Saturday, January 31, 2015
The home of the annual Byron Nelson Championship Golf Tournament has changed owners.
Blackstone Real Estate Advisors has purchased the Four Seasons Resort and Club Dallas at Las Colinas for an estimated $150 million.
The New York-based real estate investor is expected to make improvements to the 431-room luxury golf course hotel, conference center and spa in Irving.
CW Capital was the seller of the property that had been foreclosed on in 2010.
Tuesday, January 27, 2015
The Dallas City Council’s Economic Development Committee spent almost an hour this morning discussing the old Braniff building at Dallas Love Field, which Ford dealer and private-plane salesman Randall Reed intends to save and redevelop at the cost of more than $55 million. Council members had myriad questions, among them: Is this reallythe best deal for the city? How much noise and traffic along Lemmon Avenue will this pile on neighbors already struggling with the recent influx of passengers and planes arriving with the end of the Wright Amendment? Are there others interested in redeveloping the building? And, what makes the rotting structure so historic and worth saving, anyway?
But in the end, all agreed to send the deal to the full council for a vote, lest the property continue to sit vacant and rot and wind up costing the city a small fortune to prop up and remediate.
Per the deal going to council, Reed Enterprises will spend $35 million on “aviation use” within the next three years, and another $20 “for commercial use within 60 months.” Reed Enterprises won’t have to pay rent for the first 10 years, after which rent will run around $1.3 million a year. Reed Enterprises is promising the creation of some 1,100 jobs. Reed will also pay to remediate the site, unless something significant pops up unexpectedly.
“In the ’50s and ’60s, concerns about environmental impacts were not as significant as they are today, and folks tended to dump things out the back door,” the city’s director of aviation, Mark Duebner, told the council. “There may be some unseen and unknown things the city would have to clean up.”
Duebner also made it very clear to the council: For years people were interested in the property, which takes up some 26 acres along Lemmon. Duebner said he could recall about 10 solicitations just since 2011, when he took over as aviation director. They were inevitable, he told the committee: It’s a big piece of property far below market value due to its proximity to the city-owned airport and copious environmental issues. Duebner said not one of the submitted offers was “viable” until Reed approached the city in 2012 via a broker and began discussing the mixed-use development focusing on car and private-plane sales with attached office space and retailers.
Initially, Reed and the city intended to raze the structure at the cost of $8 million to the city. In November 2012 the council agreed to lease the land to Reed. But the lease was never executed. Meanwhile, preservationist raised hell about demolishing Braniff’s 1958 structure designed by the Los Angeles architectural firm Pereira and Luckman so closely tied to the future development and identify of Love Field. As our Mark Lamster wrote last year, “In the coming years, the design-forward carrier would use the building — known as Braniff Operations and Maintenance Base — to position itself as the defining airline for the modern jet-setter. That included a graphic identity by architect Alexander Girard, superchic uniforms by the Italian designer Emilio Pucci and a series of planes painted with whimsical abstractions by the artist Alexander Calder. Braniff promised the ‘end of the plain plane,’ and it was here that the reinvention happened.”
In the end, the Texas Historical Commission and the Federal Aviation Administration agreed, and signed off on saving the structure after an environmental assessment study was completed last October. (Council member Jerry Allen is skeptical about the building’s historical significance. “I’m not an architect kind of guy,” he said, referring to the building’s designers. “How famous are they? What else have they done? The Eiffel Tower?”)
Flying Crown Development, which had been interested in preserving the building three years ago, maintains that Reed’s plan is just Flying Crown’s plan. Council members Adam Medrano and Jennifer Staubach Gates asked Duebner why the city wasn’t taking other offers, when clearly there are other interested parties — well, one, at least. Medrano asked Duebner if he thought the city could get a better deal by issuing as request for proposals.
“We think this is a very good deal for the city,” Duebner said. He told the council that it already had a deal in place with Reed, and that showing off his new proposal would give other interested parties an advantage at this late date. Others, he said, could just “mimic what they’ve done and beat it by a buck.” To issue an RFP at this point, said Duebner, would likely mean losing a partner. Reed Enterprises, he said, would likely “feel like they don’t want to deal with the city anymore.” The city has a duty “to protect the developer,” he said.
Flying Crown’s managing director Stephen Birch says via email that “we are confident in delivering our proposed 1,242 jobs created with over $63.8MM in annual payroll, an overall project investment in City owned property of $84.4MM, an additional $4.2MM annually to the City General Fund, involving Dallas companies for every aspect of design and construction, and engaging the community in developing a project the entire city can be proud.” City officials say Flying Crown’s proposal is too dependent on state and federal tax breaks and incentives that, even if ultimately approved, could delay the project for decades. Duebner says Reed Enterprises is ready to go pending the council vote and the finalization of construction plans.
In the meantime, the city will also have to go searching for more than 800 parking spaces for airport employees that will disappear with the redevelopment. Duebner said that will likely involve some future land acquisition.
