GlobeSt.com EXCLUSIVE: Landhuis Asking $107M for 13-Building Office Portfolio

TULSA, OK-The Landhuis Co. of Colorado Springs is asking $107.5 million for its 13-building office portfolio here that represents 6.2% of the city’s office market inventory. The price works out to $85.05 per sf for the 1.26-million-sf portfolio, which includes buildings ranging in size from 16,000 sf to 186,000 sf, in class from A to C and in age from 1972 to 1985. The portfolio’s overall occupancy is 76%, says Fischer, in part due to 100,000 sf of leasing in the past 18 months. The worst performer in the bunch is Park Center, which is 68% occupied and located in the CBD, which Fischer admits is hurting but also says is poised for a rebound in coming years thanks to a new convention center. Other properties in the portfolio include the Hanover Building, MidFirst Bank Plaza, Town Centre Office Park and Riverbridge Office Park. Eric Kimose, Scott Fischer and Adam Hess of Marcus & Millichap’s Denver office have the disposition assignment. Fischer tells GlobeSt.com that the portfolio is concentrated in the Yale submarket, but includes buildings in all six of the Tulsa submarkets: CBD, MidTown, Memorial, Lewis, Broken Arrow and Yale. Fischer estimates the 10-year un-leveraged IRR at 10% and the 10-year leveraged IRR at 13.38%”The portfolio will enable someone to come in and hold a major portion of the Tulsa market,” Fischer says. “And a majority of the buildings are concentrated in the Yale submarket, which according to our research is one of the city’s best performing.” The portfolio will not be sold off in pieces, Fischer says. All offers are due July 15. Depending on the owner’s preference, Fischer says they will either pick one company to move forward with or go back to the top five bidders for best-and-final offers. For an extra $265,000, Fischer says Landhuis will throw in its 24-employee property management company, Paradigm Realty Advisors, which includes day porters, electricians and an in-house construction team that can handle TIs for the buildings at a discount to third-party providers.Fischer says the goal is to sell the portfolio well before the end of the year, so that the new owner may take advantage of an accelerated depreciation opportunity that has been extended through the end of 2005. “It’s pretty much close to double the annual depreciation,” he says. “It was one of the main reasons to get it out [on the market this year].”According to the company’s website, the Landhuis Co. is a real estate investment, marketing, development and property management company. Landhuis Co. president LeRoy Landhuis was not available Wednesday for comment on the would-be sale of his Tulsa portfolio. His CFO, Alan Vancil, tells GlobeSt.com the portfolio is on the market because it appears to be a good time to sell. He declined comment on what might be done with the proceeds. “We’ll see what happens if we get it under contract,” he says.