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DALLAS-In 30 days, Koll Development Co. will close a $100-million portfolio buy in its first coup as a multi-faceted solutions provider for Corporate America. The first deal is a three-tiered play that will bring a 250,000-sf build-to-suit and 2,000 jobs to Dallas-Fort Worth.

Steve Van Amburgh, Dallas-based Koll’s CEO, says the five-building deal is the lead off for “thinking out of the box.” The deep-pocketed purchasing power will be accompanied by a new shingle with a new logo to show the old guard that Koll is putting on a new face as a buyer to go along with its traditional role as developer.

Van Amburgh’s keeping some details to the first deal under wraps until all documents are signed. He tells GlobeSt.com that the transaction, which must close by July 31, calls for Koll to acquire one million sf, with some being shuttered and other space being leased back for 15 years to the Fortune 500 company. A Chicago call center will be converted into office use; a Virginia call center will be leased for three years and then shuttered. The space shuffling will result in an expansion for the West Coast operation and a new call center for Dallas-Fort Worth. And no, Van Amburgh says, the build-to-suit is not headed to the 1,300-acre CentrePort near the Dallas-Fort Worth International Airport, but it will be rising on existing Koll land that had been banked for just such a development.

For the Koll client, the end result will be a $15-million annual savings by eliminating one of three call centers and removing the real estate from its balance sheet. As Van Amburgh puts it, “at the end of the day we will own five buildings”–regional office buildings in Florida, the LA metro and Kansas City, ranging from 130,000 sf to 150,000 sf, and two call centers.

Van Amburgh says in-house capital is the funding source for the investment initiative, as reported by GlobeSt.com in mid-May when Koll hired William L. Rafkin, founder of Hampshire Capital Corp., as senior vice president of investments to lead the team. Since then, Koll hired Scott Ozymy from Cousins Properties Inc.’s Dallas team, to be second in command and named Ken Allen in San Francisco as senior vice president for the West Coast.

“Corporate America today is focused on looking at every way possible to improve the earnings per share,” Van Amburgh explains of Koll’s leverage for building the portfolio. But, he cautions, the sign clearly will read: “No white elephants allowed.”

The Koll management team started plotting the changes about six months ago at the behest of its clients, according to Van Amburgh. As talks continued, the Koll plan evolved into a strategy to become a multi-faceted solutions provider by offering sale/leasebacks, short or long term, as a real estate alternative with an economic incentive that ultimately could lead to more build-to-suit projects.

Van Amburgh admits industry changes helped push the diversification plan. Looking ahead, he believes business will be practically a 50-50% split between development, both corporate and institutional, and the investment/acquisition arena. It’s not the first time that Koll has bought real estate to spin a deal, but deals before were basically one-offs. Van Amburgh realizes it’s “not a big transformation,” but it is the most significant change since Koll shifted the headquarters from Newport Beach, CA to Dallas.


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