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DALLAS — A 125-year-old building in the West End district of downtown Dallas is entering a new chapter through an adaptive reuse project supported by property assessed clean energy (PACE) financing facilitated by the City of Dallas PACE Program administered by Texas PACE Authority.
Addressed as 501 and 509 Elm Street across the street from The Sixth Floor Museum at Dealey Plaza, the historic property is listed on the National Register of Historic Places, and the project reflects the importance of preserving Dallas’ historic built environment while adapting it for future generations.
The approximately $50 million redevelopment of this long-underutilized property demonstrates the role that PACE financing can play in helping communities preserve historic buildings while supporting new economic activity.
The owner/developer, 3L Real Estate (3LRE), acquired the property in 2021 and is transforming the building into a vibrant mixed-use destination with approximately 120 multi-family units and 29,321 square feet of improved ground floor retail space.
Joseph Slezak, CEO of 3LRE said, "Being a part of reactivating historic properties has always been 3LRE's focus. Especially when the opportunity is at a premier location in the heart of major downtowns. This building and its unique history is an honor for us to be doing alongside America's 250-year anniversary. The opportunity to bring a variety of housing and an active first floor to compliment the area around us, alongside energy enhancements for the new setup, is a great step forward from its prior chapters as an office property.”
The transformation of the property is already underway. Twenty multi-family units have been successfully converted, and the previously vacant ground floor retail space has been leased to the Museum of Money.
The project combines state and federal historic tax credits (HTC) with PACE financing, allowing for improvements to eligible energy and water systems to boost energy and water efficiency at a lower cost. Together, these financing tools have enabled the owner/developer to preserve the building’s historic character while improving the building’s long-term performance.
“Projects like 501 Elm demonstrate how innovative financing can create new housing, retail opportunities, and long-term economic impact for our downtown,” said Dallas City Manager Kimberly Bizor Tolbert. “The City of Dallas, through our Office of Economic Development, is proud to facilitate investments that strengthen the future of the West End and the City’s urban core,” Tolbert added.
Through PACE financing, the project will support approximately $16 million in eligible energy and water efficiency improvements, including upgraded lighting systems, HVAC improvements, domestic hot water upgrades, and water efficiency measures.
"We were thrilled to capitalize 501 Elm Street in partnership with Texas PACE Authority, enabling the sponsor, 3LRE, to reimagine this historic property in downtown Dallas, providing the West End district with a new state-of-the-art mixed-use property while maintaining its historic legacy," said Christopher Ellis, Senior Director of Originations, Nuveen Green Capital (NGC). "By leveraging C-PACE, 3LRE was able to bridge the gap between the senior and HTC bridge financing while also funding required HTC reserves, meaningfully reducing the equity need. This project underscores how NGC's C-PACE is a powerful tool to cost-effectively fund office-to-residential conversions."
With a savings-to-investment ratio (SIR) of 3.71, the PACE-financed improvements are expected to generate significant long-term utility savings while improving building performance. PACE financing has been integrated into the project’s broader capital stack alongside developer equity, construction financing, and permanent financing to support completion of this important redevelopment effort.
This transformation of 501 Elm Street reflects the continued revitalization of downtown Dallas and exemplifies how PACE financing, at no cost to the City of Dallas, can help create new opportunities for housing, retail, and economic activity.
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