1505 Elm Condos

[Kevin Lehnhardt]

From the Dallas Business Journal.

Sam Ware reaches for the stars with Dallas CBD's first luxury high-rise condominiums
Christine Perez Staff Writer

DOWNTOWN DALLAS -- After losing a fortune in North Texas real estate in the late 1980s, developer Sam Ware came back from the brink of professional death in 1991 with a new company name, Lazarus Property Co., and a mission to bring new life to undervalued real estate projects. Since then he has led a number of turnarounds involving office, retail and land developments. Now Ware is turning his eye to the residential sector by transforming an obsolete office tower in downtown Dallas into luxury high-rise condominiums.
Ware bought the property at 1505 Elm St. from the Greater Dallas Chamber of Commerce last year, paying $5 million for the 171,000-square-foot, 16-story building.

About half the 67 condominiums there have already been sold, with prices in the $190-per-square-foot range, or $240,000 for a typical one-bedroom unit. The 9,000-square-foot, top-floor penthouse is under contract for close to $2 million. When the conversion is complete by the end of 2002, the appraised value of 1505 Elm could jump 600% to more than $30 million.

Construction, Residential

The Central Business District has seen a number of loft conversion and apartment developments in recent years, causing the downtown population to increase from about 250 in the early 1990s to more than 20,000 today. But 1505 Elm is the only luxury high-rise condo project in the CBD. "Dallas is not really a condo town," Ware said. "It's not like Houston, Chicago, Denver, Miami or New York. There are a lot of people renting downtown, but if they want to move up to buying, they have to look to the north. We think there is a market for people who want to own a high-rise condominium in the CBD." Built in 1957, the tower at Elm and Akard was once the home of Dallas Federal Savings. It sits next to a DART light-rail station and is directly connected to the underground pedestrian tunnel network. It also has an adjacent five-story, 250-space parking garage. Residents will drive into the bank's former lobby, where a valet service will operate 24 hours a day.

The former money vault in the basement has been converted into a wine cellar. A fitness center run by personal trainer Mark Madole is also being developed in the lower levels. A rooftop pool and gardens, including entertainment areas and a dog run, are planned for the top of the garage. Steve Everback, chief operating officer at Lazarus, said the company is targeting buyers who currently pay $1,500 to $2,500 a month to rent luxury apartments downtown and across Woodall Rodgers Freeway in the Uptown area. "For what they're paying in rent, we can give them 25% more square feet and much higher-end finishes, and they get the tax and equity benefits of ownership," he said.

Niche property

Ted Wilson, partner with Residential Strategies Inc., said 1505 Elm targets an untested market. His company doesn't track condo sales but does measure townhome sales and starts. He said there is a current oversupply of townhomes, especially in the Uptown area. "We typically like to see a six-month supply, and we're currently running two to four times that," he said. "A lot of these projects got off the ground 12 to 18 months ago when the market was hot. Still, the lower-priced inventory, those under $300,000, seems to be doing fairly well. As long as 1505 Elm hits the right price points, it will probably find some interest, but it's a very niche market there."

Newt Walker, whose firm has specialized in inner-city projects for 20 years, said demand for downtown residential space has been proven by CBD apartment projects, which he said are all 90% leased. Enough people believe in the urban experience," he said. "The CBD has come light years from where we were 10 years ago. And five years from now, it will be that much better." In addition to residents, Ware says he plans to pitch corporate condos to downtown law firms. Marketing is being handled by Bobby Goodnough with Carolyn Shamis Realtors, who said most buyers are making a reverse commute.

"Of more than 30 units that have been sold, only four of the buyers work downtown," Goodnough said. "Most work in Plano and Richardson and Addison, but they like the nightlife and restaurants in downtown and Uptown." The condos at 1505 Elm range in size from 1,055 to 2,000 square feet. A couple of buyers have purchased two units and combined them to get a larger living space, which pushes the price tag up to the $700,000 to $800,000 range. Designed by Merriman Associates, the units come standard with granite countertops, marble baths with Jacuzzi tubs, see-through gas fireplaces, recessed lighting and walk-in closets. Other amenities include catering by the downtown eatery Jeroboam, and personal shopping services by Neiman Marcus, which furnished a model unit at no charge after hearing about the project.

