Repositioning Gets 97,930-SF Starting Lease

IRVING, TX-After sharing class A office space with its parent, Avelo Mortgage LLC is ready to go out on its own. In signing the 97,930-sf lease with at least 10 years on the term, the servicing company becomes the first tenant for a three-building repositioning that’s been on the drawing board nearly two years.

Avelo Mortgage, a wholly owned subsidiary of Archon Group LP, has leased two of the three floors in the empty 250 E. John Carpenter Fwy. in the former Associates/Citigroup campus in Las Colinas. The stair-stepped headquarters lease comes with an option to take down the first floor too in the 148,376-sf building, according to Michael Dudley, senior vice president for CB Richard Ellis in Dallas. And the plan is to have construction done by early to mid-April so Avelo can move in May 1.

Citigroup moved its last group out in September 2006, allowing the owner, Behringer Harvard Short-Term Opportunity Fund I LP, to start demolishing the buildings’ interiors. CBRE’s associate Worthey Wiles III tells GlobeSt.com that about $4 million has been spent to date, but the long-range plan calls for adding a second parking garage, easily a $15-million expenditure. But, that isn’t scheduled to go live until the next tenant signs. What is beginning is the addition of a 5,000-sf fitness center to the 191,970-sf Wingren building as well as a 2,000-sf deli with al fresco dining in a courtyard linking the trio.

To prep for Citigroup’s exit, Wiles has been searching for single-tenant users since the Dallas-based investment group bought the 539,368-sf complex in 2004. The strategy shifted to tenants in the 100,000 sf or more category after the once-struggling Las Colinas market gained significant leasing traction and large deals came back to the corporate nesting ground.

“We don’t anticipate there would be any more than five users in that project,” Dudley explains, citing the plan is to bank about 50,000 sf for future tenants’ expansion needs. The team’s quoting $20 per sf plus electric for the class B-plus space. The complex includes two seven-story sisters at 290 E. John Carpenter Fwy.

Avelo’s first-floor option is in place for 24 months. “It’s a reasonable period,” Dudley says. “That’s one of the reasons they selected the project was the large floor plates and ability to grow.”

Avelo, also the wholesale mortgage distribution channel for Goldman Sachs Group Inc. in New York City, has been sharing space at 600 Las Colinas Blvd., which Archon is about to exit. Dallas-based Staubach Co.’s senior vice president Brad Selner and executive vice president Jeff Ellerman ran the tenant’s side of the deal.

Wiles says the executive team pitted Dallas against Salt Lake City for the headquarters location. “It was a win that we kept them in Dallas,” he stresses. “It’s a great start. They’re really helping us to kick off the project. It’s a good catalyst.”