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Dallas: Rastegar, Sonder Propose Residential High-Rise with Short-Term Rentals

Featured Illustration (above): A pocket park and hanging gardens are part of the conceptual design for 1899 McKinney, a proposed residential high-rise with short-term rental space, in Uptown Dallas. Image: SCB

Posted: 10-17-19

By Edmond Ortiz

Dallas (Dallas County)–Austin developer Rastegar Property Co. and San Francisco hospitality startup Sonder have proposed 1899 McKinney, an Uptown 26-story residential building with 270 short-term rental units.

News of the proposed development was announced in a joint press release from both firms. Founded in 2012, Sonder leases and furnishes high-end apartments that are rented on a short-term basis on the company’s website and through outlets such as Airbnb.

Sonder oversees more than 9,500 units in nearly 20 cities, including Austin. The home-sharing company founders liken their products as combining the comforts and expectations of a hotel and short-term rental apartment and houses.

All units at 1899 McKinney Avenue will have luxury fixtures and appliances, fully equipped kitchens, in-unit laundry and NoiseAware  technology.

The tower’s community features will include underground parking, rideshare pick-up/drop-off spots, valet parking, a rooftop deck, a pool, storage lockers on every floor, and common areas, all accessible to guests. Plans also call for a sidewalk cafe, a pocket park and hanging gardens.

Hanging gardens make for a distinguishing mark in another conceptual of the planned 1899 McKinney residential tower. Image: SCB

Upon completion by 2023, the tower will be run by Sonder for 10 years before the units become for-sale condos. The company will pay all hotel occupancy taxes levied with each rental.

Chicago-based SCB is the project designer, and New York City company Turner Construction has been tapped as the general contractor.

The 1899 McKinney project must still go through the city permitting process. The construction cost has not yet been announced.

The building footprint will sit on a triangular half-acre tract that Rastegar bought from Austin-based World Class Holdings earlier this year.

A vacant small building that has hosted all sorts of purposes over the years currently sits on the property.

This will be Rastegar’s debut project in Dallas, and will be Sonder’s biggest deal to date. Uptown Dallas is seeing a rising number of residential and office high-rises.

An increasing number of veteran and startup hospitality brands are experimenting with home-sharing business models.

Executives from Sonder and Rastegar agreed this was the right time to combine resources to bring an increasingly popular style of housing option to an upscale part of Dallas.

“We strategically chose Dallas for this project due to its status as a thriving business community and burgeoning tourism destination,” Michael Merryman, head of Dallas real estate at Sonder, said in the news release.

“Master leasing the entire property rather than individual units or floors represents the vision for the future of Sonder’s business model and the future of the hospitality industry as we continue democratizing  travel by providing luxury accommodations at a great value to guests.”

Ari Rastegar, Rastegar’s CEO, added in the release: “The hospitality industry has been ripe for disruption for a long time, and I believe Sonder is providing the industry with the refresh it needs. As a tech-driven firm, Rastegar instantly connected with Sonder over a mutual belief in deploying a tech-centric approach to  business.”

Rastegar continued: “The shared vision for this partnership is to institutionalize rentals by creating a  high standard that fills the gap between five-star hotels and renting a home, especially with respect to  Sonder’s service standards. We anticipate this deal being the biggest of its kind, continuing to disrupt the  hospitality space in a way that ultimately benefits travelers and tenants.”

An empty small building sits at Rastegar Property Co.’s tract at 1899 McKinney Ave. Image: Google Streets


edmond@virtualbx.com

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By |2019-10-17T16:31:56-06:00October 17th, 2019|Construction Preview, Feature Story|

About the Author:

Edmond Ortiz is a lifelong San Antonian and a 20-plus-year veteran in local journalism, He previously worked full-time at the San Antonio Express-News, and has been freelancing for outlets such as the Rivard Report.

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