Ware has gained a reputation in recent years for high-profile turnarounds. In 1997 he renovated the 230,000-square-foot Empire Center tower on Stemmons Freeway, a building that had been vacant for 10 years, and leased the entire building to a title company.

In late 1999, Ware bought the former Prestonwood Town Center from TrizecHahn for about $20 million, then turned around and sold it a year later for more than $55 million to Archon Group, an affiliate of Goldman Sachs & Co. Ware has been self-financing 1505 Elm but expects to close soon on construction financing from Fremont Investments. He said the condo venture fits his opportunistic profile. "I like projects where people say, `What is he doing? He will never make any money,'" Ware says. "To me, it has never been about making money. The most important thing for me is the challenge. "I like saving buildings and the satisfaction of turning an undervalued property into something that's beneficial to consumers and creates jobs or cranks up the city's tax base," he says. "But let me tell you, I've gone broke and I know what that's like and I don't intend to do it again."

[CTroyMathis]

As I said everywhere else you posted, Kev, this development is on my site also.

Here is just a basic related article about condo ...stuff.
______________________________________________

Builders bet on high-end condo market
03/01/2002

By STEVE BROWN / The Dallas Morning News

Developer Larry Meyer hasn't even finished his Turtle Creek high-rise project, but he's already planning the next groundbreaking.

"As soon as we hit 50 percent sold in this building, we'll announce the next one," said Mr. Meyer, whose Turtle Creek Plaza condo tower is going up next door to the Mansion hotel.

Mr. Meyer said about a third of the units have sold at prices averaging between $600,000 and $700,000.
"Our sales are running about 50 percent ahead of projections for January and February," he said. "We've succeeded in spite of the market."

The last few months have been dicey for high-end home sellers as the economic slowdown, coupled with earlier losses in the security markets, chased off luxury buyers.

Affordable housing has been selling at record rates, but many high-price residential properties have languished. The high-end condo market has been particularly hard hit, statistics show.

Low mortgage rates contributed to an almost 19 percent rise in the sales of moderately priced condos during the last four months.

But according to statistics from North Texas Real Estate Information Systems Inc., sales of condos priced above $500,000 have fallen more than 70 percent in the last four months compared with year-earlier sales.

Blame it on the recession, said housing analyst Mike Puls of Foley & Puls Inc.

"Consumer confidence is the issue," Mr. Puls said. "It's a leap to go take out a $500,000 mortgage.

"That would be pretty scary in today's market," he said. "If you are buying a first-time home, it's a much less difficult decision."

Sales pick up


Judy Pittman of Judy Pittman Realtors, who specializes in high-rise condo sales in Dallas' affluent Turtle Creek area, said that after the Sept. 11 terrorist attacks, "the market just went dead in October and November."
"In December, they were looking again but still not buying," she said. "But our sales have really picked up starting in January."

Ms. Pittman was hired to market the Vendome condo tower under construction at Turtle Creek Boulevard and Lemmon Avenue. The 21-story tower contains more than 100 units priced as high as $4.5 million.

"I've sold three units priced over $1 million in the Vendome since the new year," she said. "I would say we are at least 78 percent sold."

Attracting buyers


Both the Vendome and Turtle Creek Plaza are wooing buyers to trade their conventional homes for full-service, high-rise living.
To add to this appeal, Turtle Creek Plaza has contracted with the operators of the Mansion on Turtle Creek Hotel and Restaurant to manage the project.

The development includes two buildings overlooking a 2.5-acre park just north of downtown.

Mr. Meyer said that along with the sales in the new tower, his company has sold about half the units in the adjoining smaller building.

And in the post-Enron investment market, many wealthy individuals are more comfortable with investing in real estate, he said.

"The general consensus is that real estate is a better place to have your money today than in the stock market," Mr. Meyer said.

Maybe so, but that doesn't mean buyers have flooded into condos.

Total sales of condos and townhouses for the four-month period ending with January were down about 17 percent in the Dallas-Fort Worth area.

On the plus side, the number of condos for sale in the area has risen by only about 8 percent in the last year, compared with a more than 20 percent jump in the inventory of unsold single-family homes on the market.

