just as promised,

The new owner is starting out a value-add play with a 58%-leased high rise and less than 8% of the in-place leases up for renewal this year, including the Tower Club on the 48th floor of the 50-story landmark at 1601 Elm St. "We are going to be very flexible in developing terms that will benefit any tenant in the market," Zaya Younan, chairman and CEO of the Los Angeles-based investment group, stresses to GlobeSt.com. "And, we will make all the necessary effort to make sure the Tower Club stays in the building."

Younan is keeping locally based Stream Realty Partners LP in place to lease the building, which presents his largest leasing challenge in three years of office acquisitions in Greater Dallas. "We're a much larger company now than before. It's less than 10% of all we own in Dallas so we are very comfortable with that," he explains. "It's a class A-plus in a great location in a market that is recovering. We do have work to do, but we are not afraid of the challenge." The plan of attack includes "lots of incentives and large TIs," he says, adding his in-house team will be managing the new deed just as it always does.

Younan says Stream's local market knowledge was the dealmaker during the face-off for the leasing contract. "They know the market very well. If Stream continues to perform," he says, "we might give them another."

New York City-based Morgan Stanley teamed with local firm, Macfarlan Real Estate & Investment Management, in 2002 to buy an 80.5% stake in the asset for $95 million, according to published accounts about the deal's closing. In the past year, Morgan Stanley has sold most office buildings in Austin and Dallas that it bought with Macfarlan as MSDW Southwest Partners. The Holliday Fenoglio Fowler LP team of Andrew Levy and Todd Savage in Dallas brought 25-year-old Thanksgiving Tower to market last November. Sources confirm the deal was inked for less than $100 per sf.

By his calculations, Younan says he's now the city's largest private owner of class A office space with more than 6.2 million sf and second largest in that category statewide. Younan made the close with a short-term, floating-rate loan for $106 million from Calabasas, CA-based Countrywide Commercial Real Estate Finance, which had senior vice president Kyle Jeffers leading the team. Richard Scandaliato of RKM Capital in El Segundo, CA brokered the financing. Younan says he plans to refinance to permanent, fixed-rate financing once the Thanksgiving Tower's occupancy is stabilized.

Younan's historically been a buyer and not a seller of its class A properties, but Thanksgiving Tower definitely is a keeper. "You can never replace a beautiful asset like that very easily," he says.

Instant Insights /

Younan Sails Through Downtown Tower Buy

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