Hines, JP Morgan Acquire Dallas' Plaza at Legacy Office Complex
- Jan 31, 2012
January 31, 2012
By Barbra Murray, Contributing Editor
Eight years after selling The Plaza at Legacy in Plano, Tex., Hines has welcomed the 215,000-square-foot office property back into its portfolio. Hines just acquired the seven-story, suburban Dallas building and an adjacent 12-acre parcel of land in a joint venture with institutional investors advised by J.P. Morgan Asset Management-Global Real Assets.
Not only did Hines previously own The Plaza, but the firm also developed it. In 2001, Hines constructed the Class A office tower that would be known as Computer Associates Plaza, as a build-to-suit for Computer Associates International Inc. at a cost of approximately $42 million. Hines sold the asset for $53 million in 2004 and continued to manage it until 2006. Financial terms of Hines and J.P. Morgan’s recent purchase of the property have not been revealed; however, Hines disclosed that the company relied on the investment-banking team of commercial real estate services firm Jones Lang LaSalle Inc. as exclusive advisor on the arrangement of the joint venture equity and the debt.
Computer Associates continues to call the building at 5465 Legacy Dr. home, but the company recently reconfigured its occupancy with a 10-year lease agreement that leaves it with 77,000 square feet of space and the option to expand into an additional 16,000 square feet.
With The Plaza no longer occupied by a single tenant, Hines has 120,000 square feet of premier space to lease, and financial assistance from U.S. Bank to fund the transformation of the property to suitably accommodate an additional user or users. “Since Hines developed the asset, we know it inside and out, and with this opportunity to reposition it for multi-tenant use, we believe it will be well-received in the market,” Ran Holman, a vice president with Hines, said.
Hines will work with real estate services firm Cassidy Turley to fill up the tenant roster. While the metropolitan Dallas office vacancy rate remains high — 21.8 percent in the fourth quarter according to a JLL study–the timing may be just right for securing a large user. JLL reports that as options for large contiguous blocks of space continue to dwindle in Far North Dallas, Uptown and Preston Center, the three submarkets that have been leading the city’s slow-but-sure recovery, absorption of such spaces will pick up this year in the Central Expressway, Las Colinas and Richardson/Plano submarkets.
Additionally, with the Dallas area’s strong job growth and corporate relocations and expansions, Hines and J.P. Morgan may very well find use for the newly acquired 12-acre parcel, which can accommodate a build-to-suit project as large as 300,000 square feet.