Dallas Downtown Historic District
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Dallas, TX8BR2BA1,800 sqft$3,000/mo lease
Worth acquiring. The numbers clear our bar with room to spare.
Operating profit, before the one time startup capital ($12,000), which the ROI and payback above already account for.
Executive summary
SPARSE COMP MARKET - comps based on city-wide benchmark, not the immediate area. Low competition can be positive (less ADR pressure) or negative (low demand); operator should verify live demand drivers directly. Comp-validated tier should be weighted less. The sleeps-16 downtown format is genuinely scarce, so the peer set is drawn Dallas-wide (West/East Dallas group homes plus inner suburbs) alongside the two professionally-run downtown operators (Mint House/Kasa, Glam Paradise). Anchored to Revarity portfolio average for 4BR units: ADR $270 (graduated seasonal discount applied) x 62.5% occupancy [match: Butler Brothers (Dallas)]. Reflects Revarity-operated economics across all years across all units, not market-derived comp estimates. Conservative underwriting - peak periods will outperform, shoulder periods will match or underperform. On the merits this clears our bar with room to spare on per-night economics: the Butler Brothers building stack (pool, gym, theater, game room, concierge, secured garage) is a real differentiator versus suburban group homes, and downtown proximity to the Kay Bailey Hutchison Convention Center and Fair Park supports event-driven premiums. Two watch-items dominate - demand shape and regulation. Independent TTM actuals for bed-matched entire homes show ~20% occupancy, far below the 62.5% anchor, a reminder that large-format units book in lumpy, event-driven bursts, so treat the anchor as professionally-managed upside rather than a floor; note also that the June-July 2026 World Cup surge is now behind us, so the near-term calendar leans on the fall State Fair/convention season. Regulation is GRAY: STRs are permitted in downtown multifamily zones, but the 2023 ordinance (registration plus a 5%-of-units cap in multifamily buildings) is in active litigation and the marketed 'sleeps 16' must be reconciled against the building's real floor-plan bedroom count and Dallas occupancy norms. Net read: pursue it, but make lease sign-off contingent on the STR clause, building cap headroom, and a bedroom-count/occupancy check. Note: Comp ADRs shown are base nightly rates. Y1 Net calculations include separate cleaning fee revenue from Revarity locked constants.
The money model
Three honest scenarios: bear (conservative), base (realistic), and bull (stretch). Base is what we underwrite to.
Seasonal demand & event calendar
What drives the peaks: named local demand catalysts.
Live comps: what the market actually shows
10 of 10 listings left out, their nightly rate wasn't clear
- Spacious, comfortable beds
- Very clean & professionally maintained
- Great host communication
- Location rated lower (4.3) - residential, drive to core
- Professional, hotel-grade operation
- Downtown location & valet parking
- Elevator issues noted
- Easy seamless check-in
- Great value for large groups
- Pool & game room highlights
- Good space to spread out
- Huge, hotel-like for families
- Clean & well-kept
- Great customer service
- Events allowed (up to 50)
- Fun retro theme/arcade
- Great for large groups
- Hot tub & pool a hit
- Value & hospitality
- Big private space for groups
- Hot tub & patio highlights
- Extra fees over 10 guests
- Luxury finishes & spotless
- Pool/spa loved
- Great for groups
- Top 10% reviews in area
- Brand-new & connected for big groups
- Close to Deep Ellum/Downtown
- Consistently 5-star
- Great communication
- Central downtown base
- Good for group getaways
- Near Holocaust Museum/JFK Memorial
- Pool/spa & game room a hit
- Exceptional (9.6/10)
- Spacious for 14-16 adults
- Suburban (Plano) location
Amenities: what it has, what it's missing
Amenities the top comps have that this unit is missing, ranked by revenue impact.
Hot tubs/spas appear in the majority of the winning group-home comps (Retroland, XL Group Home, Lake Highlands Estate, Plano). It is the biggest single amenity the subject lacks - but in a downtown high-rise a private hot tub is often infeasible, so treat as 'add if the building permits a balcony/roof spa,' otherwise lean on the building pool.
A few premium comps advertise EV charging; downtown group travelers increasingly expect it and the secured garage may already support an outlet, making this a low-cost differentiator.
Cost, ADR lift and rate targets are estimates derived from the live comp set. Advisory only, never part of the verdict, tier, or Year 1 math.
Regulatory & landlord read
Is short term rental legal here, and who owns/manages the building.
