Dallas real estate projects stuck in neutral as market idles
12:56 AM CDT on Sunday, September 19, 2010
The new streets are paved, the landscaping is in place, and fancy signs and sculptures tell motorists they've arrived at MidtownPark. But there's no there there at the project just east of North Central Expressway.
Plans for dozens of buildings have not gotten off the ground – another result of the national recession and real estate market downturn.
Developers tore down more than 80 acres of aging apartments around the intersection of Meadow Road and Manderville Lane. The blocks of prime real estate were cleared to make way for a development that was to include residential and commercial projects.
Three years ago, investment brokers were hired to market the land. But most new apartment and commercial developments have been on hiatus in the last couple of years.
The property is zoned for 3,800 apartments, condos and townhouses, 90,000 square feet of retail space and 930,000 square feet of office space.
"You can be very smart with real estate and timing, but things totally out of your control can be a real problem," said property broker Newt Walker. "The money that was available for new deals and demand for projects like that abruptly shifted away.
"Now it's just sitting there until the real estate market turns, and no one knows how long that will be."
MidtownPark developer Valencia Capital Management oversaw construction of sidewalks, a traffic roundabout and small parks for the project. The city of Dallas paid almost $10 million to help revamp the neighborhood between North Central Expressway and Greenville Avenue.
Officials with Dallas-based Valencia Capital did not return phone calls.
A few miles to the east on Skillman Street, there's another mixed-use development in waiting.
Lake Highlands Town Center is planned as a 70-acre high-density urban development to be built at Skillman and Walnut Hill Lane.
Developer Prescott Realty Group knocked down hundreds of decrepit apartments for the project, which will include retail, residential and public space along White Rock Creek.
Ground was broken in 2007 – right before the recession hit.
The first phase of construction, which includes new roads, a lake park and other public amenities, is pretty much done.
Work will be finished on a new DART light-rail station to serve the project late this year.
But so far, none of the apartment and retail buildings are under way.
"It's going a little slower than we anticipated, but we are moving forward," said Prescott Realty president Vance Detwiler. "We are actively marketing the project and hope to have an announcement in the next 90 days.
"We look forward to getting going."
Prescott Realty has also closed down two large apartment communities just south of its construction site. Those buildings will probably be knocked down at some point, Detwiler said.
Development sites are selling for as much as a 50 percent less than they were a few years ago, said Will Balthrope, a vice president of investment with Marcus & Millichap Real Estate Investment Services.
"And there is a dearth of financing for any new construction," he said.
But eventually properties like MidtownPark and Lake Highlands Town Center will be on builders' front burners, he said.
"The hard lifting has already been done," including the zoning and infrastructure construction, Balthrope said. "While those tracts sit vacant today, the person that eventually builds on them will make a lot of money."
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