Macfarlan and Morgan Stanley Real Estate Fund III acquired the Brookhollow portfolio, positioned in Arlington and Grand Prairie, in 1999 under the investment partnership of MSDW Southwest Partners. Last year, Brookhollow One, a 98,000-sf structure at 2301 E. Lamar Blvd. in Arlington, bottomed out when the lead tenant, St. Paul Life Insurance Co., pulled out. Occupancy dipped to 30% from 99%. Despite the tough times of the office market, the leasing team has edged up occupancy to about 40%, but more time is needed to get all three structures back to their mid-1990s level of being in the low- to mid-90% range, Waggoner says. He believes the team will make headway this year and make it happen in 2003. Until then, Macfarlan has bought some time with the refinancing.
The short-term facility has been provided through Wells Fargo at a rate of 2.5% over LIBOR. There is no floor rate, Waggoner confides.
In addition to Brookhollow One, the portfolio consists of the 119,000-sf Brookhollow Riverside at 2505 State Highway 360 in Grand Prairie and 145,000-sf Brookhollow Two at 2221 E. Lamar Blvd. in Arlington. Brookhollow Two is about 89% occupied and Brookhollow Riverside, 70%.
Waggoner says the trio is in good shape so no money has been pulled from the refinancing for renovations although some has been set aside for TIs for new deals or lease rollovers. What the refinancing does do, he emphasizes, is underscore Macfarlan's commitment to Arlington and Grand Prairie. Macfarlan, also the property manager, holds the distinction of owning the highest-profile class A buildings in the submarket. Stream Realty Partners is the leasing agent.
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