Archon Stamps 11-Year Lease for New HQ Space in Las Colinas

Word on the street is Archon plans to vacate or at least start the move in early 2007 to 6011 Connection Dr. from its 130,000-sf offices at 600 E. Las Colinas Blvd. Nokia's 604,234-sf campus has been owned by Atlanta-based Wells REIT since 2002. According to shop talk, Wells REIT ripped up Nokia's lease for the 234,000-sf building to lock down an 11-year deal with Archon.

Local brokers report Jeff Ellerman and Brad Selner with Dallas-based Staubach Co. were courting class A owners in Las Colinas with the Archon deal for nearly two years. The submarket has been a hotbed for aggressive talks due to steadily declining office rents that just started to gain some traction in the past six months. Archon's rent hovers at $25 per sf in 600 E. Las Colinas, a 509,707-sf high rise in the Urban Center that was bought in August 2005 for $56 million by Prime Income Asset Management Inc. of Dallas.

Market experts have been placing bets for some time that Archon would move from its long-time headquarters address. Archon started out searching for 200,000 sf so the new lease could easily have some expansion space embedded into the terms.

Prime Income's leasing broker, Joel Pustmueller with Peloton Real Estate Partners in Dallas, says Archon's move-out notice has yet to come through the door. "We're counting on them paying rent until June 2007," he tells GlobeSt.com. And, he adds, he already has one tenant looking at the entire block of space.

Pustmueller acknowledges a hard battle was fought and lost, but it wasn't for lack of trying to keep the high-powered firm as one of the high rise's lead tenants. The average class A quote is $19.75 per sf in Las Colinas so an offer was in play to shave the rate, but still failed to produce a renewal. "They just feel like they got a sweetheart deal elsewhere in the market," he says.

Archon executives and none of the brokers involved in the deal could be reached for comment prior to publication time. A spokesman for Wells REIT says a confidentiality clause is blocking any comment on the deal.