“The real benefits to this is continuing the development of Dallas Love Field and its positive impact for the city,” he told the council. “[I'm] excited there is a way to save this building and remove something that has been vacant, that is unused.”
Friday, January 23, 2015
Homebuyers and builders are beginning to downsize houses to make them more affordable and meet changing lifestyles.
The average new home built in the U.S. last year was about 20 square feet smaller than in 2013.
“After rising for four consecutive years, it began to recede in 2014,” said Rose Quint, a researcher with the National Association of Home Builders. “It went down to 2,642 square feet.
“I think the average home size will likely continue to recede in 2015,” Quint said at the builders association’s annual show in Las Vegas.
New homes on average are still about 25 percent larger than they were in the mid-1990s. And for a few years it looked like the American home would continue to be plus size, with more bedrooms, garages, media rooms and the like.
Quint said market factors are now putting a ceiling on home size growth.
In recent years most of the houses built across the country have been designed for more affluent, repeat buyers.
As young, first-time homebuyers come back to the market, average new house sizes will decline, she said.
“We are going to have more young people — first-time buyers — entering the housing market in 2015,” Quint said. “They are going to want smaller homes that cost less money.”
Those younger buyers say they are not interested in pricey features like outdoor kitchens, media rooms and fireplaces.
Dallas-Fort Worth homes have already seen big increases in size and price.
“From 2010 to 2014, the median new home price in D-FW has climbed from $213,000 to $285,000, an increase of almost 34 percent,” said Ted Wilson of Residential Strategies Inc. “During the first part of the D-FW housing recovery, as mortgage rates declined, very clearly buyers were purchasing more expensive homes with larger square footages.”
Higher construction and land prices have been putting pressure on the cost of a new home in North Texas, Wilson said. “As a result, the square footages are flat to down.”
Steve Brown - Dallas Morning News
I’m having a hard time getting my head about being a target market.
Except for hair dye and cholesterol blockers, folks my age don’t get a lot of attention from Madison Avenue.
The last time mass marketers considered me their prime demographic, it was for sales of eight-track tapes.
So I’m surprised by the love I’m getting from the nation’s $400 billion residential construction industry.
Turns out that over-55 Americans are the one of the largest and fastest-growing segments of the new home market.
“We thought that as soon as the housing industry started to recover this segment would take off in a very strong way,” Sharon Dworkin Bell, senior vice president of the National Association of Home Builders, said at the industry’s annual meeting in Las Vegas. “We have definitely seen that increase in the last year.
“We expect these buyers to continue to be a big share of the home market.”
For 2015, Americans 55 and older are likely to account for 44 percent of households. And by 2020 that share will rise to about 47 percent, housing economists forecast.
“It’s growing not just in absolute numbers but as share of all U.S. households,” said Paul Emrath, a research vice president with the Washington, D.C.-based builders association. “Those people have wealth, and that wealth makes this segment of the market attractive to many builders.”
Chris Porter, chief demographer with John Burns Real Estate Consulting, said that there are about 89 million Americans over age 55. They represent more than half of current homeowners.
“It’s a very, very rapidly growing group,” Porter said. “It’s ramped up in the last decade as baby boomers have reached this age.
“One of the reasons it continues to grow is they aren’t dying off as rapidly,” he said. “We are living longer and longer, and people are also working longer.”
Porter said that new home purchases by older buyers were delayed during the recession.
“Now they are ready to buy,” he said. “They have been waiting for the equity to return in their current homes.
“The challenge is they can’t find what they are looking for,” Porter said. “They want different layouts and new features and changes in location.”
And with existing housing inventories running short in many parts of the country, boomer buyers are more likely to be hunting for a newly built home.
“This is the story of the baby boomer,” said Tim McCarthy, a Pennsylvania homebuilder who’s vice chairman of the builders association’s 55-plus housing council. “They started arriving in our office about three years ago. Now it’s a tidal wave.”
McCarthy said that when one of his boomer target communities recently opened its doors, he sold 68 new houses in the first hour.
“The demand right now is overwhelming,” he said. “The challenge is to keep up with the production of homes.”
Steve Brown - Dallas Morning News
The Dallas area had one of the biggest home price increases on record in 2014.
Average prices rose 12 percent from 2013 levels in the 46 areas The Dallas Morning News analyzed for a year-end comparison.
The biggest price gains were in several southern Dallas County residential districts — including Wilmer-Hutchins, Southeast Dallas, Lancaster and Oak Cliff — where single-family home sales prices rose by more than 20 percent, according to data from the Real Estate Center at Texas A&M University.
Prices jumped at double-digit percentage rates in more than half of the areas.
Housing analysts and longtime sales agents don’t expect last year’s high home price appreciation rates to continue indefinitely.
