X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

DALLAS-In the culmination of a fast-paced sales year, another Downtown landmark is poised to hit the market. Sources have confirmed that Morgan Stanley has hired Holliday Fenoglio Fowler LP to sell the 1.4-million-sf Thanksgiving Tower.

Details about the debut are unavailable, but the offering stacks up as the most significant value-add deal to come down the pike this year in Dallas. The 50-story high rise at 1601 Elm St. is just 60% leased due to the exit of a Bank One credit card division in the past year. Local brokers say the remaining tenants, though, are in place for the long term.

In 2002, the New York City investment giant tapped its Morgan Stanley Real Estate Fund III to team with locally based Macfarlan Real Estate & Investment Management to buy an 80.5% stake in the property for $95 million, according to published accounts about the deal’s closing. This year, Morgan Stanley has sold several office buildings in Dallas and Austin that it bought with Macfarlan as it lowers the curtain on MSDW Southwest Partners.

Bets are starting to go down that the value add–assessed at $107 million–will change hands for roughly $100 per sf or less because the new owner will have to dig into its pockets for tenant improvements and leasing commissions to fill the open floors. “It will be substantial,” one market source predicts.

Still, Thanksgiving Tower’s location will be the dealmaker: right in the middle of all the construction for residential, retail and hotels. The construction is real; not a pipedream. To sweeten the deal’s promise, the high rise has a DART rail station at its front door and the famous Tower Club on its 48th floor. Stream Realty Partners LP of Dallas leases and manages the 26-year-old tower, which was last renovated in 1992. Its open floors are being marketed at $17.50 per sf to $19 per sf.

“There is more money going into value add than another other real estate sector,” Michael Burrichter, principal of Los Angeles-based CB Richard Ellis Investors, tells GlobeSt.com, “so you’d expect to get a lot of play out of that asset.” He says the most likely buyer will be a private investor given the dynamics of the Downtown.

The CB buying group and Younan Properties Inc., also from the Los Angeles area, are among this year’s most active buyers of class A space in Dallas/Fort Worth. Whether they become Thanksgiving Tower bidders remains to be seen, but it’s a certainty that there’s been no shortage of sales to date this year–and more set to close before the calendar turns. George Roddy Sr., president of Roddy Information Services in Addison, has logged 14 office sales for buildings with 50,000 sf or more in Downtown and Uptown. In comparison, there were just five that traded last year for the 10-month period.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.