GlobeSt.com EXCLUSIVE: 230,000 SF Going Dark in Dallas CBD

"This is what we do for a living," Roger T. Mullarkey, Colonnade vice president of marketing and leasing, tells GlobeSt.com. "We've run into these scenarios before. We expect to run into these scenarios again. Our whole business is to buy buildings and properties with upside. With upside, there is inherent risk."

Mullarkey can afford to be nonchalant about the FDIC's departure because the Dallas vice president of leasing, Tom Cruikshank, already is talking to prospects, seriously talking and they're large users. "I'm certainly pushing to get a lease in place in the next six months," he says. The plus comes in that it's all contiguous space, floors 12 through 25, and will be the largest such block available in the CBD.

Cruikshank says he will turn on the marketing heat once the 230,000 sf is vacant. The FDIC lease expires March 31. "Anytime a tenant is in place, it's hard to get people focused on the availability," he says. The lesson came from leasing efforts for nearly 300,000 sf at Colonnade I and II in Las Colinas. Less than a year after the properties were vacated, Cruikshank had practically replenished the tenant supply.

The CBD task could be tougher, but Colonnade's Mullarkey and Cruikshank say they're up to the challenge. "There is no set formula," says Mullarkey, "other than we basically throw all our resources at each property from top to bottom." Colonnade is faced with similar challenges to find tenants for large office blocks in Miami and Tampa.

One Dallas Centre, says Cruikshank, has the upper hand in the CBD. Right in front of the 350 N. St. Paul St. high-rise is one of four light-rail stations, the tunnel system is directly below and it's smooth sailing to and from the freeway system. The 588,000-sf building also boasts the highest covered parking ratio to be found in the downtown. As an added incentive, the naming rights are up for grabs.

Colonnade is quoting rates of $15 per sf to $16 per sf plus electric for the 23-year-old building, designed by the renowned I.M. Pei & Partners. They aren't fire sale rates but, the team admits, they are better than most because Colonnade bought the building in December 1998 at such a good price and they realistically reflect the going rate. As owner, manager and leasing agent, Colonnade says it can afford to dicker with the credit-worthy crowd.

The FDIC is heading into 60,000 sf at a GSA building at 1910 Pacific Ave. The move caps the close of its savings and loan cleanup work, according to Cruikshank. The FDIC originally signed on for three years and stayed for 4 1/2 years. Greyhound Lines Inc. stands as the lead tenant, occupying 170,000 sf.