High-Profile Tenant Renews, Expands HQ

BP Capital and Mesa Water Co. will get keys within a week to 4,730 sf of extra space that became available in March due to Dillon Corporate Real Estate Services' relocation, Jerry Averyt with Henry S. Miller Commercial in Dallas tells GlobeSt.com. The balance of Dillon's 5,600-sf office went to Clean Energy Co., which has the renowned Texan on its board. Pickens' two companies will be filling nearly two-thirds of the second floor at 8117 Preston Rd. while Clean Energy is seated in the balance.

The deal has closed on the eve of the Los Angeles-based BentleyForbes Group's one-year anniversary of its $135-million acquisition of the 418,604-sf Preston Commons and 302,747-sf Sterling Plaza at 5959 Sherry Lane, another Preston Center prize. Both trophy properties are leased and managed by Capstar Commercial Real Services, with vice president Trey Smith working out Pickens' headquarters deal for Preston Commons' West Tower. The tower's quoted rate these days is about $26 per sf plus electric.

"The new owner is striving for higher rental rates," Averyt says. "We negotiated some. We didn't pay the quote, but we did get what I would call a reasonable market rate. We got some rental reduction on the front three years." The end result is a five-year renewal and expansion with three bumps and the name of Pickens' investment fund, BP Capital, on the dotted line.

Though BentleyForbes is renovating the high rise, Pickens picked up "a reasonable allowance" and kicked in additional funds to finish out the second-floor headquarters, according to the tenant rep. The Texas favorite son has had his headquarters in the nearly full Preston Commons since August 1996, starting out with 2,479 sf. "He's a solid tenant and a good tenant," Averyt says.

The BP Capital deal, previously set to expire in May 2009, is a good example of the latest buzz around town. The rosy first-quarter reports, across the board, show significant upticks in leasing activity. And the word is that the boost is coming from existing companies, which are more than willing to work out early renewals to lock in expansion room before their favorite halls are filled.