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At the convergence of the affluent enclave of Highland Park and the vibrant Uptown neighborhood is a small but popular district tapping into both those worlds.
It's now largely controlled by some of the biggest names in Dallas real estate and finance.
Knox Street, spanning about a half mile from Central Expressway to Abbott Avenue, is lined with luxury retailers and high-end restaurants as well as offices and homes.
Since 2018, a joint venture between Michael Dell-affiliated investment firm BDT & MSD Partners and local firms Trammell Crow Co., The Retail Connection and Highland Park Village Associates has been assembling properties throughout the district. Many previously belonged to Sarofim Realty Advisors, a subsidiary of Houston-based Fayez Sarofim & Co.
"We didn’t want to just buy an office building or buy a piece of retail," said Sabrina Gleizer, managing director for BDT & MSD Partners. "We wanted to buy something large, something at scale, something that really speaks to the kind of capital we have, which is long-duration placemaking capital, where we buy iconic real estate and create something truly differentiated."
Stephen Summers, managing director of Highland Park Village Associates, said the partnership owns about 14 acres on Knox Street, on both its north and south sides — what he estimated to be about 70% of the properties along Knox.
That includes the 4-acre site at the intersection of Knox and Travis streets where the partnership is now developing a three-tower project with a hotel, restaurants, retail space and residences — financed with a $619 million loan from Plano-based Beal Bank.
Across the street, an entity connected to BDT & MSD owns a retail property that's home to a Starbucks, according to Dallas Central Appraisal District records. Farther east, the list includes a building that used to be home to a Foxtrot market and another home to consignment store The RealReal, plus the retail and restaurant components of a mixed-use building on Cole Avenue that houses a Trader Joe's.
Meanwhile, a Crow affiliate controls a key site at the southeast corner of Knox and McKinney Avenue after entering into a 99-year lease in 2023.
"Projects like this, locations like this don’t come around very often, and they particularly don’t come around in markets like Dallas that are so robust and vibrant and have such massive tailwinds," Gleizer said. "When this opportunity presented itself back in 2018, it was so immediately apparent that we had to play."
What exactly makes this small sliver of Dallas so attractive to investors and developers? It's a mix of favorable demographics and a vibrant, walkable streetscape — and its evolution speaks to both the vast wealth accumulated in the heart of the city and points toward the dense, high-end development that's reshaping the urban core.
Walkable retail hot spot
French restauranteur Stephan Courseau moved to Dallas in 2011 to be closer to family and open a second location of Le Bilboquet, a New York restaurant where he had worked as a manager. But he ran into challenges finding a location in walkable neighborhoods like Lower Greenville and Oak Cliff.
"Most of the deals that we would find were in strip malls, and they didn't have a charming aspect for me to put such a concept," Courseau said.
He eventually landed on a spot just off Knox Street, in the Travis Walk complex across Travis Street from where the new towers will rise. He was drawn by the walkability, the close proximity of the Park Cities and access to U.S. Route 75. But the main driver was the Katy Trail and its connection to other now-booming neighborhoods.
Courseau opened the restaurant in 2013 and later added two more just steps away: Knox Bistro and Georgie. Each is geared toward the many different tastes of Knox visitors and residents.
"This area is about to become, in my opinion, a magnet when it comes to restaurants and boutiques in general," Courseau said, adding that he has seen sales and profitability soar at his restaurants. With more real estate projects on the way next door and nearby, he said, "I think that we might really have a nice surprise within the next five years."
The neighborhood appeals to retailers and restauranteurs like Courseau because it attracts a lot of foot traffic and can draw both Uptown apartment dwellers and wealthy families from the Park Cities.
"We literally have demand from every local restauranteur in Dallas and just about every restaurant group in the U.S. has reached out looking to lease space," said Summers, who helps lease up Knox Street. "It's just so much traffic, and well-qualified traffic. ... This is the epicenter of the demographics these retailers and restaurants want."
BDT & MSD officials offered Highland Park Village Associates a slice of the deal to handle retail and restaurant leasing and participate in development, according to Summers. He said they liked that his firm was talking to luxury, contemporary and local retailers for Highland Park Village, another high-end shopping destination — and one that he said has run out of space.
"Dallas is literally on every single tenant’s radar," Summers said. "It used to be New York, L.A.; now it’s New York, L.A., Dallas, Miami, in terms of where these brands think they have to open stores."
Gleizer declined to delve into sales figures for the retailers on Knox but said the neighborhood has generated "incredibly strong" sales per square foot, which has persisted under the joint venture ownership. She credited that to the neighborhood's walkable environment that doesn't exist in many other parts of Dallas.
Knox Street attracted 3.7 million visitors in 2021. In 2023 the number soared to 4.2 million, about 17% above pre-pandemic levels, according to cell phone data from Placer.ai analyzed by commercial real estate firm Weitzman.
