DFW Office Market

[aceplace]

Well, the term DUMBO sounds like it is redundant... if you're under a bridge, you're under an overpass, right? The "overpass" is where the bridge "passes over", or something like that.

Of course if you leave out the "overpass" part, then the acronym that remains is...?

[tamtagon]

DUMB?

[aceplace]

Yup.

[tamtagon]

This continues to have nothing to do with downtown office space, but it does clear up one issue:

"The kiwi fruit was a much-appreciated treat in ancient China, and was introduced into New Zealand in 1906, where it was called "Chinese gooseberry" (although it isn't related to the green gooseberry). Years later, as foreign demand for the fruit increased, New Zealanders renamed it for their national treasure, the kiwi bird."
http://www.wholehealthmd.com/refshel...523,54,00.html

Gooseberry v. Kiwi. - At the 90% confidence level, there is no significant difference between the predominance of gay and lesbian neighbors along McKinney Street and west of Oak Lawn Avenue.

[gc]

DFW's Q1 Office Market Shows Slight Promise
GlobeSt.com - By Connie Gore - Mar 30, 2003

DALLAS-The Dallas-Fort Worth office market made some slight gains in the first quarter, with the Telecom Corridor coming out stronger than most to nip its record-high vacancy from 33.7% vacancy to 31.3%, according to the first office report rolling out the door for the region.
Julien J. Studley Inc.'s research for the DFW says the high-tech corridor's changing numbers are a direct result of a diversification bid. Greg Biggs, senior vice president and Southwest region manager, says the Q1 tally showed 675,766 sf was leased in a 22.6-million-sf submarket, where nearly 17.1 million sf are categorized as class B and C product.

Across the board, Dallas-Fort Worth's first quarter numbers, though, weren't as good as he thought they'd be. "I think there's still a lot of uncertainty...and companies aren't making long-term real estate decisions," Biggs tells GlobeSt.com. The "minor improvement" in Richardson/Plano, he adds "is really where the optimism is to be found." The wish list is in for a good 2003, but the telling factor, as everyone knows, is job growth. And more jobs simply will have to be created before there's any real change in the final numbers, he adds.

According to Studley's calculations, the Dallas CBD's 25.4-million-sf inventory is 24.5% empty, of which about 5.7 million sf is vacant direct space and 543,027 sf is available sublease space. In Fort Worth's CBD, vacancy is 8.2% in the eight million sf of office product. Of that, 546,565 sf is empty direct space and 112,259 sf, available sublease space.

The Q4 2002 darling, the class AA market continued to breed good numbers as tenants followed the 2002 lead to take advantage of the soft market and trade up. The quarter ended with 199,566 sf leased and an 11.1% vacancy in 6.6 million sf of inventory.

Most everyone just wants to cut to the quick in reading the numbers: an overall 27.5% vacancy, down just a shade from the 2002 close, in an inventory totaling about 185 million sf . At the end of the quarter, about 50.9 million sf, with 9.6 million sf of it sublease, stood empty in comparison to slightly more than 51 million sf of vacant office space at the end of 2002.

The Q1 close had three submarkets--LBJ Freeway, Far North Stemmons and Las Colinas--with vacancies above 35%, Studley's numbers show. At the other end of the spectrum, there were six submarkets as defined by Studley with vacancies below 15%: Preston Center, East Dallas, Southwest Dallas, Northeast Fort Worth, South Fort Worth and Fort Worth's CBD.

As for rent, there are few surprises with prices dropping as brokers report more and more building owners retooling direct space rates to level the playing field with sublease rates. Studley says class A product in the Dallas CBD is down to an average of $19.68 per sf and Fort Worth's, $19.25 per sf. The class AA average is now $26.97 per sf versus $27.58 per sf just three months ago. Across the board, the average rent fell 11 cents per sf to $17.70 per sf in the first quarter.

[mikedsjr]

All i know is that the forcast is mostly cloudy until second or third quarter of 2004. At which point, the sun might start peaking out.
Don't forget that Subleasing, i believe is at an all-time high. Subleasing is not a positive sign, its a negative sign. Its a sign of an economy which is having to wait out the rain and clouds, hoping a flood doesn't come and wash it away.

[gc]

Dallas CBD Law Firm Adds Extra 31,000 SF
By Connie Gore - Apr 8, 2003

DALLAS-A Dallas-based law firm is turning on lights in an empty floor of Trizec Properties Inc.'s Renaissance Tower in downtown Dallas, adding another 31,000 sf about a year after it committed to 92,500 sf. Both class A leases will run through 2013.
"Godwin Gruber is a valued customer here at Renaissance Tower," Thom Ridnour, Trizec's regional vice president in Dallas, said in a release. "They will expand their exceptional finish-out...and continue to be one of our best marketing assets."

Godwin Gruber takes over the extra floor July 1, a Trizec contact says. The finish-out contractor has yet to be selected for the 125-attorney firm's extra floor in the 56-story tower at 1201 Elm St.

Brad Selner and Jeff Staubach, both with Dallas-based Staubach Co.'s headquarters office, represented Godwin Gruber, a Fortune 500 tenant and middle-market industry leader for "Mission Critical Litigation."

Bill Brokaw, Trizec's leasing director for the landmark CBD tower, handled talks for the building owner. In early March, a triple package of renewals that included some expansion space had the 1.7-million-sf premier office property resting at 89% occupancy.

[bloodandpopcorn]

Excellent! Always great to hear of even the little accomplishments in downtown leasing.

[gc]

By Connie Gore - May 30, 2003 - www.GlobeSt.com

IRVING, TX-Frost National Bank, playing off a San Antonio role model, has struck an 18,329-sf lease for a suburban office property to shift back-office operations from the Dallas CBD to new space in Irving. The move takes place Sept. 1.
The relocation search has been under way for about nine months, J. Michael Gosslee, senior director for Cushman & Wakefield of Texas Inc., tells GlobeSt.com. Close to 100 buildings were surveyed and the short list pared to 10 before Frost Bank settled on Esters 114 Office Center at the intersection of Esters Boulevard and Texas 114.

The 10-year lease for 1701 Esters Blvd. was won with location and economics. "The advantage of a tenant's market is you buy when the price is right," Gosslee says. That right price laid on the table included "substantial" finish-out dollars, he adds. "The landlord was very aggressive in terms of the tenant improvements." The move will add some more office area in a rectangular configuration as the staff goes from a typical high-rise floor plate to a portion of a 100,823-sf, single-story design.

Frost will continue to be a mainstay name for the CBD, even though it's pulling the back office and related operations out of Bryan Tower at 2001 Bryan St., most of which are headed to the regional office in International Center at 2727 N. Harwood. The move to the suburbs is perceived as convenience for couriers who spend their days shuttling from the operations center to the Federal Reserve Bank of Dallas at 2200 N. Pearl St. in the downtown and the Dallas-Fort Worth International Airport. Gosslee says the two-year-old office building in Irving has an "easy-in, easy-out" for the day-to-day mainline stops. He says the bank's suburban campus in San Antonio has worked out well and the shift to the suburbs will work out just as well in Dallas.

In addition to Gosslee, the bank's C&W team consisted of Bob Edge, vice chairman, and Matt Heidelbaugh, associate director. Michael Peinado of Dallas-headquartered Lincoln Property Co. represented the building owner, the Operating Engineers Pension Trust of California.

[gc]

One Relocates, One Expands With Class A Acts
globeSt.com - By Connie Gore

DALLAS-Dallas deal making for class A office space has brought one newcomer to Park Central 7 in the LBJ Freeway and a tenant's extension with tack-on at the Twin Towers in the Stemmons submarket. Avidyn Inc. made the move to Park Central's 12750 Merit Dr. in a five-year pledge for 10,000 sf with expansion options in the 10-story building. Dallas-based WorkPlaceUSA steered the site search, negotiations and finish-out for the tenant, who surveyed the market for 10 months before taking a value-packed deal. John T. Amend, president and CEO of WorkPlaceUSA tells GlobeSt.com that aggressive negotiations sliced 30% off the existing rate, brought free covered parking and secured a tenant improvement allowance hefty enough to cover the build-out costs.

