Portshire Buys One, Inks Two More Contracts

Portshire, the corporate general partner for the newly formed partnership, hasn't bought in its homeport for several years. The times, though, have opened the doors to an investment group chasing "good quality, office buildings in currently depressed markets," says David Dunham, Portshire's vice president and treasurer. The DFW metroplex is leading the play, but scouts also are looking to the southeast and all across the southwest for opportunities in slumping suburban office submarkets in major metros.

The flagship acquisition is an empty 206,860-sf building at 2350 Lakeside Blvd. in Richardson's Telecom Corridor. Seller Granite Properties Inc. of Dallas acquired the asset in early April after buying a note and foreclosing on Elman Investors Inc. of New York City. Granite's plan was to upgrade the common areas and warehouse the site until the market improved. The longtime business relationship between Granite's Jim Kirchhoff and Dunham led to general talk about the building and then swung into serious talk that delivered a closing in 45 days.

"We were putting our plan together to mothball the building and market it to large users," says Gregory P. Fuller, Granite's managing director in Dallas. Portshire's all-cash offer quickly convinced the owner to flip the deed to a seller with "a longer-term horizon" than Granite, he tells GlobeSt.com.

"It is atypical for us to sell buildings without holding them for a long period of time," says Kirchhoff, who like the others isn't talking about the selling price. All Dunham will say about the selling price is that the purchase fit the partnership's criterion to only acquire at "prices substantially below replacement cost."

For the second consecutive year, Dallas Central Appraisal District lowered the levy on the empty 18-year-old building, once occupied by Nortel Networks. Just two years ago, the 6.4-acre holding was assessed at $23.7 million, fell to about $13.1 million in 2002 and now is $7 million for the 2003 tax rolls.

Dunham says the plan going forward is to actively market the building to a large user and reserve some space for multi-tenant use. Granite Properties will manage and lease the building.