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DALLAS-Capital Commercial Investments, jump-starting a buying spree in Dallas/Fort Worth, has taken control of the 873,378-sf Campbell Centre from GE Electric Pension Trust. The buyer has three more office properties under contract and a possible portfolio pick-up under review.

Derek George, partner and managing director of the Austin-based investment group, says the plan is to deploy $1.5 billion of equity into US real estate within three years. “We are looking in Dallas for another 2.5 million to three million sf on top of what we own now,” he tells GlobeSt.com, citing an appetite to buy at discount prices for class B and class A properties. He says contracts are in hand to add 750,000 sf of class A office space in Dallas before the year ends.

George, like other buyers of D/FW assets, can’t discuss the price of Campbell Centre at 8350 and 8150 N. Central Expressway due to confidentiality clauses in a non-disclosure state. Industry sources, though, say the two towers, 1970s-era space situated on 11.5 acres, brought $95 per sf for the Fairfield, CT-based seller.

With the swap now done, Capital Commercial is readying the stage for a multimillion-dollar makeover, inside and out. Joel Pustmueller, partner in Peloton Real Estate Partners in Dallas, has won the leasing assignment. As with the new owner’s other properties, Houston-based PM Realty Group’s Dallas team will manage the asset.

Interior changes will attack all common areas, including retrofitting space for a fitness center, tenant center and brokers’ facility for all to use when they’re on that side of town, regardless of whether there’s a deal in the works for the towers, according to George. Also under consideration is a re-skinning of the towers.

Three architects are being interviewed for the project as are the buildings’ tenants to “see what they’d like to see done and not see done,” George says. Work is slated to get underway in the fourth quarter and take six to nine months to complete.

The 431,649-sf North Tower at 8350 N. Central Expressway is 91% leased. Its lead tenants are Pegasus Solutions Inc. in 97,626 sf and Greenwood Village, CO-based Great-West Life & Annuity Insurance Co. in 76,176 sf. The 441,729-sf South Tower, situated at 8150 N. Central Expressway, is 69% filled, with 1st Global Capital Corp. in 63,796 sf for its headquarters.

“I think the Central Expressway market is poised to improve dramatically because of the pending LBJ Freeway construction,” says Pustmueller, who leased Campbell Centre in 2001 when he was with Trammell Crow Co. The freeway widening project, slated to take five years to finish, will begin in late 2008 or early 2009.

Pustmueller predicts Campbell Centre will be the beneficiary as tenants begin to weigh options to skirt the freeway construction. “It’s a nice high-profile property in a great location,” he adds.

George predicts Campbell Centre will reach stabilization in 12 to 18 months. There is no large turnover until Pegasus’ headquarters pact in 2012.

George says Capital Commercial secured a five-year loan at a fixed-rate interest and 30-year amortization from ING Clarion Partners of New York City. And, he adds, talks are underway with ING to finance additional deals in the pipeline.

Capital Commercial historically flies under the radar screen. It owns four other office properties in Dallas/Fort Worth, but none as large as Campbell Centre. The buyer’s MO is to acquire properties at half or 60% of replacement cost for one of four investment funds. “We look for a discount to replacement cost and have the ability to move quickly,” George says. “We underwrite for five to 10 years, usually with a seven-year strike. We’re in it for the long haul.”

George says Capital Commercial was up against one other bidder for Campbell Centre. “I think we were picked because of our background and strength of closing,” he says.

David Pepe, managing director in Orlando for New York City-based DTZ Rockwood LLC, secured the listing and ran the sales campaign with assistance from the Dallas team. He was unavailable to comment by press time about the deal.

“We’ve always been waiting in the wings for Dallas,” George explains of the investment’s hard push that’s now under way. “We see Dallas as a flight to quality. We feel very strongly about the growth of the city and its economics.”

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