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FORT WORTH-The new owner of the Oil & Gas Building/Commerce Building office complex in downtown Fort Worth has completed about 45,000 sf of leases since acquiring the 450,000-sf property in September. Leasing manager Darrah Smith of the locally based Darrah Smith Commercial reports the two most recent deals, a 13,440-sf lease with Transcom Enhanced Services and 9,000-sf lease with Holland Acquisitions, bring the property at 307-309 W. 7th St. to 73% occupancy.

The complex was 68% occupied when it was purchased by RLYB FW Properties, a partnership from New York City, which bought the historic complex from Fort Worth Plaza LP for $26.7 million, or about $60 a sf. The property consists of the 19-story Oil and Gas Building completed in 1954 and the 16-story Commerce Building, which dates to 1930. The two buildings are linked at lobby level and share a common entrance.

Smith says the previous owner, which acquired the property in 1999 with almost full occupancy, allowed the tenancy to slip because it planned to convert the complex into a data communications center. It spent millions of dollars to upgrade the power system and install fiber-optic wiring. But after the dot-com bust of 2001, it put further improvements on hold. About 20% of the space is leased to data storage companies.

According to Smith, the new marketing program strives to take advantage of the power and wiring improvements to land additional data storage tenants, but it tries to appeal to traditional office tenants as well. To attract the latter, RLYB FW will spend several million dollars more to upgrade other building systems such as HVAC, and renovate the lobbies and hallways. “This will be a welcome change to the building,” the leasing manager tells GlobeSt.com. “Nothing’s been done to the look of the building in 25 years.”

The owner has also taken steps to improve management, hiring Dallas-based Stream Realty Partners LP to oversee the complex. “Stream has brought a lot of professionalism to the building, which makes a big difference to tenants. It makes it much easier to lease,” says Smith, who adds he is working on several additional leases. Rents run around $16 a sf.

“The building is positioned right for medium-priced tenants,” he continues. “Fort Worth has one of the lowest vacancy rates in the nation, and there’s a lot of activity in the market. We haven’t even started the renovations, but business is already picking up. We’re looking forward to strong leasing for the next year or so. This will be a strong investment for the new owners.” Ken Jaffee of Swearingen Realty Group represented both the buyer and the seller in last year’s purchase transaction.

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