DALLAS-In a complicated packaged play, the State Teachers Retirement System of Ohio has banked a record-setting price for the 1.1-million-sf JPMorgan International Plaza, passing the three towers to two New York City-based partnerships. Sources are reporting the combined price hit a $275-million to $290-million strike zone, besting the record by at least $25 million.

JPMorgan International Plaza I and II went to a partnership between David Walentas as majority owner and Fortis Property Group while the third tower, viewed as the value-add to the deal, was handed off to the Mizrachi-Alcaly Group and Fortis, Jonathan Landau, Fortis’ lead executive responsible for the packaging, tells GlobeSt.com. Landau says the deal was brought to him by Dennis Trimarchi of the Schenectady, NY-based Trimarchi Management after he had worked out a contract with the pension fund, which teamed with Dallas-based Wilcox Development Co. to develop the marquee property at 14201, 14221 and 14241 Dallas North Tollway between 1999 and 2002. “He found us and asked us if we were interested,” Landau says, “and we were.”

Landau says Walentas’ acquisition far exceeded the rumored $275 per sf for the 351,248-sf and 405,603-sf towers, both of which have JPMorgan Chase as the sole occupant through 2018. “It’s akin to a bond deal,” Landau says, citing a likely long-term hold for Walentas’ first acquisition in Dallas/Fort Worth. “The tower I and II acquisition by Walentas is a price that hasn’t been realized in Dallas to date.”

The joint venture partners for the 351,248-sf third tower paid a bit less than Walentas. “We believe in a stabilized position it’s worth a lot of money,” Landau says, adding the plan for now is a long-term hold as well.

The joint venture will invest $500,000 to $1 million into renovations and added amenities to reposition the 13-story building and fill the 140,000 sf of empty space, according to Landau. Fortis has replaced GVA Cawley, the trio’s only leasing firm in its history, with Stream Realty Partners LP after a fierce competition among brokerage houses jockeying for the premier assignment. Landau says he foresees future deals with Cawley, but wanted a more “aggressive” and “comprehensive” leasing group to carry out its repositioning plan.

The repositioning will entail renovations to the lobby, entrance and conference rooms plus adding valet parking and doormen, WiFi and a specialty coffee shop and fitness center. The renovations will take about six months to complete. Then, Landau says, rents will be a firm $28 per sf. “What we liked about the deal is we think the existing tenants are well below market,” he says.

Landau says the third tower’s tenant roster has no immediate roll. Its lead tenants, Arthur J. Gallagher Inc. has 22,841 sf locked down until January 2013 and KBA LLP has roped off 20,106 sf until August 2013.

Stream’s attack plan will be to “articulate to the market the building’s rightful position in the marketplace,” Jon Altschuler, managing director and partner, says. “There’s simply no high-quality space available in the corridor and we control a hefty portion. We’ve improved rates at Chase Tower in the Downtown $5 per sf and we’ve driven occupancy more than 10 percentage points in less than one year.”

Holliday Fenoglio Fowler LP’s Dallas team brought the 12.2-acre trophy trio, complemented by 4,539 spaces in two parking garages, to market last fall. Sources say the offering triggered a heated competition among world-class institutions although some players did an early fold because the stakes were too rich. At one point, rumors were running fast and furious that the deal had cratered because it failed to make the year-end closing roster. The reality is the buyers had exercised their rights to extend. The HFF team isn’t discussing the deal due to the confidentiality clause, limiting its comment to just to fact that it had closed at last.

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