CBRE Investors Snaps Up 1MSF Suburban Dallas Office
- Jul 02, 2008
Acting on behalf of its Strategic Partners U.S. 5 fund, CB Richard Ellis Investors has just acquired The Colonnade, a 1 million-square-foot office property in Addison, Texas. The three-building Class A complex sits about 10 miles outside of Dallas. The seller of the property was Colonnade Realty Holdings, and real estate services firm Holliday Fenoglio Fowler L.P. participated in the transaction. A Class A complex, The Colonnade encompasses Colonnade I, II and III, and is located on N. Dallas Parkway in the city’s Far North submarket. “That submarket has always been one of the healthiest in Dallas/Fort Worth for the last decade,” Steven Schneider, vice president with real estate services firm Grubb & Ellis’s office group; Grubb & Ellis was not involved in the transaction. “Opus has a building under development, but we haven’t seen any new construction in the submarket in a while, and rental rates have trended upward over the last couple of years.” And housing has played a role in maintaining the office submarket, too. “Residential development has boomed this decade, and it has been outside of Dallas, so we’ve seen a lot of people that have moved out north,” he said. “Decision makers like to be close to home.” Developed in 1983, Colonnade I encompasses 292,500 square feet of office space, while the 23-year-old Colonnade II and the 20-year-old Colonnade III feature 314,100 square feet and 377,600 square feet, respectively. The structures range in height from 12 to 16 stories and presently boast an average occupancy level of 75 percent. “It’s a great project,” Schneider said of The Colonnade. “They have some large users. It’s a great buy.” CBRE Investors is planning a renovation of the property that will include the upgrading of an existing fitness center, conference facility and deli. Additionally, the investment management concern will seek LEED certification for all three structures. Financial terms of the acquisition have not been disclosed, but word on the street is the deal was a reasonable one. “Dallas continues to experience significant job growth which translates to leasing, and the bottom line is that we are able to buy high quality properties priced well below replacement cost,” Mike Burrichter, principal with CBRE Investors Strategic Partners, told CPN today. “I think what gives many investors pause when considering Dallas is its high overall office vacancy, but that includes obsolete product that will never compete with the high quality buildings we are buying.” With the purchase of The Colonnade, CBRE Investors has increased its presence in Dallas to 12 buildings. Los Angeles-based CBRE Investors, an independently operated affiliate of CB Richard Ellis Group Inc., is a global real estate investment management firm with approximately $42.2 billion in assets under management as of the close of the first quarter.