Wednesday, February 29, 2012

Dallas-area office buildings facing foreclosure

DMN files
The 20-story Stemmons Place office project in Dallas and two more in Las Colinas are scheduled for foreclosure by GE Capital.
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Three Dallas-area office buildings with almost $150 million in debt are scheduled to be sold by the lender.
The commercial buildings threatened with forced sale include Dallas’ 20-story Stemmons Place complex on Stemmons Freeway near Love Field.
The 125 John Carpenter Freeway tower and the MacArthur Center in Las Colinas are also set for foreclosure on March 6, according to legal filing reports from tracking firm Foreclosure Listing Service.
California investor Equastone owns all three of the big office developments. The debt on the properties is held by GE Capital, which has made the foreclosure filings.
Equastone purchased the buildings in 2007 as part of an acquisition it made from Crescent Real Estate Equities Co. GE made a $300 million loan to finance the 3 million-square-foot office purchase.
But the recession has reduced the values of all of the properties.
The Stemmons Place tower has almost $55.6 million in debt but is valued for taxes at $29.5 million
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Building a Beacon for Uptown

David Woo/Staff photographer
A 40-foot stainless steel sculpture is scheduled for completion next month in the West Village area of Uptown. It's intended to be a beacon for the neighborhood and a reminder of previous plans for the area.
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When the 40-foot sculpture Tower II is completed in Uptown next month, local leaders hope it will become both an icon for the neighborhood and a sly reminder of a vanished vision.
The stainless steel tower will be set with programmable LED lights that should make it stand out, even given the nearby bustle of North Central Expressway.
“It’s going to be very noticeable,” said Neal Sleeper, president of Cityplace Co., which developed West Village and much of the surrounding area. “We want it to be something that will remind people they’re in Uptown.”
The sculpture is part of an extensive reworking of the old Hank Haney driving range. The project includes new pocket parks, two other sculptures, the extension of two nearby streets and, a few yards away, a new DART rail entrance and the McKinney Avenue Trolley turntable.
The project is scheduled to open in mid-December.
Eventually the land will be developed into residential and retail space, Sleeper said.
The creator of Tower II, Venice, Calif., artist Cliff Garten, said he wanted art that would stand out and yet be built to a scale that comfortably fits with its surroundings.
“It occupies an intermediate scale between the pedestrian realm and the surrounding architecture,” he said. “What it is, is a beacon for the neighborhood.”
For the moment, it will stand out, surrounded by a largely empty lot. But when the adjacent land is filled in with residential and retail buildings, Tower II will become less of a beacon and more of a neighborhood amenity, drawing pedestrians to sit on nearby park benches, Garten said.
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Long-coveted Turtle Creek block may finally see construction

Steve Brown
An Oak Lawn block that's been empty for a quarter century is being planned for apartments and office construction.
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Developers are eyeing an Oak Lawn block that has long been considered the best construction site onTurtle Creek.
The 6-acre tract at Turtle Creek Boulevard and Cedar Springs Road has been vacant since the 1980s, when builders knocked down an old office building.
Back then the plan was to construct a 30-story office tower complex. But the real estate crash put an end to that scheme.
And for more than a quarter of a century the land — owned by General Electric Pension Trust — just sat.
Now apartment builders and an office developer are looking at new projects for the property, which GE will help fund.
Columbus Realty Partners, one of Dallas’ most experienced apartment builders, has filed plans with the city of Dallas to build a 347-unit rental project on the north half of the property.
Two buildings about eight stories tall would be built on both sides of Dickason Avenue at Sale Street.
Columbus Realty CEO Robert Shaw declined to discuss plans for the project.
But details at City Hall say the building will be designed by JHP Architecture, a firm that’s worked on multiple urban-style apartment projects in Dallas’ Uptown neighborhood and other close-in locations.
Columbus Realty has partnered with GE on some of its projects in Collin County. And Shaw pioneered the Uptown apartment building market starting in the 1990s.
The property owner is also working to develop the south half of the Turtle Creek block for office space.

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Telecom Corridor apartments trade after strong bidding

Institutional Realty Advisors
The 285-unit Venue complex is in one of the Telecom Corridor’s largest employment centers. “I had three public real estate investment trusts fiercely bidding for it,” said Will Balthrope of Institutional Realty Advisors.
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A Telecom Corridor rental community that overlooks one of Richardson’s light-rail stations has been purchased by one of the country’s largest apartment owners.
Illinois-based Amli Residential bought the Venue apartment complex located in the Galatyn Park urban center on U.S. Highway 75.
The four-story, 285-unit apartment project is next to Richardson’s performing art center and in the middle of one of the Telecom Corridor’s largest employment centers.
“It’s a really high-profile property that was just built,” said Will Balthrope of Institutional Realty Advisors. “It’s the finest quality and just 100 yards from the DART rail stop.”
Balthrope and partner Lindsay Allen have been marketing the luxury project to investors for a few months.
“I had three public real estate investment trusts fiercely bidding for it,” Balthrope said. “Almost every major apartment owner in the country was tracking this sale.”
Terms of the transaction were not disclosed.
The building is almost fully leased at rates of between $830 and $2,200 a month.
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Two more Maple Avenue apartment deals cooking

