Capital One's 159,000-SF Renewal, Expansion Quietly Derails B-T-S

The deal puts Capital One in control of the entire Plano complex: the 159,000-sf Tollway Office Center II at 3905 Dallas Parkway, where the lease was just inked with the Minneapolis-based building owner, Allianz Life Insurance Co. of North America, and the 120,750-sf Tollway Office Center I at 3900 Dallas Parkway, owned by Wells REIT of Atlanta.

When GMAC relocates a claims office in February, Capital One will transition to a triple net lease in the two-story Tollway Office Center II, Jack Eimer, president of the central region for Houston-based Transwestern Commercial Services tells GlobeSt.com. The six-year-old building, positioned on 11.4 acres, commands $21 per sf plus electric.

The biggest hurdle in landing the renewal and expansion was guaranteeing a 7:1,000-sf parking ratio or three more spaces per 1,000 sf than currently exists. "Development was the main competition," Kim Brooks, Transwestern's senior vice president in Dallas, says about a 10-year, stair-stepped lease that took one year to nail down.

In recent weeks, Allianz bought an abutting 2.2 acres from Baruch Properties of Dallas, which is planning to build retail on its remaining land. The just-bought land is now being prepped for surface parking for the Richmond, VA-based Capital One's call center expansion plan. The lot will be done in two months, Eimer says.

"That building was out of the competition because it couldn't park it (the mandated 7:1,000 sf)," Eimer says. "The tenant wouldn't commit to the lease until we bought the land and we couldn't commit to buying the land until the tenant committed to the lease...so it was simultaneous." Equally difficult, he says, was keeping a tight lid on a transaction that insiders would only refer to as "the quiet deal."

Tollway Office Center II is positioned in the Upper Tollway/West Plano submarket, where office park land is readily available. Kelley Kackley, vice president, and John Gates, president of the Southwest corporate services and executive vice president with Dallas-based Staubach Co. acted on behalf of Capital One, which took over Tollway Office Center I at 3900 Dallas Parkway when it bought Summit Acceptance Corp. and then went next door to sublease the lion's share of Tollway Office Center II from the Paris-based Alcatel. The sublease was set to expire in the summer.

Gates says the decision-makers wrestled with the challenge of keeping Capital One's groups together and gain expansion room for perhaps another 150 jobs. "It was tough trying to work with staggered lease terms," he explains. "It effectively now works like a campus."