American Electric Heading Into 30,610 SF at Renaissance Tower

The five-year lease is a flat rate deal with a minimal low tenant improvement allowance, Bill Brokaw, leasing manager for Chicago-based Trizec Properties Inc., tells GlobeSt.com. "They're putting a lot of their own money into the space," he says.

American Electric will relocate from 1616 Woodall Rogers Freeway, which was sold to Oaktree Capital Management LLC of Los Angeles. The Columbus company acquired the holding in 2000 when it merged with Central and South West Corp. of Dallas, tagging the CBD building as surplus property. "It was an empty building from an investment standpoint," says Brad Thornburg of Cushman & Wakefield of Texas Inc., who brought the property to market at least six months ago along with C&W's Andrea Peskind.

The search for replacement space began in late spring, says C&W's Lawrence Gardner. AEP's execs initially weighed three office buildings in Las Colinas against a trio in the Dallas CBD, says Gardner, who teamed with C&W's Daryl Mullin in Dallas and Tim Relyea in Houston to lock down replacement space. "Economics were certainly important in their decision," Gardner says, adding the suburban price wasn't significant enough of a cut to lure the operation from the CBD.

As for Ren Tower at 1201 Elm St., its chief selling points were a location along the DART line, fitting the team on one full floor and an existing owner-tenant relationship. "AEP has a strong presence in Dallas and a history of working with Trizec around the country," Thom Ridnour, Trizec's regional vice president in Dallas, says in a press release. AEP leases about 100,000 sf in Tulsa from Trizec.

AEP exercised an option to use "an existing lease that they'd seen before," Brokaw explains. "It makes it easier for them to do business in other cities."

Brokaw says the 1.7-million-sf Renaissance Tower, quoted at $16 per sf to $17 per sf plus electric, is now 86% leased. AEP is filling space emptied about two years ago, but chopping off the eighth floor so that Brokaw has floors nine through 14 sitting in a 185,000-sf contiguous block. And the way he sees the new lease is that it's net absorption for the CBD because AEP went from owner to tenant and traded up to class A in the process.

AEP is one of the nation's largest electricity generators and largest utilities with nearly five million customers in an 11-state grid. It also has interests in the UK, China, Brazil, Mexico and Australia through wholly owned subsidiaries.