File 2010/Staff Photo
Developer Odyssey Residential Holdings hopes to begin work in early 2012 on a 252-unit apartment project adjacent to the Inwood Road DART rail station.
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Dallas’ already busy Maple Avenue development district is getting two more projects that will add to the construction boom.
Developer Odyssey Residential Holdings hopes to begin work in early 2012 on a 252-unit apartment project next to the Inwood Road DART rail station.
The five-story rental housing development is planned for an industrial site at 5522 Maple at Butler Street.
“We’ve gone through the zoning process, and we have financing in place,” said Odyssey president Saleem Jafar. “We still must close on the land purchase, and there is an existing warehouse there we must demolish.”
Odyssey plans to deliver the first new residential units in early 2013. The project is planned with 60 percent affordable apartments and 40 percent to be rented at full market rate.
“We’ve been working very closely with DART on this project,” Jafar said. “This is truly a transit-oriented development in what is the largest sustainable employment area in Dallas.”
The new rental housing projects are in response to construction of new hospitals in the area by Parkland Health & Hospital System and UT Southwestern.
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Behringer Harvard plans to sell stakes in rental communities

Behringer Harvard
The Fitzhugh Urban Flats apartments in East Dallas are included in a large apartment investment deal in the works.
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Addison-based real estate investor Behringer Harvard is working on a deal to sell a stake in 18 of its apartment properties — including a Dallas project.
Behringer Harvard Multifamily REIT I Inc., in filings with the Securities and Exchange Commission, said it has agreed to sell joint venture interests in the apartment communities to Milky Way Partners LP.
Milky Way Partners is a venture of Chicago-based Heitman LLC and a Korean pension fund.
As part of its planned transaction with the investors, Behringer Harvard disclosed that it hopes to sell an undisclosed interest in its Fitzhugh Urban Flats apartments in East Dallas.
Last year, Behringer Harvard bought the 452-unit rental community on Fitzhugh Avenue for $49.75 million.
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Planned Pelli project will shake up Dallas office market

In 1972, an engineer-turned-real estate developer turned the Texas commercial property market on its ear.
Houston developer Gerald Hines hired illustrious architect Philip Johnson to design a downtown office project.
Most of Hines’ office buildings to date had been workaday projects that delivered good value to tenants for the money.
But with Pennzoil Place in Houston, builder Hines demonstrated that high architecture and for-profit commercial property development could be married.
His Pennzoil Place was fully leased when it opened and was hailed as the country’s Building of the Year byThe New York Times.
Developers all over the country took notice — especially in Dallas, where the skyline had long been derided as looking like “a bunch of Kleenex boxes standing on end.”
A transformation
The 1980s real estate boom and the rise of postmodern architecture soon shook Dallas real estate.
Before you knew it, renowned architects including Johnson and partner John Burgee, I.M. Pei, Aldo Cossutta and Skidmore, Owings and Merrill’s Richard Keating were forever changing the city with eye-popping building designs.
During the last decade or so, a tighter business focus on real estate costs and tougher financing hurdles for builders have reined in spending for buildings.
The exception has been in downtown Dallas’ Arts District, where acclaimed work by Renzo Piano , Foster + Partners, Joshua Prince-Ramos and Rem Koolhaas have brought Dallas international attention.
And, of course, too much has been said about those new bridges by Spanish architect Santiago Calatrava.
Even in the public sector, the high cost of top-tier architecture can be a tough bill to swallow. A stunning Dallas convention center hotel tower designed by Foster + Partners was nixed in favor of a more tame scheme when the projected costs got out of hand.
The files of developers and architects are full of proposed projects that never got off the drawing board because of the economics of the deal.
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East European investors buy vacant Dallas skyscraper

The former First National Bank tower opened its doors in 1965.
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Downtown Dallas’ former First National Bank tower, vacant for more than a year, has been sold to an investor who hopes to renovate the skyscraper.
The 52-story office building at 1401 Elm St. had been up for sale by lenders who took control of the property and investors. Terms of the deal were not disclosed.
The last tenants moved out of the 45-year-old tower in early 2010.
Since then, Colliers International has been trying to find a buyer for the 1.3 million-square-foot tower, which had a price tag of $19 million.
A group of Eastern European investors headed by Turkish developer Mukemmel Sarimsakci bought the empty skyscraper with hopes of redeveloping the building.
“It took a while, but we finally got it sold,” said Colliers’ David Glasscock, who negotiated the sale with Jim Sobel, also of Colliers. “The sale just closed.”
The new owners, in a presentation almost two weeks ago to the city of Dallas, said they plan to spend about $125 million to convert the empty high-rise to offices, apartments and retail space.
If the plan goes forward, the city might contribute $30 million in tax increment financing assistance.
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Oak Lawn apartment project planned for tollway site

Developers are eyeing an block in Oak Lawn for the next luxury apartment community.
The builders are seeking city approval to replace a 46-year-old apartment complex at the Dallas North Tollway and Wycliff Avenue with new rental units.
Developer Hepfner, Smith, Airhart & Day wants to build a four-story, 306-unit project called the Residences at Wycliff on the 4-acre block at Congress Avenue and Wycliff.
Plans for the project filed with the city of Dallas show a brick and stone building with a central parking garage. The project was designed by Dallas-based BGO Architects.
The two-story buildings there now have about 144 rental units.
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