GlobeSt.com UPDATE: Cornerstone's Ready to Buy

Cornerstone, the Hartford, CT-based real estate arm for MassMutual, is driving a hard play in Dallas with the capital and the wherewithal to make deals happen. The acquisition of the 395,910-sf Premier Place at 5910 N. Central Expressway was closed by collapsing a single-asset REIT of Irving, TX-based Archon Group and international financier, George Soros, rolling the cost into the price and putting up the balance in cash, George Helf, Cornerstone's vice president of acquisitions, confides to GlobeSt.com.

Helf says the Dallas office of Holliday Fenoglio Fowler LP, which brokered the class A sale, is now following through by putting together a financing package with a 60% leverage. He is tight-lipped about the selling price, even though GlobeSt.com's real estate sources have pegged the purchase at slightly less than $55 million.

Helf did confirm talk on the street that the lease rollover in the 86%-occupied building was a particular concern for any buyer. In the next three years, 60% of the leases will turn. That coupled with a health club tenant, despite its prestige, made some buyers nervous. "At this point in the cycle, we thought it was a risk worth taking," Helf says.

Jones Lang LaSalle is holding onto the property management contract for Premier Place, but leasing duties have been handed to Transwestern Commercial Services' Dallas team. The first large order is lining up tenants for three full floors that will be vacated by Dallas-based American First Insurance.

With Premier Place neatly tucked away, Helf is shopping for other comparable office product. He's looking in Dallas, Las Colinas and Austin as well as Atlanta, Orlando, Phoenix and Broward County, FL. The keys are quick job growth and "not too many barriers to entry," he says. Cornerstone is looking to spend $500 million to $600 million across the board, with no one city meriting a quota. The strike zone is class A and A-minus and class B in class A locations, in the $25-million to $45-million range and leasing holes upward of 50%.

Helf says empty or nearly empty office buildings aren't to his liking, as he saw at two properties in Las Colinas. But, he admits he's looking hard at the Unitrin Building at 10,000 N. Central Expressway and the Millennium, which is being marketed by CB Richard Ellis Inc.'s Gary Carr and Russell Ingrum.

Helf says Cornerstone came back to Dallas for its "rotational strategy. Dallas is the poster child. It goes down first, goes really low and when it comes back it will do so quickly and strong." Helf says his marching orders are "to try hard" to get more deals done before the calendar turns.