Argus' $38M Wins 369,052-SF TriWest Plaza

DALLAS-Staying true to its reputation to get what it chases, Argus Realty Investors LP has pocketed the deed to the 369,052-sf TriWest Plaza, best known to locals as the Club Corp Building for $37.7 million.

"We've never put a building under contract and not closed," Haris Totakhail, acquisitions director for the San Clemente, CA-based buyer, tells GlobeSt.com. "This is a deal we couldn't pass on. We were going to buy this deal no matter what." Argus made the close for the class A prize at 3030 LBJ Freeway with a five-year hold in mind, he adds.

Argus won the deed for $102 per sf, but Totakhail calculates the replacement cost at $225 per sf. Gary Carr and Russell Ingrum, executive vice presidents for CB Richard Ellis in Dallas, were running the sale for Centennial Real Estate Corp. of Dallas, which bought the 17-story asset with New York City-based Praedium Group in November 2004 as part of the Texas pullout by Mack-Cali Realty Corp. from Cranford, NJ.

J. Drever, Argus' vice president of acquisitions, was up against "a number of institutional bidders," Carr says. "But our confidence in Argus' ability to close smoothly and on time and our firm's relationship, with the buyer and J. Drever on other acquisitions, were deciding factors."

The 20-year-old building, sitting on 3.88 acres, was 85% leased when Argus put down its contract and 87% leased by the closing, according to Totakhail. Club Corp of America, which extended its lease last year, occupies 25% of the 40-tenant building. A CBRE team, with 12 years at the leasing and management helm, is being kept in place. The six-month pipeline has enough deals to fill another 5% of the structure. "We plan on getting this property to 95% occupancy in 18 months to two years," Totakhail says.

Argus' biggest hurdle on the road to the closing was "to get over the occupancy to make sure we were comfortable with the soft market," Totakhail says. He explains the comfort zone came from TriWest Plaza's out-performance to comparable class A space in the LBJ Corridor and tenant interviews.

The acquisition was financed with a five-year loan from LaSalle Bank in Chicago. Totakhail says Argus sealed the 68% loan-to-value financing with a 6.03% fixed-rate interest.

In the past four years, Argus' local buys have been the 172,000-sf DFW East and West at 4425 W. Airport Freeway in Irving and 4001 W. Airport Freeway in Bedford, respectively, and the 250,000-sf Cornerstone at 6755 Clifford Dr. in Dallas. But Totakhail says Argus is looking to spend $500 million nationwide this year--and Dallas/Fort Worth is high on the priority list. The criteria are low- to high-rise properties of office, research and development, industrial or flex space with at least 80% occupancies and price tags from $10 million to $150 million.

"From our perspective, we believe Dallas is poised for a nice comeback," Totakhail says, "and we want to be there at the forefront of that uptick. We will be buying more in Dallas."