Avidyn relocated to the Dallas headquarters from the Keller area, exiting 16,000 sf in a two-story, 20-something, class B building for a more efficient floor plan in a premier complex of three buildings, boasting 845,919 sf of class A space.

Sandie Matejek of Jones Lang LaSalle in Dallas negotiated the terms for the building owner, Park Central 789 Realty Holding Co. Inc. of New York City. Amend was assisted in the tenant's representation by Victor Sansone, WorkPlaceUSA vice president. Avidyn is a leading health-care services firm that provides business solutions for the industry.

In the Stemmons submarket, the San Diego-based Shidler Group reworked a pact with Interactive Learning Systems Inc. for a lease extension and expansion at Twin Towers at 8585 N. Stemmons Freeway. In packaging the deal valued at $409,000, the tenant added two years to the term for 8,355 sf and backed it up with a 62-month pact for another 2,738 sf.

Malcolm Ross of Jones Lang LaSalle in Dallas represented the Shidler Group. Stephen Jenkins of Stephen Jenkins Commercial Real Estate Services in Dallas brokered the terms for the tenant, a Battle Creek, MI-based school for a comprehensive, stand-alone English-language program and computer courses.

[gc]

New office lease deals are perking up a down market
06/13/2003 - By STEVE BROWN / The Dallas Morning News

Even in a good office market, Flowserve Corp.'s 100,000-square-foot office lease in Las Colinas would be an eye-catcher.

Dary Stone says he hopes that the just-signed Irving office deal – along with a handful of other large leases recently made – is an indication that the worst is over for the Dallas area's battered office building market.

"It's nice to have something positive to talk about for a change," said Mr. Stone, whose Cousins Properties rented four floors in the landmark Towers at Williams Square to Flowserve, an industrial valve and pump manufacturer. "Frankly, there hasn't been a lot good to say lately about the office market."

That's an understatement.

The latest vacancy estimates for the local office market show that the supply of empty space is every bit as bad as it was in the last real estate recession of the late 1980s and early 1990s.

As of early June, overall office vacancy in the Dallas area is 26.9 percent, according to preliminary numbers from Cushman & Wakefield of Texas Inc. And in some other areas, the numbers are even worse. Office vacancies are about 30 percent or higher in the Telecom Corridor, on North Stemmons Freeway, downtown and along LBJ Freeway.

"The first quarter saw the largest negative demand [tenant move-outs] in the history of the Dallas office market," said Cushman & Wakefield's Rick Hughes. "And I think vacancies are going to go up further because companies are still consolidating."

Tenants moved out of 1.7 million square feet of office space in the early months of this year. And that's on top of the more than 5 million square feet of negative net leasing during 2001 and 2002.

"If you look back in 1989 and 1990, the reason we had high vacancy was overbuilding," Mr. Hughes said. "This time we didn't overbuild the office market but we have huge business shrinkage."

Like securities investors looking for signs of another bull stock market, real estate brokers and investors are looking for positive signs.

"At this point any major new lease has got to be considered great news," said Mr. Stone, who says the Flowserve lease in Williams Square will bring the buildings up to about 90 percent occupied.

It's the second large office lease announced in Las Colinas in as many weeks.

Digital Architects Inc., a software company, rented more than 19,000 square feet of office space in the Embassy building on Greenway Drive.

"They're moving from another building in the area and more than doubling their space," said Ken Walter of Insignia/ESG, who brokered the transaction. "It was a switch because most of the deals we've seen are still consolidations.

"I hope we are getting to the point that all the companies who are consolidating have done it, and the next step is people expanding," Mr. Walter said.

He's more optimistic than he was a few months ago, but Mr. Walter also said few prospective tenants are in a hurry.

The Digital Architects lease took more than four months to complete.

"Tenants are not really in a great rush," he said. "They think the empty space will be there next week and the week after.

"A couple of years ago, if you found a vacant office space, you were in a rush to get it leased before it was gone," Mr. Walter said. "Now tenants think it will still be there a year from now and at a lower price."

Slow comeback


Mr. Walter and other office leasing agents say they see signs of a slow comeback in demand.

"Within the last few weeks, I've seen the velocity of the market jump," said Tim Terrell of Stream Realty. "There are a number of 15,000- to 100,000-square-foot office deals in the market right now.

"We have not seen this many in maybe a year," Mr. Terrell said.

Even the burned-out Telecom Corridor is seeing a flicker of activity.

Paint company Sherwin-Williams just leased 24,134 square feet of empty office space previously occupied by telecom giant Nortel Networks Corp.

Earlier in the year, insurance company Blue Cross and Blue Shield of Texas rented about 135,000 square feet in the same area. That lease has been expanded to almost 150,000 square feet.

Crescent Real Estate Equities did both deals.

"If the hours I'm working are any indication, yes, things have definitely picked up," said Mike Lewis of Crescent Real Estate Equities. "Most definitely since the war ended it's improved, and there's a push to get stuff done."

Turnaround opinions


Some outside real estate analysts are less easily convinced of a turnaround.

In a recent report, bond rating company FitchRatings said that Dallas has the highest office vacancy in the country and that a recovery probably won't begin until next year.

Some local brokerage companies have estimated that Dallas has more than a seven-year supply of office space based on recent trends. Of course, if you use the last three years as a measure, you might conclude that no one will ever lease anything again.

Such estimates have always proved faulty.

Without local employment gains, Mr. Hughes predicts more business consolidations.

"Almost every deal I've done in the last 12 months has been a consolidation," he said. "I'm working on one lease now where the tenant is going from 128,000 square feet to just 30,000 square feet.

"Every new deal like that just creates more office vacancy," he said.

[mikedsjr]

GCarey,

That's what I've heard, but the positive for this is we probably are stabalizing a little more. And late 2004, when some analyst think it will begin to rise is really not that far away.

[gc]

Real Estate
Report: office market poised for upswing
Christine Perez - Dallas Business Journal

The local office market is on the road to recovery, according to a new report from Encino, Calif.-based Marcus & Millichap Real Estate Investment Brokerage Co. Tim Speck, regional manager in the firm's Dallas office, said activity has been subdued in early 2003, but signs are emerging that the bottom has been reached.

Investors remain active despite the market's weak fundamentals," he said. "Low borrowing rates and a sense that the worst may be over have encouraged investors to establish a position and wait for market conditions to improve."

Among the group's findings:

Job growth in the Metroplex will return in 2003, with 31,000 new jobs created this year. Development activity will be restrained, with builders adding just 615,000 square feet of new space. Net absorption by year's end will be 24.4%, identical to what it was at the end of 2002.

Office lease rates have dropped by 8% over the last year, to an overall average of $15.58 per square foot. Richardson (down 20%) and Las Colinas (down 14%) have been hit the hardest; but the low lease rates are driving positive absorption in the submarkets.

Investors remain interested in office properties, increasing median prices by a healthy 9% over the last 12 months.

Done deals

Digital Architects has leased the 20,000-square-foot top floor of The Embassy at 1431 Greenway Drive in Las Colinas. Ken Walter of Insignia/ESG and Dennis Barnes of Cushman & Wakefield of Texas Inc. represented the landlord in the deal. Jay Lucas and Andy Folmer of Harry B. Lucas Co. represented the tenant.

