AEW Value-Add Fund Tucks Away Its First Deed

The office/warehouse at 2115 Beltline Rd. in Carrollton is the first acquisition for AEW's newest fund, a value-add play to buy properties with high vacancies, complete lease-ups and flip them for a quick profit. AEW bought the 61%-leased building from Cohen Asset Management of Beverly Hills, CA, marking the property's second sale in 14 months by the same broker, Tom C. Smolik, a senior vice president with Dallas-based TIG Real Estate Services.

Smolik isn't divulging the price for the 15.9-acre holding, assessed at $8.7 million by the Dallas Central Appraisal District. Comparable class B office properties, with higher occupancies, are getting $30 per sf in the metroplex. All Smolik will say about the final price is "both parties felt like they got a fair deal."

Smolik tells GlobeSt.com that he has enough deals in the pipeline to fill the 29-year-old building, designed with a two-story front and 40,000 sf of office space. "Once it's leased, we're going to take it to market again," he says.

In March 2003, Cohen bought the office building from the Des Moines, IA-based Principal Life Insurance Co. At the time, it had just one tenant--PrimeSource Building Products Inc. in 160,000 sf with a 10-year lease. Since then, Smolik placed LE Klein, a wholesaler of gas grills and accessories, into 58,000 sf. "They (Cohen) locked a good price by going in right and added income," he says of an off-market opportunity he laid on AEW's desk because it fit the value-add fund's buying criteria."It was a sale that worked for both parties because of the timing."