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IRVING, TX-TIC Properties LLC, making its first acquisition in Texas, has bought the lion’s share of Royal Tech Center and is keeping its eyes on the balance. The $22.2-million claim was staked with the acquisition of the 216,772-sf, four-building headquarters campus of Michaels Stores Inc.

The Greenville, SC-based TIC Properties’ president Trevor L. Gordon tells GlobeSt.com that the deal with Chicago-based CMD Realty Investors severed the fifth building in the Las Colinas business park along Bent Branch Drive because its sole tenant wasn’t quite ready to take on more space. “In this case, not knowing a good timeframe for Michaels to go into building 5, it did not make sense for us,” he says. “Had we bought that fifth building, it would not have allowed CMD to maximize its selling price on that property.”

For the past decade, Michaels has subleased the class B campus at 8000 Bent Branch Dr. and 2910 W. Bent Branch Dr. from the Armonk, NY-headquartered IBM Corp. In April, the locally based arts and crafts chain’s top execs inked a 10-year lease for four buildings, adding one in the direct deal with CMD Realty, according to Gordon. The gross-leased agreement has expense caps so its effective yield mirrors a triple net lease, he adds.

Gordon says TIC Properties assembled 19 investors, kicking in an average of $426,000 to close the deal, brokered by Darren Sides with the Stan Johnson Co. in Tulsa, OK. The anticipated hold, he says, will be 10 years unless an offer that’s too good to pass up comes along.

According to Gordon, the unsold structure is due to be vacated this month by three tenants–another reason the buyer struck a deal to sever it from the 13-acre block. He adds TIC isn’t holding a right of first refusal on the building, but is keeping it in its sights. Even at that, the acquired campus has a high parking ratio that would allow a garage and another three-story building to be added to the 20-year-old campus, he says.

“Based on the strength of Michaels, the location and opportunities currently available in the Metroplex,” says Paul Aiesi, TIC Properties’ chief investment officer, “we felt the acquisition of this property fell nicely in line with our core criteria. We knew certain markets in Texas had struggled over the past few years, but felt long-term the metroplex could perform.” Aiesi spearheaded the $102-per-sf acquisition, which closed with $16 million in financing from Chicago-based LaSalle Bank and $8.1 million of 1031 exchange equity. J. Matthew Good with Professional Mortgage Co. Inc. in Greenville, SC arranged the financing.

Not only is the acquisition a Texas first for TIC Properties, but it’s also its first syndicated deal that closed with “true costs for the investors” without any phantom profit centers, which is commonplace in the TIC crowd, Gordon explains. That accomplishment effectively marked a milestone for the investment group, which has $150 million to spend by year’s end, he says. TIC Properties planned to spend $200 million this year in the US, but anted up the stakes to $250 million just recently, according to Gordon.

“We want Dallas/Fort Worth to know we have $150 million to spend before the end of the year,” Gordon says, “and we don’t care if we spend it all in the metroplex.” In two weeks, another deal closes for a Midwest property.

Gordon says the acquisitions team is “looking” at several buildings in Dallas/Fort Worth, including more from CMD in its bid to sell all that it has in the market. The buying criteria is office and industrial product in the $7-million to $90-million range. And the sweet spot is $12 million to $20 million.

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