$80M Plan Gels for 625,000-SF Exchange Park

DALLAS- Lionstone Group is ready to forge ahead on redevelopment of the 625,000-sf Exchange Park, which is considered to be the largest privately held block in the UT Southwestern Medical Center District. The estimated $80-million vision is an urban-style, mixed-use village.

Houston-based Lionstone has Stream Realty Partners LP of Dallas quarterbacking the entire 24-acre project bounded by Forest Park Road, Treadway Street and Harry Hines Boulevard. To date, three architects, including a re-branding pro, have been hired and interviews started with a handful of residential developers, one of whom will be picked within 90 days.

Stream has been leasing the three buildings since last year and picked up project management in January, but it wasn't until last month that it got property management too. "Things are firing on all cylinders now that we have those functions under one roof," says Ryan Stewart, Stream's head of development. The Exchange Park buildings will be undergoing varying degrees of construction, beginning in September. If the plan stays on track, residential construction will begin in mid- to late 2007.

Marketwatchers have been speculating for awhile that Lionstone would do a residential component--either new or conversion--to tap a built-in renters' pool from the abutting UT Southwestern's medical and research campus. And, it's official: the 168,663-sf AT&T Building at 6303 Forest Park Rd. is at the heart of the plan.

"It could be torn down, but ideally it's going to be converted. Its structure is perfect to be converted to residential use, potentially with student housing or faculty housing," Stewart tells GlobeSt.com. Gary Pitts with Beeler Guest Owens Architects Inc. in Dallas is working on the AT&T Building's redesign, which most likely will have 100 apartments.

Stewart says Exchange Park's 10.1 acres of vacant land also is being eyed for residential use. Larry Good, with Dallas-based Good, Fulton & Farrell Architects is doing the master plan and laying out the land for a project with at least 500 units.

"The wave of value is still trickling in," Stewart explains, "so it's not an optimal time to liquidate those parcels now." He did add that the extra land might be used to leverage a deal with the AT&T Building's residential developer, possibly as a joint venture proposition in "three to four years."

The 300,000-sf American General Tower at 6333 Forest Park Rd. will stay office, but that's not the case for a 131,000-sf "mall," which in reality is a four-story office structure with 4,000 sf in two food pavilions, 3,000-sf pharmacy and 2,000-space parking garage. Stewart says the 6363 Forest Park Rd. building is being re-tenanted with larger users, mainly medical office, but the plan is to transition the space to retail after the residential units are on the ground. It will be at least five years before retail replaces office, he says.

Holly Nichols with Interprise Southwest in Addison is redesigning the mall and mapping out interior design standards for all Exchange Park structures. About $500,000 will be spent to outfit the mall with a new entrance and add another food pavilion. Stream has contracted with Custom Food Group of Dallas to develop concepts for an owner-controlled scenario to create a "dining destination" for Exchange Park and its neighbors. The plan will include reserved customer parking.

"With the leasing activity and interest that we've seen, we think there's a lot to work with," Stewart stresses. "As long as leasing stays strong and we can solve the AT&T component, there's no reason to tear anything down." The AT&T Building is the oldest structure in the complex, rising in 1957 as the headquarters for the now-defunct Braniff Airlines. Construction on the other buildings wrapped up in the mid-1960s.

"Now that we finally have our arms around the expansion and a good sense of direction, we want to step up our marketing," says Brandon Henry, Stream's senior associate who's in charge of Exchange Park's leasing.

By September, all roofs will be replaced plus windows re-tinted on the American General Building. By October, the first phase of the food pavilion revamping will be done.

Stewart stresses the Exchange Park proposal, with an all-in development tab pushing $80 million, has been cross-matched to UT Southwestern's master plan. "We want to create a seamless approach," he says. "We want to create a critical mass of uses that really drives value for everyone. The way to maximize value is a mixed-use setting."