EXCLUSIVE: Trizec Interviewing Sales Teams for Trophy Marketing

Word on the street is the 1.73-million-sf Renaissance Tower at 1201 Elm St. will hit the sales block first and then Trizec's 50% stake in the 1.53-million-sf Bank One Center at 1717 Main St. But, some insiders say it's not a foregone conclusion which trophy will lead off a play mortared in a recapitalization strategy to reduce its risk as a large stakeholder of trophy office space in any one CBD. All sources agree that "a great case could be made" for Renaissance Tower or Bank One Center.

Trizec usually doesn't comment on marketplace speculation, but has responded to GlobeSt.com's inquiry about a possible sale of Renaissance Tower, a question raised in last week's earnings call and one that's been part of the Dallas rumor mill for several months due to a pair of high-profile renewals. "One of our most important business strategies is how we allocate capital. We strategically review the value of our assets and possible opportunities in the marketplace," says Brian Lipson, executive vice president and chief investment officer for the Chicago-based Trizec. "It would be premature to assume that any sales or investment scenarios at any of our local assets are certain or immediate."

Trizec bought the 56-story Renaissance Tower in 1996. The following year, Trizec struck a 50-50 joint venture with Fort Worth-based Crescent Real Estate Equities Co. to acquire the 60-story Bank One Center. And, investment circles are keenly aware that Crescent is marking its second year to transition into an investment manager by selling percentages of key assets so the inroad's already been paved.

The Renaissance Tower story is it's 86.5% leased. At year's end, Southwest Securities Inc. signed a 156,000-sf headquarters renewal with a 15-year term, inking the deal three years in advance of its expiration. Blockbuster Inc. and Trizec are waiting on Dallas City Council to sign an incentive package to bed down a 250,000-sf, 10-year headquarters renewal, which includes a right to terminate if the promised perks fall through. A vote is expected before the month ends. Blockbuster's existing pact expires next year.

The story behind Bank One Center is it's 84.6% filled. Its lead player, Bank One, is locked in until 2010. And, sources point out, Bank One Center is sure to fetch a higher price even though it's smaller in size, effectively serving to raise the bidding bar in any marketing of Ren Tower.

It's uncertain which way Trizec will turn, but it is certain that the games will begin relatively soon, particularly since Dallas is collecting top-dollar prices for its class A and AA space in open-bid scenarios. Last year's top sweepstakes winner, Lincoln Centre in North Dallas, pulled in $250 million. In an industry that doesn't marry its product, the record-breaking prices simply are too tempting to pass up. And as Lipson points out in his statement, Trizec is "a disciplined investor that capitalizes on the right opportunities at the right time."

Regardless of how the deals shake out, Dallas remains a core market for Trizec. The sales, whether it's one or two, are aimed at reducing weight in the Downtown. As a result, Trizec's 1.2-million-sf Plaza of the Americas along Pearl Street isn't likely to hit the market and the same is true for its 1.4-million-sf, three-tower Galleria complex in North Dallas.