Dallas CBD Toasts Its Largest Lease This Year

"They looked at everything, but at the end of the day they valued the relationship that we've had all these years," says Randy Kohana, principal of New York City-based RAK Group and owner of the financial district high rise. "Sometimes, it's better not to move."

Kohana tells GlobeSt.com that Bank of America's existing lease was good through May 2005 in the one-million-sf structure at 1201 Main St. Four months of serious negotiations produced a "market-rate" deal for class B-plus space with a street price of $14.75 per sf plus electric, he says.

Bank of America, shopping the market for nearly two years, cut a straight-up deal with options for expansion space. "I anticipate them growing in this building over the next year," Kohana says. "It's a very strong commitment from a very strong tenant ... and it's the best thing that's happened in Dallas in a long time."

Bank of America houses administrative support services in 13 floors of the 34-story, 82%-leased building. The deal has the potential for retail space, but that clearly hinges on what other tenants do, says Hunter Blanks with CB Richard Ellis Inc. in Dallas.

More so than the retail space is the undertone that more office area will be taken down by One Main Place's lead tenant. "A tenant that size and with that amount of space downtown is constantly shifting," Blanks says.

In a press release, the bank president indicated a space shift could be at hand. The just-signed deal "will provide us with the flexibility to address the future operational needs of the bank," Kathleen Gibson, Bank of America's president, says.

The bank's short list was down to three to five buildings, mostly CBD properties. "You've got to be aggressive with a deal that size," Hunter Blanks with CB Richard Ellis Inc. in Dallas, says. "We tried to keep the tenant and not give away the store."

Bank of America's decision-makers were particularly focused on the ongoing upgrades to the 36-year-old building versus what is available in a new building. Kohana says RAK has invested $8 million to date in renovations to basically gut the structure and improve mechanicals, lobby and common areas.

If a new building was part of the consideration, it's a safe bet that the location was Victory. It's widely known around town that Ross Perot Jr.'s team is courting every large tenant in the CBD to jumpstart an office building as a neighbor to American Airlines Center, the W Hotel & Residences and planned multifamily and retail projects.

Despite Victory's proximity, Dallas leaders, like Mayor Laura Miller, considered the renewal key to the financial district's stability. "The financial district is an important component in maintaining the vibrancy of the Dallas CBD," Miller says in the press release. "It is important for both stakeholders in Downtown such as RAK Group, as well as the whole city, that Bank of America is continuing its strong presence at One Main Place."

The RAK Group's team from CBRE included Tom Ligon and Matthew Wieser plus Blanks. Bank of America's negotiators were Phil Puckett, Brant Bernet, Chris Hermann and Joe Cicardo, all with Trammell Crow Co. in Dallas.