Sycamore Development Plans Conversion of Dallas Icon

A Dallas landmark is getting a makeover via Sycamore Development.

The Dallas-based firm is planning a $200 million overhaul of the historic Magnolia Building downtown, redeveloping the 103-year-old tower into a mix of hotel rooms and apartments.

The 29-story building at 1401 Commerce Street, known for its neon Pegasus sign, will see its 320-plus hotel rooms cut in half to 160, while 130 mixed-income apartments are added, the Dallas Morning News reported.

Plans filed with the state last week outline a redesign with hotel amenities on the first two floors, apartment lobbies and amenities on the third, and residential units through the 16th floor. The hotel will occupy the upper stories, with separate elevators serving each use.

The apartments will include 39 studios, 52 one-bedrooms and 39 two-bedrooms, with just 59 of the units leased at market rates, per city ordinance. The developer has already lined up $20 million in state housing tax credits over the next decade and intends to pursue federal historic tax credits, city incentives and tax increment financing district funds to help finance the project. Construction, pegged at $90 million, is slated to start early next year and wrap by 2028.

The redevelopment is a pivot from prior plans. Current owner NewcrestImage bought the Magnolia in 2021 with ambitions for a high-end redo, including a potential Waldorf Astoria hotel location and a three-story addition, but that never materialized. Sycamore is now under contract to buy the property from the Grapevine-based firm, with Davidson Bogel Real Estate and attorney Philip Kingston advising on the deal.

Originally the headquarters for Magnolia Petroleum when it opened in 1922, the building was the tallest west of the Mississippi at the time and a symbol of Dallas’ early oil-fueled growth. Its Pegasus, installed in 1934, has long been one of Downtown Dallas’ most recognizable icons. In 2022 the Dallas City Council footed the $358,000 bill to secure and repair the 30-ton sign’s eroding steel supports to prevent a fall.

— Eric Weilbacher