another one that will never be built. They will miss the residential market while its hot too.
I don't think that they would have to state in an article that they are looking for a tenant for a company to jump on the opportunity. The development team, without a doubt, has been in contact with companies pursuing potential leases for years now. It's not like this is new information to businesses, just a press release to inform the public that they are actively shopping for a tenant.Originally Posted by cowboyeagle05
That's really all I am referring too is that the article is more of a "I am just saying this clearly out loud so everyone is clear that this thing is a go". I'm sure they have been in contact with many companies I have no doubt but keep in mind that the developers of the new office tower that's supposed to go up in Victory Park stated that the tenant they were planning to sign wanted the developer to announce the building publicly first before signing on the dotted line.
I hope they're going with a community building SOP and putting more effort into bringing a new tenant to downtown instead of cannibalizing from competitor in the same neighborhood.
Link?
The repeated references to the "many office leases ready to roll in the CBD within the next two to three years" suggests cannibalization is likely.
Totally. I'm sure some of the buildings have a more promising future as office space if they're emptied out and fully renovated to suite contemporary needs, some are better off emptied and converted to residential, etc....
It's excellent for Dallas that so much money is there to be made by developers eager to keep the office market on the forefront of contemporary tenant needs, but sure does leave building management companies with a larger, daunting burden. I continue to think the downtown area office market need the tenancy turn over to further "clean out" the stagnation of previous boom & bust events, and municipal leaders need more time to reconstruct the city's foundation cracked to hell by the suburban exodus. One terrible PR hurdle of the evolution is awful sounding vacancy rates.
I wonder if you could make the case that office buildings have a fairly well defined useful life for offices... And perhaps during that time the city could collect a special tax that would sit in a re-development fund... When the building reaches that end of life as offices the money becomes available for speed it's redevelopment to another use (like apartments) --- in fact you could probably do that for other classes of bulding like Bigbox retail and such.
^ Yup. Nothing encourages construction and economic development like taxing it. And of course the best way to promote the effective and efficient re-purposing of functionally obsolescent structures is to give the politicians a new slush fund to control. Certainly that will work better than letting market forces determine the best uses for properties and the best allocation of capital.
Eh, don't we kinda already do that on the back end with historic preservation tax credits and TIFs?
^ Sure do.
So your argument is that since politicians already have slush funds that they should get more?
Nope. It'd be nice if people remember that today's shiny new towers are tomorrow's fusty crane-bait.
The point is that cities exist for hundreds of years... And we have seen over and over that people just don't tend to think in those terms... we build a building for a short term solution to a problem... but the building has a life span of hundreds of years in many cases. So we see these buildings cycle out of use and sit abandoned for years at a time... they ultimately bring down the value of buildings around them and decrease the tax base of the whole area.
What I was simply proposing is that we plan for this... since we know it will happen... and attempt to make the downtime for the building as low as possible. As for leaving it to the market... well the market is not always rational and it won't always do what is in the best interest of the city or neighborhood that surrounds the building.
Not sure where to put this as it relates to several proposals in North Texas, mostly of them downtown.
http://www.dallasnews.com/business/c...or-restart.ece
The Spire office building reminds me of the Statler Hilton.
Is it just me or does the Granite Park and Victory tower look similar in design, they are both done by BOKA.
I hope they all get built. More infill!
RAIN! To....much.....rain.....
Generally I'm with you of course. But I'd hate to see these result in a net expansion of vacant space downtown. Hopefully they'll spur (re-)developers to convert and/or upgrade the existing stock of towers (to office, residential, or something else).
No, it's not just you.
Ok thanks....looked like they took the same basic design and added some floors.
Bad news for all of the proposed towers mentioned in this post (Spire, Victory Park, Hall Arts, Two Arts, Harwood) but law firm McKool Smith, which many of these developers were courting to kick-start their building, is staying put in the Crescent. The only winner in this, of course, is Crescent and its own proposed office tower by Pelli Clarke Pelli.
Crescent complex keeps largest office tenant
http://www.dallasnews.com/business/c...ice-tenant.ece
That is not really a surprise after all the Crescent still to this day is a high quality office building that Crescent Co. continues to invest in upgrades to maintain its status as one of the best maintained and built office buildings in the state.
Not only do they keep them, they got McKool to sign an eighteen-year deal. For 100,000 (plus) square feet. In one of Dallas's most famous, prestigious, and luxurious office buildings. There's no telling where I'd end up, I'd just inked a deal like that. A bartender somewhere is probably going to have a pretty good night (or several).
