JV Partners Buy CBD Duo for $100M Plus

Trimarchi teamed with Fortis Property Group of New York City to acquire the class A Harwood Center at 1999 Bryan St. and Atlanta-based Goddard Investment Group for the class B St. Paul Place at 750 N. St. Paul St. Trimarchi picked up the value-add play about four months ago after the New York City-based joint venture owner, led by Lehman Brothers, failed to get a buyer after nearly eight months of trying.

Bought with one vision, the Schenectady, NY-based Trimarchi's plans for the high rises, positioned two blocks apart, are as different as the financing behind them, which was arranged by Mike Bryant, senior vice president of Capmark Finance Inc., formerly GMAC Commercial Mortgage. The 721,759-sf Harwood Center is 85% leased; the 273,080-sf St. Paul Place, is 56% leased. With the deal done, Trimarchi's team will manage the properties, but the leasing assignment, now held by the Atlanta-based Taylor & Mathis Inc.'s Dallas office, is poised to change.

The Trimarchi-Fortis JV got a ready-to-go piece of real estate in the 36-story Harwood Center, assessed at $92.81 million by Dallas County and supported by a strong credit-grade roster to set up a long-term hold. The lead tenant, Omnicom Group Inc., has at least 12 years on its lease and has been steadily expanding its footprint in the building.

"The upward trending dynamics for the CBD of Dallas are better than they have been in 30 years and Harwood's location next to the DART rail becomes more important each day as professionals desire to work and live in the CBD," Dennis Trimarchi, president of the namesake investment group, says in a press release issued late Friday on the heels of the long-awaited closings.

Several condo converters were trying to buy into the deal for St. Paul Place. "He wasn't interested. He wanted to hold it long term," Bryant explains to GlobeSt.com. "Dennis has shown again he has an uncanny ability to time his acquisitions."

Trimarchi has jumped into a repositioning plan for the 22-story St. Paul Place, assessed at $11.11 million by Dallas County, by hiring an architectural firm from New York to begin redesigning the first full-body makeover in the 24-year-old building's history. And, he's jumpstarted talks with Dallas leaders to change St. Paul Place's address to Ross Avenue. "He wants to reintroduce St. Paul Place to brokers and tenants as a Ross Avenue building," Bryant says. "He's ready to respond very quickly to brokers and tenants who want to lease space." As it now stands, Harwood Center's space is quoted at $16 per sf plus electric and St. Paul Place's at $15 per sf plus electric, with sublease offers undercutting the rate by several dollars.

Bryant arranged a 10-year, fixed-rate package of senior and mezzanine financing with Credit Suisse First Boston's New York City office for Harwood Center, closing the deal within 30 days of application. He secured financing for St. Paul Place through Dallas-based Viewpoint Bank. "It's the largest refinance in the Southwest US since we became Capmark Finance Inc. six weeks ago," Bryant says of the 200-employee buyout. "It definitely kicks off the new company."