Lazarus Property Co. has also seen a turnaround in customer traffic during the last few weeks at its 1505 Elm St. residential project in downtown Dallas.

The developer is converting the 16-story office building into 67 condos priced from about $240,000 for a typical one-bedroom unit to about $2 million for a top-floor penthouse.

"We have definitely seen an increase in activity since the first of the year," said Lazarus chief operating officer Steve Everbach.

"We expect to be under full construction in 30 days with the first move-ins scheduled for fall."

Two markets


One saving grace for condos is that they appeal to different groups of buyers, said David Griffin, founder of David Griffin Realtors.
"There are two markets – the young professional market and the empty-nester market," he said.

Most of the empty nesters own traditional homes and may not be motivated to hurry up and buy. They also typically purchase the more expensive units.

The young professional condo buyers are more motivated.

"The younger buyers are going for a price range that's affordable, and they are coming out of apartments," Mr. Griffin said.

He isn't surprised that sales of units priced under $250,000 are soaring. "If you can list one in that price range, it will fly out the door," Mr. Griffin said.

By comparison, while only two condos priced above $500,000 changed hands in Dallas-Fort Worth last month, 130 units in that price range were still unsold at the start of February.

Still confident


Developers of high-price units are undeterred by the inventory of units on the market.
Custom home builder Sharif Munir has contracted to buy three units in the Vendome building that it will finish out and sell to luxury buyers.

Each unit will be priced at more than $3 million, said Matt Patterson, the company's vice president of sales and marketing.

Sharif Munir is also hunting a buyer for a $3.2 million, 4,600-square-foot unit it built in the Mansion Residences high-rise at 2801 Turtle Creek Blvd.

The custom builder has expanded into high-rise speculative construction after building traditional homes in the Dallas area for almost 25 years.

"We see it as a complement to our traditional business," said builder Michael Munir. "We've found there is always demand for homes in these price ranges."

[CTroyMathis]

Perhaps, eventually, we'll be asking - who the first major downtown grocery store will be. And, second, how will they incorporate their store into the downtown environs...

[psukhu]

1505 Elm: downtown Dallas project bringing new life to CBD
Christine Perez Staff Writer

DOWNTOWN DALLAS — When Sam Ware is finished transforming 1505 Elm from an obsolete office tower into luxury high-rise condominiums, the taxable value of the property will jump 600% to more than $30 million. The project is also bringing new life to the central business district, with residents living and working downtown.

Ware's Lazarus Property Corp. purchased the vacant building from the Greater Dallas Chamber two years ago, paying $5 million for the 16-story, 155,000-square-foot facility and adjacent five-story, 250-space parking garage.

Built in 1957, the tower was once the home of Dallas Federal Savings. It sits at the corner of Elm and Akard streets, next to a DART light-rail station and is directly connected to the underground pedestrian network.

Downtown Dallas has seen a number of loft conversion and apartment developments in recent years, causing the downtown population to jump from about 250 in the early 1990s to more than 20,000 today. But 1505 Elm is the only luxury high-rise project in the CBD.

The 66 condos range in size from 1,500 square feet to 2,500 square feet. More than half have been presold, with the first resident taking occupancy this month. The 9,000-square-foot top-floor penthouse, featuring an 18-foot-high wall of windows on all four sides, is still available.

Condo owners at 1505 Elm will drive into what once was the bank's lobby, where a valet service will operate 24 hours a day. The former money vault in the basement has been transformed into a one-of-a-kind wine cellar, with an ornate, secured rack for each resident.

An underground health club and private movie theater are being developed, and a rooftop pool and garden — including entertainment areas and a dog run — are planned for the top of the garage.

Inside, the condos feature solid slab granite countertops, lavish stone and wood floors, stone showers with unframed glass, coffered ceilings, hologram fireplaces and cityscape views. All units are pre-wired for broadband services and satellite television.

The architects behind the $20 million renovation are Hodges & Associates, Merriman Associates and Graphic Design Group. Julian P. Barry Co. is the general contractor. Condo sales are being handled by Carolyn Shamis and Bobby Goodnough at Carolyn Shamis Realtors.

