Younan Sheds 600,000-SF, Class B Office Trio for $28M

Zaya S. Younan, chairman and CEO of the Woodland Hills, CA-based investment group, says in this morning's press release that the gain, presenting an IRR of 100% to his backers, will be used to buy more class A space in Dallas. Younan, who in recent months bought 1.1 million sf from Chicago-based Equity Office Properties Trust, is the city's third largest owner of office properties.

The just-sold buildings, all seven-stories, are the 312,000-sf Brookriver Executive Center, a 28%-leased structure at 8200 Brookriver Dr.; 155,000-sf One Brookriver Place, a 70%-occupied asset at 7929 Brookriver Dr.; and 125,000-sf Mockingbird Tower at 1250 W. Mockingbird Lane, which is 88% filled. According to Younan, Brookriver Executive Center's operating costs were shaved to $1.2 million from $3 million during an 11-month hold; and One Brookriver Place and Mockingbird Tower delivered 22% returns and 30% reductions in expenses by hiking occupancies 22 points and 48 points, respectively. Younan credits renovations, occupancy increases and improved operating strategies with shaving costs without undermining standards for tenants.

Younan's brokers, Scot Farber and Darrell Betts, senior vice presidents in Dallas and Houston, respectively, for Grubb & Ellis Co., also represented the buyers: Khoshbin Properties of Irvine and Professors Capital, with headquarters offices in of Solano Beach, CA and Washington, DC. Khoshbin Properties bought One Brookriver Place and Mockingbird Tower with Professors Capital getting title to Brookriver Executive Center.

"We entered the challenging Stemmons submarket two years ago, in the middle of a recession, fully aware of the difficulties associated with stabilizing and improving assets in an office market that has been plagued with vacancy rates of 35% and higher," says Younan, who's ramping up to launch an IPO by year's end.

Younan tells GlobeSt.com that the sales represent the last class B office buildings in the Dallas portfolio and there's just one left in Houston, which is going to go as well. All funds will be deployed into class A acquisitions, he emphasizes.