BombSHELLS: 36 Percent Price Drop on 1505 Elm Penthouse Shell

Originally built in 1957 and designed by George Dahl, 1505 Elm Street began life as the home of Dallas Federal Savings. In 1974 it was sold to Dresser Industries for their headquarters. It changed hands a few more times before in 2001 Lazarus Property purchased it to convert into Dallas’ first office-to-condo conversion. The 17-story building now houses 67 condos including a 6,465 square foot, full-floor penthouse shell.

Since the converted units began selling in 2002, the penthouse has been relentlessly on the market for $1.5 million.  It’s been with Steve Shepherd of Local Dwelling since 2010.  Recently it took a huge price drop of over 36 percent to $985,000 or $152 per square foot. Compared to neighboring Museum Tower’s penthouse listed at $1,953 per square foot, this would appear to be a bargain …

… but with finished units in the building currently asking from $130 to $210 per square foot, is the better question whether it’s come down enough? Price drops in this building, seemingly left out of the Dallas boom, are the norm.  Even in our hot market, of the four other unsold units on the market today, three have had price reductions.

BUT as you can see, it’s a pretty special space surrounded on three sides by floor-to-ceiling glass (fingers-crossed for multi-pane windows).  There is no window without a spectacular view of downtown Dallas.  Even though at 17-stories it’s been eclipsed by taller buildings, the vantage point is still breathtaking.

In addition to the standard building amenities, this unit comes with six parking spaces and estimated HOA dues of $4,750 per month.

Nighttime views westward towards the Bank of America Tower with its new ever-changing lights.  Included at no extra charge are many other Dallas landmarks.

Another view is of the Joule Hotel and its gravity-defying cantilevered pool.  A pair of binoculars and a martini and you’re set for the summer (Fess up … you were thinking it too!).

This shell poses some interesting questions.  Given the price points of the building, is it simply too large of a space to interest a buyer, regardless of the cost? Surely a build-out will cost a bare minimum of $100 per square foot ($646,500).  Is ~$1.6 million a realistic finished price for the unit?

In this case, I think the better solution is for the condo owners to purchase the unit and convert into an owners’ space (a la the Mayfair’s Sky Club room).  If they paid the current asking price, each owner would pay $14,701. A little chiseling down on the asking price and I think a finished space, with a swish rooftop deck, would be a great amenity and shine a new light on the building as a whole.

Another option sees the owners purchasing the shell and to lease out as a fabulous restaurant space.  There’d be a line around the block of restaurateurs for a space like this. A well-crafted lease would see a huge contribution to the building’s finances resulting in much lowered HOA dues.  Both the lower dues and prestige of the right restaurant would increase values again for owners.

What do you think?  Penthouse? Owners’ Lounge? Proposal-inducing restaurant?

 

Remember:  High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement.  If you’re interested in hosting a Candysdirt.com Staff Meeting event, I’m your guy. In 2016, my writing was recognized with Bronze and Silver awards from the National Association of Real Estate Editors.  Have a story to tell or a marriage proposal to make?  Shoot me an email [email protected].