"Sometimes, it just takes time for these kinds of deals to mature," Chris Kenney, vice president of portfolio management for the San Francisco-based REIT, tells GlobeSt.com. The 4025 Midway Rd. office building was built five years ago as spec product and reportedly leased for awhile to a now-defunct web hosting company. The structure has been vacant roughly two years.
Billingsley executives didn't return telephone calls to discuss the sale. But, Kenney says, the REIT approached the local firm about the acquisition, putting an offer on the table and making an all-cash close within three months. "We've known about this property for a number of years," he says. The CB Richard Ellis Inc. team of Pat O'Keefe and Anthony Bolner negotiated the sale for Billingsley.
According to Billingsley's marketing material, the structure, positioned on 8.3 acres, was outfitted with more than $30 million of high-tech infrastructure and full redundancy for all systems. The local firm's leasing team was asking $16.50 per sf, triple net.
Kenney says Digital Realty's specialty leasing team will market the building as is. "We will evaluate the rate," he says, adding it's undecided at this point if it will be pitched as single- or multi-tenant use. "We're going to let the market tell us which way it's going to go."
Kenney says the REIT's team doesn't have any prospects in hand, but he believes the built-in deal flow from its 44 other properties in the US will help to fill the space. "A 100,000-sf vacancy is nothing to be taken lightly," he says. The one-off acquisition is Digital Realty's second data center in the Greater Dallas area and its sixth office property in the region.
In addition to the Carrollton purchase, Digital Realty spent $13.5 million for an occupied 45,000-sf, single-tenant building and 75,000-sf sister in the Met Center Business Park near Austin. The plan is to position the buildings for redevelopment and lease it to corporate and Internet enterprise users.
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