50-Story Dallas Office Tower to Convert Vacant Floors to Apartments

It’s happening in cities across the US: an iconic but aging office tower that has a lot of vacant space will be converted into a mixed-use residential building in an adaptive re-use project.

In this case, the 50-story-building scheduled for a makeover was the second tallest building in Dallas when it was built in 1982 and known as the Thanksgiving Tower due to its location on the opposite side of Elm Street from Thanks-Giving Square in Big D.

In 2020, the building—one of the first glass-sheathed office towers to go up in Dallas and now the eighth-tallest building in the rapidly expanding Dallas skyline—was renamed Santander Tower for the bank that it is its anchor tenant.

Dallas-based Wood Capital, in a partnership with Mintwood Real Estate and Dallas-based Adolfson & Peterson Construction (AP), is planning to convert the 1.4M SF office tower into a mixed-use residential building including 229 multifamily units.

The tower, which is owned by Woods Capital and underwent a $40M renovation in 2017, currently has a two-story hotel called The Guild on its top floors and a helipad on the roof.

The adaptive re-use project will begin later this summer with renovations on the first floor and floors 18-25 and 37-39, according to a press release issued by the partners. The project will feature one- and two-bedroom floorplans, with project amenities including a swimming pool, a fitness center and a meeting space featuring a kitchen for entertaining.

“Adaptive re-use is a thrilling trend in today’s real estate industry. This is an exciting development for the Dallas Central Business District, which is ripe for office-to-residential conversions,” said Will Pender, AP’s Gulf States regional president, in a press release.

“By converting vacant office space into luxury, multifamily housing, we can create a more vibrant, mixed-use neighborhood and meet the growing demand caused by migration to the area,” said Jonas Woods, Woods Capital CEO.

The adaptive re-use project for Santander Tower is scheduled to be completed in 2023.

Despite overall office occupancy rising in the Dallas metroplex in Q2 2022, the delivery of new vacant space in the market caused overall vacancy rates in DFW to increase 10 bps from Q1, up to 21.1%, according to Cushman & Wakefield.

Overall, Class A office space in DFW had a vacancy of 21.9%, while Class B had a vacancy of 20.4% in the second quarter. The vacancy rate in the Central Business District was 28.7%, with nearly 500K SF available for subleasing.

Asking rents in the Dallas CBD have averaged $28.75 for all classes of office buildings, about $30 for Class A space.