Stemmons Towers, a 14-acre, four-building 285,312-square-foot office campus near Central Dallas has been sold to Sava Holdings, Ltd., which intends to redevelop and rebrand it into Lumiére, a 394-unit upscale apartment community. The property was sold by its previous owners, 2700 Stemmons LP, for an undisclosed amount. Younger Partners Executive Managing Director John St. Clair and Managing Principal Trae Anderson represented the seller in the transaction. Sava Holdings plans to begin the renovations in mid- to late 2024, with a to-be-determined completion date.
Preserving the historic roots
According to Yardi Matrix information, the Stemmons Towers campus was built in three phases (1963-1968) by a joint venture between John Stemmons, and Trammel Crow. At the time of their sale, the buildings were struggling to attract and retain tenants as the city’s office market experienced rising vacancy rates and an increasing number of distressed properties.
The redevelopment marks the first foray into multifamily for Sava Holdings, a Dallas-based boutique hotel developer that has converted other properties in the area. With the purchase, the firm plans to retain the buildings’ original exterior facades while adding a 13th floor to each 12-story tower. The four buildings, positioned to the East, South, North and West, will have 60, 96, 98 and 140 units, respectively, and will be geared toward upper-tier market rate to luxury rentals.
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Sava Holdngs Principal Suhas Naik emphasized the importance of the buildings’ architectural features to Multi-Housing News. “The original design of the four 12-story tall mid-century modern Stemmons Towers office buildings in the 1960s was at the forefront of modernist design at the time, and the linear landscape zone that connects all buildings is a unique feature that enhanced the lives of the occupants,” Naik explained. “The renovation and rehabilitation planned will return this architectural composition to its former appearance with a transformation into multifamily use,” he added.
Around Lumiére, the developer plans to upgrade the space’s landscaping to resemble a park, while adding an outdoor pool with cabana areas, in addition to a spa. The building will also be lit like many high-rises in Downtown Dallas. This feature is also the origin of the redevelopment’s name, and was part of the original campus, according to Naik.
The Lumiére will lie across from the Medical District of Dallas, home to many of the city’s largest employers. The community lies in between the Dallas Area Rapid Transit’s Medical/Market Center rail station, as well as Stemmons Freeway with direct access to The City Center District, which lies three miles to the southeast.
Conversion cascade
Conversions of older, underused office space to multifamily are increasing in the U.S. A February 2023 report from the Urban Land Institute and the National Multifamily Housing Council puts the median age of the office stock at 40 years old, while 25 percent of it is at least 60 years old and as much as 1 billion square feet may be obsolete entirely.
In Oklahoma City, for example, Gardner Tanenbaum recently obtained a $63 million refinancing loan for the conversion two office buildings into 265 multifamily units. Over the summer, New York City Mayor Eric Adams announced the targeted conversion of 136 million square feet of vacant office space in Midtown Manhattan to 20,000 new apartment homes.