“I can’t imagine we will see the kind of appreciation we have seen over the last couple of years,” said Rich Thomas, executive director of the MetroTex Association of Realtors. “I think things will level out a little bit.
“But overall I think we will see much of the same in 2015 as we saw in 2014,” Thomas said. “It’s still going to be a tight market.”
A shortage of houses for sale in the Dallas area has combined with robust economic growth to create the current housing crunch.
There’s only about a two-month supply of preowned homes listed for sale with Realtors in the area. A normal market is about six months of inventory.
“Inventory is still at an all-time low,” said Mary Frances Burleson, CEO of Dallas’ Ebby Halliday Realtors. “I just wish we had more homes.
“People are not rushing to put their house on the market and sell it,” she said. “Every time I go to a sales meeting we talk about inventory and what to do.”
Because so few houses were available, Dallas-area home sales were basically flat in 2014 compared with the year before. The largest sales increases were in Lancaster, Ellis County, Wylie and Euless.
Home sales fell in about half of the residential areas, with the largest declines in affluent neighborhoods with scare supply, including North Dallas, the Park Cities and Southlake.
“I think 2015 will be another good year for smart agents who can get the listings,” said Virginia Cook, CEO of Dallas’ Virginia Cook Realtors. “I think buyers realize that one day mortgage rates will go up, and it could be a substantial increase.”
Current low home finance rates have motivated some potential buyers, said David Brown who oversees the Dallas office of Metrostudy Inc.
“With rates down, it’s causing people to get into a rush,” Brown said. “Buyer traffic is up substantially, and earlier than normal.”
Analysts and some sales agents are predicting that home price gains will slow in the Dallas area this year.
“I think prices have leveled off, and the hip pocket listings aren’t selling like they were,” said Dallas agent Allie Beth Allman. “The sellers are worried about the oil market.
“Residential real estate is driven by emotion and fear.”
By Steve Brown/Dallas Morning News
Thursday, January 08, 2015
FAQ Capital LLC headed by Mike Hoque has just purchased the 27-story Adolphus Tower on Main Street with plans to redevelop the building into first-class offices and restaurant space.
The 181,000-square-foot, 60-year-old office tower is about 70 percent leased to a variety of business and retail tenants. Major tenants include WhichWich’s corporate headquarters, the State of Texas, The Berry Law Firm, Mathis & Donheiser Law Firm and consulting firm Litzler, Segner, Shaw & McKenney.
The new owners plan to give the high-rise a new exterior plus rebuild the ground floor for restaurant and retail tenants.
Buyer Hoque’s DRG Concepts has developed a string of popular downtown restaurants including Dallas Chop House, Dallas Fish Market and Wild Salsa. He’s credited with significantly boosting the downtown restaurant market.
His Hoque Global firm is also in transportation, meeting planning and other businesses.
“We have admired the Adolphus Tower since our entry into downtown with Dallas Fish Market in 2007 opening in the historic Kirby Building at Main and Akard,” Hoque said Tuesday. “With an ideal location and scale, Adolphus Tower will become an even more exciting downtown Dallas anchor in providing modern office space, and quality of life amenities for business and residents with a vibrant and expanded retail and restaurant mix.”
Hoque said he’s been working with Dallas developer Jack Matthews who did the Omni Hotel to better understand the downtown market.
“This is not something I just woke up and decide to attack,” he said.
After renovating Adolphus Tower, Hoque said he plans to target the offices to technology firms and business entrepreneurs.
Construction will start sometime during the next three months.
Hoque has hired Dallas architect 5G Studio Collaborative to handle the redesign of Adolphus Tower.
“We are looking at different sources of exterior lighting,” he said. “In the next few weeks we will be looking at finalizing the design.”
The building’s mechanical systems will also be reworked.
FAQ Capital bought the tower from a partnership set up by Henry S. Miller Co., which had owned the building since 2005.
Darrell Hurmis with Henry S. Miller Brokerage and Jonathan Diamond of United Commercial Realty brokered the sale. Terms of the transaction were not disclosed.
Adolphus Tower was built by the famed Dallas developer Leo Corrigan. He also owned the landmark Adolphus Hotel next door.
The office building was originally supposed to be 50 stories tall but it was impractical to construct a building so tall on such a small site. The $7.5 million project was designed by noted Dallas architect Wyatt C. Hedrick, who also did many prominent 1950s projects.
It was touted as “the most modern office building in the Southwest.”
The original exterior of Adolphus Tower was done in gray aluminum panels, which were replaced with stucco in the 1980s.
The renovation of Adolphus Tower will be just the latest in a series of high-profile building redevelopments on Main Street in Dallas’ old financial district.
“The Adolphus Tower at Main and Akard is a premier downtown location and important project in the Main Street district,” said John Crawford, CEO of the economic development group Downtown Dallas Inc. “In addition to adding and expanding restaurants, the decision to purchase Adolphus Tower and invest in improvements shows [Hoque’s] continuing commitment to downtown.”