AmeriVest Woos Brokers for $22M Buy

For now, all eyes are on that contract. "We are disappointed to lose the management, but that's their model to manage in house, but we are interested in the leasing," says Malcolm Ross, regional leasing director for Jones Lang LaSalle in Dallas. He confirmed to GlobeSt.com that they're already talking.

But then, so are others, says Kim P. Boswood of AmeriVest's investor relations. "We are in talks with several brokers," she says. The plan is to outsource although AmeriVest has put in Brett Harner as regional leasing director to oversee the activity for Chateau Plaza and its only other Dallas-Fort Worth property, Parkway Center II in Plano.

Chateau Plaza hit the market in early summer. Then, word on the street is that it was pulled. Early last week, AmeriVest, a niche player for small to mid-size tenants, finalized the deal. Chateau Plaza was bought at a first-year cap rate of more than 10.5%. The $22-million price tag or $128 per sf was paid with $15.4 million loaned by Fleet Bank and the balance in cash.

Sold by the Archon Group of Irving, TX, the 18-story building has 10 tenants. Dean Foods, the lead tenant since 1998, occupies 120,607 sf, a problem spot for the new building owner. The lease expires in December 2005, but carries an early termination clause that could allow an out by December 2003, with a stiff penalty.

Dean Foods' broker, Harold Ginsburg of Harold Ginsburg Inc. of Dallas, did not return a telephone call for comment. But Boswood did comment, repeatedly emphasizing that Dean Foods as a tenant just isn't the right size. She wouldn't go so far as to say if talks are under way for an early out. Chateau Plaza's average tenant size is 16,700 sf, with Dean Foods; without, it is 5,200 sf. AmeriVest's target audience is 2,000 sf to 4,000 sf.

Once Dean Foods does exit, there is no doubt what will happen, according to a prepared statement from AmeriVest's CEO William Atkins. The plan then will be to upgrade and market the premier office space to smaller tenants. For now, there will be some interior changes so that the tenants can have the amenities that AmeriVest likes to provide, Boswood says.

There's no question about AmeriVest's ability to turn a profit from the 16-year-old building at the intersection of McKinney Avenue and Fairmount Street in Uptown/Turtle Creek, a submarket that attracts tenants with its tony corporate addresses and high-brow lifestyle due to its proximity to the downtown and the freeways. "To acquire a building of this quality in one of the best submarkets in Dallas for small and mid-size tenants represents a tremendous opportunity," Atkins said. "We believe that Chateau Plaza is the best small tenant building in the market and will evolve to an appropriate tenant mix over time."

Evan Stone of Eastdil Properties in Dallas represented Archon. AmeriVest used an in-house representative to broker the purchase.