458,791-SF Class A Office Sale Passes Closing Table

The closing rolls deeds for the 220,471-sf Waterway Tower at 433 E. Las Colinas Blvd. and the 238,320-sf Canal Plaza at 400 E. Las Colinas Blvd. Bandera, making its first office acquisition eight months after it formed, won an enviable position in getting waterfront properties that will be 81% vacant in September when Fidelity moves the last of the operation to its Westlake campus in nearby AllianceTexas. "That was the attraction for us," Pryor Blackwell, Bandera's founding partner, tells GlobeSt.com. "Frankly, the upside is all out in front of us."

Blackwell says lease-up will be approached with the same attitude as the acquisition, allowing patience to pay off. The properties are positioned in a submarket with a 25.7% vacancy that had the average rent drop $2 per sf in the past year to $18.33 per sf.

"As the market recovers, they will lease. We're not going to chase the cheapest deal in town," Blackwell stresses. "There are just three blocks of space over 150,000 sf ... and we have one of them."

Ben Sumner of Stream Realty Partners LP in Irving will lead the leasing drive for the 13-story Waterway Tower and 10-story Canal Plaza. Blackwell says prospective tenants have already inquired about both buildings. Waterway Tower will remain multi-tenant while Canal Plaza, now fully occupied by Fidelity, will be held in reserve for a single-tenant corporate headquarters user.

Bandera acquired the 22-year-old buildings with a capital partner. "We feel like, and we believe the seller feels like, we've reached a reasonable agreement for what we feel the value of the buildings are for both parties," Blackwell says. Waterway Tower sits on 3.9 acres fronting Lake Carolyn and is assessed at $9.3 million by Dallas County. Canal Plaza, with canal frontage on a three-acre tract, is assessed at $9.8 million. Fidelity acquired the buildings in 1994 and 1995, completing multi-million-dollar renovations on both in 2001.

Blackwell says the closing was delayed a couple times for a variety of reasons, including the wait for a parking variance. Yesterday's closing dragged out a few hours longer than expected, but at the end of the day Russell Ingrum and Gary Carr, CB Richard Ellis Inc.'s powerbroker team, had final signatures for the seller. The buy side was handled by Bandera's partners, Charles Anderson, Tom Leiser and Blackwell.

"There was a lot of interest in the buildings," Carr says, "but the relationship with Lehman, Bandera and the ownership had an impact on their final decision.