Capital Commercial Investments Plans Upgrades on Former American Airlines HQ
The opportunity to acquire an airport-peripheral office campus within a diverse economy was compelling and Capital Commercial executed the acquisition well, given the unusual economic circumstances.
FORT WORTH—The three-building 1.39 million-square-foot office campus that formerly served as the world headquarters for American Airlines Inc. and American Airlines Federal Credit Union has sold to Capital Commercial Investments Inc. for an undisclosed price. The 40-acre campus is one of the few large blocks of contiguous space in the metro.
Transwestern Real Estate Services’ investment sales and mortgage finance team, including managing director Mike Hardage, facilitated the transaction to Austin-based Capital Commercial Investments in conjunction with Troy Barron from Weston Commercial Real Estate. Transwestern principals Alan Harrington and Steve McCoy, and senior analyst Brooks Creech provided additional support.
“We are pleased Capital Commercial Investments saw the immense value in this iconic property,” said Hardage. “Dallas-Fort Worth has a prolific track record as a top US metro for corporate relocations. As the former home of American Airlines, a renowned Fortune 500 company, the opportunity to acquire an airport-peripheral office campus within one of the world’s most dynamic economies was very compelling. The company did an outstanding job of executing the acquisition given the unusual economic circumstances.”
The 40-acre campus, which also includes 6.33 acres of undeveloped land, is located at 4333, 4255 and 4151 Amon Carter Blvd., just three miles from Dallas-Fort Worth International Airport and equidistant between Dallas and Fort Worth. Additionally, the Trinity Railway Express commuter train and station are about a 15-minute walk and offer 30-minute rides to both cites.
With the sale, Transwestern takes over leasing and property management on behalf of the new ownership. Hardage offered insights into what types of tenants would be a good fit for the behemoth space. This would include large tenants seeking exposure to both Dallas and Fort Worth labor markets, he says.
“Healthcare entities, technology firms, financial institutions, government entities and large fulfillment companies are the right tenants,” Hardage tells GlobeSt.com. “We needed to find an elephant hunter. Those are big floorplate buildings and they do not accommodate 2,000-foot users. The buyer could not be afraid of that, and the challenge was finding a company willing to seek out those huge companies.”
The buildings feature irregular dodecagon-shaped floorplates with four wings of office space affording 12 sides of glass windows. Additionally, the property has an underground pedestrian tunnel connecting all three buildings.
Prior to the sale, Transwestern’s in-house engineering and capital markets experts collaborated to identify the property’s maintenance needs, in addition to exploring options for debt and equity underwriting. With the purchase, Capital Commercial Investments plans to renovate the entrance lobbies, build out model suites and common areas, and enhance existing lighting throughout the buildings.
Transwestern’s Duane Henley and Nathan Durham will provide leasing services, with property management led by Becky Dennis.
DFW office rent growth began to accelerate in first quarter to 4 to 5% year-over-year, outpacing inflation after a period of cooler growth, while absorption and leasing activity have both been strong during the last eight quarters, according to a first quarter report by Transwestern. While new build-to-suit and spec projects have broken ground, there are no indications that office has been overbuilt this cycle, says the report.
Taken together, the DFW office market appears to have been entering a new expansionary phase that was arrested by an external shock. Long-term effects on the office sector will only become clear in the coming months as economic impacts ripple through to commercial real estate and more information becomes available. Nevertheless, Transwestern believes that the office market may experience a contraction in the coming quarters, but not a correction, resulting from price dislocation and misallocated capital.