COPPELL, TX-Shucking a non-core asset that it inherited, ProLogis has banked $177 per sf from a deal that surpassed expectations as 20 would-be buyers lined up for a chance at the 101,844-sf class A Gateway Office Center. The winner of the chase was Lexington Realty Trust.

The New York City-based buyer took the 555 Dividend Dr. deed in an all-cash close. “Clearly the main interest was we had two strong credit tenants and a very good submarket. It started with the location,” Richard Rouse, Lexington’s chief investment officer, tells The investment group’s last purchase in Dallas/Fort Worth was November 2005.

Rouse says as the ink dried on the takeover, talks opened with Brink’s Inc. to expand its lease. The Richmond, VA-based Brink’s home security subsidiary occupies 75% after two years in the building, steadily picking up additional space as Washington Mutual Bank downsized from 50,000 sf that it leased in November 2002 for its National Operations Center. Brink’s lease runs through June 2015 and the Seattle-headquartered banking giant’s name is in place on 25,461 sf through August 2012, according to the marketing flyer.

Rouse says the anticipated hold is “at least five years, if not 10.” With an office in the metroplex, Lexington will lease and manage its newest buy, a 7.3-acre, freeway-fronting footprint at the Interstate 635-Freeport Parkway junction.

CB Richard Ellis executive vice presidents Gary Carr and Russell Ingrum steered the sale for ProLogis. The seller’s dance card was filled with names of private buyers, institutions and single-tenant net-leased investors.

“It’s not that big of an asset, but we had good activity on it,” Ingrum says. “I think we under-estimated how many people are looking for cash flow. It just goes to show there is a lot of demand for predictable income streams.”

Ingrum says the deal went full circle in 60 days, crediting the 20 offers to location, tenants and construction–a two-story building with 50,922-sf twin wings connected by an atrium. Gateway Office Center was built in 2002 by the San Francisco-based Catellus Development Corp., which merged in 2005 with ProLogis.

A ProLogis spokesman says Gateway Office Center is the only inherited asset that will be sold in Texas. He says the “for sale” sign went up because it’s office, making it non-core for the industrial giant.

Gateway Office Center, though, fulfills Lexington’s sweet spot which, as the industry knows, is single-tenant, net-leased assets and occasionally a few tenants more. Rouse says the in-place rents are market rate. However, the submarket has been steadily producing occupancy and rent gains for the past year, with tenant demand now at its highest level in five years. The latest reports show occupancy at 88.6% and rents averaging $19.80 per sf.

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