Washington Mutual Bank has expanded its lease by 13,570 square feet for a total of 40,000 square feet in Dominion Plaza at 17304 Preston Road in Dallas. Greg Hoffman and Mike Pierre of Wilcox Realty Group negotiated the lease with Chris Mickey of CB Richard Ellis.
CPL Inc. has leased 11,500 square feet of space in Sojourn Office Center at 4450 Sojourn Drive in Addison. David Dees, of Wilcox Realty Group negotiated the lease with Robert Ikle of IC3.

[gc]

Baker Botts opts to stay downtown
After considering move, law firm expands lease in Crow tower
06/19/2003 - By STEVE BROWN / The Dallas Morning News

One of downtown Dallas' largest law firms has shrugged off chances to leave the central business district.

Instead, Baker Botts LLP renewed and expanded its seven-floor lease in the landmark Trammell Crow Center.

The law firm had considered moving its operations to a new office tower in the Uptown district.

"There were numerous developers that wanted to kick off a new building in Uptown with Baker Botts as the lead tenant," said Greg Biggs, southwest region vice president for real estate broker Julien J. Studley Inc.

Studley spent almost a year looking at potential new locations for Baker Botts' office.

"There was heavy competition for this deal," Mr. Biggs said. "At the end of the day, we had three good options of proposed new Uptown buildings that would have worked for them."

But some strong negotiations by Trammell Crow Center owner Crescent Real Estate Equities helped persuade Baker Botts to stay, he said. Terms of the long-term lease have not been disclosed.

With the new lease, the skyscraper is about 90 percent occupied, according to Matt Craft, a principal with Trammell Crow Co. who also worked on the deal.

The expansion of the adjacent Belo Mansion legal center and construction of the new Nasher Sculpture Center were also factors in Baker Botts' decision to stay in the Ross Avenue skyscraper, according to law firm partner Jack Kinzie.

Baker Botts has been in the building since 1985.

"We did look at a lot of possibilities, and we were courted," Mr. Kinzie said. "But if real estate is about location, location, location – and it is – then this is a fabulous location."

The developers who tempted Baker Botts to move to a new building in Uptown were some of the area's largest office builders, including Lincoln Property Co., Hines Interests, CarrAmerica and Harwood Pacific.

"We started out looking at a large geographic area with more than 25 possible new and existing buildings," Mr. Biggs said. "But we really focused on the Uptown area and downtown."

Baker Botts is the latest in a series of big downtown law firms that have renewed their leases in the last 18 months.

Cowles & Thompson; Thompson, Coe, Cousins & Irons; Diamond, McCarthy, Taylor, Finley, Bryant & Lee; Fulbright & Jaworski; Godwin Gruber; and Crutsinger & Booth recently signed leases downtown.

Central business district landlords had worried that some of these legal firms would exit downtown for newer locations in Uptown.

[gc]

Dallas CBD Clinches 176,239-SF, Class A Office Lease
By Connie Gore - Jun 19, 2003 www.globest.com

DALLAS-The Dallas CBD, waiting for an office market recovery, has just gotten its first significant sign this year with a 176,239-sf, class A signing by a longtime tenant at the Trammell Crow Center. Word on the street is that a larger office deal of the same caliber is poised to close in the coming days.

The law firm of Baker Botts renewed 164,239 sf and added another 12,000 sf to take the bottom line to seven full floors at the 49-story office building, where it's been a tenant for the last 16 years. An extensive search and active jockeying by the city's building owners delivered a long-term deal with terms safely tucked away by a tough confidentiality agreement. The building is carrying quoted rates ranging from $25 per sf to $27 per sf, plus electric.

One broker from the building owner's team labels the deal as "creative" more so than aggressive. Jon McNeil, senior vice president of Trammell Crow Co., tells GlobeSt.com that "we held rates significantly well," given the push to win the deal, which has been in the market since July 2002. "We had to be a little creative," he says, noting that "aggressive may not be the best word. When all is said and done, both parties are happy with it."

McNeil says the bottom line is "we think it's a good move for the building. They are a good tenant." The lease pushes occupancy to 90% in the 1.1-million-sf office building at 2001 Ross Ave. in the heart of the Arts District.

McNeil and Trammell Crow principal Matt Craft represented building owner, Crescent Real Estate Equities Co. of Fort Worth. Greg Biggs, southwest region vice president and Dallas branch manager, Peter Speier, vice chairman and director, and Jim Nelms, senior managing director, all with Julien J. Studley Inc.'s Dallas office, and Maurice Crowe, chairman, and Dodd Crutcher, president, of RM Crowe Leasing in Dallas represented the tenant. The Baker Botts team, with the final say, consisted of law firm partners Pat Stanton, Jon Dunlay, Mark Van Kirk, George Lamb, Andy Baker and Jack Kinzie, with credit extended to the behind-the-scenes office administrator, Mary Driskell.

McNeil says build-out could start at any time although occupancy isn't set to occur for 12 to 24 months. The improvements will take awhile to complete because the law firm intends to get extra attorney offices with the same high-end finishes as its other space. The law firm is taking over the balance of the 11th floor to bundle a full seven floors of contiguous space.

The decision to stay registers "a vote of confidence in the building and also in the future of downtown Dallas," John Zogg, Crescent's senior vice president of asset management and leasing. The law firm, with more than 650 attorneys, also has offices in Austin, Houston, New York City, Washington, DC, as well as offices in Baku, London, Moscow and Riyadh.

[gc]

Baker Botts opts to stay in downtown Dallas
Christine Perez - Staff Writer - Dallas Business Journal

After eyeing a build-to-suit in Uptown, Baker Botts L.L.P. has decided to expand and renew its lease in Trammell Crow Center, the downtown high-rise it has occupied since 1985.

The law firm will spend at least another decade in the 49-story tower at 2001 Ross Ave., tacking on 13,000 square feet to its lease for a total of 176,300 square feet. It will occupy floors six through 12 in the 1.1 million-square-foot building.

Baker Botts is the latest big tenant opting to stay, and the latest professional services firm to put its faith in the future of the Dallas central business district. Other companies renewing downtown in the last year or so include Fulbright & Jaworski (105,000 square feet in JPMorgan Chase Tower); KPMG (200,000 square feet, KPMG Centre); Jackson Walker L.L.P. (141,000 square feet, Bank of America Tower); and Locke Liddell & Sapp L.L.P. (225,000 square feet, JPMorgan Chase Tower).

One law firm, Thompson, Coe, Cousins & Iron L.L.P., moved to the CBD from Uptown, leasing 70,000 square feet at Plaza of the Americas in late 2002.

"Clearly the trend has been to renew in or move to downtown Dallas," said Matt Craft, principal at Trammell Crow Co. Craft and Jon McNeil, also with Trammell Crow, represented the landlord in the Baker Botts deal. Trammell Crow Center is owned by Fort Worth-based Crescent Real Estate Equities.

Baker Botts has about 340 Dallas employees, including 160 attorneys. The firm has offices in Austin, Houston, New York and Washington, D.C., as well as four international locations.

Jack Kinzie, partner-in-charge in Dallas, said Trammell Crow Center's location in the heart of the Arts District was a key factor in his firm's decision.

"We are encircled by the Belo Mansion, the Morton H. Meyerson Symphony Center, the Dallas Museum of Art and the spectacular Nasher Sculpture Center," he said. "The promise of the Dallas Center for the Performing Arts and the Woodall Rodgers Greenspace Initiative completes what for us is a location that cannot be equaled."

Baker Botts was represented in its search by Greg Biggs, Peter Speier and Jim Nelms at Julien J. Studley Inc., along with Maurice Crowe and Dodd Crutcher at R.M. Crowe Co.

Trammell Crow Center's opulent interiors also played into the law firm's renewal, Craft said.

"Our competition on this deal was a build-to-suit in Uptown," he said. "But this building, with its finishes, is irreplaceable."

