Monday, September 29, 2014

Historic downtown Dallas office tower sold for hotel project

The 1700 Commerce tower was built in 1922. (Steve Brown)
A historic downtown Dallas office tower has changed hands for the first time in 20 years.
Boxer Property has sold the 21-story 1700 Commerce building at Commerce and Ervay streets to Irving-based hotel firm NewcrestImage LLC.And the new owners plan to convert the 132,000-square-foot high-rise into a hotel.
That’s the same firm that recently looked at converting a building in downtown’s West End Historic District.
Instead, the company has purchased the 92-year-old 1700 Commerce building, which is located across the street from Neiman Marcus’ flagship downtown store.
Boxer Property founder Andrew Segal said he sold the historic office tower after NewcrestImage approached his firm about a deal.
“It was one of our first buildings which we bought back in the dark days of downtown Dallas,” said Segal, whose Houston-based firm now owns properties all over the state. “In hindsight, back then I should have bought everything I could.
“It turned out to be a great asset and everything is getting better in downtown Dallas,” he said.
Segal said redeveloping the old office tower into hotel rooms will add more life downtown and be a catalyst for further development.
“It takes office space off the market and brings people there at night,” he said.
Boxer Property still has its Pacific Place office building on Elm Street, which recently became the home of Texas A&M University’s expanded downtown Dallas campus.
“In that building we can’t build new space fast enough, there’s so much demand,” Segal said.
The 1700 Commerce Building – which Segal acquired in 1992 – was originally constructed as the Allen Building.
It was developed by prominent Dallas attorney Arch C. Allen and was designed by architect James N. McCammon.
The brick and stone office building cost about $1.5 million when it was new.
By the time Segal bought the property 70 years later, he only paid about $525,000.
Terms of the latest sale were not disclosed.
NewcrestImage owns and operates more than a dozen hotels, with five properties under construction and more in planning stages. The company has new hotel developments in East Texas, the Houston area, Waco, Midland and Oklahoma City.
NewcrestImage just opened two hotels in Grapevine, a Courtyard by Marriott and a TownePlace Suites hotel.
And it’s developing a historic downtown New Orleans hotel into an AC Hotel, Marriott’s new urban-style hotels, which are similar to Starwood’s Aloft brand.
The 1700 Commerce building is one of several downtown commercial buildings repurposed as hotels.
The former United Fidelity Life Insurance Building at 1025 Elm St. was converted to a Homewood Suites by Hilton Hotel.
And the historic Magnolia Building on Commerce has been a hotel since 1997.
The Santa Fe warehouse building on Young Street at Field was remodeled into an Aloft hotel.
Owners of the historic Tower Petroleum Building on Elm have proposed turning the art deco high-rise into a boutique hotel.
Hotel rooms are under construction at the former LTV Building on Elm Street and planned for the One Main Place tower on Main Street.