Iconic Dallas Office Tower Gets New Owner
- Oct 07, 2016
By Barbra Murray, Contributing Editor
Dallas—The 369,000-square-foot 17Seventeen McKinney office tower in Dallas has changed hands, with HFF pulling double duty on the deal. The commercial real estate and capital markets services provider facilitated the sale of the trophy office asset on behalf of Granite Properties Inc. and MetLife Real Estate, and arranged financing for the buyer, Gaedeke Group’s Gaedeke Holdings XIV Ltd.
HFF was the right firm to handle the job; it has history with 17Seventeen, having orchestrated $73 million in financing for the property through Regions Bank, a tenant in the building, in 2014.
Located in Dallas’ coveted Uptown submarket, 17Seventeen is classified as Class AA, and it’s got all the premier characteristics to support the designation. “This building is pure quality—every box has been checked,” Belinda Dabliz, vice president of leasing with Gaedeke Group, said in a prepared statement.
The 19-story 17Seventeen sits on a 2-acre parcel at 1717 McKinney Ave., and features such extras as a landscaped, 1-acre amenity deck and a seventh-floor amenity level with a conference room and deli. It also offers the seemingly requisite retail space and fitness center, coming in at 7,500 square feet and 4,000 square feet, respectively. Designed by architectural firm Good Fulton & Farrell, the tower is highlighted by a 22-story LED illuminated light panel, and is recognized as the first LEED Gold-certified development in Dallas.
The list goes on. Of particular note is 17Seventeen’s occupancy level: the building was 98 percent leased at the time of sale. Regions heads up the tenant roster with 74,300 square feet, or 20 percent of the office space, and its full-service drive-through bank branch accounts for a portion of the property’s retail segment. And then there’s the 1,100-space attached parking facility, and premier location providing convenient access to freeways and rail transportation.
17Seventeen is the kind of property that’s like catnip to investors. HFF hasn’t yet disclosed any transaction dollar signs, not even the amount of the fixed-rate acquisition loan secured for Gaedeke through 17Seventeen co-seller MetLife. One recorded figure attached to the asset is its 2010 development cost. Granite built the office tower in conjunction with Gables Residential’s 292-unit Gables at Park 17 luxury residential high-rise, which is linked to the office structure by a roof deck. The buildings, known collectively as Park Seventeen, were completed at a cost of approximately $200 million, according to a city of Dallas Office of Economic Development document.
Given its status as an iconic, well-leased, well-located office destination, 17Seventeen likely fetched a pretty penny—more than what most Class A Dallas office properties command these days, which was an average $215 per square foot at midyear, according to a report by commercial real estate services firm Transwestern. 17Seventeen’s price tag probably pushes up the average for the third quarter, as KPMG Plaza did in the second quarter. The approximately 460,000-square-foot office property sold to a group headed by Champion Partners and Korea’s Hanwha Life for $225 million, or roughly $490 per square foot.
Image courtesy of HFF