[JaeTex]

"The promise of the Dallas Center for the Performing Arts and the Woodall Rodgers Greenspace Initiative completes what for us is a location that cannot be equaled."

Woodall Rodgers Greenspace Initiative?????

Does this mean there is actually someone, somewhere with some authority planning to deck WR with greenspace. I mean if it already has a catchy nickname like that and if it was a factor in them staying it must be for real, right? Woohooo!!!

Seriously, has anyone heard anything at all concrete or believable on this? You would think that of all the places on the web if this was public we would know. Why is it behind closed doors?

[gc]

Trizec Wins Neiman's Space Race
By Connie Gore - Jun 20, 2003 - www.globest.com

DALLAS-Everyone's talking, except the deal makers, about a 105,000-plus-sf Neiman Marcus renewal at Renaissance Tower in the second lockdown this week of a large class A office lease in the Dallas CBD. A third lease, said to be the largest in the stack, is still hanging on the sidelines as brokers talk through the terms.
The silence from the brokers doing the Neiman deal most likely is tied to a confidentiality clause. This morning, Steve Zimmerman, principal of Trammell Crow Co. and Neiman's broker, confirms that GlobeSt.com facts are correct, but there are a few outstanding issues. "It's not a done deal yet," he says.

Numerous real estate sources yesterday confirmed final signatures were garnered on a long-term contract for Neiman Marcus Group's block of high-end office space at 1201 Elm St., a 1.7-million-sf landmark tower owned by Trizec Properties of Chicago. Trizec did not respond to telephone calls for comment on the deal prior to publication time.

Sources describe the chase as "intense competition" that pared all but two from the final fracas. Ren Tower, scrapping to hold onto a top name on its roster, was up against 1700 Pacific, a 1.3-million-sf high-rise owned by First City Center Association of Dallas. Thanksgiving Tower at 1601 Elm St., the 1.1-million-sf joint venture holding of Dallas-based Macfarlan Real Estate Services, made the short list and then was withdrawn from the bidding war.

One source tells GlobeSt.com that Trizec, a hardball negotiator when it comes to besting the competition, is believed to have fared "better than most people think. Trizec fought long and hard and they made a good deal."

Renaissance Tower's quoted rate is $17 per sf to $18 per sf plus electric, but it's a well-known fact that building owners, across the board, are shaving rates 10% to 20% to score the win while tenant improvement packages oftentimes are exceeding $25 per sf. Long-term commitments are earning six months and up of free rent, according to office brokers around town.

Activity in the Dallas CBD started picking up midway through the second quarter as law firms and the like started re-upping while class A prices are right. The 21-building, class A inventory has occupancies ranging from 82% to the low 90% mark. In March, Renaissance Tower was sitting at 89%.

One tenant's rep confides that building owners have been setting hooks to renew by stair-stepping the rate, a commonplace practice that gives discounts up front and balloons over time; erasing the balance of the term, in some cases 18 to 24 months, in exchange for fresh signatures and a longer deal; and committing to fixed rental rates on future expansion options. As for the building owners' brokers, they claim they're just being creative to maintain occupancy until the good times return. But from the tenant's take, the good times are here, at least when it comes to negotiating leases.

[psukhu]

Firm's move downtown is cheered
Epstein Becker will relocate downtown; decision 'great news'


06/25/2003

By STEVE BROWN / The Dallas Morning News

Downtown building owners and leasing agents are cheering a North Dallas law firm's decision to relocate to the central business district.

Epstein Becker & Green PC – a 30-year-old legal firm with offices in 11 U.S. cities – has leased a full floor in the Lincoln Plaza skyscraper at Akard and San Jacinto streets. The company is moving from the Park Central VII building near LBJ Freeway and Coit Road.

"We started working on this deal last fall, so it's taken a while," said Blaine Hale of CB Richard Ellis, leasing director of Lincoln Plaza. "This is great news for downtown."

The law firm leased 25,436 square feet in the office tower, bringing the building to 84 percent occupancy, Mr. Hale said.

Officials in Epstein Becker & Green's Dallas office could not be reached Tuesday for details about the move.

Real estate broker Staubach Co. represented the law firm in its search for downtown office space. Epstein Becker had been in its North Dallas location since 1991, according to Jim Ballard, Staubach's vice president of corporate services.

He said the company considered multiple locations before picking downtown.

"We looked at everything south of LBJ Freeway along North Central Expressway, in Preston Center and the Uptown area," Mr. Ballard said. "Downtown has always been a mecca for the legal community, and their clients wanted them to be there."

The availability of the light rail commuter line to downtown was also a big factor in Epstein Becker's decision, he said. "A big part of it was being close to DART – you don't get that in Preston Center and Uptown," Mr. Ballard said.

Some see the just-completed transaction as an endorsement of Dallas' core.

"It's exciting to see someone in the suburbs coming downtown," said John Zogg, senior vice president of Crescent Real Estate Equities, downtown's largest office landlord. "This is particularly good news on the heels of Baker Botts' announcement last week. A lot of companies are making decisions about downtown right now."

Law firm Baker Botts LLP renewed and expanded its seven-floor lease in the Trammell Crow Center after considering a move outside the central business district.

"The vibrancy and momentum and good things happening downtown are starting to pay dividends," Mr. Zogg said. "People are not only staying downtown but moving downtown."

The overall office vacancy rate in downtown Dallas is just over 30 percent, compared to more than 35 percent in office districts in Far North Dallas and in Richardson's Telecom Corridor. Citywide office vacancy as of early June was about 27 percent.

Mr. Hale said Lincoln Plaza's location downtown – it's across the street from the Fairmont Hotel and the YMCA – and the quality of the building helped land the Epstein Becker lease. "At the end of the day, it always comes down to economics, but they weren't looking at the cheapest deal in town," he said.

Epstein Becker was founded in New York and Washington, D.C., in 1973. The firm is best known for its work in health, labor and employment law.

The firm has 340 attorneys in Atlanta; Boston; Chicago; Dallas; Houston; Los Angeles; New York; Newark, N.J.; San Francisco; Stamford, Conn., and Washington.

E-mail stevebrown@dallasnews.com

[psukhu]

I think more of this will happen as more rail is rolled out.

[gc]

I agree! It only takes a few leases to get heads turning towards DTD!

[gc]

By Connie Gore - www.globest.com
June 25, 2003

DALLAS-An 11-month race for a 65,061-sf international headquarters lease has ended with the longtime tenant's existing building owner crossing the finish line ahead of two class A competitors.
Occidental Tower at 5005 LBJ Freeway in Dallas has bested its submarket neighbors, Lincoln Centre and Centura Tower by packaging "a market lease" with a 10-year term for the Susan G. Komen Breast Cancer Foundation Inc., Robert Powell of Grubb & Ellis Co. tells GlobeSt.com. The foundation has been an Occidental Tower tenant since the late 1980s, but decided to see what the market had to offer. Powell's offer reworks the office space on four floors into three full floors for a net gain of about 10,000 sf.

Powell says the foundation renewed about five months ahead of the existing lease's expiration and bringing an end to hard-line negotiations in the marketplace. "They definitely did their homework," he says of the search and winning terms. "Both parties are extremely pleased with the deal." The 91%-occupied, 540,000-sf tower carries a quoted rate of $22 per sf plus electric.

Under the reworked pact, two floors occupied by the foundation will be extensively renovated as will another, now sitting empty. Powell, the building owner's representative, says finish-out planning has begun so construction can be done in time for a November occupancy. Scott Collier and Karra Guess, both with the Staubach Co.'s Dallas office, represented the Susan G. Komen foundation.

In sync but not tied to the foundation signing, Occidental Tower will be getting a first-floor lobby makeover and an 1,800-sf conference center addition as an added amenity for its tenants. Powell says the work will start within weeks. The building is owned by Occidental Tower Corp. of Houston.

