TIC Buyer's $11M Plus Takes Seller's Last Office Asset

"We're looking to buy, but we can't find anything that's reasonably priced," Michael Broder, executive vice president of Dallas-based CrossTimbers, tells GlobeSt.com. As a result, CrossTimbers will focus on management contracts for class A and class B office buildings, including a new one with DBSI to remain in place at the just-sold 2201 E. Lamar Blvd. in Arlington. Broder says talks have begun with the a tenants-in-common owner to manage its other DFW assets, which includes the 80,104-sf Offices at Brookhollow at 1701 E. Lamar Blvd. But the Arbors, he adds, "is truly their plum asset in all of Texas."

CrossTimbers built the Arbors in 1999 on 7.9 acres. The fully leased building has seven tenants, with SBC in the lead although it recently subleased 85,000 sf to Hotels.com. The only lease roll this year was renewed; the balance is in place for the long term.

CrossTimbers and its local partners, ABHO Partners LP, own an abutting 2.5 acres, the last piece of open land in the Brookhollow Office Park. "We're not quite sure what we're going to do with it," says Broder, a limited partner in the ownership. "Ideally, we'd like to develop it ... but banks aren't free-flowing with their money for spec."

DBSI was up against four other serious offers for the Arbors at Brookhollow, scoring the win with the top offer on the table. Broder says the deal closed in three months with the TIC buyer assuming an existing loan with seven years left on its term with Gemsa Loan Services LP of Houston. The Arbors carries a $10.8-million assessment from Tarrant County. All Broder will say is the final price beat the assessment. Brookhollow office product, though, is considered some of Arlington's finest class A space. In January 2003, the 98,750-sf Brookhollow One at 2301 E. Lamar Blvd. brought $95 per sf and it was 56% leased at sale time.

The Arbors sale is CrossTimbers' third disposition this year, having parted with class A office buildings in Las Colinas and Richardson. Broder says falling cap rates, low interest rates and plenty of buyers drove the decision to sell.

Howard Fuerst with Marcus & Millichap's Dallas office and CrossTimbers' David Cunningham and Broder brokered the sale. DBSI relied on in-house brokers to handle its takeover of the property.