Cityplace Center East building

[gc]

Be on the lookout, Cityplace is going up for sale soon.

[Kelley USA]

That's right- and I'm the buyer!!!! Not really... Don't you work in Cityplace GC? Do you have an idea what the current occupancy rate is?

[gc]

Yes, I am currently working at Cityplace. I do not know the buildings occupancy, but it is pretty full. The current owner wants to sell because it is not a core asset...and no they are not relocating.

[gc]

7-Eleven is selling Cityplace tower
Real estate agents say investor interest is 'extraordinary'
10:08 PM CDT on Tuesday, September 16, 2003
By STEVE BROWN / The Dallas Morning News
http://www.dallasnews.com/sharedcontent/dallas/business/stories/091703dnbuscityplace.c9376.html

A new product from 7-Eleven Inc. is likely to draw a crowd of shoppers.

But instead of selling a new flavor of Slurpee, the international retail chain plans to make millions by selling a signature Dallas skyscraper.

The convenience store chain said Tuesday that it has hired real estate brokers to market its Cityplace Center East office tower just north of downtown.

The 42-story building is the only Dallas skyscraper built in the 1980s that hasn't already changed hands.

Real estate agents hired to sell the Cityplace tower predict that the building will attract a swarm of potential buyers.

"It's an unbelievably unique asset and a destination in itself," said Mark Gibson, executive managing director of Holliday Fenoglio Fowler LP, which is marketing the tower. "Already we are in the market, and the investor interest has been extraordinary."

Holliday Fenoglio Fowler sold the landmark Galleria shopping mall in Far North Dallas in December for more than $200 million.

No one is talking price so far, but the Cityplace tower cost more than $300 million to build when it opened in 1988.

The 1.4-million-square-foot pink Brazilian granite high-rise was designed by New York architect Araldo Cossutta as the centerpiece of a 160-acre inner-city redevelopment envisioned by 7-Eleven's owners.

Unfortunately, a real estate market crash hit before the first building was finished. Plans for a twin 42-story tower on the west side of North Central Expressway and six smaller office buildings were canceled.

The remaining undeveloped land was sold to investors in 1990.

But 7-Eleven (originally Southland Corp.) has continued to occupy more than a third of the Cityplace tower and has retained ownership of the building.

"The current strength of the commercial marketplace for a Class A building like Cityplace convinced us that it was time to move forward with marketing this Dallas landmark, which is a noncore asset for our company," Jim Keyes, 7-Eleven's president and chief executive, said in a statement.

The retailer may sell all or part of the 10-acre office property, company spokeswoman Margaret Chabris said. But even if the building is sold, 7-Eleven says it plans to keep its headquarters there.

Other major tenants in the building include Residential Funding Corp. and law firm Silber Pearlman LLP. The tower is about 90 percent leased.

Mr. Gibson said the quality of the skyscraper plus its location on top of Dallas Area Rapid Transit's only Uptown-area light rail station will make it attractive to buyers such as pension funds or foreign investors.

"This building was designed to be the most incredible office building of its time," he said.

Inside, the post-modern-style tower has elaborate polished marble lobbies, five atriums and a ground-floor conference center.

Under the skyscraper there are huge parking garages and the mechanical systems to support both the Cityplace tower and three of the seven-story office towers that were never built.

"It's a very complicated deal, but it's a fantastic asset," said Jack Minter of Cousins Properties. "There are not a lot of buildings like that for sale anywhere in the country.

"And it's a great time to sell because the interest rates are low," he said.

Since the Cityplace tower opened 15 years ago, the area around it has become Dallas' hottest retail market, with thousands of luxury apartments, new retail space and other construction.

"It should make the building a lot more attractive to investors," said Neal Sleeper, president of Cityplace Co., which is developing the Cityplace land acquired from 7-Eleven in 1990.

"I have no idea what they will be asking for the tower," Mr. Sleeper said, "but what 7-Eleven is paying in rent will have a huge impact on the price.

"I hope whoever they sell it to is someone who wants to build another building because we can sell them some granite," he said.

Cityplace Co. owns all the exterior stonework that was cut in the 1980s to build the other buildings in the project. It's been in storage ever since.

E-mail stevebrown@dallasnews.com

[psukhu]

7-Eleven says it plans to keep its headquarters there.

That's what I was looking for.






I hope whoever they sell it to is someone who wants to build another building because we can sell them some granite

You never know...

[bloodandpopcorn]

I'm glad that 7-Eleven will stay. Don't really see why they would choose to sell now, seems like it would be getting to a point of even higher profitability, but I guess selling when the potential for the area is greatest will yeild the highest bid on the building.

[gc]

7-Eleven exploring sale of Cityplace tower
http://dallas.bizjournals.com/dallas/stories/2003/09/15/daily27.html?jst=b_ln_hl

7-Eleven Inc. is exploring a sale of its 42-story Cityplace Center East tower off Central Expressway in Dallas, but the company said it would keep its corporate headquarters at the site.

The operator of the world's largest convenience store chain said it is considering shedding the "non-core asset" because of the strength in the commercial marketplace for a Class A building like Cityplace.

