feet of leases signed and have leases out for another 20,000 square feet," said leasing manager Mark Lewis. "I think we will be 30 percent before we open the building."
Accountants Montgomery Coscia Greilich LLP just took 34,000 square feet in the project.
"Deal flow has definitely dropped off, but we are seeing quality deals," Lewis said. "The most positive thing is there is a real restriction of supply.
"Even if demand for office space along the tollway does significantly drop off, there are not 15 cranes in the air like there were in the '80s."
The only new office building along the tollway south of Highway 190 is just opening. Opus West Corp.'s six-story Two Addison Circle has 198,000 square feet of office space and cost more than $23 million. It's just north of Arapaho Road and faces the west side of the tollway.
"To be candid, activity is pretty sluggish compared to earlier in the year," said Opus West's Texas development director Geoff Meyer. "We've had a good number of inquiries, but those haven't translated to tours yet.
"We're working on a couple of decent-sized deals, but nothing I would categorize as imminent."
Some vacancies
During the first quarter, the area that includes the tollway lost about 200,000 square feet of office tenants, according to statistics from Cushman & Wakefield.
At the same time, business districts farther north in Frisco and West Plano saw their net leasing grow by about 100,000 square feet.
"Things could be better along the tollway, but it's not a flashback to the 1980s," Biggs said. "Most of the buildings are still very well leased."
In 2008, the tollway lost office tenants for the first time in more than a decade, Biggs said.
And several large office blocks – including space now leased to Tenet Healthcare – are coming on the market.
Biggs predicts that office vacancy along the tollway will continue to rise this year – in part due to tenants moving farther north.
"Plano and Frisco are always going to be on tenants' radar because of the incentives those cities offer," he said.
Not everybody is moving.
Energy service firm Dresser Inc. just renewed the lease for its 44,000-square-foot headquarters in the Millennium Tower at the tollway and Arapaho in Addison. The landlord is KBS Realty Advisors.
Scott Collier and Kevin Morrison of Jones Lang LaSalle, who represented Dresser, looked at multiple locations before signing up for renewal.
"There are plenty of options in the area for tenants of 50,000 square feet and up," Collier said.
Periods of free rent and extra money for tenant space improvements are being offered to lure creditworthy companies.
"If you have a lease expiring, you have a great opportunity," Collier said.
KBS, a California real estate investor just bought another office building along the tollway at Spring Valley Road in Farmers Branch.
The 12-story Providence Towers was built in 1986 and has about a half-million square feet of space.
"It's an iconic building and very high quality," said KBS senior vice president Walter Foster. "We like the tollway, and when that building was put on the market, we were instantly attracted to it.
"This is one of the few institutional-quality buildings we've seen come on the market in Dallas." Steve Brown/DMN

Big U.S. Cities See Resurgence in Population Growth

Reversing a decade-long trend, many of the largest U.S. cities are now growing more quickly than the rest of the nation, yet another sign of an economic crisis that is making it harder for people to move.
Census data released Wednesday highlight a city resurgence in coastal regions and areas of the Midwest and Northeast, due to a housing crunch, recession and higher gas prices th"Cities are showing a continued vitality as hubs of activity even as some suburban and exurban areas go through tough times," said William H. Frey, a demographer at the Brookings Institution. "It emphasizes the buoyancy of large established cities with diverse economies and populations."
Frey and other demographers said many of the population shifts could be longer-lasting. They noted that while the Sunbelt region is still growing, it is unlikely to return to the torrid growth rates of earlier in the decade before the housing bubble burst.
President Barack Obama has pledged to upgrade mass transit and push energy conservation, high-speed rail and other urban priorities. That could create shifts in residential patterns and city life, especially for younger couples and small families more likely to move.
"Suburban sprawl may not be dead, but it's certainly on hiatus," said Mark Mather, associate vice president of the nonprofit Population Reference Bureau. "Even if the economy recovered tomorrow, it might take a while for people to change their behavior. Attitudes just don't change overnight."
Robert E. Lang, co-director of the Metropolitan Institute at Virginia Tech, predicted that upscale, inner suburbs with developed transit systems will see bigger gains in the future. He noted that while far-flung exurbs have been declining in population growth, closer-in suburbs such as Virginia's Arlington and Alexandria outside Washington, D.C., jumped 3 percent and 2.9 percent in 2008, respectively, to rank among the 20 fastest-growing cities.
New York continued to be the most populous U.S. city, with 8.4 million residents. Los Angeles

Investors buy key building site next to Richardson DART station

Parliament Group, a Dallas real estate investment firm, has acquired a prime 220-acre site adjacent to DART's rail stop in Richardson.

The land was sold by the estate of Hassie Hunt, one of the heirs of legendary oilman H.L. Hunt.

Terms of the all-cash sale were not disclosed.

In real estate lingo, locations like the Richardson property are described as the corner of Main Street and Main Street, meaning they're top-notch.

Located at the crossroads of two of North Texas' major freeways, North Central Expressway and Bush Turnpike, the tract is also adjacent to a busy commuter rail station.

"It's obviously as good an intersection you can find in Dallas-Fort Worth with an unbelievable amount of potential," said Richardson City Manager Bill Keffler.

The new owners plan to spend the next six months to a year planning the property for mixed-use construction.

"Not very often does one have the opportunity to acquire such premium, undeveloped land," said Joe Altemore, partner in the Parliament Group. "We didn't think a property like this would ever be available."

The Hunt family owned the land for more than three decades. It was part of a broad swath of real estate the wealthy oil heirs bought before State Highway 190 and the DART line were built.

The development tract, just east of North Central in the Telecom Corridor, is one of the largest such vacant properties in Richardson.

"For an inner-ring suburb to have a development opportunity like this is very unique," Keffler said. "It's a very exciting opportunity for us in some tough economic times."

Very few such property investments are being made because of the recession and credit crunch.

Parliament Group has been in business since the days of the last big real estate downturn in the late 1980s.

Altemore describes the company owners as "just a group of old real estate guys in the fourth quarter of our careers looking to do really great deals."

"This one definitely fits the box."

He said the company will "wait until the market is right" before it builds on the property.

"It's not a matter of if, just when," Altemore said. "We are not going to be forced to do something because the meter is running or make a sale just to generate some revenue."

The new owners probably will subdivide the land and work with developers interested in building on the property.

Some of the construction types being considered include office, retail, commercial, high-tech and residential buildings.

Altemore said Parliament Group took about 60 days to complete the Richardson purchase, and the partners are already looking at other investment opportunities.
Steve Brown/DMN