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[IMGCAP(1)]RICHARDSON, TX-In an atypical move for its MO, Hillwood has bought a 511,796-sf portfolio of office and office/tech space at the heart of the original Telecom Corridor. Sources say the eight-building Cardinal Technology Center I and II have brought slightly less than the $125 per sf replacement cost.

Hillwood’s point man for the deal didn’t return a telephone by deadline to discuss the motivation for the strategy shift for the North Texas-based developer who’s got office, flex and industrial projects under way coast to coast. The 25-acre asset was on the market 30 days as a whole piece or two–369,440 sf in five tech structures and 142,356 sf in three office buildings.

[IMGCAP(2)]Michael Hardage, managing director for Tranwestern Dallas, tells GlobeSt.com that there were eight full-portfolio offers and another half dozen for the two pieces. Hillwood outbid the pack to become the second owner for the complex, which had its office/tech space deliver in 1996 and the pure office come on line in 1999 and 2000. The keys were turned over by an institutional client of Seattle-based Kennedy Associates Real Estate Counsel Inc.

“There really were no hurdles because the product was so well received. The buyer stepped up and performed beautifully and on schedule,” Hardage says. “There were no delays.” As would be expected, the deal closed all cash, with the private buyer and seller imposing a gag rule on all financials.

Since the dot-com bust, Richardson has diversified its economy so the Telecom Corridor label is gradually disappearing. There are five DART light-rail stations planned for the city, all primed for transit-oriented developments as the stops come on line. “People could see the resurgence in that area,” Hardage says about the private and institutional investors who put offers on the table.

Although Hillwood’s strategy shift is unclear, the value-add to the deal is quite clear: 85% occupancy in a submarket with steadily increasing demand. The complex was marketed as class A space. “It’s tilt-wall, but it’s new product in extremely good shape and a great location,” Hardage says. “It’s the best value-add office product there is in that market.”

In closing the deal, Hillwood tapped Dallas-based Stream Realty Partners LP to lease the buildings after interviewing several firms. Senior associate Benjamin J. Hautt and brothers Colby and Blaine Annett, both associates, are in charge of the assignment. Cardinal Tech’s long-time overseer, Talynn Otsuki, says her future calls for sourcing and investing, along with other investors, in office and office-tech properties in the Southwest.

Hautt says the immediate plan calls for cosmetic upgrades inside and out. “We’re going to spruce it up and re-brand it as Cardinal Park. “Properly positioned and managed, it will be the premier tech space in Richardson,” he says.

Hautt’s team is starting out with a 55,000-sf vacancy at 1155 E. Kas Dr., and 28,000 sf at 1701 N. Plano Rd. The buildings range from 45,732 sf to 100,150 sf. The rest of the addresses are 1125 and 1155 E. Collins Blvd., 1680 N. Glenville Dr., 1703 and 1705 N. Plano Rd. and 1680 N. Prospect Dr.

The tech buildings’ tenant roster includes Yahoo Inc.!, Tyco International Inc. and Sprint Communications. The office buildings are 66% filled by publicly traded companies. And, there are no lease rolls at all in 2008. “We had very strong interest in that listing because it has such strong credit tenants, 50% of which are investment-grade,” says Hardage, who brokered the deal with Transwestern managing director Stephen K. Simon.

Hautt says there already are four large prospects eyeing the balance of Cardinal Park’s open space–and that’s before marketing shifts into high gear. The office buildings’ opening quote is $15 per sf plus electric; the office/tech, $12 per sf plus electric and janitorial. “We just got up and running this past week and are ready to kick off,” Hautt says.

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