"These assets we, along with our partners, have decided to take to market because we think the value has been created and the time has come to sell," Bill Deyo, principal of Atlanta-based Goddard Investment, tells GlobeSt.com. Goddard owns an additional one million sf or slightly more in Dallas, but the listed properties are the only ones that Deyo says will be up for sale this year.
A June 6 call for offers is set for the 232,541-sf Crossings I at 5429 LBJ Frwy. and the 296,587-sf Crossings II at 5501 LBJ Frwy., the only class B in the stack. The class A Crossings I is assessed at $24.4 million and the class B is $19.2 million. Jones Lang LaSalle managing directors John C. Alvarado, Jack Crews and Evan Stone along with senior associate Seth Bame are heading up the sales campaign.
The 273,080-sf Saint Paul Place at 750 N. Saint Paul St. in the Dallas CBD is being marketed by CB Richard Ellis' executive managing directors Gary Carr and Russell Ingrum. The 22-story building is assessed at $27.3 million.
The Pyramids of Park Lane is a two-building medical office complex assessed at $39.3 million. The asset stack is the 145,543-sf north tower at 9101 N. Central Expressway and 150,000-sf south tower at 9201 N. Central Expressway. Holliday Fenogolio Fowler LP's Andrew Levy, Todd Savage, John Bourret and Kelsey Roop hold the listing.
The value-add components are a mix of vacancy, submarket improvements and in-place tenant names like Baylor Health Care System. Crossings I is 82% leased; Crossings II, 15%. St. Paul Place is 50.2% leased and the Pyramids are 98% occupied.
Deyo says there is no pressure to sell any of the assets so it boils down to offers living up to the sellers' expectations. "There's always the possibility" that a building could be pulled, he says "if we decided the price we had hoped to achieve was not available."
But as Alvarado points out, 80% of institutional capital has been allocated for value-add strategies. [IMGCAP(2)]The Crossings "represents the best value-add investment opportunity in all of Dallas, certainly along the lower tollway," he says. "The number of offers in the market has decreased significantly from last year. That's a reflection of uncertainty in the marketplace, but there is equity looking for investment."
Dallas continues to hold its place in the investment limelight, with several other class A and AA buildings penciled to change hands in June. As a pricing barometer, class AA buildings have been fetching north of $200 per sf.
In a case study glimpse of Goddard's strategy, Alvarado says the Crossings were bought four years ago, with the lion's share of the $5 million in renovation capital going into the 10-story, class A building, which was 25% leased when it was bought. The 12-story Crossings I just landed a 25,070-sf lease from the Republic Group in recent weeks. The sweet spot is they don't have to go as a pair.
"With the lack of attractive investment opportunities in the marketplace, Goddard realized they could capitalize on selling the upside to a future owner," Alvarado explains. "The leases that are in place are rolling to significantly higher rents, meaning there is vast upside to this." To date, institutional investors and private buyers, mostly from California and New York City, have been sizing up the deal. If all goes as planned, the Crossings will be sold by the end of summer.
"I think there's been a lot of interest," Deyo says, extending the assessment to all his "for sale" properties. "We've seen interest from institutional and private buyers."
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