Mixed-Use Plan Fills Void in the Center of Downtown

DALLAS—In the second of a two-part article, GlobeSt.com looks at the plans for one of the most iconic buildings in Dallas' history, 1401 Elm. It has been acquired out of bankruptcy by Drever Capital Management of Tiburon, CA.

Several significant changes have been made to what is considered to be the city of Dallas' most extensive adaptive-reuse project. An earlier plan called for converting the office building to 480 rental apartments with floor-to-ceiling windows to capitalize on the unobstructed views from the 50-story building.

The plan has been upgraded by the new owners to offer 335 apartments with high-quality finishes—from one-bedroom to top floor penthouses—and adding a luxury hotel in the tower. Several nationally branded hotel owners and operators have inquired about being involved but no decisions have been made. The new owner's freshly unveiled redevelopment plan for 1401 Elm appears to be well received by local officials and supporters of the city's urban core revival.

“It fills a huge revitalization void square in the middle of downtown by transforming this block-long old office building located on our rapid transit line to a vibrant residential, retail and hotel mixed-use high rise that will attract new people to live or come downtown,” said John Crawford, CEO of Downtown Dallas Inc.

Bryan Dorsey of BDRC Partners says the city, and the city council including the mayor's office, have “been extremely and continually supportive of this project in so many ways. Their providing tax incentive financing is a prime example of helping make an uneconomic property eventually be economically viable. For the last five years, it has been 100% vacant and still is and, hence, virtually dead on the tax rolls. Our councilman, Philip Kingston, has been an excellent and responsive sounding board on this project—restoring an entire city block to prominence.”

Andres Construction of Dallas has been appointed construction manager by the new ownership. Drever Capital re-engaged Jerry Merriman, principal in the Dallas architectural firm of Merriman Anderson, to be lead architect. Merriman worked for Charles Dahl, the noted Dallas architect who designed the tower in the 1960s for H.L. Hunt. Merriman, who has worked for past owners said he agrees with the new ownership's vision for 1401 Elm.

“We respect the tower's original timeless design and will not change it, however, we're enhancing it with new Greek marble that we're adding to the building's podium level,” says Merriman. “I like having an owner say, 'we want this to be a socially and environmentally long-term investment for my family and our legacy impact investors, and we will spend money on the building to do it right and secure a LEED Gold designation.'”

The redevelopment plan will include a multi-floor level of retail stores aimed at serving apartment residents, hotel guests and others living or visiting downtown Dallas. The retail mix will serve apartment and downtown residents' daily shopping needs and commuters using DART, the light rail system which connects directly to Dallas-Fort Worth International and Love Field airports. DART's Akard Street Station is directly in front of 1401 Elm.

“The redevelopment plan is evolving and will include fashion shops and specialty retailers,” adds Amy MacLaren, vice president of CBRE. “The original Neiman Marcus, its flagship store, is a block away and a Forty Five Ten fashion boutique is relocating across the street.”

1401 Elm currently has 450 underground parking spaces. Another 450-plus spaces will be added by converting four of the bank's storage floors to parking for a total of 900 spaces, more than any other building in Dallas.

Robert Kline, senior managing director in Cushman & Wakefield's Phoenix office, who arranged the acquisition financing, is also arranging the construction and permanent financing. He is bullish on Dallas' re-energized central core and 1401 Elm's new ownership.

“I've sat in on a lot of lender meetings discussing Maxwell Drever deals over the last 10 years and I know he does them very well,” said Kline. “And I've done a ton of development deals with Bryan Dorsey over the years. Bryan is this dynamic guy who starts his day at 5 a.m. if not earlier, and he puts his heart and soul into the deal, all day long and into the night. So when you have this unique opportunity–buying 1401 Elm–that takes passion, fortitude and obviously money, and takes the right personalities and the right mindset which both these men have, you support it. I highly doubt this deal could have been done by anyone else.”

Dorsey's enthusiasm is definitely part of this redevelopment effort. He tells GlobeSt.com: “I have lived and breathed this project for the past three years. I believe this will transform the landscape to a project Dallas will enjoy for many decades to come. The significance of 1401 Elm will be talked about by our children and grandchildren, and the impact it had as an urban redevelopment will be significant.”

