GlobeSt.com UPDATE: Legacy Campus Key to KDC's $217M Deal

KDC teamed with locally based Invesco Real Estate to acquire the Legacy portion of theEDS portfolio. "We are going to create a new identity," says Bill Rafkin, KDC senior vice president of investments. He tells GlobeSt.com that about $5 million will be invested into exterior changes, including ripping out the fabled chain link fence surrounding the 107-acre complex in Plano. "We want to make it welcoming," he stresses.

The identical low-rise triplets, each 400,000 sf, are located at 5320, 5340 and 5360 Legacy Dr. EDS occupies about 600,000 sf gross for the next two years, Rafkin says. And when the term's up, KDC expects EDS will be returning part of the space. Another one-third of a building is the headquarters of Safety-Kleen Systems Inc., which is in place for the long term.

With the redevelopment plans kicking in, the KDC team has launched a face-to-face, full-court press of corporate America to land a long-term tenant or tenants to become the next generation of users in the high-profile campus developed in the mid-1980s by EDS founder, Ross Perot Sr. "I feel highly confident that we'll find a number of very strong prospects within the next three to six months," Rafkin says. "We feel this is an unprecedented opportunity to offer 1.2 million sf of class A space."

Rafkin says KDC spent a year watching and waiting for the EDS portfolio to come to market. "Legacy was the key for us to be able to redevelop those properties," he says about the all-cash deal. "That's why we went through all this effort."

The crux of the makeover is to create curbside appeal for a complex long regarded as a high-security fortress to keep out trespassers: security barriers, like the fence, will come down; new landscaping will go in; and entranceways will be opened. As for the buildings, they are in prime shape, Rafkin says. "They don't need stem-to-stern redevelopment," he adds.

KDC's intends to redevelop and sell. It could be one year or seven, Rafkin says. That's not the case for the rest of the package that KDC bought with Invesco. Plans are being readied to sell holdings in Denver and Dayton, OH, he says.

The partnership buy with the New York City-based NorthStar Realty Finance Corp. is a planned long-term hold. EDS is the sole occupant of the package, which includes buildings in Sacramento, Auburn Hills, MI, Camp Hill, PA and Tulsa, OK.

The European portfolio, bought with London-based Citigroup Property Investors of Europe, is a mixed bag that had to be included in the deal in order to get Legacy, according to Rafkin. The package contains three office/warehouses in the UK; one each in Paris and Leuna, Germany; and two in Caserta, Italy near Naples and Pomezia near Rome. Rafkin says EDS holds a long-term lease for buildings in the UK, Paris and Pomezia and has three years left on its Leuna contract. The Caserta building, 90,000 sf, is empty. As for the anticipated hold, Rafkin says that decision is pending.