Santander Renews 211 KSF Lease in Downtown Dallas

This renewal marks the largest office deal in the area in the last five years.

Property at 1601 Elm St., Dallas
The tower underwent two adaptive reuse developments. Image courtesy of Cushman & Wakefield

Santander Consumer USA has renewed its 211,087-square-foot office lease at 1601 Elm St., a 50-story, 1.4 million-square-foot mixed-use tower in Dallas. Owned by Pacific Elm Properties, a subsidiary of Woods Capital, the property has been called Santander Tower since 2020.

Cushman & Wakefield represented the tenant, while Pacific Elm Properties had in-house representation.

This deal marks the largest office lease renewal year-to-date in Dallas, as well as the biggest renewal in downtown Dallas in the past five years, according to Cushman & Wakefield. As part of the agreement, Santander gets to keep its naming rights.

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The property encompasses 28,400-square-foot floor plates featuring 12-foot 6-inch ceiling heights. According to the U.S. Green Building Council website, Santander Tower is currently in the process of receiving a LEED certification.

Santander Tower also includes a 60-key hotel and a 290-unit multifamily community. Amenities include a gym, ground-floor eateries and a private dining club on the 48th floor.

Located in downtown Dallas, the building is proximate to numerous transit stops, parks, quick-service restaurants and retail options. Less than 1 mile away, Pacific Elm and KDC will build Parkside Uptown, a 500,000-square-foot office project. In April, the venture landed a $290 million construction loan issued by Goldman Sachs Alternatives.

Cushman & Wakefield Vice Chair Robbie Baty and Executive Director Travis Boothe represented the tenant in the lease renewal proceedings. Pacific Elm Properties Chief Marketing Officer & Executive Vice President Sara Terry alongside Vice President Reegan Busby represented the landlord.

Adaptive reuse projects at Santander Tower

In 2013, Woods Capital purchased the 1981-built asset for $57.4 million from Commercial Mortgage, CommercialEdge data shows. Renovations began in 2017, when the ground floor was remodeled to include some 16,000 square feet of retail space, which is currently occupied by two restaurants.

The refurbishments also involved the replacement of dark granite and marble with white stonework and tile, as well as the addition of clear glass. Later in 2020, two adaptive reuse projects kicked off at Santander Tower.

The first was an office-to-hotel conversion which included the property’s 49th and 50th floors. The Guild Hotels, an Austin, Texas-based hospitality company, leased the 60,000-square-foot space and partook in the conversion.

This marked the firm’s first office adaptive reuse, according to The Guild’s co-founder Brian Carrico, as reported by The Dallas Morning News. Mint House Hotel currently operates the space.

Three years later, the owner debuted Peridot Residences, a 290-unit luxury multifamily community located between the 18th and 25th floors, as well as 37th and 39th floors. The office-to-residential conversion was co-developed alongside Mintwood Real Estate.

The Metroplex’s office vacancy rises

According to a recent CommercialEdge report, Dallas-Fort Worth’s office vacancy rate was 21.6 percent as of May, spiking by 450 basis points year-over-year and 190 basis points year-to-date.  Meanwhile, the national vacancy rate stood at 17.8 percent, up 80 basis points over the year, but down 20 basis points since January.

Earlier this year, Sidley Austin inked a 118,484-square-foot lease at an upcoming office development in Uptown Dallas. Developed by Granite Properties and Highwoods Properties, 23Springs rises 26 stories. The 626,215-square-foot tower is slated for delivery in 2025.

Another Metroplex agreement closed between Property Advisers Realty, the owner of a 288,000-square foot Class A office tower named The Madison, and CheckSammy. The waste and sustainability operator inked a 45,098-square-foot expansion and extension lease at the Addison, Texas, property.

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