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Cityplace Co. Pens Five-Year Expansion Lease
By Connie Gore- Jun 30, 2003

DALLAS-Cityplace Co. tomorrow turns the key in new space at its old address in a renewal and expansion at One McKinney Plaza. The building's developer penned a five-year lease for the contiguous block of class A space on the eighth floor.
Cityplace Co. boosted the office space from 1,800 sf to 5,831 sf at 3232 McKinney Ave. Michael J. Haase of Gaedke Landers brokered the lease to take the 257,328-sf Uptown building to 80% occupancy. Gaedeke Holdings II Ltd. owns the class A property, with Gaedeke Landers in charge of leasing and management.

Sabine Gaedeke Stener, executive vice president for Gaedeke Landers, tells GlobeSt.com that "we did a good deal for them, but the class A submarket in Uptown is so strong and you have enough demand that it's not heavily discounted. It is pretty close to our quoted rate." That rate is $22 per sf to $23 per sf plus electric. Cityplace's lease was due to expire at the end of August.

The renewal wasn't a given, but it is highly unlikely that Cityplace would have exited a submarket that it helped to create. The development and management company has developed more than 1,000 residential units in Uptown and 300,000-sf plus of retail since 1991 when it bought 130 acres from Southland Corp.

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Dallas Office Market Takes Another Hit
By Connie Gore - Jul 1, 2003 - www.globest.com

DALLAS-The first batch of second-quarter numbers hit the streets yesterday, with Dallas again taking a "back step" in occupancy, rent and absorption. But, it's only as temporary as the nation's down economy, say the market watchers and brokers on the street.
"As Corporate America gets back on a solid ground, we're going to see our market take a back step temporarily," Rick Hughes, senior director of brokerage services for Cushman & Wakefield of Texas Inc., said at yesterday's unveiling of the numbers. His advice to clients: make up your mind and sign for the long term. Obviously, not all clients are listening or Dallas wouldn't be sitting at its highest office vacancy in a decade.

But, companies are addressing their space needs although it's not doing much for the market since many are "right sizing" offices to adjust to a smaller workforce or provide less space per employee. Though the office adjustments add to the vacancy, companies are being credited with finally making decisions, said Daryl A. Mullin, senior director.

The newest numbers on the street show direct vacancy at 23.7% or 37.7 million sf of the 158.9-million-sf inventory. Sublease space stands at 7.2 million sf versus 7.6 million sf at midyear 2002. The quarter-to-quarter analysis, though, isn't as promising, with tenants dropping another 445,000 sf onto the sublease market as they pay the tab and shop for a replacement. C&W's research director, Cynthia Jeter, calculates that 826,000 sf of the available sublease rolled to direct in the last quarter, helping to nudge the overall vacancy to 26.8% or 0.6% higher than last quarter. As for the midyear absorption, it's down 2.5 million sf--a historical level for the DFW market for a January-to-June reading.

Through it all, leasing activity has been brisk as tenants try to take advantage of the market conditions, Mullin said. The average office rent, based on quoted rates, is now $18.06 per sf in comparison to $18.21 per sf just three months ago.

Dallas, the C&W team says, isn't any worse than any other market. "At the end of the day, it's not the stock market, it's not the price of oil, it's job growth," Hughes emphasized.

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Nike Seals Five-Year, Class AA Deal
By Connie Gore- Jul 18, 2003
http://www.globest.com/RMIWEPQ56ID.html

DALLAS-In the coming weeks, Nike Inc. unveils its newest design: a 12,359-sf, class AA office at JPMorgan International Plaza III. The high-profile tenant has signed a five-year lease to end nine months of negotiations for a relocation of its regional sales team from the Galleria.
Nike will be the second tenant in the door for a 351,000-sf premier office building that delivered a year ago as spec space after the turn in the economy made it clear that JPMorgan Chase was going to simply sit tight in two buildings in the prestigious 1.1-million-sf office complex along the North Dallas Tollway. At the year's start, Arthur J. Gallagher Inc. took the first set of keys to 23,000 sf at 14241 Dallas Parkway. Nike's fourth-floor keys turn Aug. 1. A third tenant, confides Buddy Tompkins, vice president of Wilcox Realty Group in Dallas, is reviewing the final contract for 15,400 sf and more deals are brewing that could seal off another 50,000 sf.

Tompkins represents the building owner, the Ohio State Teachers pension fund. The Beaverton, OR-based Nike used an in-house real estate executive to bargain its terms. The class AA office space is being quoted at $24 per sf. Tompkins won't confirm talk on the street that Nike's tenant improvement allowance went for more than the quoted rate. But, he acknowledges, he got aggressive to get Nike's attention. Not only is JPMorgan International III the "new kid on the street," but it's facing stiff competition from other trophy names in North Dallas. "My biggest problem is my rent has a '2' in front of it," Tompkins tells GlobeSt.com. "We're fighting that."

Nike brought the deal to market about a year ago, with a hard focus on class AA space. Tompkins says talks for International Plaza got serious in the fall and lasted long enough that Nike is now in a hold-over position while the new space is finished out. The office area is about the same size, he says, but the practically column-free floor plates and 4:1,000-sf design, including the parking ratio, built in efficiencies not likely to be matched by its 1980s-era competitors.

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Crescent Deals Trophy Win With Lease Transfer
By Connie Gore - Jul 18, 2003
http://www.globest.com/RMIAOJQ56ID.html

DALLAS-A Las Colinas tenant heads to the Dallas CBD in a "seamless" transfer of a lease with Crescent Real Estate Equities to a trophy property with a deal that fills 16,825 sf of class AA space and quadruples the office size. But, the move won't come until the fourth quarter.
FTI Consulting Inc. surveyed the scene both inside and outside the CBD and then started talking to its current building owner at 125 John Carpenter Freeway, where it occupies about 3,000 sf to 4,000 sf. Talks got underway about six months ago as Crescent took the field with a lease transfer offer for premier space at "AA competitive rates," Kirby White, the Fort Worth-based Crescent's leasing manager, tells GlobeSt.com. The roll took a lease with several years left to go and bundled it with a long-term contract for vacant space on the fourth floor of the 49-story Trammell Crow Center at 2001 Ross Ave.

"We did have to compete for it," White says. But, he adds, the transfer ability is a sweet spot that clearly gave the building owner, a two-time winner of a national customer service award, a distinct advantage over its competition.

The Annapolis, MD-based FTI Consulting, a longtime tenant in the John Carpenter Freeway building, was looking to lock in a location that would put its Southwest region business recovery services practice closer to its clients in the legal profession. The tenant is a multi-disciplined consulting firm with leading practices in the areas of turnaround, restructuring, bankruptcy, merger and acquisition and investigative and litigation-related services.

Finish-out will begin in September, with the keys turning sometime in the fourth quarter for about two-thirds of a floor in a trophy property that's now 90% occupied. Depending on the space, the quoted rate is $25 per sf to $28 per sf. White says the win clearly speaks to tenants' desires for class AA space and the synergies of the Dallas CBD, particularly in the immediate area of Trammell Crow Center where the Ray Nasher Sculpture Center is set to open and Belo Mansion, home to the Dallas Bar Association, is expanding.

Crescent owns the majority interest in the building, leased and managed by Dallas-based Trammell Crow Co., through subsidiaries Crescent Real Estate Funding VIII LP and Crescent Commercial Realty Holdings LP. Matt Craft, a TCC principal., and Jon McNeil, TCC's senior vice president, represented Crescent. Chris Hermann, TCC's vice president of corporate advisory division, negotiated for the tenant.