They are taking leasing in house. I assume its to keep critical leasing info from leaking out to other development companies.
http://www.dallasnews.com/business/c...ct-leasing.ece
Dallas' Spire Realty shuffles project leasing
Spire Realty Group said Monday that it will now handle its own leasing activities, instead of using outside firms.
The private firm owns more than 2 million square feet of office space in the Dallas-Fort Worth area, including downtown's Bryan Tower, 500 East John Carpenter Freeway in Las Colinas, and the Mockingbird Towers and Park Stemmons buildings in the Stemmons Freeway corridor...
...“Given the competitive environment and our significant development projects underway, we believe that an in-house team will give us a closer connection to the market," Caleb Smith, owner and president of Spire Realty Group, said in a statement.
Smith said that Peloton Commercial Real Estate will continue to lease Spire's City Place project in Fort Worth.
http://blogs.dallasobserver.com/unfa...ict_develo.php
It seems the project is still moving forward, as the City Council will vote Wednesday on whether to to abandon stubby segments of Federal, Hawkins, and Jack Evans streets to make way for the development. The city would then sell the 15,000 square feet of land to Spire Realty Group, which spent a decade acquiring the surrounding property, for $1.9 million.
I really wish that Eric had called us with a little more lead time so that we could have cleared some things up, but we are inviting Eric down to our office to show him our model, tell him our intentions, etc. so that in the future there will be no entries that allude to anything less than our 100% commitment to the project going forward. The timeline hasn't changed: we aren't going to build spec, but when we land that anchor tenant is the question for the ages (and no, I can't divulge anything :/ ). I will say that the reception we've received to how well thought out our phase 1 is has been remarkably positive.
Last edited by Mark Lea; 13 November 2012 at 09:59 AM.
someone is obviously doing some serious shopping for space... this is the 4th or 5th PR spot i have seen for a new building in the Downtown/uptown area in the past few weeks...
be nice if it is someone new moving to downtown... the plot thickens
So, like, Hall, Spire, Crescent, Harwood, Two Arts, (probably) Victory Park are all developers with a masterplan and a highrise ready to go or in design just waiting for a lead office tenant. Interesting. I guess now Headington can be added to that list, but without the stated intent to secure a major office commitment.
I'm wondering a couple things, initially, what are all the reasons these downtown proposals were not selected by State Farm or Raytheon which are building in a huge Richardson development. Probably, State Farm and Raytheon are not looking for space as nice/expensive as what's being proposed for downtown.
2nd, Considering that there's a ton of folks chasing after a handful of office tenants, I just don't understand why the big downtown masterplanners other than VP haven't acknowledged the generational demand for downtown residential and kicked-off major residential component withing their respective plan. I realize an office tower makes far more money than a residential tower, but rather than years of trying to lure the big fish to your big empty pond with a big deal, why not stock the pond with a lot of extras - residential. The development is more likely to get a huge office tenant if the next door neighbors are already getting on with things....
The mediator between the head and the hands must be the heart.
^This is what kills me about the Spire property. Their master plan is done, but they went ahead and added the adjacent property that was originally meant for a second phase of the Arts apartments. Why not develop that project until the market is ready for their shiny office tower.
Because most office developers are not residential developers. After talking with some developers the thing that is the most obvious is developers are not traditionally mixed use. They like focusing on one type that's why many partner up to do these mixed use developments like the Sarofim project in Knox Henderson. Most of the time they don't partner up and these days that means they develop office projects with a few condos so they can call it "mixed use".
In Spires case it's primarily office we will see if over time they make increased efforts to truly integrate residential, office and retail. The issue is and will be for awhile that developers focus on a chosen field and only deviate if they have too or if they have some vision to collaborate.
Me, too, that's the masterplan I mostly think is wasting time chasing the big office component to start while the residential potential is left dormant. Spire also bought remnant surface street land from the city, so they have an entirely unobstructed path from rail station to arts district. The path from trains to the Arts District is the backbone of the whole development, and is begging to get built, lined with trees and garden spots, benches, fountains and temporary grassy lawn space. Gift the public with this appealing route to the Arts District and it will become preferred. Immediately start the second phase of the Arts apartments, and get started on an even bigger residential footprint. Improving the neighborhood will accelerate the timing of the shiny office tower.
The mediator between the head and the hands must be the heart.
