Star-Telegram.com

Fort Worth Star-Telegram (TX)

1 August 2004
Section: Business
Edition: Tarrant
Page: F1

Overhaul to turn Tandy Center towers into condos

By SANDRA BAKER
STAR-TELEGRAM STAFF WRITER

FORT WORTH--The owners of the Charles D. Tandy Center hope to spend about $110 million to turn the twin-tower office complex being vacated by RadioShack into 350 condominiums, the largest high-rise residential redevelopment project in downtown Fort Worth to date.

The project, whose developers are still shopping for financing, includes demolishing most of the structure between the towers that was built in the late '70s as a shopping mall and was most recently known as the Fort Worth Outlet Square. It will be replaced with villa condominiums with rooftop gardens, a fitness center, an indoor pool and parking for more than 700 cars.

Skywalks will connect it to the residential towers.

The 1.2 million-square-foot redevelopment will include about 350 residences, nearly 1,200 parking spaces and more than 78,000 square feet of stores, restaurants and shops.

The developers will also ask the city to rebuild Second Street between Throckmorton and Taylor streets.

The project, which has not yet been named, will "become a very interesting community," said David Porter, president of PNL Cos., which bought the property from RadioShack in December 2001.

PNL has hired Holliday Fenoglio Fowler in Dallas, a privately held commercial real estate intermediary, to find a residential developer or capital partners to join PNL in the project. Costs are more than first anticipated, Porter said.

The towers will be stripped to the concrete-and-steel structure and rebuilt, and terraces and balconies will be added. The cost to replace the windows alone will be about $10 million, he said.

The project's size makes "it big enough to attract attention," Porter said.

While financing hasn't been nailed down, developers said they are confident that it won't be a stumbling block.

"PNL will stay very involved," Porter said. "We do want to bring in as strong a development team as we can.

"Fort Worth is generating a lot of interest. That has not been lost in the investment community."

Jeffrey Stone, senior managing director of Holliday Fenoglio Fowler's Dallas office, said the group has already talked with some potential investors.

"Downtown Fort Worth is recognized as a viable downtown market," Stone said. "The investment community knows that."

When PNL bought the property, it said then that it had planned to turn the south tower into residential use. But because attempts to find corporate users for the north tower have not produced any tenants, the company decided to make the entire project residential.

An April 2003 study found that it was unlikely that Fort Worth would be able to attract enough office users to occupy the space being vacated by RadioShack, as well as Pier 1 Imports, which is moving from City Center office towers to its new headquarters along the Trinity River.

It would have taken a company with about 1,000 employees to fully lease the 320,000-square-foot north tower, Porter said.

City Center managers say they are negotiating with a handful of possible tenants for the 170,000 square feet of space that Pier 1 will leave. No deals have been signed, although it is anticipated that some companies in the Neil P. Anderson office building, which will be redeveloped for residential use, will move to City Center.

Putting even one of the Tandy Center towers back on the open market would have flooded downtown with surplus space and put a huge crimp in the relatively low vacancy rates that downtown Fort Worth has enjoyed for the past few years.

According to the latest figures from real estate company Grubb & Ellis, the downtown market is 88 percent leased. In comparison, downtown Dallas is only 70 percent leased.

Tarrant County has purchased RadioShack's Technology Center, built in 1992 just across Taylor Street from the Tandy Center.

Andrew Taft, president of Downtown Fort Worth Inc., said the market should be able to absorb the units quickly. He cited a study from a couple of years ago that showed that there was an immediate need for about 5,000 residential units downtown, including for-sale units.

Although the study hasn't been updated, Taft said he is confident that the number of needed units is now higher.

Moreover, occupancy levels at the apartment communities around downtown remain at a tight 95 percent, a proportion that hasn't fluctuated much in the past several years.

Taft described PNL's move to all residential units as a "thoughtful reaction" to the market.

"The lifestyle appeal of living downtown keeps increasing," Taft said. "The demand is driving the market."

Porter agrees.

"What The Tower has shown us is the market is strong," he said.

The Tower's condos are 84 percent spoken for, eight months before tenants will be able to move in. A few months ago, based on the high number of sales, its developers decided to convert the portion that had been set aside for apartment rentals into for-sale condos.

RadioShack has leased the Tandy Center property through April, but Porter said it appears that the company could be out by February, when it begins its move to new headquarters along the Trinity River on downtown's north end.

Construction on the redevelopment will begin soon afterward, Porter said, but it may not be until mid-2006 when people begin moving in.

The project will begin with the demolition of the center portion of the buildings. The south tower, built in 1978, will still be the first redeveloped.

Curved glass structures that will house mechanical operations will be added to the top of both towers, as will additional space for condos. Those additions will make the north tower 19 stories and the south tower 20 stories.

On the low end, some condos will be 750 to 800 square feet and cost between $110,000 to $130,000. The larger units, at more than 4,000 square feet, will cost more than $1 million.

The new center portion will include three levels of parking, retail and amenities space and 16 villa condos. An additional 10 villa condos will be added to the portion just north of the south tower, as will 18 condos and space for residents to use.

The parking lot north of the north tower will remain. The project is to receive about $9 million from the downtown tax increment financing district in exchange for 500 public parking spaces in the north garage.

An existing skywalk from the property to the Renaissance Worthington Hotel will remain and could serve as a link to provide condo residents with concierge service, room service and maid service from the hotel, Porter said.

The villas will have courtyards and a series of trellised walkways.

The north tower, built in 1976, will have 134 units and six penthouses. The lobby and retail space will cover about 5,729 square feet. It will have 12,030 square feet for below-street-level storefronts.

The north parking garage has 443 spaces. The new garage will have 755 parking spaces, including 412 underground.

The south tower will comprise 144 units, six penthouses and more than 21,000 square feet of shops and stores.

"It's hard to know what the density, or number of people living there, will be," Porter said. "It can become a very interesting community."

Conversion plan

Key to above photograph (refer to microfilm)

  1. The former shopping mall section, built in the 1970s, will be torn down and replaced with a parking structure that will feature rooftop villas, gardens and resident amenities.
  2. The developers want Second Street restored between Taylor and Throckmorton streets.
  3. The only portion of the existing mall area that will remain will be redeveloped with condominium and retail space and additional rooftop villas.
  4. The south tower will be the first to be redeveloped into condos. It will feature new windows and balconies.
  5. The north tower will also be redeveloped into condos.
  6. The existing parking garage will remain with few changes.

Gone condo

The Tandy Center redevelopment joins several downtown condo projects:

  • The Tower: Fourth and Throckmorton streets, 294 units.
  • Houston Street Lofts, 910 Houston St., 30 units.
  • Pecan Place, 601 E. First St., nine units.
  • The Neil P. Anderson Building, 411 W. 7th St., between 40 and 70 condo units.
  • Smaller projects:
  • The Versailles, Henderson and Peach streets, seven units.
  • Bluff Street, 959 W. Bluff St., four units
  • Le Bijou, between Seventh and Sixth streets and Jones and Grove streets, 16 units.

Sandra Baker
(817) 390-7727
sabaker@star-telegram.com

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