BombSHELLS: 36 Percent Price Drop on 1505 Elm Penthouse Shell

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1505 Elm PH - Interior 1

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 …

A Proposed finish-out from more heady days
A Proposed finish-out from more heady days

… 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.

1505 Elm PH - Exterior 2

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.

1505 Elm PH - View 1

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.

1505 Elm PH - View 2

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 sharewithjon@candysdirt.com.

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Jon Anderson

Jon Anderson is CandysDirt.com's condo/HOA and developer columnist, but also covers second home trends on SecondShelters.com. An award-winning columnist, Jon has earned silver and bronze awards for his columns from the National Association of Real Estate Editors in both 2016, 2017 and 2018. When he isn't in Hawaii, Jon enjoys life in the sky in Dallas.

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Comments

  1. Matt says

    It’s very simple. It’s been highly overpriced considering prices in the building, and the HOA fees are absolutely astronomical. If they’re that high already, I’m sure that savvy buyers understand they’ll probably go higher as the building ages and systems need to be replaced. I personally believe the high HOA fees are why the rest of the “normal” units sit on the market. Not to mention, the common areas are rather lackluster for a building that charges such a high HOA fee.

    • Matt says

      The best thing to do would be to lease it as office or restaurant space and drive down the HOA fees of the rest of the units, so existing condo owners have a better chance of selling their units.

    • Jon Anderson says

      At roughly 73¢ per square foot, the HOA dues are far from exorbitant…there are just a lot of square feet. All HOA dues increase over time, considering the building’s systems were redone in 2002, I think the 1957 issues are pretty well taken care of.

  2. John says

    The board should buy it, but not until there is an offer, if they have right of first refusal, which they most likely do.

    I’ve always thought La Tour should buy the Post leasing office if it ever hits the market. I don’t know what we would do with it but it’s probably way more valuable to us than anyone else given the small size, odd shape and limited parking. 10 years from now when the last lots in Uptown are stuffed with highrises having even more property than we have now probably wouldn’t hurt.

  3. Kevin Sowers says

    Can you buy the unit and split it into 4 units at approx 1500ft. It’s a swish space…cheap HOA, I think it’s just too much space. Limited market for so much space.

  4. Nick says

    Did they just add this penthouse to the top of the building or was it always there? It looks a tad out of place up there. Anyway great suggestions turn it into a swanky restaurant but where would everyone park?

    • Jon Anderson says

      The Penthouse has always been there (from the look of things…never thought to ask). It’s the city, what cars wouldn’t fit in the building’s valet, would be parked elsewhere. At 6,465 square feet, we’re not talking about an enormous restaurant space once kitchen and other back of house spaces were added.

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