Thompson's new chief investment officer and president of the newly created Middle East fund, Darrell Betts,, had been marketing the buildings for Grubb & Ellis Co. along with former partner, Scot Farber in Dallas for locally based Resdeco Real Estate Development. The just-bought buildings are the 80,227-sf Oakwood Tower at 3626 N. Hall St. and 53,812-sf One Lee Park West at 3303 Lee Pkwy. The larger building is 94% leased; the smaller one, 92%.
Darryll Goodman, senior vice president in Las Vegas for the Irvine, CA-based Thompson National Properties, tells GlobeSt.com that there is considerable lease rollover in the next three years so the game plan is to renovate and bump rents to market rate. Although there's the obvious risk of move-outs, he says "it's a loyal tenant base." He estimates in-place rents are 30% below market rate.
The new team in charge of leasing and management, Holt Lunsford Commercial of Dallas, is quoting $21 per sf plus electric as the pre-renovation rate. Bids are now being solicited for the upgrades.
Goodman says the anticipated hold is three to five years. Both positioned on highly valuable land, the nine-story Oakwood Tower, built in 1972, sits on 0.8 acres while the five-story One Lee Park West, delivering in 1964, is positioned on 0.6 acres. Based on previous value-add sales in the submarket, the deal most likely hovered $100 per sf. Resdeco bought Oakwood in June 1987 and the other building in December 1991.
"The buildings have great bones, but they need some freshening," Goodman says. And that is the going-forward strategy whether it's in Dallas or elsewhere, according to Goodman, who came on board in April from Thompson's former camp at Grubb & Ellis Realty Investors Inc. of Santa Ana, CA. He's not sure about the quota for Dallas, but it is one million sf of acquisitions in the next 12 months in his homeport of Las Vegas.
"We're being very, very aggressive," Goodman says. "Every market we find an opportunity like this, we're going to go and buy. These are extremely well located in Turtle Creek--it's the Beverly Hills of Dallas." Financing was arranged by Adam Levinson of Cohen Financial through Grandbridge Real Estate Capital LLC.
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