Conversions Top the List for Westmount in Recent Years

Stephen Kanoff shares insights into Dallas metro conversion projects.

DALLAS— Stephen Kanoff was recently promoted to the position of executive managing director and chief investment officer of Westmount Realty Capital LLC . Kanoff has been at Westmount for more than 22 years and was most recently the executive vice president and a partner of the company, with operational responsibility for all aspects of property acquisition, disposition, development, underwriting, due diligence and asset management. His efforts have been instrumental in bringing significant value to the properties within the Westmount portfolio. Kanoff recently discussed some of the firm’s recent projects and future opportunities in this exclusive . GlobeSt.com: What are some of the significant projects you’ve had a hand in during your tenure with Westmount? Stephen Kanoff: The redevelopment of a historic warehouse into a 203-unit rental loft project in downtown Dallas, and then a condo conversion of the project, SoCo Urban Loft Condominiums ; and the successful repositioning of Riverside Commons , a campus-like, six-building office complex at Las Colinas in Irving, TX. The project was converted from single-tenant buildings to a multi-tenant property, extensively renovated and awarded LEED certification by the US Green Building Council for successfully converting an existing project to green materials and systems. The lead tenant at Riverside Commons was the headquarter offices of Blackberry NA , and the entire property was ultimately sold to them. GlobeSt.com: What was significant about the historic warehouse that made redevelopment into a 203-unit rental loft project workable/possible? Kanoff: It was only the third residential building to be brought to market in the Dallas CBD at a time that the common thinking was that no one would ever live in an old building, let alone in downtown Dallas.  Financing was very difficult to obtain so it took several years and many meetings to finally convince HUD to provide a first lien construction loan as well as the city of Dallas to provide a low-interest second lien loan in order to fill the void that banks and investors were reluctant to fill. GlobeSt.com: For the condo conversion of the project, SoCo Urban Loft Condominiums: what were the challenges and opportunities? Kanoff: As difficult as it was to complete the initial rental project, the conversion to condominiums was fraught with challenges as well. Firstly, and even after six years as a rental project, the downtown Dallas residential market was still in its infancy. Secondly, at the time, while there were an increasing number of rental units in the CBD, no one had really tested the market for home ownership in downtown.  Finally, as we had been warned, the conversion rate of tenants to owners turned out to be woefully low since most people did not wish to own what they had previously rented. I am pleased to report that the project sold out and at prices that exceeded expectations. Since then, resale prices in the building have really jumped. GlobeSt.com: With the repositioning of Riverside Commons, what was the previous use of the property?  Kanoff:   Prior to our ownership, the Waterside Commons , as it was known, was designed as single- tenant buildings. The lead tenant at that time was Sprint. At the time of our acquisition, the property was only about 50% occupied and had not seen any renovations for more than 25 years. In addition, and since it had been a single-tenant campus, the tenant rep brokers were not familiar with, nor had shown any potential tenants the property, in many years. Westmount undertook a multi-million dollar renovation, re-branding and re-introduction of the property to the multi-tenant brokerage community.  As a result, Research in Motion , the owner of Blackberry, initially leased one entire building (or 84,000 square feet) and then went on to purchase the entire campus for its own use. GlobeSt.com: What other potential product types is Westmount looking at in DFW?  Kanoff:   We are looking at multifamily, industrial and office. GlobeSt.com: Do you see activity tapering off or continuing its velocity?  Kanoff:   With interest rates expected to remain at historically low levels and with the continued influx of new businesses and residents, we foresee continued growth.