DALLAS-The 1.3 million-square-foot 1401 Elm Street office building has ended up in the hands of Mukemmel Sarimakci, a Turkish developer. The structure, which was shuttered in early 2010 due to lack of tenants, was offered at a $19 million ask, but reports indicate Sarimakci snared the asset for half that amount and plans to invest $125 million in its renovation.

This particular building has some construction challenges,” notes David Glasscock, executive vice president with Colliers International Investment Services Group in Dallas. Glasscock worked with Jim Sobel of Colliers International in San Francisco to represent the buyer, operating under the name 1401 Elm Street Holdings LLC and the two sellers. SCI ROEV had possession of the asset’s 864,702-square-foot tower, while LNR Partners had control of the building’s lower nine floors, totaling 428,884 square feet. 

Glassock tells GlobeSt.com that the tower and base ownership were split for tax reasons and that the sale required two different contracts  and closings.  The lower part of the building went into foreclosure in early 2010 and was taken over by LNR.

The Dallas Morning News reported on Jan. 15, 2010 that the building was being shuttered due to the foreclosure and low occupancy which was at 20% and still dropping.  The reasons for the occupancy were partly because the CBD itself was suffering low occupancy rates.  Another reason, according to the article, was because of competition from newer downtown and suburban office buildings.

The 52-story building was built in 1964 and, during its more than 40 years of existence, was known as First National Bank Tower and as a home for Bank of America. For a long period of time, the building had the distinction of being the tallest building west of the Mississippi.

Despite the construction challenges inherent in the structure, Glasscock says the building attracted many interested buyers. Ultimately, he says, Sarimakci was able to offer the cash to get the deal done, as well as ambitious plans for the structure. “In this marketplace, it can be difficult to get financing on a project like this,” he points out. “This buyer showed he had the resources to buy, and to renovate.”

A recent article in the Dallas Observer explained that the sale was contingent on the city of Dallas’ approval of $30 million in TIF funds for the building’s restoration. That request was unanimously approved in early August 2011, allowing the sale to proceed.  The developers plans to convert the asset into mixed-use office, retail and residential.