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USPS opts to remain in Stemmons Center
Renewal to help stabilize CMD Realty property
http://dallas.bizjournals.com/dallas...21/story8.html

After months of searching for office space, the U.S. Postal Service has decided to spend another decade in Stemmons Center, renewing its 80,000-square-foot lease there. The 11-story, 219,000-square-foot building sits north of Mockingbird Lane off Interstate 35-E.

USPS employs about 325 in the regional administrative office, which has been based in Stemmons Center for the past 10 years. Its lease was set to expire in December.

The Postal Service was represented by Jeff Ellerman and Greg Burns with The Staubach Co.

"It was a lengthy search," Ellerman said. "There were a lot of options to sift through. In the end, USPS made a win-win transaction with the landlord."

The group's renewal will help stabilize the property, owned by Chicago-based CMD Realty Investors. Stemmons Center took a hit last year when Computer Sciences Corp. vacated the 55,000 square feet it had in the building, along with space in several other Metroplex facilities, to consolidate in Las Colinas.

A departure by USPS would have left Stemmons Center nearly vacant. About 131,000 square feet -- or 59% -- remain available.

Stemmons Freeway currently is one of the weakest office submarkets in Dallas-Fort Worth, with an overall vacancy rate of 29% at the end of the second quarter of 2003, according to statistics from Cushman & Wakefield of Texas Inc. Over the past year, average lease rates have fallen about 70 cents per square foot, from $15.65 to $14.95.

Dale Ray with Capstar Commercial Real Estate Services leases space in Stemmons Center for CMD. He said the property owner is about to embark on a major redo of the main lobby.

"We're doing an architectural redesign, replacing some of the older materials in the building," he said.

CMD owns 16 office buildings in the Metroplex. Its local portfolio exceeds 3 million square feet of space.

Ray said Stemmons Center is a finalist for a couple of sizable deals in the market right now.

"The prospects like the great views of the central business district, the covered parking and easy access off Interstate 35 and Mockingbird," he said. "This has to be one of the nicest properties along Stemmons."

Contact DBJ writer Christine Perez at cperez@bizjournals.com or (214) 706-7119.

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Class A Lease Shifts Dallas HQ to Fort Worth
By Connie Gore
Last updated: Jul 23, 2003 12:09PM

FORT WORTH-Hallmark Financial Services Inc. has decided to bunk part of its Dallas staff with the commercial insurance operations in Fort Worth, signing an eight-year lease for 27,808 sf of class A space at Carter Burgess Plaza in the CBD.
There is no intention of relinquishing the premier office space in the Princeton Building at 14651 Dallas Parkway in North Dallas although the headquarters officially changes cities, the tenant's reps emphasize to GlobeSt.com. Hallmark Financial started scouring the Fort Worth CBD's available stock about four months ago, says Rob Shepherd, managing director in Dallas for the New York City-headquartered Julien J. Studley Inc. The decision was down to sublease or retool the insurance operation's existing space to accommodate the corporate staff.

Crescent Real Estate Equities Co., as owner of Carter Burgess Plaza, sweetened the deal to keep the Hallmark Financial name on the door. "Basically after evaluating the market and very good options, Crescent made a compelling case for them to stay in the building, says Shepherd, who represented the tenant along with Studley's Greg Biggs, southwest region vice president and Dallas branch manager, and Craig Wilson, associate.

Call the deal aggressive or even creative, but it really just boils down to street-savvy negotiations to hold onto a tenant, formerly Millers General Agency Inc., which has been in the building about five years. The new lease neither adds nor subtracts to the bottom line of the 10th floor office.

The move from Dallas will take place in stages, with Crescent making "swing space" available during build-out, Wilson says. The first construction stage gets underway in about a month and should wrap up in six weeks. Then, construction will ramp up on the second half of the office. Shepherd says three finish-out contractors are in the running for the job.

Crescent's leasing manager Whit Kelly represented the building owner, the Crescent Real Estate Funding I LP. For Crescent, the deal keeps the city's tallest building, the one-million-sf- Carter Burgess Plaza, at 92% occupancy.

Hallmark Financial Services primarily sells property and casualty insurance products, mostly in Texas, Arizona and New Mexico. In December 2002, Hallmark acquired some subsidiaries and other assets from Millers American Group Inc. The deal included the Carter Burgess tenant, Millers General Agency, a Texas managing general agency, which effectively was bought from Millers Insurance Co., an indirect subsidiary of the parent firm. The buyout expanded Hallmark's services to include commercial insurance lines and non-standard vehicle insurance while adding Idaho, New Mexico, Oregon and Washington to its coverage territory. In January, Hallmark acquired another subsidiary, Phoenix Indemnity Insurance Co., based in Arizona, in a move to give Millers Insurance the wherewithal to reorganize and re-capitalize.

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Trizec's Class A Triple Fills 22,621 SF in Dallas CBD
By Connie Gore - Aug 1, 2003 12:12PM
http://www.globest.com/RMI0NP1DQID.html

DALLAS-Trizec Properties has hit a class A triple with one renewal and two expansions, all law firm tenants committing for the long term to Renaissance Tower in the Dallas CBD.
The deal-making closes off any available space on the 48th floor as two firms expand and backfill a hole emptied just three months ago by Prudential Security. "There wasn't much downtime at all," Bill Brokaw, Trizec's in-house leasing director for Ren Tower, tells GlobeSt.com.

A tenant for 25 years at 1201 Elm St., the firm of Touchstone, Bernays, Johnston, Beall, Smith & Stollenwerck added 5,147 sf to take the total to 40,731 sf and earn the title as the building's fourth largest law firm tenant. The balance of the floor's open space, 5,412 sf, went to Goins, Undrekofler, Crawford & Langdon, which expanded to 20,320 sf just 1.5 years after it put Renaissance Tower on its letterhead.

Paul Stockard and Sanders Thompson, both with NAI Stoneleigh Huff Brous McDowell's Dallas office and Gifford Touchtone of Gifford Touchstone & Co. represented Touchstone Bernays in a three-year, four-month expansion lease. Stockard also negotiated the six-year expansion pact for the Goins law firm. Both expansions are co-terminus with master leases.

The firm of Johnson & Sylvan re-upped 12,062 sf for six years on the 44th floor. Dan Paterson and Mike Johnston, both with Swearingen Realty Group in Dallas, represented the law firm, a tenant since 1989.

Brokaw says Johnson & Sylvan "scoped the market" before signing a deal that, like the others, were closed at market rates. The high-rise's quoted rate is $17 per sf to $18 per sf plus electric.

But for Touchstone Bernays, it wasn't looking to move from its 47th and 48th floor offices. "Touchstone Bernays has built its practice upon long-term relationships with our clients. In the same way, we have enjoyed our long-term relationship with Renaissance Tower and Trizec Properties Inc., having been one of the first firms to occupy the building in 1976," Sid Davis, a partner with Touchstone, Bernays, Johnston, Beall, Smith & Stollenwerck, said in a press release.

Thom Ridnour, regional vice president in Dallas for the Chicago-based Trizec, says the closed deals "exemplify the continuing appeal of downtown Dallas as the ideal location for the city's most prestigious law firms." Renaissance Tower's 1.7 million sf is 83% occupied, of which 35% is filled by law firms, according to Brokaw.

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Bickel & Brewer Quashes 48,183-SF Venue Change
By Connie Gore - Aug 1, 2003 01:49PM
http://www.globest.com/RMIFRQ1DQID.html

DALLAS-After 18 months of weighing all options, the law firm of Bickel & Brewer has grabbed the one put into play by its existing building owner to keep the 13-year tenant in the Dallas CBD's Bank One Center.
The 12-year lease for the international headquarters was renewed about two years early with "an economic package that we felt we couldn't refuse," John W. Bickel II, co-founder and co-managing partner of a litigation firm with a far-reaching reputation for winning its cases, tells GlobeSt.com. "We're exactly where we want to be, at the right numbers."

