Dallas CBD's 1700 Pacific Hits Sales Block

As the market knows, the Bank One-Chase Bank merger is just weeks away. "Bank One's upcoming expiration will create one of the largest contiguous blocks of class A space in the submarket," John Alvarado, senior vice president for Dallas-based Trammell Crow Co., says. The value-add offering, sent to 350 investors, lured 10 confidentiality agreements within 24 hours of the marketing kickoff, he tells GlobeSt.com.

The Boston-based CSFB acquired the Downtown office building, assessed at $77.7 million, in a takeover in 2000 by a DLJ Growth Capital Partners fund. Now, it's up for sale as part of a routine portfolio turnover, Alvarado says.

In anticipation of a sale, CSFB spent $6 million in three years to upgrade mechanicals, lobby, common areas and a 34,000-sf retail concourse that's 90% leased to a recognized lineup of national names. The 21-year-old asset has 300 parking spaces underground and a skybridge connecting to a shared parking garage, with 1,410 reserved spaces.

The 1700 Pacific property, 49 stories of pure office, has at least 50 tenants, of which 20% of their leases roll next year, according to Alvarado. The Akin Gump and Thompson & Knight law firms occupy 134,000 sf through December 2013. The building's going rate is $16.50 per sf.

As Alvarado launched the US marketing, TCC's Jack Minter, national director for investment sales, is on a road show in Europe seeking buyers for several properties, including the Dallas CBD gem. Alvarado says it's never happened to him, but the right deal could halt marketing. "Whether that happens here, we don't know," he says of a no-minimum ask. "We just brought it to market."

The plan, right now, is to call for offers in early July and make a close in the fourth quarter. The TCC sales team includes Jack Crews, senior vice president, and Josh McArtor, senior associate, while the leasing responsibilities falls to James Yoder, principal, and Jeff Eckert, vice president.

The 1.1-acre property is at the hub of a wave of office building conversions into residential product, part of a Downtown metamorphosis for a 24-hour CBD with cosmopolitan charisma. The class A building, nudging the trophy category, sits across the street from three under-construction conversions with a combined 573 units and within close proximity to 24 restaurants, of which 21 have opened in the last three years.

"I do believe this will be a heavily sought after and competed for opportunity. There's not many that come on the market like this on an annual basis," Alvarado says.

The 1700 Pacific is debuting just weeks after the death knell sounded on the sale of the 1.1-million-sf San Jacinto Tower at 2121 San Jacinto St. in the CBD. Farmington Casualty Co. of Hartford, CT, reportedly lost a couple buyers after nearly seven months of running the deal, with Boston-based Berkeley Investments being the latest to fall out. Street talk blamed the collapsed deal on myriad problems.