Sycamore Strategies’ $200M Magnolia Dallas Redevelopment Moves Forward
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The Magnolia Hotel is one step closer to its dramatic reimagining with Sycamore Strategies at the wheel.
As CandysDirt.com reported in January, Sycamore Strategies plans to gut and redevelop the interior of the 29-story Magnolia Dallas located at 1401 Commerce St., and use half the space for affordable housing and the other half for hotel lodging. This unusual half-residential, half-hospitality model will be the first of its kind in Dallas.
Filings with the Texas Department of Licensing and Regulation and details shared with The Dallas Morning News outline just how the redevelopment will unfold. Sycamore intends to cut the hotel room count from more than 320 to 160, while adding 130 apartments, including 39 studios, 52 one-bedrooms, and 39 two-bedroom homes. According to a city resolution, only 59 of those units will be market rate, with the rest income-restricted for attainably-priced and affordable housing.
Sycamore plans to invest $200 million, including property acquisition, to redevelop the landmark in downtown Dallas. Construction is slated to begin in early 2026, with an estimated $90 million build-out scheduled for completion in 2028.
Sycamore has already secured $20 million in tax credits from the Texas Department of Housing and Community Affairs over the next decade, along with state and federal historic tax credits, and is expected to seek city incentives and tax increment financing.
Hotel amenities and lobby will be concentrated on the first and second floors, while the third floor will house the apartment lobby and resident amenities. Floors four through 16 will be residential, and hotel rooms will occupy the upper floors, with separate elevator banks for guests and tenants.
This marks a sharp turn from the Magnolia’s previous redevelopment plan. Grapevine-based NewcrestImage purchased the property in 2021 and announced a $200 million makeover, potentially rebranding the historic building as a Waldorf Astoria, though the deal never came to fruition. Instead, Texas’ first Waldorf Astoria is slated for a 2027 opening in the Hill Country.
When the Magnolia opened in 1922, it was the tallest skyscraper west of the Mississippi and a bold symbol of Dallas’ rising skyline. At 399 feet, it held that title until 1931 when the Mercantile Bank Tower opened.
Designed by British architect Sir Alfred Bossom as Magnolia Petroleum’s headquarters, the Beaux-Arts building earned its place in the city’s skyline with the addition of the neon-outlined Pegasus in 1934. The revolving sign became a beacon for travelers arriving by train at Union Station and is still one of Dallas’s most recognizable symbols.
Magnolia Petroleum later merged into Socony-Vacuum Oil Company and was acquired by Mobil Oil, who adopted the Pegasus as its trademarked logo. After Mobil Oil moved out of the office building in 1977, it was converted into a hotel in 1997 as one of downtown’s first luxury boutique hotels that helped spark a wave of adaptive reuse projects.
“This redevelopment gives us the unique opportunity to honor the building’s rich history while reimagining it as a place that welcomes a broader community with mixed-income housing and hospitality,” Jess Krochtengel, managing member of Sycamore Strategies, told the Dallas Morning News.