Jim Keyes, president and chief executive, said in a statement the company was committed to keeping its headquarters at the location because of its "central location and easy access within the Dallas/Fort Worth Metroplex."

7-Eleven said it has hired the Dallas office of Holliday Fenoglio Fowler LP to represent it in the transaction.

The Dallas Business Journal reported in October 2002 that the company was working with consultants to assess future space needs and was looking to reduce the 430,000 square feet it had at Cityplace to between 250,000 and 350,000 square feet, either at Cityplace or by moving to another Dallas-area building.

7-Eleven, formerly Southland Corp., built the skyscraper on the east side of North Central Expressway, at 2711 N. Haskell Ave., in 1988 at a cost of more than $300 million. The company owns the 1.4 million-square-foot building through a subsidiary.

Cityplace was designed by Cossutta & Associates of New York. The landmark tower has a Brazilian granite exterior and sits on 10 acres that include four retail sites, an underground parking garage and a connection to Dallas Area Rapid Transit's light rail station.

Southland Corp.'s original plans for its 130-acre Cityplace development called for a pair of 42-story towers on the east and west sides of North Central Expressway, linked by a skybridge over the busy roadway. Those dreams died with the real estate crash of the late 1980s and, a year after the east tower was built, Southland sold the undeveloped acreage on the west side of North Central Expressway to Cityplace Co. That land is now home to West Village, where several apartment and retail projects have been developed.

Company Web site: www.7-Eleven.com

[gc]

7-Eleven Bets On 1.4M-SF World HQ's Drawing Power
By Connie Gore - Sep 17, 2003 09:23PM
http://www.globest.com/RMITCQSCEKD.html

DALLAS-Following through on a year-old study, 7-Eleven Inc. has put its 1.4-million-sf world headquarters on the sales block in a bid to rid itself of an 87%-leased, "non-core asset" and cash in on the real estate investment appetite of the rich and famous.
The study recommended a sale of the 42-story, multi-tenant Cityplace Center East at 2711 N. Haskell Ave., a 10-acre block with four retail pad sites and an underground parking garage. Every option will be reviewed, eliminating any "all or nothing" speculation and clearly opening the door for a partnership purchase, which has become increasingly popular as real estate prices spike to all-time highs thanks to the continued flux of the stock market.

The corporate giant occupies 482,000 sf on floors 29 through 41 plus a portion of the 42nd floor and the basement. And, 7-Eleven intends to stay put for the long term at an address that houses 1,000 of the corporation's workforce and 325 vendor partners, a company contact tells GlobeSt.com.

Built in 1988 for 7-Eleven's predecessor, the Brazilian granite trophy has 180,700 sf or 13% of its space empty, according to the company. Most of Southland Corp.'s assets have now been sold, including the acreage across the freeway where a twin tower was supposed to rise along with a half dozen other buildings. In 1999, the name changed and the 7-Eleven chain dominated the focus, as it still does. The chain owns one-third of the 5,300-store branding in the US and Canada, with the balance held by franchisees. Licensing agreements are in place for another 19,400 stores in 17 countries.

As it now stands, 7-Eleven leases most of its US office space, but the landmark listing is clearly aligned with the economic gains from the sale than any intent to continue a disposition course that began in 1987. A bidding war is guaranteed, with the asset carrying a $120.9-million assessment and key location with easy freeway access to the north of the CBD and a 360-degree view of the city, a full-service conference center, cafeteria and 2,100-sf 7-Eleven concourse store.

7-Eleven hired Holliday Fenoglio Fowler LP's Dallas team of Mark Gibson, HFF executive managing director, along with Jeffrey Stone and Andrew Levy, both senior managing directors, to steer the sale.

[gc]

7-Eleven sells Cityplace to Prentiss in $124M deal
http://dallas.bizjournals.com/dallas/stories/2004/03/29/daily20.html?jst=b_ln_hl

Convenience store operator 7-Eleven Inc. is selling its Dallas headquarters building to Prentiss Properties Acquisition Partners LP for $124 million.

According to the agreement, Dallas-based Prentiss will add another $14.5 million to the purchase price if 7-Eleven exercises a lease extension option.

7-Eleven built the Cityplace Center skyscraper in 1988 to house its headquarters. Construction costs exceeded $300 million. The 42-story, 1.2-million-square-foot building sits on about 8 acres on the east side of North Central Expressway, at 2711 N. Haskell Ave.

The Dallas Business Journal reported in September that 7-Eleven was exploring a sale of the property and had hired the Dallas office of Holliday Fenoglio Fowler LP to represent it in the transaction.

On Tuesday, the convenience store operator said it expects to seal the deal by the end of April.

"We wanted to take advantage of the strong commercial marketplace and believed the timing was right to sell Cityplace," said President and Chief Executive Jim Keyes. "With this sale, we have divested the company of a non-store asset, lowered our outstanding debt by approximately $110 million and will reduce expenses over time."

At closing, 7-Eleven plans to pay off its Cityplace term loan due March 1, 2005, with a combination of proceeds from the sale of the building and corporate funds. As a result of the expected debt reduction, the company raised its core earnings projection for 2004. 7-Eleven now expects per-share earnings between 86 cents and 90 cents, up from previously issued guidance of 85 cents to 99 cents.

