Massive Renovation Helps Fountain Place Secure 500,000 SF in Renewals

May 25, 2017— A number of major renovation projects are in the works along Ross Avenue in downtown Dallas. Arguably the most significant is the redevelopment of Fountain Place, where owner Goddard Investment Group was the first to kick off activity in this cycle.

The $70 million renovation includes office tower enhancements and a new 10-story garage with four plaza-level restaurants at its base. Additionally, AMLI Residentialis developing a stunning new 45-story, luxury apartment high-rise at the corner of Field Street and Munger Avenue.

The redevelopment of Fountain Place has been a key factor in securing renewals from five major office tenants. The latest to recommit is Bracewell LLP, whic¬h recently extended its lease for nearly 40,000 square feet. This follows renewals from Wells Fargo (123,650 square feet) and Gerald Ray (11,500 square feet) earlier this year. The first two big tenants to recommit were Tenet Healthcare (240,000 square feet) and Hunton & Williams (87,800 square feet), which inked long-term lease extensions in 2015.

The renewals all add up to more than 500,000 square feet. All were secured by longtime Fountain Place leasing agents Johnny Johnson and Lauren Napper of Cushman & Wakefield.

“The renewals and new leases are an absolute validation of the vision of Goddard Investment Group and their commitment to such a significant reinvestment in an iconic Dallas property,” Johnson said. “While most other Dallas properties of this vintage are getting cosmetic improvements, Fountain Place is being completely reinvented as a bustling live-work-play complex.”

Fountain Place is currently 85 percent occupied, with about 155,000 square feet available. In 2019, another 295,000 square feet will open up with the departure of the Environmental Protection Agency, which is moving deeper into the core of Dallas with a 229,000-square-foot lease in Renaissance Tower.

“We’ve been able to retain 100 percent of major tenant rollovers that we prioritized,” Johnson said. “This also speaks to the pendulum swinging back toward downtown Dallas and the Arts District area along Ross Avenue, which is seeing renewed interest from office tenants.”

Phil Puckett, who led the CBRE brokerage team representing Tenet, said he and his client were impressed by Goddard’s ambitious plans and dedication to creating a world-class environment for tenants. “It quickly became apparent to us during the decision-making process that Goddard Investments was about to transform the entire ground level of Fountain Place into an entirely new experience, where people could gather or meet for lunch, dinner, or cocktails,” he said. “What I personally like most about the transformation is the commitment by Goddard to transform the 1980s-vintage ground-floor lobby from dark green floors and walls into a ‘light and bright’ experience. The lobby may be one of the top transformations I’ve seen in my career, and will now be what I call ‘millennial-friendly.’”

Goddard Investment Group purchased Fountain Place in the summer of 2014. “Our business is acquiring properties where we see potential for dramatic improvement,” said Jim Wilson, Principal. He, along with colleague Richard Markham, Principal, are overseeing the tower’s redevelopment. “We saw the impact of Klyde Warren Park and the growth of the southern segment of Uptown extending into the Arts District and Ross Avenue. At the same time, we saw parking lots surrounding Fountain Place being acquired by some of the most successful investors in Dallas, who had exciting plans for the properties. So, we saw that area as being on the cusp of an upswing.”

From the start, the goal for the redevelopment was to take one of the greatest pieces of architecture in the South, and energize it and bring it up to the standards of today’s greatest buildings, Markham said. “The exterior of Fountain Place is impeccable and timeless, but the interior felt like your grandfather’s building,” he said. “We wanted it to be relevant and current—the finest building in this part of the country. And every decision we’ve made has been in line with that goal.”

Great care has been taken to ensure the redevelopment not only lives up to but exceeds the original vision for Fountain Place, designed by Harry Cobb of I.M. Pei and Partners and built in 1986.

Goddard selected James Carpenter of James Carpenter Design Associates Inc. and Gensler to lead the redesign. The plan includes:

• A new 10-story, 1,500-space garage, situated between Fountain Place and the Fairmont Hotel, anchored at its base with plaza-level retail
• A complete renovation of the lobby, including the replacement of all finishes and removal of the mezzanine level, which will vault the ceiling to 30 feet.
• A floor-to-ceiling, glass-wall art feature, custom-designed by Carpenter, who’s known for his glassworks expertise.
• An expansive tenant lounge, replacing the old Avanti restaurant space at the north end of the lobby
• An 8,000-square-foot, state-of-the-art fitness center, with spa-like locker room facilities.
• A new training room, which can accommodate up to 150 people and is loaded with high-tech features.
• The fitness center opened in April 2017. The garage will open this coming October. All other building interiors work is scheduled for completion by May 2018.

Jack Gosnell, Senior Vice President of CBRE Urban, oversees leasing of the retail space. He expects to have deals locked up with four restaurants in the near future. “We’ve had an absolutely great response on the space,” Gosnell said. “What it’s doing is bringing more Uptown-quality restaurants downtown.”

Fountains Upgrade, New Residential Tower

Along with the new garage and interior improvements, one of the most ambitious aspects of the project is the careful redevelopment of the building’s signature fountains. A master work of renowned landscape architect Dan Kiley, the fountains of Fountain Place have become a beloved natural sanctuary in the center of Dallas.

The renovation of the fountains at Fountain Place preserves the sanctity of Kiley’s work and enhances it with more seating areas and pedestrian walkways that extend all the way to Munger Street. It also solves a significant water-leakage problem, Wilson said. “In a drought-sensitive environment, it was critical to stop the leaking, but it was also important to do it in a way that was respectful to Kiley’s design,” he said. “We’re confident tenants and visitors will be very pleased with the upgrades and provide an even more enjoyable outdoor experience.”

Goddard was able to acquire a tract of land along Ross Avenue, allowing it to build the garage between Fountain Place and the Fairmont Hotel and thereby enabling development of a new luxury apartment tower on the north side of the complex and preserving views of the fountains for residents. The 45-story, 367-unit high-rise, to be developed by AMLI Residential was designed by noted architect Larry Speck of Page and is planned to open in the fall of 2019.

“People today are looking for a 24/7 environment, and that’s what we’re creating at Fountain Place, a real destination” Wilson said. “Our intention is to create the finest office building in this part of the country, but we’re able to charge lease rates that are significantly lower than rents in Uptown.”

“We saw the trend of tenants leaving Class AA buildings downtown for Uptown, and we thought we had a good chance of stemming that and reversing it,” Markham added. “The renewals at Fountain Place are an indication that our plans for the property have been well received, and that what we’re doing is right on the mark.”