GlobeSt.com EXCLUSIVE: $9M Discount Play Gets 47%-Leased Park

The Chicago-based Transwestern isn't commenting about the sale nor is its brokerage team, Steve Simon and Jeff Smith in the Dallas office of Transwestern Commercial Services. The 8.5-acre park at 6310-90 LBJ Freeway went under contract in August 2005, but the closing was pushed to this week reportedly due to delays by the seller. Though the seller's not talking, local sources say the park only appealed to private, mostly local buyers.

Ryan Phillips, Signature's principal, tells GlobeSt.com that the deal plays right into his sweet spot for acquiring properties at deep discounts due to vacancy issues. The top selling point, from his perspective, is the park's location. "It's just a few doors down from Preston Road," he says, "and everybody likes being near Preston Road. The LBJ area's been beaten down, but it has a long-term great future."

Phillips says Transwestern had completed some renovations in recent years so his going-forward plan is to make upgrades "as things need to be done." Six buildings were built in 1972 and the balance rose in 1985.

The park has 70-some tenants, but there is little, if any, roll in leases coming this year, according to Phillips. Staying in place is the Transwestern leasing team of Matt Hurlbut, senior vice president, and Melinda Alford, senior associate. Phillips says he's also holding to the average rate of $13.50 per sf and one month free rent per year per lease term. According to the North Texas Data Exchange, Concourse Office Park has 116,548 sf of vacant space in eight of its nine buildings.

Phillips secured a three-year, fixed-rate loan from Colonial Bank in Preston Center to buy his seventh office building, pushing the mostly class B portfolio to 750,000. The 15-year-old Dallas firm's last acquisition was just two months ago--a 126,581-sf O'Connor Ridge at 4545 Fuller Dr. in Las Colinas, another class B office building bought at a steep discount compared to its submarket counterparts.