DALLAS—In the second of a two-part article, GlobeSt.com looks at the plans for one of the most iconic buildings in Dallas' history, 1401 Elm. It has been acquired out of bankruptcy by Drever Capital Management of Tiburon, CA.

Several significant changes have been made to what is considered to be the city of Dallas' most extensive adaptive-reuse project. An earlier plan called for converting the office building to 480 rental apartments with floor-to-ceiling windows to capitalize on the unobstructed views from the 50-story building.

The plan has been upgraded by the new owners to offer 335 apartments with high-quality finishes—from one-bedroom to top floor penthouses—and adding a luxury hotel in the tower. Several nationally branded hotel owners and operators have inquired about being involved but no decisions have been made. The new owner's freshly unveiled redevelopment plan for 1401 Elm appears to be well received by local officials and supporters of the city's urban core revival.

“It fills a huge revitalization void square in the middle of downtown by transforming this block-long old office building located on our rapid transit line to a vibrant residential, retail and hotel mixed-use high rise that will attract new people to live or come downtown,” said John Crawford, CEO of Downtown Dallas Inc.

Bryan Dorsey of BDRC Partners says the city, and the city council including the mayor's office, have “been extremely and continually supportive of this project in so many ways. Their providing tax incentive financing is a prime example of helping make an uneconomic property eventually be economically viable. For the last five years, it has been 100% vacant and still is and, hence, virtually dead on the tax rolls. Our councilman, Philip Kingston, has been an excellent and responsive sounding board on this project—restoring an entire city block to prominence.”

Andres Construction of Dallas has been appointed construction manager by the new ownership. Drever Capital re-engaged Jerry Merriman, principal in the Dallas architectural firm of Merriman Anderson, to be lead architect. Merriman worked for Charles Dahl, the noted Dallas architect who designed the tower in the 1960s for H.L. Hunt. Merriman, who has worked for past owners said he agrees with the new ownership's vision for 1401 Elm.

“We respect the tower's original timeless design and will not change it, however, we're enhancing it with new Greek marble that we're adding to the building's podium level,” says Merriman. “I like having an owner say, 'we want this to be a socially and environmentally long-term investment for my family and our legacy impact investors, and we will spend money on the building to do it right and secure a LEED Gold designation.'”

The redevelopment plan will include a multi-floor level of retail stores aimed at serving apartment residents, hotel guests and others living or visiting downtown Dallas. The retail mix will serve apartment and downtown residents' daily shopping needs and commuters using DART, the light rail system which connects directly to Dallas-Fort Worth International and Love Field airports. DART's Akard Street Station is directly in front of 1401 Elm.

“The redevelopment plan is evolving and will include fashion shops and specialty retailers,” adds Amy MacLaren, vice president of CBRE. “The original Neiman Marcus, its flagship store, is a block away and a Forty Five Ten fashion boutique is relocating across the street.”

1401 Elm currently has 450 underground parking spaces. Another 450-plus spaces will be added by converting four of the bank's storage floors to parking for a total of 900 spaces, more than any other building in Dallas.

Robert Kline, senior managing director in Cushman & Wakefield's Phoenix office, who arranged the acquisition financing, is also arranging the construction and permanent financing. He is bullish on Dallas' re-energized central core and 1401 Elm's new ownership.

“I've sat in on a lot of lender meetings discussing Maxwell Drever deals over the last 10 years and I know he does them very well,” said Kline. “And I've done a ton of development deals with Bryan Dorsey over the years. Bryan is this dynamic guy who starts his day at 5 a.m. if not earlier, and he puts his heart and soul into the deal, all day long and into the night. So when you have this unique opportunity–buying 1401 Elm–that takes passion, fortitude and obviously money, and takes the right personalities and the right mindset which both these men have, you support it. I highly doubt this deal could have been done by anyone else.”

Dorsey's enthusiasm is definitely part of this redevelopment effort. He tells GlobeSt.com: “I have lived and breathed this project for the past three years. I believe this will transform the landscape to a project Dallas will enjoy for many decades to come. The significance of 1401 Elm will be talked about by our children and grandchildren, and the impact it had as an urban redevelopment will be significant.”