The 3.5-mile Katy Trail, which extends from Victory Park through Uptown and has an entry onto Knox Street, is expected to welcome 3 million visits this year, according to Friends of Katy Trail data provided by Highland Park Village Associates.
"It's Dallas' version of the High Line in New York City," Summers said. "We have to celebrate that with whatever we do; we’re trying to create outdoor spaces, park space, great restaurants, stuff that the community that's walking up and down the trail in exercise clothes can utilize.
"But at the same time, you're also trying to capture the wealthy client from Highland Park and the young kids that are living in apartments in Uptown. It's a really unique challenge."
Knox Street is easy to walk from end to end, said Joel Behrens, managing director of Trammell Crow Co. He said short distances are a common theme among great retail streets.
"Sometimes when it stretches too long, you don't get to experience that whole street," Behrens said. "Even in the hot summers and in the springs and falls of Dallas, you're going to walk from one end to the other, which I think is kind of unique because it creates some vibrancy and activity on the street."
Emerging office hub
In addition to retailers and restaurants, many companies see benefits in putting offices along Knox Street to tap into the same vibrancy.
That demand shows in the numbers. Knox Street ranked No. 12 among the most expensive streets for office rent in the United States and No. 1 in Dallas in a recent study by commercial real estate firm Jones Lang LaSalle based on year-end 2023 data.
The average asking rent for office space on Knox was about $79 per square foot and the highest on the street was $108, according to JLL. That compared with an average asking rate of $167.74 per square foot on Sand Hill Road in Silicon Valley and $162.43 in New York City's Hudson Yards.
"In a world where there's less occupancy in office buildings, you think of ways to get people to the office," Behrens said. "What better way than to have an office located in a walkable, mixed-use neighborhood that is vibrant and has a lot of options for all their employees to experience throughout the day?"
To the south of Knox, Houston-based real estate giant Hines and Dallas-based Stockdale Investment Group LLC have proposed a three-story project called Knox Promenade with offices and residences, including senior living. Dallas City Council in July voted in favor of the plans, the Dallas Morning News reported.
Around late 2021 or early 2022, developer Four Rivers Capital completed construction of Weir's Plaza, a 12-story office tower with 250,000 square feet of space that was leased up prior to completion. For now, the project at the southeast corner of Knox and Travis remains one of few options for office tenants along the block — until the BDT & MSD partnership completes its office tower. Dallas-based ISN Software Corp. plans to move its headquarters into the building.
Justin Schoellkopf, co-founder and managing partner of Four Rivers Capital, said sentiment about the district has changed quickly.
"There's just such a different look, vibe and tone for where things are and where they're heading compared to just five, six, seven years ago when we first started out," he said.
Tommy Nelson, a senior vice president at CBRE Group Inc. who markets the space in Weir's Plaza for lease, said professional services businesses such as law firms and financial services companies are looking at Knox as a place where they can attract and retain top-tier talent.
"We've been 100% leased for three years, and I still get a call every week or so of tenants looking to get into the building," he said.
The building's largest tenants are law firm Kirkland & Ellis LLP and New York-based private equity firm Fortress Investment Group LLC, according to Nelson.
Part of the draw of Weir's Plaza is its diverse array of ground-floor restaurants that Schoellkopf said are exceeding expectations: Green Point Seafood and Oyster Bar, Village Baking Co., Pizzana and Mister Charles. Schoellkopf called the last of those the hottest ticket in town.
"It’s like a Taylor Swift concert," he said. "You can’t even get a reservation."
Adding more towers to the mix
For the three-tower project at Knox and Travis streets, it was important to BDT & MSD and its joint venture partners to maintain the neighborhood feel and serve as an anchor to the community, Gleizer said.
"If you think about what makes a hotel successful, you know, a hotel bar works when locals want to be at the hotel bar," Gleizer said. "I would take that analogy to every aspect of this project."
The project team kept the old Sid Mashburn store facade along the sidewalk to preserve the walkability and scale of the neighborhood, and also kept the highest points of the project away from the street.
"When you're walking along Knox Street, you're not going to be surrounded by big tall towers, you're going to be surrounded by a setback and a smaller-format building," Gleizer said. "And I think all of that walkability and light and air is what creates an environment that leads these existing tenants to be really successful."
It was also important to have legacy local players involved as partners, she said.
"We thought if we're going to be doing something really special here in this location, we want to bring in people who really understand it, and really understand the Dallas sensibility and what the city really wants," Gleizer said.
The partnership has additional holdings along Knox that have yet to be redeveloped. But Gleizer said whatever more the group decides to build, if anything, it will be aimed at maintaining and honoring the neighborhood.
"We don't want to fundamentally change what makes it so special."
