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[IMGCAP(1)]ADDISON, TX-CB Richard Ellis Investors, tapping a $2.1-billion equity fund, has closed on the 1.03-million-sf Colonnade I, II and III in North Dallas, immediately earmarking more than $5 million for upgrades. If the street has it right, the sale was sealed for $171 per sf or roughly $176 million.

Chicago-based Colonnade Realty Holdings, whose extended family includes Blackstone Group and JPMorgan Asset Management, has controlled the class A trio along the Dallas North Tollway since April 2005. CBRE Investors, buying for its Strategic Partners US 5 fund, is starting out with 75% occupancy in the trio: the 292,490-sf Colonnade I at 15301 Dallas Pkwy., 314,125-sf Colonnade II at 15303 Dallas Pkwy. and 377,639-sf Colonnade III at 15305 Dallas Pkwy.

Michael Burrichter, principal of the Los Angeles-based investment group, says the plan is to upgrade mechanicals, add its branded 5-Star service center, make over the 70 foot-high atrium and concourse connecting the trio and improve energy efficiencies so the complex meets LEED requirements. [IMGCAP(2)]Architect Andre Staffelbach of Staffelbach Design Associates Inc. in Dallas has started to build the design and technical team to price the job and get permits so work can begin by year’s end. The ballpark estimate is the trio’s new packaging will take one year to complete, according to Burrichter.

Burrichter says the tentative plan is to slide in a CBRE team to fill the empty space by relying on upgrades and reduced operating costs for tenants as incentive for expansions and add new names to the directory. He says the work is predicted to shave 10% to 15% from tenants’ current energy tabs. The management and leasing center will get an anchor seat in the atrium while other changes are expected to double the size of the fitness center, add more food-service tenants and incorporate the full concierge-style lineup of the 5-Star program.

The Colonnade was widely marketed by Holliday Fenoglio Fowler LP’s team in Dallas. “It was competitive. It’s competitive for high-quality assets everywhere,” Burrichter tells GlobeSt.com, “but we really liked the building and wanted to buy it and knew there was competition.” All he’ll say about the financials is the fund assumed some debt.

Burrichter says there is still work to do this year for in-place leases about to roll. “This is right down the fairway in terms of leasing, existing vacancy and rollover,” he says. “We’re confident we can get the leasing done.”

The Colonnade, positioned on 12.9 freeway-fronting acres, is the fund’s first acquisition in Dallas. The recently closed fund has spent slightly more than $1 billion of its equity, which when teamed with debt is providing $6.4 billion of buying power. “We’re right out of the box on this fund,” Burrichter says, “and it’s the first Dallas acquisition.”

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