The company plans to lease its current space for a term of three years and has an option at the end of 18 months to extend the least for another seven years.

7-Eleven said that, for the time being, it would continue to reside at Cityplace, where about 1,000 of its employees occupy roughly 500,000 square feet of office space. But the company added that it would hire Prentiss to represent it as it explores potential alternative sites in the Dallas-Fort Worth area for its headquarters.

[dallastophoenix]

it would be cool for them to return to s. dallas (their roots). of course, dtd would greatly benefit, as well.

[barrycb]

Forget about it. Sorry to be so pessimistic, but they'll either renew at Citiplace, or move to the burbs.

[Foucault]

It's quite possible that they'll relocate to the suburbs, I hate to say: CEO Jim Keyes lives near Addison, and CEO residential location's usually a big factor in corporate relocations... :(

[Quiz03]

If they do move I wonder if they'll take out the 7-11 in the basement.

[rantanamo]

According to News 8, Cityplace has been bought for $142 million. Don't remember the buyer, but they stated 7-11 will remain and lease space.

[psukhu]

I think they just wanted to get the capital that was tied up in the building. They'll then use that capital to open more stores around the world.

[gc]

7-Eleven agrees to sell headquarters building
Prentiss paying $124 million for Cityplace skyscraper
11:21 PM CST on Tuesday, March 30, 2004
By STEVE BROWN / The Dallas Morning News
http://www.dallasnews.com/sharedcontent/dws/bus/stories/033104dnbuscityplace.2c26f.html

7-Eleven Inc. has agreed to sell its landmark Cityplace headquarters tower to a local real estate investment trust.

Prentiss Properties is paying $124 million to buy the 42-story skyscraper on North Central Expressway near downtown Dallas.

It's one of the biggest office building sales in recent years, but the purchase price is less than half what the granite-and-glass skyscraper cost to build in the mid-1980s.

And the deal includes a potential twist: 7-Eleven, the tower's biggest tenant, could move out in the next few years. The convenience store chain put the office high-rise on the market last September.

Prentiss Properties – a $3 billion REIT with 17 million square feet of office buildings nationwide – recently emerged as the lead bidder for the tower.

Prentiss chief executive Tom August said Tuesday that he hopes to complete the sale next month.

"What made it attractive was the big discount to replacement cost and the fabulous quality of the building," Mr. August said. "We are buying it for about $100 per square foot."

Prentiss Properties also agreed to pay 7-Eleven $14.5 million if the company decides to extend its lease, which has three years remaining. In the meantime, Prentiss will help 7-Eleven evaluate its office needs – including leaving the building for another headquarters location.

About 1,000 7-Eleven employees occupy 500,000 square feet in the 1.4 million-square-foot tower.

"We wanted to take advantage of the strong commercial marketplace and believed the timing was right to sell Cityplace," company president Jim Keyes said in an announcement. "With this sale, we have divested the company of a non-store asset, lowered our outstanding debt by approximately $110 million and will reduce expenses over time."



Boosting the bottom line

With the sale, 7-Eleven said its 2004 earnings would probably increase as much as 2 cents a share because of debt reduction.

It will pay off the mortgage on the tower with proceeds from the sale and company funds. A prepayment penalty on the Cityplace loan will result in a non-specified one-time charge.

7-Eleven (then Southland Corp.) opened Cityplace in 1988 as the first phase of an ambitious 160-acre redevelopment. The elaborate tower – with eight interior atriums, a conference center and underground parking for thousands of cars – cost more than $300 million.

The development was to be even bigger.

Three seven-story office buildings flanking the tower were never completed. And a twin 42-story skyscraper across Central Expressway never made it off the drawing board – even though developers bought all the exterior stonework for the tower.

Most of the undeveloped land surrounding Cityplace was sold to investors in 1990 and has been developed into apartments and retail space, including the West Village complex on McKinney Avenue.



Long-standing ties

7-Eleven hired Dallas investment broker Holliday Fenoglio Fowler LP to sell the building. The broker said a wide range of potential buyers were interested.

The final bidder had an edge.

Prentiss Properties has been the leasing agent for the building for the last 10 years, Mr. August said.

"Because of our long-standing relationship, we were able to give them a price they were happy with and the flexibility they needed," he said.

And Prentiss might end up building the company a headquarters complex if 7-Eleven decides to leave, he said.

"We will explore all other occupancy options for them, including relocating, staying there or building another building," Mr. August said. "Even if we have to re-lease the 7-Eleven space and the [current] vacant space, we are still in the building for under $120 per square foot."

Similar-size new construction would cost more than twice that.

Prentiss Properties got its start as the U.S. division of a Canadian company and built two downtown Dallas skyscrapers in the 1980s. It already owns nine office buildings in the D-FW area, but this one is a milestone.

"The Cityplace purchase is the largest deal we have done and the best quality," Mr. August said.

E-mail stevebrown@dallasnews.com

[psukhu]

..but the purchase price is less than half what the granite-and-glass skyscraper cost to build in the mid-1980s

Wow, it may be a while before we see a new signature skyscraper.