Known in the industry as a visionary who's willing to take on high-risk projects, Ware said 1505 Elm fits his opportunistic profile.

"I like saving buildings and the satisfaction of turning an undervalued property into something that's beneficial to consumers and creates jobs or cranks up the city's tax base," he said.


Contact DBJ writer Christine Perez at cperez@bizjournals.com or (214) 706-7120.

© 2003 American City Business Journals Inc.

[Knight23]

Uh...is that a missprint? Are there really 20,000 people living in downtown? or did they mean to say 2,000.

[gc]

Well, inside the loop is roughly 2000. But if you count the apartments/condos in Uptown and those in Deep Ellum, I think you can reach those kinds of numbers. Otherwise, it is a serious MISPRINT

[downtownbum]

when they give those numbers like 20k they are saying like a 1 mile radius from downtown. i think the actual dt population is about 2k as garret said. the 250 number from 10 years ago is also probably a little low, because the building i live in on commerce has close to 300 apartments and was built in the 60s.

[tamtagon]

"The former money vault in the basement has been transformed into a one-of-a-kind wine cellar"

cool. I wonder how much the penthouse is going for..

[jsoto3]

i just interviewed with Beeler Guest Owens Architects (http://www.bgoarchitects.com/) of dallas. they are the firm working on 1505 elm, dpl, davis, the merc, and an awkward proposal for 211 ervay, as seen in the subsection 'highrise lofts' here (http://www.bgoarchitects.com/housing.html).

[gc]

Cool, thanks....and good with the job interviewing process.

[bloodandpopcorn]

I rather liked that rendering for 211 Ervay... hope they go ahead with it and find it sucessful.

[gc]

I agree bloodandpopcorn. The 211 Ervay is rather interesting. I have often wondered why that building hasn't generated more interest in the past. I sure hope something happens.

[aceplace]

Great website! I had no idea that Austin Ranch was a New Urbanist development.

I'm a fan of places like that... yesterday, I spent much of the day checking out the three New Urbanism villages on the North Dallas Tollway (four, if you count the West Village as "close").

The NU village in Frisco is just getting started... it looks like a small downtown, with a huge field next to it... inside that field, you have four story apartment buildings that look like something out of New York or Chicago... the buildings are isoated now, but I can see the entire square mile covered with an urban neighborhood.

Better yet, there is a railroad track between downtown Frisco and the NU project... possible commuter rail to DT Dallas?

[gc]

With his 1505 Elm project half filled, developer Sam Ware is turning his attention to new opportunities in downtown Dallas
Christine Perez Staff Writer --> DBJ

DOWNTOWN DALLAS -- A year ago, maverick real estate developer Sam Ware raised eyebrows when he announced his plan to transform an obsolete downtown office building into the central business district's first luxury high-rise condominiums. The critics are quiet today, with the project nearly finished -- and already half occupied.

Ware, president and CEO of Lazarus Property Co., paid the Greater Dallas Chamber about $5 million for the 17-story, 171,000-square-foot former home to Dallas Federal Savings at Elm and Akard streets in 2001. After a costly and "excruciating" renovation, the project now has a value of $24 million to $25 million, said Steve Everbach, chief operating officer at Lazarus.

"If it were an easy thing to do, someone else would have done it," he said.

Nine of the 14 residential floors are now occupied, with four condos per floor. The old bank vault has become a wine cellar, and on-site managers and valet parking attendants are in place.

Construction of a pet run, putting green and outdoor pool, which sit atop an adjacent five-story parking garage, and a 20-seat movie theater and fitness facilities will be completed within 60 days.

"It's like we've taken Frankenstein, brought in the top plastic surgeons in the country and turned him into Brad Pitt," Ware said.

The condos range in size from 1,300 square feet to 2,040 square feet and in price from $188,000 to $450,000. An 8,800-square-foot penthouse, with a separate 2,000-square-foot terrace and a 17-foot-high wall of windows on three sides, is available for $2 million, unfinished.

Buoyed by the success of 1505 Elm, Ware is eyeing a couple of other downtown buildings for similar redos. The next time around, though, he will pursue economic incentives from the city of Dallas, he said.

