$19M Plus Clinches 152,163-SF Class A Office

The New York City-based seller inherited the 75.3%-leased, three-story office building at 19111 N. Dallas Parkway in the $2-billion buyout of CRT Properties Inc. of Boca Raton, FL in September 2005. Earlier this year, DRA sold another inherited property, the 127,226-sf Cigna Plaza at 6600 E. Campus Circle Dr. in nearby Irving to CBRE Investors.

"CBRE Investors likes the play in Dallas right now," Russell Ingrum, a CBRE executive vice president, tells GlobeSt.com. "The fundamentals are performing, the rental rates are rising and there's strong absorption.

Ingrum and CBRE's Gary Carr, also an executive vice president, marketed the asset 30 days for seller of record, Koger Dallas II LP. Ingrum says the "straight-forward, multi-tenant building" offering baited nearly a dozen offers from a "good cross-section" of institutional and private buyers. The best and final, he says, was practically neck and neck.

The lead tenant, TransCore LP, a manufacturer of RFID technology, has one year left on its lease. The company's headquarters fills 60,840 sf or 35% of the building, which is set on 7.19 acres at the intersection of the tollway and the George Bush Turnpike. With the closing, a CBRE team took leasing and management reins from locally based Capstar Commercial Real Estate Services.

When Fund IV buys, it most often means a three- to five-year hold is in the offing. The MO, mortared in leasing risk, relies on a formula to buy, fix, lease and sell. Tollway Crossing's upside isn't in a fix-up, but more so in an expansion--coming with enough land and an in-place design to add 150,000 sf to the nine-year-old building. The 24.7% vacancy arose in July 2006 with one move-out.

The Tollway Corridor has become one of the region's top office markets in terms of absorption and development. As rents climb to $25 per sf or higher for the upper tier, bets are going down that there will be a push by tenants to flee to less costly class A's and class B-plus buildings. Tollway Crossing's quoted rate is $21 per sf and holding, at least for awhile.