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Old Posted Aug 4, 2003, 3:55 AM
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Apartment boom hits Las Colinas
1,300 units going up by '05

Christine Perez
Senior writer

After a decade of scant multifamily development in the area, four companies are speeding ahead with apartment projects in the urban center of Las Colinas, a sprawling 12,000-acre masterplanned community in Irving.

The projects will add a whopping 1,300 units to the community over the next two years.

Three of the four developments are on the east side of Lake Carolyn, an area recently opened up by the completion of Lake Carolyn Parkway, a split-lane road that will eventually surround a Dallas Area Rapid Transit light-rail line.

"The urban center was always intended to be a 24-hour environment, but we've never had the rooftops," said Bobby Stewart, vice president at Cousins Properties, which serves as development manager for Las Colinas. "There is a pent-up demand, and now that the infrastructure is in place, we've made a few multifamily land sales."

United Dominion Realty snapped up 7.3 acres at the southwest end of Lake Carolyn Parkway and will begin construction on a 370-unit complex during the first quarter of 2004. Billingsley Co. closed last week on 5.3 acres just to the north on the east side of the street, with plans to build 270 units.

The Hanover Co., a Houston-based developer, has already begun work on The Lofts at Las Colinas, a four-story, 341-unit complex on 5.3 acres at Lake Carolyn Parkway and O'Connor Boulevard. The apartments will range in size from 750 to 1,550 square feet, said Ed Hamilton, development partner at Hanover.

"This project is not similar to anything in that market right now," he said. "It's patterned after one of our Houston projects called The Lofts at the Ballpark, which has a 9,000-square-foot clubhouse, a demonstration kitchen, 32-seat theater and cybercafe, conference center and two pools."

The Lofts at Las Colinas is the first Irving project for Hanover, which also owns Churchill on the Park in Dallas and The Lodge at Frisco Bridges in Frisco. Hamilton said the company was attracted to the urban center's high-end environment.

"It had a lot of things we look for, the concentration of the office sector and the access to retail," he said. "We like that it's a masterplanned area, that it's on the lake and the fact that we'll have rail coming in at some point. It costs more to be in Las Colinas, but the future is better for the property."

The fourth new project in Las Colinas will be developed by Palladium USA, the American affiliate of Palladium International Inc., based in Milan, Italy.

It will be adjacent to the only residential high-rise in Las Colinas, Grand Treviso, which Palladium finished last year.

The 17-story, $47 million Grand Treviso project is 90% leased, said Spencer Stuart, chief operating officer for Palladium.

"It's going well, considering the state of the economy," he said. "We've always liked and believed in the strength of the market in the urban center of Las Colinas."

Units in Grand Treviso range in size from 730 square feet to 3,070 square feet and in price from $895 per month to $6,615 per month. Those in the mid-rise segment of the development, which encircle the high-rise portion, are 99% leased.

Construction will get under way before year's end on Palladium's newest endeavor: Lofts Canal Side. The four-story project will be next to Grand Treviso at the southeast corner of Las Colinas Boulevard and Windgren Boulevard.

"Our success with the mid-rise buildings in Grand Treviso has given us confidence that a new project would also be successful," Stuart said.

Two sides of the complex will run along Mandalay Canal, the waterway that meanders through the urban center of Las Colinas. Amenities will include pedestrian access to the canal, restaurants and retail, along with a "spectacular" pool complex and garden retreat, Stuart said.

Underserved submarket
Kevin McGlaun, vice president at Cousins Properties, said the four multifamily projects will offer relief for area workers.

"We've got 100,000 people working here and only about 25,000 who live here," he said. "Of those who live here, probably less than half of them work here, so 90% of our daytime population is commuting out of Las Colinas every day."

"There have probably been only 1,500 units built here in the last eight to 10 years, because the infrastructure wasn't in place to allow it," McGlaun added. "Demand has never been the problem."

Still, the four new projects come at a time when the Metroplex apartment industry is struggling, with average rents falling 3.4% over the past 12 months and occupancy dropping to 90.2%, according to a recent report from M/PF Research Inc.

"Las Colinas has been proportionately underserved over the last several years, but I don't think there is pent-up demand anywhere at this point," said Greg Willett, director of research at M/PF.

The Dallas-Fort Worth market saw 12,300 new units delivered for the 12 months ended June 30, 2003, more than doubling the demand figure of 4,560.

Las Colinas performed better than other submarkets. Its mid-year occupancy of 92.5% was the best suburban performance in the Metroplex, and average rents remained stable.

"Compared to the overall market, there's a pretty big difference in performance there," Willett said. "I'd have a hard time defending a new multifamily project in Dallas right now, but if it is to happen, Las Colinas is a logical choice."

Contact DBJ writer Christine Perez at cperez@bizjournals.com or (214) 706-7120.



2003 American City Business Journals Inc.
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