Though BentleyForbes' president and CEO David W. Cobb isn't confirming the price, he is talking about the portfolio's newest crown jewels. Amid the quiet end to the long-awaited deal, BentleyForbes picked Cushman & Wakefield of Texas Inc. to manage and lease the 418,584-sf Preston Commons, three mid-rise buildings in the 8100 block of Preston Road, and the 303,000-sf Sterling Plaza at 5949 Sherry Lane.
Cobb tells GlobeSt.com that the deal closed without a loan assumption, but did require debt from the capital markets. That too, he says, is off limits due to the private company status.
The deal certainly helps to shore up BentleyForbes' shift from single-tenant or minimal tenant buildings to larger office properties, predominately CBD and definitely class A. Cobb says BentleyForbes, which owns two other office buildings in Dallas/Fort Worth suburbs, is under contract to buy another class A, multi-tenant office building in the metropolitan area.
When it comes to upside, Cobb's eyeing a package with 205 tenants and a lease roll of about 20% per year. Additional upside, he says, will come from the submarket itself, which is land constrained, and built-in rent growth from an improving economy. "The thing we like is the Preston Center submarket does really well in good times and bad times," he says. "It does not have the volatility of the rest of the Dallas/Fort Worth market." Preston Commons is 95% leased; Sterling Plaza hovers 88%.
The newest portfolio members "are larger in size than our average portfolio, but we certainly consider these as good as anything that we've got," Cobb says. Preston Commons is made up of a 122,500-sf, 10-story building built in 1954 at 8111 Preston Rd.; 122,500-sf, 10-story structure built in 1986 at 8115 Preston Rd.; and 296,000-sf, eight-story building, also a 1986 product, at 8117 Preston Rd. The Dallas County Appraisal District assesses the trio at $72.49 million. Sterling Plaza, built in 1984, is assessed at $54.8 million. The Chicago-based EOP, now a step closer to its market exit, bought the properties in February 2000.
BentleyForbes and C&W are poring over plans to upgrade both buildings. Cobb says they're ready to float proposals to architects. The plan should be ready to discuss in 30 days.
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