PS Business Parks Unveils New Strategy for 1M-SF Royal Tech Portfolio

The Grubb & Ellis Co. win has placed the Glendale, CA-based owner's Royal Tech portfolio into the hands of Kathy Permenter, office leasing director; Moody Younger, executive vice president and managing director; and Burson Holman, associate. The program of signing perks will be unveiled in the coming weeks.

PS Business Parks is looking to the Grubb & Ellis team to strengthen its brand with local brokers. "They know our name," Jeff Paschal, the owner's leasing director, tells GlobeSt.com, "but they don't know our property. We're trying to change that." The 13-building portfolio sits on 78 acres, with 10 banked for another 100,000-sf structure, in Irving's Las Colinas master-planned stronghold. PS Business Parks assembled the portfolio in the late 1990s, choosing to one-off assignments as space opened up. In most cases, Dallas-based Stream Realty Partners LP got the job.

Stream went up against Grub & Ellis for the portfolio win, as did Cushman & Wakefield of Texas Inc. and Trammell Crow Co. "PS maintains a strong relationship with Stream Realty and was pleased with their efforts over the past years," says Celeste Signor, PS Business Parks' leasing director in Dallas/Fort Worth. Last year, Stream filled nearly 178,000 sf with a trio of new tenants. A 13,420-sf lease delivered on the day that Grubb & Ellis got the nod for the 93%-leased package.

"It's a competitive business," says Jon Altschuler, Stream's managing director, "and we're disappointed we're no longer working with PS Business Parks, but we'll stay in close contact and hope to work with them in the future."

In first quarter 2006, the New York City-based Citigroup Inc. will exit 200,000 sf for a build-to-suit campus in Las Colinas. Another five tenants' leases, totaling 125,000 sf, will roll this year and next, according to Signor.

The four-property portfolio runs the gamut from traditional back office to Citigroup's infrastructure-heavy office space. A number of Fortune 500 companies lease space for back office and data center uses. "It's a great back-office location for Corporate America," Younger says.

The Royal Tech buildings range from the 22,053-sf Royal Tech 7 at 8100 Springwood Dr. to the 101,200-sf Royal Tech 17 at 2975 Regent Blvd., now housing Citigroup. Younger says several users searching for 18,000 sf to 60,000 sf have toured the upcoming space and existing vacancies in recent weeks.

Signor and Paschal say the 700,000-sf balance of PS Business Parks' 1.9-million-sf portfolio in Dallas/Fort Worth will continue to be one-off assignments, for now. The REIT has another 13 buildings in Garland, Richardson and Plano. Most often, assignments fall to the Robert Lynn Co. in Dallas.

As for other PS Business Park assets in its eight-state, 18-million-sf footprint, the Dallas/Fort Worth deal could open the door for more Grubb & Ellis assignments. But, Signor stresses, the corporate culture allows the decision to be made locally.