City of Dallas STR Ordinance (2023) - registration under Dallas City Code + zoning amendment restricting STRs to multifamily/commercial/mixed-use zones (banned in single-family); enforcement of the 2023 zoning ban currently enjoined by court order. See https://www.getchalet.com/rental-regulations/dallas-tx and Avalara summary https://www.avalara.com/mylodgetax/en/blog/2023/12/judge-blocks-enforcement-of-new-dallas-short-term-rental-law.html
Pending: 2023 zoning ban on STRs in single-family zones is enjoined; City appealed and 5th Circuit (Feb 2025) sided with the Dallas STR Alliance, preserving operators' rights pending final resolution; City has signaled intent to enforce restrictions; regulatory risk remains elevated; 2024 nuisance-ordinance amendment added STR-specific triggers (3+ verified complaints/12mo = suspension)
Flags: Historic only: prior pre-redevelopment owner 'Ervay Lofts LP' filed Chapter 11 (2011) and was sued by the City of Dallas over code violations on the then-vacant building (2010); both predate the completed $55M Butler Brothers conversion and are not attributable to current operations
[Cached: 2026-05-25] STR explicitly permitted per lease; building management confirmed active in-building STR operators with no HOA ban.
Seasonal pricing rate card
Suggested ADR targets by season and the named local events that drive the peaks.
| Period | ADR target | Min stay | Note |
|---|---|---|---|
| State Fair / Red River Rivalry weekends (late Sep–Oct) | $360–450 | 2–3 nights | Peak fall event demand near Fair Park/Cotton Bowl — charge to the top of the range. |
| NYE / winter holidays | $340–420 | 3 nights | Downtown holiday & NYE draw supports a premium and longer minimums. |
| Convention weekday (spring/fall) | $260–320 | 2 nights | KBHCC group business; midweek corporate is the unlock above the hotel ceiling on space. |
| Fall/spring weekend (non-event) | $290–340 | 2 nights | Standard leisure-group weekend rate. |
| Winter weekday | $200–240 | 2 nights | Softest window — respect the ~$92–200 downtown hotel ceiling. |
| Mid-summer weekday (heat) | $210–250 | 2 nights | Post-World-Cup summer lull; discount to hold occupancy. |
Cost, ADR lift and rate targets are estimates derived from the live comp set. Advisory only, never part of the verdict, tier, or Year 1 math.
Neighborhood trajectory
Where this submarket is heading: capital, prices, and the ADR ceiling.
Downtown Dallas is in a durable redevelopment cycle — office-to-residential conversions, the $3.7B convention-center expansion, and the announced $5B Reunion District point to a positive 5–10yr land-value trajectory. Near term, apartment oversupply softens rents (good for the operator's cost basis) while capping ADR growth until the 2027 supply pullback.
- Butler Brothers Building redevelopment (the subject asset, 500 S Ervay) · $55M (completed conversion to ~250 apartments + hotel/retail)
- Hunt Realty 'Reunion District' · $5B (announced) (announced master-plan, adjacent downtown)
- Kay Bailey Hutchison Convention Center expansion · $3.7B (targeted completion spring 2029)
- The Cedars corridor (S Ervay) redevelopment · $10B+ active/announced (multi-project, ongoing)
- Four Seasons Hotel & Residences, Turtle Creek (under construction, 118 residences, 2027)
The analyst's take
GREEN / Tier S - strong downtown large-group economics on the portfolio anchor, but verify occupancy shape and the STR-permit cap before signing.
- Butler Brothers on-site amenity stack (pool, gym, theater, game room, concierge, secured garage) differentiates vs suburban comps at little marginal cost
- Scarce true downtown sleeps-16 supply - fills a group/convention niche few competitors serve
- Fall demand: State Fair of Texas, Red River Rivalry, and year-round KBHCC conventions drive event premiums
- Soft lease market (concessions/free-rent) lowers the effective rent basis at signing
- Professional management (Asset Living building + Revarity ops) supports hotel-grade guest experience
- Regulatory: 2023 STR ordinance in litigation; multifamily 5%-of-units cap could block or unwind the permit
- Demand shape: vendor TTM actuals imply ~20% occupancy for bed-matched entire homes - large-format units are lumpy/event-driven
- Occupancy-limit mismatch: 'sleeps 16' may exceed Dallas per-bedroom occupancy norms if the physical unit is a 1-2BR floor plan
- Metro apartment oversupply (~16k 2026 deliveries, ~12% vacancy) pressures near-term ADR
- Downtown property-crime perception (car break-ins/MV theft ~3x national) can surface in reviews
What guests say: POSITIVE THEMES (across ~30 reviews from the 3 closest comps): - Space for groups: everyone gets a bed, big common areas — the core draw for 14-16 guest bookings. - Location/walkability: guests value proximity to downtown, the arena, restaurants and the convention core. - Cleanliness & professional operation: repeat praise for spotless units and seamless self/valet check-in (esp. Mint House/Kasa). - Value vs hotels: groups highlight cost-per-head advantage over booking multiple hotel rooms. - Responsive hosts/management: quick issue resolution called out repeatedly. NEGATIVE / WATCH THEMES: - Elevator reliability: recurring elevator downtime complaints in downtown high-rise stays — operational watch-item for a Butler Brothers unit. - Nighttime safety perception: 'not the safest to walk around at night' appears in downtown reviews despite good proximity. - Maintenance misses: isolated reports of a non-working toilet / AC — pre-arrival checks matter at 16-guest occupancy. - Location score drag: one strong comp rated location 4.3/5 (residential/quiet), a reminder demand skews to walkable cores. - Parking/valet confusion: clarify garage access instructions to avoid check-in friction.
