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FORT WORTH-Crescent Real Estate Equities Co. is close to signing a pension fund partner for a $400-million to $450-million buying pool for office properties while it drums up other alliances to take majority interest in two office buildings. The “capital in, capital out” play could leverage a bid for Houston’s 1.2-million-sf Enron Center South.

The Fort Worth-based REIT’s executives, during and after the second-quarter call, stopped short of saying it will make an offer on the fallen energy giant’s partially finished CBD tower. They admit interest and hint at the prospect by saying their office product is practically filled in the Energy City. A short list of bidders will vie for the property Sept. 30 at an invitation-only auction in New York City.

Crescent, in the meantime, is aligning with capital for buying opportunities in its existing markets. One fund-raiser calls for selling 70% interest in two office buildings, with Crescent clinging to the leasing and management contracts. Crescent’s not saying which office buildings are earmarked for the program. Two other office buildings will be sold outright and should add $175 million to $200 million to the coffer, according to the earnings call.

For more than a year, Crescent has been selling class B assets. The plan is to replenish the portfolio with class A properties. Second-quarter fund-raising collected $500 million through bonds and preferred stock sales. Part of the ongoing capital drives will fuel Crescent’s one-third share for the pension fund-backed buying pool.

Denny Alberts, president and COO, says talks with the pension fund partner are in “the final, final stages.” With that, talks also are under way for buys. The dealmakers could close $100 million before the year’s out, he says. Crescent is as tight-lipped about the institutional partner’s identity as it is about the buildings being eyed.

That’s not all the talking that Crescent’s doing. It is in negotiations with a brand-name resort operator for the Sonoma Mission Inn, now under the watch of the Varma Group. The San Francisco Bay resort reported an average occupancy of 57% for the first six months. Varma also operates Crescent’s Big Sur property, Ventana, but occupancy there is somewhat better–68%.

Keira B. Moody, Crescent’s vice president of investor relations, stresses to GlobeSt.com that the talks are “not necessarily the property, not necessarily the operator. We need to reposition the property and one way to do that is to bring a big name in.”

Crescent’s office properties, though, stole the show on the earnings call. Overall occupancy is 90.4% in comparison to 92.6% at the 2001 close. Still, there’s no cause for alarm, says CEO John C. Goff. Crescent simply isn’t “giving into pricing pressures” in its markets to get tenants. The short-term exchange isn’t worth the trade-off in long-term value, he says. In the end, it could prove more beneficial to warehouse the space until the office market improves.

Despite universal office market conditions, Crescent is still “winning” business, says Alberts. Denver is close to backfilling 325,000 sf of 400,000 vacated by ARCO. In Houston, active negotiations are underway for one million sf, half of which are signed or close to signing and the balance is “in deep negotiations,” he said. Another 320,000 sf has been signed at rates several dollars above the competitors, he said.

The Q2 leasing stood at 807,000 sf, of which 473,000 sf were renewals. Crescent edged up the rents 4% in its markets. Tenant improvements related to the leases were $1.73 per sf and leasing costs 92 cents per sf.

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