GlobeSt.com EXCLUSIVE: Dr. Lee Marches Into Texas for 685,661 SF

Lee's first Texas purchase is the 235,058-sf Atrium at Collin Ridge at 500 N. Central Expressway in Plano and 450,603-sf Twin Towers at 8585 N. Stemmons Freeway in Dallas. The sale leaves the JV partners with just one asset to hawk from a six-year-old, $265-million acquisition of the Octagon Portfolio from Sinar Mas of Indonesia. The 1301 Fannin St. in the Houston CBD, expected to draw $125 million, hit the streets two weeks ago.

Lee was lured to Texas by Marc Renard, executive director for Cushman & Wakefield of California Inc.'s Los Angeles office, who ran the Atrium and Twin Towers deal for the JV sellers and has sold "eight or nine" office buildings to the L.A. investor in the past 10 years. "At first, there was some hesitancy, but after he was educated about the market's intrinsics he saw the potential," Renard tells GlobeSt.com. "It's an indication of the positive trends in the Dallas market and the opportunity that Dr. Lee saw in purchasing at this time."

Lee's Jamison Properties Inc. owns more than 60 buildings with a market capitalization in excess of $1 billion. The portfolio now totals about 13 million sf of office space, primarily in Downtown L.A., Long Beach, the Westside and San Fernando Valley.

Renard says the Atrium-Twin Towers package "was highly sought after" in a 60-day, no-minimum marketing. Assisting Renard on the sales front were Andrea Peskind, C&W's senior director in Dallas, and Brad Thornburg, associate director.

The 80%-leased Atrium at Collin Ridge, built in 1984 on 8.3 acres, is assessed at $22 million by Collin County and the 86%-occupied Twin Towers is a 33-year-old development on 13.5 acres with a Dallas County assessment of $25.7 million. Matt Root, a Shidler Group partner, confides that 15% to 20% of the leases will roll annually, but none in the near term.

Root plans to hold the proceeds and evaluate additional purchases in Dallas, Austin and Houston. He says "serious talks" are under way for a few properties, but no contracts have been placed although he's hoping for a closing by year's end.

In the past month, the Shidler-Angelo, Gordon partnership has sold three properties in California for $124.7 million and now the double in Dallas. "It's a good time to be a seller," Root says.

The JV sold the first Octagon Portfolio asset, 801 Figueroa in L.A., within a year of its purchase in 1998. In the past 2.5 years, the partners sold the Pasadena Hilton Hotel and a neighboring office tower and the Melrose Hotel in Dallas. The upcoming sale in Houston, Root says, will be the moneymaker. The CB Richard Ellis Inc. team in Dallas of Gary Carr and Russell Ingrum will call for offers in two weeks. The 800,000-sf building, with an 88% occupancy, is half leased to Dallas-based ExxonMobil Corp.