GlobeSt.com EXCLUSIVE: $46M Republic Center Project Gets Funding Today

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DALLAS-With the final partnership agreement inked just yesterday, Gables Residential Trust and the New York City owners of Republic Center will get their funding this morning to develop a residential component in the 1.1-million-sf CBD block. The $46-million development has been three years in the making.

Construction will begin Monday morning on 357,000 sf of shell space in the north office tower, which was gutted and mothballed in mid-2002 after an investment group, made up of Iranian families from New York City, bought the 325 N. St. Paul St. foothold for less than $10 per sf. The Boca Raton, FL-based Gables, joint venturing with the owners, bought the air rights to floors 10 through 35 and street-level office space to develop 229 apartments with a penthouse floor of amenities that will include a swimming pool, Douglas Chestnut, Gables’ senior vice president of investments for the Western US, tells GlobeSt.com.

Thomas Bakewell, Gables’ point man on the project for the past three years, says the first units will deliver in fall 2006. Apartments will average 1,165 sf; rent is projected at $1,650 per month.

Not only is it Gables’ first project in the Downtown, but Chestnut believes it’s the first time that the multifamily developer’s bought air rights. “This is the hardest deal that I’ve ever been involved in,” he says, confirming today’s funding.

The Downtown project already has clearance for $4.6 million in Center City TIF money and 10 years of tax abatements, totaling nearly $2.5 million, from the city and county, according to Bakewell. In retrospect, he says “the most complicated part was trying to work with an existing building that’s part of a larger complex.” Republic Center has 700,630 sf of office space that’s 70% leased and 65,000 sf of retail that’s roughly one-third filled.

The residential and office components will share a parking garage, an issue that required a condo declaration to box up the legalities. Transwestern Commercial Services’ Dallas team of Steve Williamson and Larry Jordan brokered the deal for Republic Center’s owners, who set up the JV as Republic Residence LP.

RTKL Associates Inc., a Republic Center headquarters tenant, designed the high-end apartments for Gables. Andrews Construction Co. of Dallas is the general contractor.

Meanwhile, the Transwestern leasing team of Sheryl Pickens and Cris Jordan snagged an 18,000-sf retail tenant to add to the list of coups. The Holland, MI-based Haworth Inc. will set up a regional showroom of its high-end office furnishings, using an innovative stacked layout teaming street-front and second-floor space. Jordan says the store finish-out will cost more than $130 per sf.

Practically every building owner in the city’s design nooks and those with retail space in the CBD chased the Haworth deal. The spotlight, though, was pointed at the CBD, according to Jordan, who was holding a 10-year lease for a new tenant with the chase ended.