Home is where the heart is
Developers are gearing up to meet the growing demand for city center residences
Sandra Zaragoza
Staff writer
The desire of professional singles, empty-nesters and young couples to live
close to the heart of the city continues to spur residential development in
downtown Dallas.
"It is a new phenomenon for Dallas," said Steve Habgood of Coldwell
Banker Residential. "It is still in its infancy, but it is growing."
And it's not just downtown workers who like living in the area. There are also a considerable number of reverse commuters -- people who live downtown and work elsewhere, Habgood said.
But while things are changing in the residential sector, a "Catch-22" situation is posing a problem. Buyers are waiting to see 24-hour activity and retail, while retailers are waiting to see pedestrian traffic, said developer Alice Murray,
As the market matures, warehouse-style lofts, soft lofts with apartment finishes, luxury apartments and high-end condominiums are what new residents will expect developers to supply, Murray said.
According to the Central Dallas Association, currently there are 2,900 residents within the downtown freeway loop. Residential property occupancy is about 94%.
As of January 2003, 545 units were under construction in that area and plans for 867 more had been announced.
Those under construction include the Davis Building with 183 lofts, The Lofts at Thanksgiving Square with 91 lofts, and the West End Complex with 204 lofts.
Among projects still in the planning stages are the Dallas Power & Light Complex with 154 apartments; Phase 2 of Camden Farmer's Market with 300 apartments and the Davis Lot with 150 apartments.
One key to development has been incentives offered by the City Center Tax Increment District, which takes dollars generated by property taxes and reinvests them in the district. Currently, the Dallas Improvement District is leveraging $107,721 in funds with $2.38 million in private investment to offer facade and storefront grants.
The Alice Murray Co. recently received both TIF and U.S. Housing and Urban Development loan approvals to renovate the Gulf States Building at 1415 Main Street. The company plans to convert the 18-story building into 68 apartments with ground-floor retail. The project is set to begin construction by the end of the year and be completed by early 2005.As downtown residential proves its strength it is believed that financiers and developers will become more interested in investing in high-end projects and for-sale product.
The success of 1505 Elm, a 17-story building with 67 luxury units costing from $100,000 to $300,000, 37 of which have already been sold, may pave the way for more upscale, for-sale developments, experts believe. So far most of the high-density developments have been for-rent housing.
Denver-based developer Donald G. Behunin, of the Gage Behunin Co., believes his recently completed upscale project, Residences at Jackson Downtown Dallas, at 1300 Jackson St., will find a ready market.
After three and a half years of renovation, 1300 Jackson has been converted into an eight-unit, luxury high-rise with ground-floor retail. It is one of only a few small-scale, luxury residential projects in the central business district.
Behunin, who is confident the $500,000 to $900,000 units will be fully occupied within a year, says the pace of downtown development has been slower than he hoped for.
"I think the city hasn't fulfilled some of its promises and that has hurt us," he said. But, "I am also very encouraged by what I see happening in downtown or I wouldn't have invested in it."
Contact DBJ writer Sandra Zaragoza at szaragoza@bizjournals.com or (214) 706-7113.