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DALLAS-UBS Realty Investors LLC is changing the guard for a three-million-sf office and industrial portfolio in North Texas after a decade with the same team at the helm of the majority of space. Effective Nov.16, Cushman & Wakefield of Texas Inc. takes over leasing and management of a 10-building package to mark its largest coup with a single property owner.

“This was not a termination for cause. I want to make that clear,” Joe Gaukler, director and region head of asset management in Dallas for UBS Realty Investors, tells GlobeSt.com. “It was a realignment of management and leasing. There are some efficiencies to be gained. Continuity is the word I like to use from an asset management view.”

The package has five properties each of office and industrial in Dallas and Tarrant counties, with occupancies of 88% and 84%, respectively. Two of each product type are fully leased. Since 1993, Trammell Crow Co. managed and leased eight buildings in the portfolio. Stream Realty Partners and Kennedy-Wilson International Inc. held contracts for one building each and the Holt Cos. had one management contract. The portfolio’s smallest asset is the 180,000-sf Addison Business Park and the largest is the 300,000-sf VHA Place, formerly Tower East, in Las Colinas.

Gaukler says negotiations began several months after Dennis Barnes and Marijke Lantz left Insignia/ESG and joined the C&W ranks. “We typically don’t jump around,” Gaukler says. Barnes, senior director of leasing, asset services, approached him with the idea of bundling the portfolio to capture efficiencies and Lantz, managing director, handled the negotiations.

“We know what the market is, had we bid it. This was not a price-driven issue,” Gaukler stresses. “We wanted continuity in leasing and management.” To meet that challenge, C&W offered to bring on board a 25-year pro in Dallas/Fort Worth as a dedicated overseer for the portfolio.

“UBS knows corporately and locally that this is centered on a commitment … with senior people,” Barnes says. Eric Rutledge, previously with Cousins Properties’ Texas team, has been hired as general manager and director to give the Hartford, CT-based UBS a single point of contact for its Dallas portfolio instead of four service providers. Rutledge will have an assistant on the leasing side while C&W is working up the management plan right now. “We definitely have met and are meeting very capable people,” Barnes says of the interviews with the buildings’ property managers, some of whom could be kept in place.

Gaukler says UBS Realty is anticipating the contract will be long term. And, it’s only for the existing office and industrial portfolio. The Galleria contracts and those of Mayfair Village, a smaller retail property in Fort Worth, are not part of the deal.

Gaukler dispels street talk that the assignment is a test drive for UBS portfolios in other cities. “We clearly want to see how this is going to perform. Obviously if it’s a terrific success, we will look at it elsewhere, but there is no pre-ordained plan,” he emphasizes.

Few of the companies losing the contracts were willing to make a comment. One firm, seeking anonymity, stressed the loss certainly wasn’t a reflection on the contract holders. Stream Realty Partners’ Tim Terrell, senior vice president, says “we fully understand and agree with their motivations. UBS is a great client to work with … and we hope there is some opportunity in the future to team up.” For two years running, Stream has held the management contract for a Beltline Road office building that’s fully leased to State Farm Insurance Co.

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