NYC REIT Carves Market Inroad With $46M Net-Lease Win

The portfolio, competitively marketed by Steve Simon and Jeff Smith with Transwestern Commercial Services Inc. in Dallas, consists of 3905 Dallas Parkway in Plano, a 159,000-sf structure leased through 2015 to Capital One Financial Corp., and 1660 N. Westridge Circle in Irving, a 101,120-sf asset tied down through 2013 by Omnicom Group Inc.'s Rapp-Collins Worldwide Inc. Both properties came free and clear in top-notch condition, says Michael Heneghan, senior vice president of originations for the New York City-based Capital Lease, a long-term holder in most cases.

In March 2004, the REIT set out on a course to acquire $1 billion in net-leased assets in the US. "We are on target to reach our goal," Heneghan says. And though, the Allianz portfolio is its first in the metroplex, he's saying it's not going to be the last. "There hasn't been that much available in Dallas," he tells GlobeSt.com. "We are really focused on strong credits, net leases or net income and decent markets. And, that means submarkets within the markets too." He credited the TCS team with making its market entry a smooth experience. "They were exceptionally responsive and professional," he stresses.

Capital One just moved into Tollway Office Center II in February. For that story, click here. With Capital One's data center positioned next door, "it was a compelling reason for us to buy," he says, citing the strength of Plano's office sector as another motive for bidding the deal.

The Rapp-Collins Worldwide building is part of a recovering submarket, Las Colinas, but one that's historically been strongly favored by the corporate crowd. "We like Las Colinas," Heneghan says. The tenant has eight years remaining on a 15-year, build-to-suit lease, he says.

Capital Lease leveraged the buy with a $34.5-million loan with an eight-year term and coupon rate of 5.24%. It also issued $4.4 million of inter-company corporate credit notes that mature in February 2013, according to a press release.