Posts #178, 179, 180 and 181 copied from Hall Arts District thread.
Further compounding the build-to-suit competition for a lead tenant that allows new office construction is that renovating older office space into custom, nice, contemporary office space is finally likely to become a trend in the CBD, with coveted HKS moving into Patriot Tower as a the beginning of the trend. HKS could also be the exception since they'll be designing their own space, but they could easily take the experience and grow-the-business as the architects for other projects customizing other older and lagging CBD office towers.
The mediator between the head and the hands must be the heart.
Could it be that the demand for downtown residential is not quite as strong as you think? It seems the residential demand may not support non-subsidized new construction, especially high-rise.
It is tiresome and rude when people insist on injecting truculent political expressions in what should be apolitical settings.
Not really, the population growth occurring in CBD neighborhoods as well as other downtown neighborhoods is just getting started, will last at least another generation, probably longer than that. High population density in the downtown area is in the running to be this decade's biggest 'economic engine' in North Texas. Of course, five to ten times as many people will take up residency in existing and/or new suburban neighborhoods, depending on how suburban and urban are defined.... but the impact of 100,000 new residents in downtown area neighborhoods is exponential while the suburban growth is linear.
I think the CBD residential market would be buoyed if in two years Spire delivers 500 brownstone and mid rise apartments.
The mediator between the head and the hands must be the heart.
Probably for the same basket of reasons that roughly 85% of all metroplex occupied office space is outside of downtown/uptown Dallas. (And that percentage is growing larger. More than 90% of recent office occupancy growth has been outside of downtown/uptown Dallas.) Some combination of cost, convenience to employee base, preference for campus-style settings, preference for low-rise/large footprint office space...
It is tiresome and rude when people insist on injecting truculent political expressions in what should be apolitical settings.
Everything in your post could be true and there still may not be the market demand for new residential construction that you imagine. Spires' (and other developers') apparent low interest in proceeding with residential development is pretty strong evidence of that.
It is tiresome and rude when people insist on injecting truculent political expressions in what should be apolitical settings.
As cowboyeagle mentioned, Spire hasn't been a residential developer, and may never have that inclination. That's no evidence that residential demand is lacking. The old high school is on tap to be residential, part of the Spire property was on tap to be residential, new residential in the West End, Farmer's Market, next to City Hall - low/midrise residential buildings are in various stages of development all over the CBD, and will continue on a track similar to what's been seen in Uptown. Within 5-10 years, we're likely to see several active CBD highrise residential developments.
The mediator between the head and the hands must be the heart.
and still you wonder why no one is kicking off major new construction residential development. Really hard to figure out, isn't it? ;-)
It is tiresome and rude when people insist on injecting truculent political expressions in what should be apolitical settings.
No silly! Just like a couple others, I wonder why Spire isn't joining the fun. The real estate they have is ideally suited for residential, office, retail and entertainment.
The mediator between the head and the hands must be the heart.
And I answered your question. You just don't care for reality. ;-)
It is tiresome and rude when people insist on injecting truculent political expressions in what should be apolitical settings.
You may never know how much I appreciate the roll you play to question the emerging and existing trends of Dallas rejuvenation that get pointed out on this forum, but at some point even you will have to accept that the downtown residential market is hot hot hot.
Do you mean to imply or speculate or postulate that because ~800-1,000 CBD dwellings are in development for delivery within three years that the market is saturated?
The mediator between the head and the hands must be the heart.
I mean only what I said.
That the market for new construction, non-subsidized residential development, especially of the high-rise variety, is such that Spire and similar developers choose not to go forward with residential development at this time.
(See, e.g., the extraordinarily weak sales of Museum Tower; the very weak sales of the House; reduction of housing planned for Two Arts; the decision(s) by Spire to include a relatively minor residential component and to make that component a later phase...). It might be the difference between the relatively strong rental market and a weak "for-sale" market.
It is tiresome and rude when people insist on injecting truculent political expressions in what should be apolitical settings.
Ultimately, there's only so much land "in the loop"/Victory, etc. A developer is stuck with whatever it puts on a certain site (at least for a while). So, my best guess at this point for most developers and properties is: the market conditions for residential vs. commercial development + opportunity cost of waiting > cashflows over time from new residential development - opportunity cost of waiting.
