225,000-SF Makeover Wins 59,426-SF Tenant

IRVING, TX-After a six-month search, Health Management Systems Inc. has struck a 69-month lease for 59,426 sf of class B-plus space in the Las Colinas Office Center. The Manhattan-based firm will move in Nov. 1, becoming the second tenant in a multi-tenant push for a long-time single-user building.

Aside from an “aggressive” proposal, the inbound tenant’s broker says the 225,000-sf, 10-story building’s vacancy helped to nail the deal since there’s room to expand beyond the initial three-floor lease. Health Management Systems has been scouring the market for a local office expansion and nationwide consolidation of select functions from a 23-office network, according to Evonne N. Keene, senior vice president for Transwestern in Dallas. The firm has leased enough space in Corporate Point at 5615 High Point Dr. for the 150-employee office to add 250 more workers in the coming years.

San Diego-based Equastone bought the asset in July 2006, nearly one year after it was emptied by Verizon Communications Inc. Since then, Equastone has completed a multimillion-dollar renovation, inside and out, of the 1983 design.

Keene tells GlobeSt.com that Health Management will vacate 25,000 sf of class C office space at 1140 Empire Central, where it has just marked the third year of a seven-year lease. She says talks are under way for an early buy-out, but regardless an early termination becomes possible in August 2008.

Corporate Point was on a short list with one of Royal Ridge’s buildings, Lakepoint at Las Colinas at 1321 Greenway Dr. and 7700 Bent Branch, all relatively close to each other and within easy driving distance of Dallas/Fort Worth International Airport. Corporate Point is the closest to the airport and the largest in the stack.

“The deal was fiercely fought after,” says Kurt Cherry, vice president in Houston-based PM Realty Group’s Grand Prairie office. “They certainly did their homework. I think the win for us was we had the ability to provide an above-market parking ratio and expansion opportunities.” The parking ratio is 5.7 spaces per 1,000 sf.

Keene says Equastone and its broker were particularly aggressive in their pursuit of the deal. Plus, she says “the look of the building” factored heavily into the final decision. Keene teamed with Steven J. Conrad, Transwestern’s senior director in Denver, to work out the relocation and expansion for the national account.

Health Management, which services government healthcare programs, has taken the first, fourth and fifth floors. Ricoh Corp. of West Caldwell, NJ leases the 15,121-sf third floor. Cherry is marketing the retooled space for $17.50 per sf plus electric.

“It was a good deal for both parties,” Cherry says. “Las Colinas is still very attractive from a tenant’s perspective. And proximity to D/FW airport doesn’t hurt.”