The price per sf is the lowest paid for a building along the corridor during this real estate cycle. The estimated replacement cost of the building is $140 per sf.
The building is located at 7200 S. Alton Way in Southgate Business Park and is constructed with precast concrete, consisting of pre-stressed double tee floor system and precast beams and columns. It sits on 6.6 acres plus a secondary parcel of 1.5 acres for a total of 8.1 acres.
It was built in 1981 as the corporate headquarters of Cypress Minerals, which occupied the building for 10 years. For the next 10 years, AT&T and later its spin off Baby Bell, Lucent Technologies, occupied the building.
Now, the building is 52% leased by Kiewitt Construction and the Southeast Corridor Constructors, which are building the T-Rex project at nearby Interstate 25. T-Rex is widening and adding a light rail line to I-25.
The leases, at what DPC calls "strong" lease rates, will burn off in part through 2008. At a minimum, the current leases put the project at operating breakeven for the next two to three years. During that time, DPC expects that there will be a reasonable upturn in the demand for office space, and little new supply.
However, DPC, which hired Doug Wulf of Fuller and Co. to lease the building, isn't waiting for the market to improve. It is immediately making extensive improvements to the main lobby and common areas. Also, they will take an entire floor and subdivide it into 1,000-sf to 5,000-sf spec offices with class A finishes.
Wulf says the building will lease around $14.50 per sf. He expects strong demand from small professionals, such as lawyers, accountants, engineers and others.
Although the building was built as a corporate headquarters, and has in the past catered to large tenants, because of its bay depths it can easily accommodate small tenants, where most of the growth is coming from, Christopher R. King, EVP of DPC tells GlobeSt.com. King has headed all acquisitions, sales and marketing for DPC since 1992.
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