Steve Habgood with Coldwell Banker Residential said the downtown residential market is starting to mature.

"It began with the renters coming in and getting a taste of what living in downtown Dallas would be like, and now we're starting to see the evolution of for-sale properties," he said. "What 1505 Elm has done is combine all of the elements, with beautiful, above-average finishes, fit into an existing downtown mid-rise.

"The mix of residents at 1505 is surprisingly broad," Habgood added. "It has attracted an awful lot of reverse commuters who want to live downtown and take DART to work. I would have guessed just the opposite."

Ware is known for tackling ambitious projects. He currently is redeveloping former Gov. Bill Clements' 2,400-acre cattle ranch near Forney into a masterplanned community called Travis Ranch, and is planning a similar venture at The Lakes of Arlington, a 1,950-acre tract south of the Trinity Rail Express between FM 157 and State Highway 360.

He said 1505 Elm has been particularly rewarding.

"We're pirates, so we went into this venture to make money," Ware said. "But it has evolved into a mission of rejuvenating downtown Dallas and saving a building that otherwise would not have another life. Its success is very gratifying."

[mdunlap1]

Anyone toured this building or its apartments? (They have open house on weekends.) It sounds like a really cool project.

1505 Elm (unit listings) (http://www.carolynshamis.com/list_pgs/1505Elm/12Floorplans/Price-List.htm)

[CARTMAN]

I'm all for Central Dallas building up Townhomes, Lofts and Apartments, but the prices are getting a little ridiculous. There is no way a most late 20 something early 30 year olds could afford these places coming right out of school. I live near Cityplace and the thought of paying that much for a little piece of Urban Renaissance here is making me think twice about staying here after school. I found a 1 bedroom Co-op Apartment in Queens, New York for $130,000 on realtor.com. Compare that to the average $200,000 starting range of these Lofts. These are gorgeous redos, but I just don't think Dallas has developed the main portion of Downtown and Central to command these prices right now. Most of friends would love to live in Central Dallas, but they say its just too expensive. I thought the whole purpose was to attract urban dwellers from the West Coast Midwest and Northeast to Downtown Dallas? Not drive them to buy a place out in Denton.

[chiboi]

Hopefully, as more projects are developed, there will be broad range of housing choices in downtown with many different ethnic, lifestyle and socioeconomic groups living there. I think the costs involved in rehabing this building required premium prices for the condos. Perhaps some of the other projects will offer more affordable housing.

[gc]

I agree CARTMAN. I know several would-be-buyers of townhomes, condos, etc that have been dissuaded because of the high cost. There are many people interested in "In-town" living and I too hope that future development will become more affordable.

[psukhu]

You can find a one bedroom condo (750 sq ft) for $30k to $40k further out (like Walnut Hill and 75). That is still a better location compared to Queens, NY.

You could also get a three bedroom house in Richardson for $100 to $130k. ...or pay that price and live further in at Walnut Hill and Marsh.


The Dallas CBD can't be compared with any other part of the city. When comparing to other cities, it is only fair to compare to their CBD. (Like lower Manhattan)

[CARTMAN]

I totally agree with you Psukhu. Those are great deals for housing, but my whole point is enjoying a"Urban Lifestyle". I shouldn't have to be forced to choose to live in a Cookie Cutter development. I chose to live in CBD because most of the apartments and houses in that area aren't the cookie cutters we see above Mockingbird and beyond. I enjoy living in a Urban setting not having to drive to the store or bar all the time. I guess its just a matter of what lifestyle you enjoy. The comparison I was making to Queens such as neighborhoods like (Astoria, Forest Hills, Jackson Heights or Kew Gardens) is that it is still a mix of Urban Lifestyle with Suburban if that makes any sense. You still don't have to drive to most conviences in those areas.

[psukhu]

I used to live in Astoria. (30th Ave + 35th Street)

Give Dallas another decade. There are a lot of empty lots in the CBD that could offer one bedroom condos for $150k or less. I guess the city wants to focus on redevelopment before it focuses on attracting new construction.