Bickel & Brewer went to market early, but merely to "make sure...that we had the best building in the market. We wanted to be convinced that this was the best deal for us," Bickel stresses, noting that clients from near and far constantly praise the location and quality of its 48,183-sf office, with a mock courtroom, in the 60-story high-rise at 1717 Main St.

The 60-member law firm occupies the 48th and 49th floors in the 1.5-million-sf building, owned by Fort Worth-based Crescent Real Estate Equities Co. and the Chicago-headquartered Trizec Properties Inc. in a 50-50 partnership. The deal included TI dollars for space upgrades, but Bickel says there's no deadline pressure to spend the capital. The office area was renovated about two years ago so any upcoming construction is at least six months away, he adds. The deal also includes expansion rights to the 47th floor of the Philip Johnson-designed high-rise.

Bickel says the firm's team--Trammell Crow Co. principal Phil Puckett and senior associate Searcy Ferguson--presented every possible leasehold imaginable during the 18-month search. All class A buildings in the CBD, Uptown and Central Expressway submarkets were reviewed and Las Colinas was eyed as a build-to-suit prospect, Ferguson says. The short list was pared to five properties. Don Dowell of Trizec Properties'Dallas office represented Crescent in the negotiations.

"Clearly when you added everything--economics, culture of the firm, the downtown--it was definitely the right decision to make," says Ferguson.

Ferguson nor Bickel will talk about the rate. A real estate source tells GlobeSt.com that word on the street is the economics were "tremendous" and the renovation allowance was "substantial." The building is quoted at $21 per sf to $24 per sf.

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Uptown spec building attracts first tenants
Christine Perez
http://dallas.bizjournals.com/dallas...wscolumn5.html

2525 McKinnon, one of the few speculative office buildings to be built this year, has its first tenants. Houston-based Sterling Bank has signed on for 6,000 square feet, and the law firm Stone & Bruce P.C. is taking another 5,000 square feet.

About 95,000 square feet remain available, said Matt Craft, principal at Trammell Crow Co., which is leasing 2525 McKinnon for its owner, Dallas-based Seneca Investments. The eight-story building has 20,000-square-foot floorplates, with a parking garage taking half the space on floors one through four.

Craft said he's not worried about leasing a spec building in a market with an overall vacancy rate that exceeds 25%.

"The double-A buildings in Uptown and downtown Dallas are maintaining high occupancy, and we're right in the middle of them," he said. "We're priced behind The Crescent with a similar location and amenities, so it's a viable option, especially for smaller tenants."

Done deals

Trizec Properties Inc. has renewed three law firms in Renaissance Tower, the 1.7 million-square-foot tower it owns in downtown Dallas. Johnson & Sylvan P.C., represented by Dan Paterson and Mike Johnston of Swearingen Realty Group L.L.C., extended its 12,100-square-foot lease. Touchstone, Bernays, Johnston, Beall, Smith & Stollenwerck L.L.P., represented by Paul Stockard and Sanders Thompson of NAI/Stoneleigh, Huff, Brous, McDowell L.L.P. and Gifford Touchstone of Gifford Touchstone & Co., added 5,150 square feet for a total of 40,700 square feet. Stockard also represented Goins, Undrekofler, Crawford and Langdon L.L.P., which added 5,400 square feet for a total of 20,300 square feet. Bill Brokaw was the in-house leasing representative for Trizec on all three deals.

A partnership assembled by Henry S. Miller Commercial has purchased 8 acres at the southeast corner of F.M. 3040 and Morriss Road in Flower Mound from Don Carter. The group plans to develop a 36,000-square-foot retail center on the site. The buy was put together by Vaughn Miller, Mark Hajdu and Ryan Hamilton at Henry S. Miller.

Contact DBJ writer Christine Perez at cperez@biz journals.com.

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GlobeSt.com EXCLUSIVE: Realty America Scores Class A Buy for HQ
By Connie Gore - Aug 13, 2003
http://www.globest.com/RMIT2TBM5JD.html

DALLAS-Realty America Group, taking a transaction full circle, has invested more than $100 per sf into its first local acquisition, gaining a 60,512-sf, class A office building in Uptown with enough space for the corporate headquarters.
The behind-the-scenes trade had Realty America Group brokering the sale between Presidio Investment Advisors of San Francisco and Realty America Investment Management, a wholly owned subsidiary, and arranging the debt through Stamford, CT-based GE Capital's local office. With the deal done, the plans are flying for a headquarters relocation into 4809 Cole Ave., which will be tagged with the Realty America Group name in time for an October move-in.

Realty America Group is a 19-month-old firm founded by industry veterans, Webb Sowden and Jeffrey C. Berry, with Rives E. Castleman as managing partner for Realty America Investment Management. Their first acquisition was in March--the one-million-sf Lincoln Mall in Chicago. Sowden tells GlobeSt.com that they should corner one or two more deeds before the year ends as part of their "principal transactions" component for a three-pronged business model that also includes investment sales and mortgage banking. "We're looking," he says, "so bring us deals."

Phil Brosseau, an independent local broker, brought the 4809 Cole Ave. deal to Realty America Group after learning the deed could be pried from Presidio's portfolio. The 94%-leased office building, with 182 underground parking spaces, was constructed in 1984 and extensively renovated in 1999. It sits on about 1.2 acres near the border of Uptown and Highland Park, two of the ritziest neighborhoods in the city. Realty America Group plans to lease and manage the property, which will be 100% occupied with the firm's relocation from 5440 Harvest Hill Rd.

"It's true core real estate. It's not a value add," Sowden says, adding that the lease roll "is extremely stable." Toreador Resources Corp. is the lead tenant.

The office building's location near the principals' homes and the chance to own a piece of Uptown were deal-makers for a new player with an investment strategy that most often will be a two- to four-year hold. "The Cole acquisition is one we intend on owning for the next 20 years," Sowden emphasizes.

Starting in 2004, Realty America Group will swell the buying pool to five or six assets per year via various investment partnerships. The "comfort zone" is $7 million to $15 million for value-add product of all type.

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Longtime Infomart Tenant Expands
By Connie Gore - Aug 18, 2003 12:07PM
http://www.globest.com/RMIB4SC7FJD.html

DALLAS-A high-tech company has settled into 7,762 sf in a relocation from within the Dallas Infomart at 1950 Stemmons Freeway.
TekFokus Inc., a longtime Infomart tenant, slid from 5,000 sf on the third floor to the second and filled space that was vacant for nearly 1.5 years, Evan Reynolds of Dallas-based Reynolds Co. tells GlobeSt.com. He says all options in the Stemmons Corridor were evaluated before the Informart's team put the winning economic package on the table. "They (TekFokus) are rate sensitive, but the fact that we got a great rate sealed the deal," he says of the aggressive nature of the talks. The start of the 62-month lease practically coincided with TekFokus' old pact's termination date.

Janet Hopkins, a vice president with Trammell Crow Co., represented the 1.6-million-sf Infomart's owner, Nexcomm Capital Partners of Dallas. The Dallas-based TekFokus provides advanced training for IT professionals and developers in Microsoft technologies so maintaining the address had built-in advantages with the Infomart's well-known high-tech roster. The added space will be dedicated to more classrooms and extra office area for the sales team, Miguel Wood, TekFocus' president and CEO.

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A brighter outlook for Las Colinas
A string of big office deals and new apartments signals better days for Las Colinas
10:21 PM CDT on Thursday, August 21, 2003
By STEVE BROWN / The Dallas Morning News
http://www.dallasnews.com/sharedcont...nas.5ab05.html

Along State Highway 114, the rows of office buildings in Las Colinas look sleek and prosperous. This executive enclave is a favorite spot for relocating corporations, regional offices and Fortune 500 firms.