^One encouraging sign is that developers are building residential projects closer and and closer to the city center without any TIF or city subsidy. Greystar is under contract to build on the City Lights property. Trammel Crow has projects at Goat Hill and a few blocks from the Arts District. Gables may be building apartments above Whole Foods on McKinney Ave...
Last edited by lakewoodhobo; 19 December 2012 at 10:21 AM.
Tucy, I hear what you are saying, but you are grouping condo development (for sale) and rental developments together. Two different products and two different stories. The House, Museum Tower, and Arts plaza are all examples you mentioned and were all originally condo towers. The House has changed to rental / rent to own and is now filling up. Residential in the form of rental is very hot right now and will be for at least the next couple of years. Rental rates grew fast over the past year due to shortage of housing in the city center neighborhoods, and the number of rental projects coming out of the ground and being proposed only continues to grow. Spire's residential may be condo or may be rental, all we know is they are concentrating on office first. They have been pretty open about that from the start. Anything else is not evidence but just shop talk.
Last edited by slfunk; 18 December 2012 at 08:41 PM.
Yeah, that's why I said "It might be the difference between the relatively strong rental market and a weak "for-sale" market."
And yes, we all know quite well that Spire has told us that their residential will be in later phases. That was the point of the discussion... Tamtagon was asking "why", in the face of the strong residential market, Spire was not jumping in with residential development. I proposed an answer that seems pretty unassailable. Does anyone really think that if Spire saw a strong enough market for their residential product, they would not be building post-haste?
Regarding the overall downtown rental market, I have moderate skepticism regarding its depth. (1) Almost all of what has thus far been developed has been very heavily subsidized by the city and fed govt.; and (2) there seems to have been a very long gap between announcement and activity on a whole bunch of the current developments that are supposedly in the works (some of which have been represented at various times as done deals):
Statler
Grand Ricchi
Elm Place
old high school project
West End Fairfield project
Query: what is the current occupancy at The House? Any idea?
It is tiresome and rude when people insist on injecting truculent political expressions in what should be apolitical settings.
I understand your concerns and know how it may appear at the surface, but you have to look deeper into the financials to understand how these big developments come together. Each one of those you listed requires heavy renovation work except for West End FairFied, and that has been the way of it for sometime not just in Dallas but in most major cities. Dallas was just one of the first to come up with the TIF tool. All the major residential developments downtown in the past 10 years have been renovation work except for 1001 Ross, West End Apartments, and Museum Tower. With the cheap land in the burbs, the city had to and in large part has to continue helping bridge the gap of costs associated with remediation work. Costs that a developer would otherwise not touch because of the financial risk associated with rehabbing an uninhabitable building. Its very easy for the renovation of a 30 story building that has sat vacant for ten years to cost substantially more than a brand new 30 story building, and that is where the TIF comes into to play. You can have all the demand in the world like in NYC, but there is a lot of hidden cost when rehabbing a building that consumer demand can not overcome.
Couldn't tell you the occupancy of the House currently. Sure anyone could call. A buddy of mine lives there and ever since they announced going rental, he has stated a couple of times its filling up now. What should be a sign of things heading in the right direction is the recent development history starting with the Mercantile. At that time the city was begging for development. They gave more than half of the projected TIF fund for downtown to Forest City. Since then more and more developers local and abroad have been focusing on downtown and will always ask for money as long as the city has some available.
Last edited by slfunk; 18 December 2012 at 11:23 PM.
You're not a person that seems to rely on your skepticism. Where are the numbers?
Well, yeah, developers will run to free money like a moth to a flame. The important questions are: How many, if any, of those developers would be focused on downtown or even giving it a glance were it not for the very generous subsidies being shoveled out by the city? What happens to the downtown residential market when the city runs out of money or decides to stop subsidizing downtown residents?
Also, you overlooked or chose to ignore my second concern. That is, we see lots of happy talk here about the hundreds and hundreds of new units currently "under development"; But there seems to be reason to question the validity of a bunch of these: Elm Place, Fairfield West End, old high school, Grand Ricchi, Statler. Some or all may happen, eventually. But if one just follows the happy talk of project announcements and misleading statements about their plans (i.e. w/re: the Statler and Grand Ricchi), and doesn't bother to follow up on their actual status, one could start believing that the market is truly booming and, heck, why doesn't Spire join the party before the punch bowl runs dry? ;-)
It is tiresome and rude when people insist on injecting truculent political expressions in what should be apolitical settings.
How do you think the Transcontinental Railroad got built?
Tighten the female dog!
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