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DALLAS-A Trammell Crow Co. fund has flipped a 115,000-sf office building as the final leg to a complicated transaction that secured a new headquarters location for Republic Underwriters Insurance Co. The quietly marketed, single-tenant opportunity has put the Boise, ID-based DBSI Group in control of the deed for close to $27.4 million, sources say.

The dealmakers won’t confirm the price, but will, to some degree, discuss the flip of 5525 LBJ Freeway, bought in early October and sold about five weeks later. “Word got out there was a good credit tenant with a long-term, net lease so the deal was put to bed,” Russell Ingrum, senior vice president with CB Richard Ellis Inc.’s Dallas office, tells GlobeSt.com about the sale. “Trammell Crow Co. was executing a broad strategy…and had a number of people approach them.”

TCC senior vice president Richard Fletcher masterminded the Republic deal. First, he sold its 228,000-sf HQ at 2727 Turtle Creek Blvd., then used the fund to buy 5525 LBJ Freeway and capped the layered transaction with a pair of leases. Republic inked a six-month lease for the Uptown building and penned a long-term one for its new HQ. The move takes place in spring 2005. Fletcher says the plan always included a sale of 5525 LBJ Freeway at some point in time.

The well-known TIC buyer has picked up a handful of single-tenant, net-leased assets in Dallas/Fort Worth. It also has one under contract in San Antonio, where it’s been equally as active on the acquisitions front.

The 5525 LBJ Freeway sale was “very, very clean transaction,” Ingrum says. “It was a brand new lease and quite a bit of improvements planned due to that lease.”

The class A office building brought nearly $27.4 million, selling at a 7.5% cap rate with a 2% annual increase in the rent, according to GlobeSt.com sources. In October, the building sold for more than $4.2 million, but the plan was to spend roughly $2.8 million to renovate the class B building into a class A space. The source labels the trade as “a credit play,” with embedded economics in the triple net lease that resulted in one of the highest prices per sf to date this year in Dallas/Fort Worth.

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