Westmount Sells 460,000-SF Dallas Office Complex to Tenant
- Jan 21, 2009
Just short of three years after purchasing the Riverside Commons office complex in Irving, Texas, Westmount Realty Capital L.L.C. and equity partner Buchanan Street Partners have just sold the 460,300-square-foot Class A property to two-year tenant Research in Motion. Situated on 13 acres in Irving’s Las Colinas submarket about 10 miles east of Dallas/Fort Worth International Airport, Riverside Commons (pictured) consists of six structures that were developed between 1984 and 1987. Westmount and Buchanan snapped up the property, then known as Waterside Commons, from Crescent Real Estate Equities in February 2006 for approximately $25 million, and proceeded to shell out $5.7 million on upgrades and repositioning. “It had been a single-tenant campus, but we saw an opportunity, as the market at the time was–and continues to be–a small tenant market,” Steve Kanoff, Westmount executive vice president & partner, told CPN. “We brought the buildings into the 21st Century and made them available for multiple tenants, and that was the secret to this success.” At the time Westmount and Buchanan took over ownership, Riverside Commons was 50 percent leased; presently, the complex is 86 percent leased. New owner Research in Motion, the Ontario, Canada-based maker of BlackBerry wireless devices, established its U.S. headquarters at Riverside Commons in 2007, signing a 10-year lease for 110,000 square feet at the property. Last summer the company took advantage of an option to expand, and added approximately 25,000 square feet to its occupancy. Sprint Nextel Corp., with 211,300 square feet of space, is the lead tenant at the property. CB Richard Ellis Inc. marketed Riverside Commons and represented both Westmount and Research in Motion in the transaction. Essentially, the deal had been brewing for several months. “We approached Research in Motion in June of last year when it was clear that they were liking their facility and thinking about expanding,” Kanoff said. “While they were mulling it over, we took the property to market around Labor Day.” While interested parties did come to the fore, the credit market had frozen up quite solidly at that point–then, Research in Motion reentered the picture. Westmount’s decision to sell the Riverside Commons within a few years of purchasing it had always been part of the plan. “We anticipated Riverside Commons as a value-add and sale opportunity and our business plan was for a four-year hold,” Kanoff said. “But we are ahead of schedule and slightly over pro forma; this was a successful deal.” So the disposition marks a desire, as opposed to a need, to sell. “Our ability to make acquisitions is independent of this sale. We are actively looking for opportunities in the marketplace; we’re just waiting for the right opportunities to come to the market.” While the time was right to let go of Riverside Commons, Westmount is not letting go of the Dallas market. “Dallas and Houston are probably among the strongest office markets in the country,” noted Kanoff. “We own two other office assets in the Dallas market and there’s still activity. We’re thankful that we own property in what is such a good market, despite national conditions.” Bound by a confidentiality agreement, Westmount would not disclose the financial terms of the Riverside Commons sale. However, Kanoff admitted that, even after investing in capital upgrades, the company made a profit on the deal in this less-than-hospitable real estate market. “A lot of planets had to align, and they certainly did,” Kanoff said. “We feel fortunate–but sometimes you make your own luck, too.