This Turtle Creek condo offers one bedroom units for $150k. I figure something like this on the south side of the CBD could offer units even cheaper. (With the nice amenities like pool, fitness center, valet parking, etc)http://www.renaissanceonturtlecreek.com/html/main.html

[bloodandpopcorn]

You could always live in some of the 'urban' development to begin going up around northern light rail stations... those might be more suited to the Quees, NY-type costs, and still provide you with urban living and convenient connnections to downtown/uptown/etc.

[CTroyMathis]

I think it's amazing, or just plain cool, how they turned an old bank vault in that building into none other than a wine cellar.

Classic, heh!

I hope Sam Ware is still looking hard around downtown for those 'steals' in defunct properties that he can turn into what 1505 Elm has become and is becoming. Even though he's all about money more than anything like any other developer, he seems to make 'the process' work well so far for downtown.

From what I've read, not even everyone who's bought into the building works downtown. That's a bit of a small surprise. Reverse commuting by DART from the downtown neighborhood...

As for affordability in downtown sooner, there will probably need to be even BETTER incentives or some other kind of program that's SERIOUS enough to REALLY lure a broader mix of low-, mid-, and high-rise developments. I'm never quite sure of the answer there, other than just giving the whole evolution lots of time to find a happy equilibrium in pricing. Sure is a lot of land begging 'over here, look at me' in downtown, though. Many individual sites and even entire swaths of adjacent land. As psukhu said, redeveloping the infrastructure already abandoned right now and begging for attention is also an obvious priority - and Dallas' downtown may only be able to support that type for now - instead of both.

[jsoto3]

I looked into this place for my wedding/reception, but it is about to go on the auction block next month. And there is no AC (shell space) so I would have had to rent two AC units for a few thousand. Too bad . . . .

Info:
http://www.loopnet.com/xNet/MainSite/Listing/Profile/ProfileSE.aspx?LID=14494624&linkcode=1070&sourcecode=1lww2t006a00001
http://www.cartergrp.com/sites/1505penthouse/Home.html

Pics:
http://www.cartergrp.com/sites/1505penthouse/Views%20from%20the%20Top.html
http://www.higgenbotham.com/auctionpictures.asp?AuctionID=455

It is up for auction in a month:
http://www.higgenbotham.com/auctiondetails.asp?AuctionID=455

[elmstreetdallas]

Wow. That may very well be one of the best, if not THE best, views in Dallas. Wonder what it will go for?$?$?

[Cole]

I looked into this place for my wedding/reception, but it is about to go on the auction block next month. And there is no AC (shell space) so I would have had to rent two AC units for a few thousand. Too bad

Too bad, that place is amazing.

[Mephis Gooseberry]

Is the 1505 Elm remodel construction complete?

[jsoto3]

Excluding the finish out of the yet-to-be purchased units (not many), yes.

[buffaloniagara]

Buyer beware HOA fees will end up fixing the exterior... check the bottom of the following post:

http://forum.dallasmetropolis.com/showthread.php?t=1812&page=5

[VectorWega]

I just noticed a condo for sale in this building for 225k. The HOA fees are listed at $810 monthly. This seems very high to a non-urbanite like myself. Is this due to the exterior work or is this a fairly standard HOA amount?

The condo is a 2 br condo that is close to 1600 sq ft.

[Rob]

I just noticed a condo for sale in this building for 225k. The HOA fees are listed at $810 monthly. This seems very high to a non-urbanite like myself. Is this due to the exterior work or is this a fairly standard HOA amount?

The condo is a 2 br condo that is close to 1600 sq ft.

That's about 500 SQ FT more than my place - but it is about 3.5 times more than my dues.

I don't know all the circumstances, but that does seem quite high.

[VectorWega]

I noticed some of other the condos in the building that are slightly smaller have dues in the $700+ range so I guess it has to do with that exterior work.

[moopinator]

I would bet the dues also pay for the 24-hour valet ( I live across the street and see them all day & night). Also, 1505 Elm is becoming more family friendly by converting some of the common areas to play areas for kids. Specifically the putting green near the pool is being turned into a mini-playground. So you are paying for that too.

[Boredkid]

....

[dizzy]

It appears that someone is shooting a music video in the penthouse at 1505 Elm tonight.

[cowboyeagle05]

Yes they were also in front of Comerica Tower shooting on the sidewalk around noon.