Wells REIT Corners 386,116-SF Office Duo

The Atlanta-based Wells is eyeing the upside from a 10% vacancy, submarket upswing and five acres of developable land at Las Colinas' Texas 114 and George Bush Tollway junction, Keith Willby, senior vice president of acquisitions, tells GlobeSt.com. With the deal for the East Campus Circle Drive property, Wells has bumped its total footprint at the high-profile interchange to nearly one million sf. "We like the concentration," he says, adding the REIT's marking its fourth year as owner of the neighboring, three-building, 600,000-sf Nokia campus.

Willby says the latest piece of class A space came with five acres of surface parking primed for development. Although there's no immediate plan to build, he says the land could hold a 150,000-sf office addition to the six-floor, 159,212-sf Las Colinas Corporate Center I at 6333 E. Campus Circle Dr. and eight-story sister with 226,904 sf at 6363 E. Campus Circle Dr.

The Las Colinas submarket has been a hotbed of trades, with more to come if local dealmakers are calling it right. And with an across-the-board uptick, rents are now on the rise in the popular corporate nesting ground. "The activity level continues to build in Las Colinas in terms of tenant activity and sales activity," says Phil Baker, president of Magellan Commercial Realty Inc. "The rates have popped up."

Willby can't discuss the closing price, but did say that the asset's one neighbor commanded $200 per sf. "We didn't pay that," he says. "But, we like our price per pound on this asset." He says the deal was underwritten for a 10-year hold.

The buildings' have roughly 20 tenants, with leases on average having three to eight years left on their terms. Lincoln Property Co. of Dallas has been kept in place to lease and manage the duo, built in 1997-98 by locally based Archon Group. Deloitte & Touche, HD Vest Financial Services, the Feld Group and Standard Pacific Homes Inc. occupy about 50% of the complex. Top space-taker, Vest, a subsidiary of Wells Fargo & Co., is locked down through December 2012. The smaller building's quote is $20.50 per sf; the larger one's resting at $24 per sf.

The Holliday Fenoglio Fowler LP Dallas team of Andrew Levy and Todd Savage brokered the deal along with MetLife's Melayne Packer, also in Dallas. "It was a highly competitive bid process," Willby says.