$6M Office Buy Primed for Repositioning

Younan's $6-million check bought the 116,000-sf Sterling Bank Building, a class B asset at 1250 Mockingbird Lane with a 70% occupancy that's tailor-made for the buyer's usual repositioning play to fill holes practically simultaneously with acquisition. An 18,000-sf tenant is in hand and close to joining a rent roll with solid footing for the next 10 years, Zaya Younan, chairman and CEO, tells GlobeSt.com.

The building, acquired from Dallas-based Mockingbird Associates LP, will continue to carry the bank's name although it occupies just 12,230 sf of the six-story building. Parkland Hospital, the lead tenant, occupies 45,000 sf and the Texas attorney general's office has 11,102 sf.

Younan obtained a $5.2-million, five-year loan, with $500,000 earmarked for a rehab, through North Houston Bank in Houston. The lobby, interior common areas, outdoor cafe and landscaping will be upgraded by year's end while the new leasing team, Lincoln Property Co., woos the market with the goods. Younan says the strategy will be to offer "different incentives to the broker to bring us the tenant." He believes the new leasing team and the bait will boost occupancy as high as 95% "very shortly."

Younan is confident that the quoted rate of $14.50 per sf can easily be achieved in the marketplace. "It's one of the nicest buildings in that submarket," says the owner of the neighboring 152,500-sf One Brookriver Place. "The Mockingbird acquisition is part of our strategic plan to continue our momentum in the Stemmons market." Plus, it doesn't hurt that he can achieve economies of scale by owning neighboring assets.

Younan, owner of the 303,720-sf One Greystone Center at 3010 LBJ Freeway, isn't say what building comes next, but there is a fourth under contract. That transaction is expected to close in 60 days, he says, noting that the deal most likely will satisfy this year's one-million-sf buying goal in Dallas.

Darrell Betts and Scot Farber, the Grubb & Ellis Co. senior investment sales team, represented buyer and seller. Since its founding 18 months ago, Younan Properties has acquired more than 20 office US buildings, totaling more than 2.1 million sf, and sold 480,000 sf in eight structures. The hard focus in Texas is supported by the firm's research that shows the market has bottomed out and is poised to climb.