Downtown Dallas Set to Experience Renaissance with Nearly 1,500 New Residential Units in the Pipeline

March 16, 2023

In the last two decades, Downtown Dallas has undergone a remarkable transformation, and adaptive-reuse projects could help the neighborhood become a more around-the-clock destination.

Downtown Dallas is about to hit a new critical mass with nearly 1,500 adaptive-reuse residential units expected to come online in the next 24 months across five projects alone.

"The downtown population in the Main Street District will increase from nearly 6,000 to 8,000 residents, and the average household income will go from $81,000 to $100,000," said Jonas Woods, chief executive officer of Woods Capital, which is currently working on three adaptive-reuse projects in the Main Street District.

That growth in population and average household income is intrinsically linked to the introduction of new units that offer competitive rental rates and amenities comparable to newly developed properties in the city's downtown and uptown areas.

Bryan Tower was purchased by Woods Capital in 2022 and is undergoing a repositioning, bringing in roughly 425 residential units to Downtown Dallas.

In the last two decades, Downtown Dallas has undergone a remarkable transformation, and these adaptive-reuse projects could help it become a more around-the-clock destination.

The 1980s-built high-rises that dominate Dallas's skyline were originally occupied solely by office users. Driving into the city, then going home was once how Dallasites lived. Yet, that original purpose has shifted to become functionally different over time, leaving downtown Dallas and such buildings increasingly empty.

Centurion American Development acquired a vacant 19-story hotel and tapped Merriman Anderson Architects to design The Statler, which now features a 159-room hotel, 219 luxury apartments, a 14,000 SF ballroom, 7,000 SF meeting space, six food and beverage venues, two rooftop pool decks, ground floor lease space, and a 250-space interior parking garage that opened January 2018.

Thanks to a combination of the city's pro-growth attitude and firms willing to take on ambitious projects, downtown in 2025 is slated to be completely different from what exists today.

Dallas started to "stack uses" into these 1980s-built Texas towers roughly 20 years ago. That was partly because of the stack of empty buildings in the city, but also due to a state historic tax credit that came online at the same time, according to Jennifer Picquet-Reyes, principal at Merriman Anderson Architects.

Introducing hotels, bars, pools, residences, and upscale dining options is expected to create opportunities for more businesses and companies to thrive.

Woods Capital, the owner of many downtown towers and a prominent figure in Dallas's adaptive-reuse projects, purchased Santander Tower, originally called Thanksgiving Tower, in 2013 at a great price.

Santander Tower, originally called Thanksgiving Tower, was purchased in 2013 by Woods Capital. After a complete renovation of the building, the company has continued to update it, bringing in a hotel called The Guild, on floors 49 and 50, along with 291 residential units set to open in June 2023.

"Because of how they've performed historically, they've traded at incredible discounts to replacement costs," continued Woods. "The economics today of where rents are relative to the cost of doing the adaptations you can justify and can be successfully financed."

"We contemplated a pure office strategy with the asset," said Woods, who executed a significant renovation to the building, everywhere from common areas, the buildings infrastructure, elevators, and roof, to make it like new again.

This, in turn, doubled rents.

However, Woods' strategy for its portfolio of assets took a turn when a hotel operator came to the firm and asked to lease the two top floors of the hotel, The Guild.

This idea was compelling for Woods Capital. The firm believed there would be a "phenomenal synergy" between the Tower Club on Floor 48 and The Guild on Floors 49 and 50. Following the successful launch of The Guild hotel, Woods Capital gained confidence in pursuing further reuse strategies. That includes the addition of 291 residential units to Santander Tower, adding amenities such as a pool, and gym. The residences are expected to open in June.

Woods also recently acquired Bryan Tower and Comerica Bank Tower with plans to repurpose both buildings.

Bryan Tower will be enhanced with 425 units, while Comerica Bank Tower will be transformed into a development featuring 150 hotel rooms and 230 residential units, taking away currently vacated office space.

Bryan Tower will be enhanced with 425 units, while Comerica Bank Tower will be transformed into a development featuring 150 hotel rooms and 230 residential units, taking away currently vacated office space.

Dallas-based Todd Interests is employing similar strategies in adapting Renaissance Tower and Energy Plaza, bringing more jobs and economic development activity to downtown.

Nevertheless, besides financing and architecting the project, another challenge owners of these buildings must overcome is the logistical nightmare of adapting these properties with live tenants still occupying the building.

"It's like an orchestra and takes a certain sophistication," said Will Pender, Gulf States president at Adolfson & Peterson Construction, when asked about the challenges to adaptive-reuse projects.

"If this were a regular ground-up development, we would have free access to the site, an external elevator, and a crane to fly in the material. But when you're working around active office tenants in an active building, you're timing things down to the minutes for deliveries in and hauling out debris," said Pender.

When it comes to challenges, Pender said such projects have one entry point, one elevator and one exit point for all our debris.

"We're not tearing down these beautiful old buildings in downtown Dallas. They are just ready for a new life," said Pender, who believes adaptive-reuse projects like these are the environmentally responsible way to go.

"Adaptive-reuse projects are a key to sustainability so that we're not sending stuff into the waste stream into the landfills. We're reusing what we have and making it ready for folks to live in and enjoy a vibrant downtown," continued Pender.

The growth of Downtown Dallas could end up culminating in the preservation of historic buildings through adaptive-reuse projects.

Dallas is a bit ahead of the trend for adaptive reuse, according to Picquet-Reyes, as even class B offices in outer submarkets are becoming viable candidates for these projects due to the scarcity of unadapted buildings in the downtown core.

As more residential units become available, this push could create a self-sustaining ecosystem with an influx of business and retail in the area.

However, while DART provides affordable transportation, there is a need for more schools to accommodate the growing population.

Merriman Anderson Architect President Milton Anderson points to Booker T Washington High School as an excellent example. He mentioned that his company is working on bringing another high school to the downtown area.