Activity is just starting to pick up at City Hall Bistro when Jonas Woods walks in and takes a seat across from me in a large booth in the back of the restaurant. Tucked inside The Adolphus hotel, the eatery has racked up a solid 4.5-star Yelp rating since opening in July 2017. It is Woods’ first visit to the restaurant, but the newly renovated Adolphus is a regular stop when he squires prospective office tenants around downtown.
It has been 11 years since Woods left a “dream job” at Hillwood, where he worked closely with Ross Perot Jr. on Victory Park and other high-profile endeavors, to launch his own firm. The timing of his departure—just before the Great Recession hit—was less than spectacular. With development at a standstill, Woods shelved his idea of building new mixed-use projects and began buying up distressed residential assets instead. “I had to come up with a new business plan that was suited to the new economic climate,” he says.
Things have worked out pretty well. His Woods Capital has acquired 1,500 apartment units, 2,000 single-family lots, and 5,000 acres of land. He also was co-founder and developer of the prized Trinity Forest Golf Club. Oh, and he bought 3.5 million square feet of prime office space—all in the core of downtown.
Woods was seeking to diversify his investments away from a heavy residential focus in 2012, when he learned of an opportunity to buy Thanksgiving Tower on Elm Street. There had been a lot of chatter about redevelopment plans for downtown Dallas while Victory Park was getting underway. As he looked at the Thanksgiving Tower opportunity, he realized a lot of things that were talked about in the early part of the 2000s, things people said were going to happen—that he doubted to some extent back then—had, in fact happened.
From Belo Park to Main Street Garden, vacant office buildings were being transformed into residential, retail, or restaurant space. “There weren’t any gaps,” Woods says. “Very cohesive redevelopment was happening, almost building by building.”
When Woods Capital acquired the 1.4 million-square-foot Thanksgiving Tower out of receivership in 2013, the 50-story building was just 52 percent leased. But an additional 600,000 square feet of tenants had announced plans to move out. “The durable occupancy, if we had not bought it, was probably close to zero,” Woods says. His challenge was to generate meaningful leasing activity before the existing tenants departed.
Instead of the “race to the bottom” game other downtown landlords were playing by continually lowering rents, Woods took the opposite approach. He poured $40 million into a massive repositioning at Thanksgiving Tower, brought in Ascension and Gather Kitchen, and got super generous with tenant improvements ($50 million to date) for new occupiers willing to commit to building out first-class space.
The gamble paid off. Thanksgiving Tower is now about 70 percent leased, with some tenants paying double the lease rates the property was getting when Woods first bought it. WeWork gave the building a boost when it decided to occupy three floors. And Beck, the venerable construction and architecture firm, just announced it would also take three floors, relocating from its longtime headquarters on Ross Avenue.
More street-level retail is in the works, and Woods and Club Corp. are giving the Tower Club on the 48th floor a $4 million repositioning. About 500,000 square feet of office space remain available in Thanksgiving Tower, at a time when the office-leasing pendulum is shifting back toward downtown. Lease rates are significantly lower in the core than they are in Uptown, and highly sought-after millennial employees are craving urban environments. “Downtown Dallas is the only authentic urban environment in the city,” Woods says. “We created them in other places, but downtown is the only truly walkable, mixed-use neighborhood, certainly in Dallas.”
Woods Capital also owns the office component of One Dallas Center and, with Tom Dundon, AT&T’s global headquarters building. Both assets are fully leased and both are poised to benefit from significant new amenities. The new 3.2-acre Pacific Plaza Park next to One Dallas Center is scheduled to open next fall, and AT&T is at work on a $100 million “Discovery District” around its corporate home. There’s much to be excited about in Dallas, Woods says: “It’s the best real estate market with the best long-term outlook in the country.”