Risk & compliance checks
Every deal breaker we screen, scored on this property.
Roach and mold complaints confirmed in Butler Brothers Building STR guest reviews; no documented management treatment response found.
Downtown Dallas crime is declining with dedicated police presence, but citywide rates remain above national average; nuisance-driven risk persists.
Active Airbnb ecosystem confirmed in-building, but management reviews reveal STR guest complaints about building cleanliness, broken amenities, and a single-maintenance-person staffing gap.
[Cached: 2026-05-25] Hotel ceiling well-supported; 8BR STR ADR sits comfortably above the downtown 3-star median.
Butler Brothers published units top out at 1,683 sqft (1–2BR); no true 8BR long-term comp exists at this address or within 0.5mi.
No eviction litigation or bankruptcy found against landlord, but building management quality is rated 2.8/5 stars with documented responsiveness failures and a severely understaffed maintenance team.
Butler Brothers has an established in-building STR ecosystem with multiple professional operators; 8BR is a rare configuration within 0.25mi but broader STR density is moderate.
[Cached: 2026-05-25] Five-plus quantified demand drivers confirmed within 5 miles, including Convention Center, American Airlines Center, and multiple major employers.
[Cached: 2026-05-25] Weekend party noise from STR guests in-building is the dominant nuisance risk; highway proximity is secondary.
[Cached: 2026-05-25] Downtown Dallas multifamily pipeline is active; some new supply delivering within the submarket over the next 18–24 months.
Tier 3 — not run. Trigger 'Go Deeper' to add this domain.
Tier 3 — not run. Trigger 'Go Deeper' to add this domain.
Sources: every figure links back (26)
Open any to verify the data yourself.
- 01Wanderlog — Butler Brothers Building STR guest review · "The most disgusting was having to kill roaches our whole stay!"
- 02ApartmentRatings — Butler Brothers Building · "red mold developed in the shower in a matter of weeks, and our AC never worked right"
- 03Pest Sentinel — Dallas Bed Bug Risk · "The current city-wide risk score is 59/100 — MEDIUM."
- 04DPD Beat — Dallas Police Department · "in 2025 a dedicated patrol division was created to focus on the unique concerns in a large city's urban core"
- 05PODS — Safest Neighborhoods Dallas 2026 · "In 2024, major crime categories like homicides and assaults declined by over 26 percent."
- 06CrimeGrade.org — West End Historic District · "The Cost of Crime per resident in West End Historic District is $882 per year"
- 07Airbnb — Butler Brothers Building page · "The building is located at Dallas Downtown Historic District in the heart of Downtown Dallas."
- 08Regal Stays — Butler Brothers Check-In Guide · "Building Name: Butler Brothers Building Address: Dallas Downtown Historic District, Dallas, TX Dallas Downtown Historic District"
- 09ApartmentHomeLiving — Management response · "we do not monitor residents who choose to utilize the central location of Butler Brothers Building as an Air BnB location"
- 10Cached from prior Revarity research · 2026-05-25
- 11Apartments.com — Butler Brothers Building · "Butler Brothers Building has rental units ranging from 817-1683 sq ft starting at $2100."
- 12ApartmentFinder — Butler Brothers Building · "This apartment community was built in 1910 and has 9 stories with 237 units."
- 13SafeButler — Butler Brothers Building · "Rated 2.8 by 176 residents."
- 14LoopNet — Dallas County tax records · "BUTLER BROTHERS BUILDING CONDO ALL BLK F/100 ACS 2.5448 HOTEL AUXILIARY UNIT"
- 15VRBO — Downtown Dallas condo inventory · "Choose from 443 properties and rent one of the best condo rentals in Downtown Dallas"
- 16MarkerDB — Dallas Downtown Historic District Zip Code Guide · "This district houses the headquarters of several Fortune 500 companies"
- 17Airbnb comp #1 · Modern 4BR New Build | Perfect for Groups
- 18VRBO comp #2 · Mint House Dallas Downtown by Kasa (5BR/3BA, Sleeps 15)
- 19VRBO comp #4 · Modern Home Dallas- 17+ (6BR/3BA, Sleeps 25)
- 20Airbnb comp #5 · Retroland near Downtown Dallas (4BR/9 beds, Sleeps 16)
- 21Airbnb comp #6 · XL Dallas Group Home, Grand Patio w/ Hot Tub
- 22VRBO comp #7 · 4BR Dallas Family Estate | Heated Pool + Hot Tub | Sleeps 16
- 23VRBO comp #8 · Connected Double Townhomes - Six Bedroom Villa, Sleeps 16
- 24Booking comp #9 · Glam Paradise 5BRs Downtown Dallas
- 25VRBO comp #10 · Heated Pool & Spa! Pool Table! Sleeps 14-16 Adults
- 26STR ordinance / regulation
Figures shown are modeled projections from our analysis engine, not guarantees. Verify everything before committing. Some listing data provided by RentCast.
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