GlobeSt.com EXCLUSIVE: Behringer Harvard Buys 536,241-SF Campus

The Dallas-based Behringer Harvard tapped its short-term opportunity fund to set up a 30-day close with Martel Office Building I LLC of Plano, TX, for three buildings at 250-90 E. John Carpenter Freeway, Jon Dooley, senior vice president of asset acquisitions for the buyer, tells GlobeSt.com. He says the 15.3-acre, class A-minus campus probably will be mortgaged down the road, but the immediate play was fielded with cash. The final price came close to the assessment, he says.

Behringer Harvard has hired a Trammell Crow Co. team to court corporate tenants for the campus, which was inherited by Citigroup's buyout of the Associates and is ticketed to be vacated in 2006 when work wraps up on a 40-acre, 625,000-sf campus less than five miles away. Behringer Harvard has the patience and the flexibility to wait for the right user to come along, Dooley says, speculating one building ultimately could end up as multi-tenant.

Dooley says he's confident that the complex will snag a corporate relocation. "With the balance of the Citigroup lease, it gives us plenty of time to find a new tenant," he says, adding the quoted rent will be set when the New York City-based financial giant gets closer to its move-out.

Dooley says capital is earmarked for upgrades to the lobby, which connects all three buildings. He says Behringer Harvard's team has yet to decide if the upgrades will be made now or delayed to offer an "open palette" to a large corporate user.

The Las Colinas submarket slowly is rebounding after getting slammed the hardest during the downturn. The 21.7-million-sf office inventory ended the first quarter with an overall vacancy of 25.7%, the same as it was a year ago, according to Cushman & Wakefield of Texas Inc. However, the Q1 leasing activity was 398,954 sf this year versus 333,779 sf in 2004.

The Citigroup complex is Behringer Harvard's first purchase in Las Colinas. Citigroup, though, still owns roughly 80 acres in the vicinity of the just-sold campus, which was brought to market under the watch of C&W's Andrea Peskind and Brad Thornburg.