But looks can be deceiving – almost a third of those tinted windows hide vacant space.

"Yes, the overall office vacancy out here is tough," said Dary Stone, vice chairman of Cousins Properties, which manages the Irving business park. "We're showing a 32 percent vacancy rate.

"But we think things are starting to move in the right direction," he said.

A string of big office deals and land sales for new apartments are signaling better days ahead for Las Colinas.

"So far this year, we've signed almost 400,000 square feet of office leases," Mr. Stone said. "And we still have a great location – between two of the busiest airports in the Southwest."

That proximity to Dallas/Fort Worth International Airport and Love Field has served Las Colinas well in the past.

During the 1990s real estate market rebound, Las Colinas was one of the first areas to bounce back with thousands of square feet of leasing and new construction.

Unfortunately, many of the businesses that flocked there were high-tech firms that have gotten pounded in the current recession.

Cutbacks at those companies have contributed to the almost 7 million square feet of empty office space on the market in Las Colinas.

Because of the glut of office space, now there are some leasing bargains in the area, and business is picking up as a consequence.

Real estate brokers say that rental deals averaging $15 per square foot and less annually are common in a market that just a couple of years ago was quoting rents over $20.

MedSynergies, a medical services firm, recently subleased 27,000 square feet in the WestPoint office building at 1255 Corporate Drive that previously housed operations for Verizon Communications Inc.

"We had a lot of options – proposals from 12 different buildings in the Las Colinas area," said MedSynergies president and CEO J.R. Thomas.

"That's unfortunate for the economy but great for our company," he said.

First Horizon Home Loan Corp., one of the country's largest mortgage companies, just rented 116,000 square feet in the Las Colinas Commons complex at 1555 Walnut Hill Lane.

This fall, the mortgage company will move about 500 of its workers into the building from an older location near Love Field.

"They took an opportunity to upgrade their facility, which a lot of companies are doing," said Paul Moser of Stream Realty, which handled the lease. "It was a highly sought-after deal – they had numerous options.

Proximity to D/FW


"They had looked at some other cities in the U.S., too," Mr. Moser said. "They decided on Las Colinas mainly because of proximity to their headquarters" at the northeast end of D/FW Airport.
Along with the smaller transactions, a 100,000-square-foot lease for the headquarters of manufacturer Flowserve Corp. has brightened the outlook for Las Colinas.

Las Colinas has "a more diversified tenant business than the Telecom Corridor, and there are already a number of corporate headquarters out there," said Greg Biggs, who manages the Southwest Region for real estate broker Studley Inc.

North Texas' largest company – Exxon Mobil Corp. – is based in Las Colinas, along with two other big corporations – Kimberly-Clark Corp. and Advance PCS.

And even with the current office vacancies, almost 100,000 people work in Las Colinas. The office district is bigger than downtown St. Paul, Minn., or all of Memphis, Tenn.

Wave of apartments


All those workers need someplace to live, which is driving the new wave of apartment construction.
In the last few months, developers including Palladium USA, Billingsley Co., Hanover Co. and United Dominion Realty Trust have bought land to build almost 1,300 apartments in the Las Colinas urban center.

Palladium USA could have built its new loft-style apartment complex in Uptown or West Plano, but developer Spencer Stuart said the success of Palladium's new Grand Treviso apartments in Las Colinas was the deciding factor.

The 17-story residential high-rise opened last year in the Las Colinas urban center and is now more than 90 percent leased.

"We're going to build 360 loft-style units," said Mr. Stuart. "We like the fact that this area has a lot of amenities and a very urban location."

The four- and five-story apartment buildings will be built along a canal and will average more than 900 square feet.

"The Las Colinas area of the city of Irving currently ranks as the top-performing suburban apartment market across metropolitan Dallas," said Greg Willett of market analyst M/PF Research. "This neighborhood was one of the few segments of the Metroplex where occupancy actually improved during the past year."

Overall apartment occupancy in Las Colinas is about 92.5 percent, compared with about 90 percent citywide.

Developers and commercial brokers say the new homes, apartments and shops will help Las Colinas turn the corner quicker.

"We've seen the same thing in Uptown," said Jeff Swope with commercial builder Champion Partners.

"I think with all the new residential stuff going up, it will get more vibrant."

E-mail stevebrown@dallasnews.com

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GlobeSt.com EXCLUSIVE: CBD Law Firm Inks 13-Year Renewal
By Connie Gore
Last updated: Aug 21, 2003 11:22PM
http://www.globest.com/RMIP4OF7FJD.html

DALLAS-One of the Dallas CBD's hottest deals of the day closed yesterday, with a leading law firm putting final signatures on a 207,495-sf, 13-year renewal for Thanksgiving Tower.
Gardere Wynne Sewell re-upped early on a corporate headquarters lease, which was expanded several times over since the 1996 move into the 1.5-million-sf, class A tower at 1601 Elm St., Helen Rivero, director of asset management for Dallas-based Macfarlan Real Estate Investment tells GlobeSt.com. The new pact takes effect immediately.

Every building owner in the Dallas CBD's stock of class A and trophy properties presumably was part of the chase, which got underway in March. Details, the bulk of which are being kept under wraps, provide for tenant improvements in 2004 or after, but the coup came with a lock-in through Dec. 31, 2016, Rivero says. And, it's a flat deal not stair-stepped as has been so common with this year's transactions.

Gardere Wynne Sewell occupies some of the 23rd floor and full floor plates for 24 through 30 of the 50-story tower. The firm, founded in 1909, employs more than 300 attorneys in 40 practice areas. Aside from Dallas, there are offices in Austin, Houston, Mexico City and Washington, DC.

The closing keeps Thanksgiving Tower at an occupancy of about 88.2% and closes out the 2003 renewal season for the downtown high-rise. Rivero says close to 10 renewals, shoring up about 410,000 sf, have been signed, sealed and delivered so far this year. The building's quoted rate is $18 per sf to $21 per sf.

Macfarlan acquired the building in 1999 in partnership with Morgan Stanley Real Estate Fund III. Macfarlan is the on-site manager and Dallas-based Stream Realty Partners is the leasing agent. Stream's Jon Altschuler and Rivero were negotiating against a Staubach team that consisted of Jeff Ellerman, Matt Coit and Elysia Ragusa, the firm's president and COO.

[gc]

Neiman's re-ups at Renaissance
Yearlong search brings retailer home again
Christine Perez - Senior Writer
http://dallas.bizjournals.com/dallas...25/story6.html

After a yearlong search for space, The Neiman Marcus Group Inc. has opted to keep its corporate operations at Renaissance Tower in downtown Dallas. The company has inked a 10-year deal for 105,000 square feet in the building, where it employs about 400.

Neiman's has been in Renaissance Tower since 1988. It will continue to occupy floors 27 through 29 and will consolidate other operations scattered throughout the building to the 19th floor. The company is leasing about the same number of square feet, but trading in a 7,000-square-foot fitness center for more office space.

Chicago-based Trizec Properties Inc., which owns Renaissance Tower, hasn't decided if it will continue to operate the fitness center as a building amenity, said Thom Ridnour, regional vice president.

Neiman's was determined to stay downtown, said Steve Zimmerman with Trammell Crow Co. , who helped represent the high-end retailer in its search.

The 56-story, 1.7 million-square-foot Renaissance Tower was up against Thanksgiving Tower and 1700 Pacific, but Trizec came up with the right economic package to secure the deal. Neiman's also liked Renaissance Tower's large floorplates, amenities and the fact that Dallas Area Rapid Transit light rail comes right to the building's doorstep.

"About half of Neiman's employees -- about 200 people -- use DART, so that was important," Zimmerman said.

Of the 6.2 million square feet of space Trizec owns in Dallas, about 75% is in the central business district. Ridnour said the company aggressively pursues renewals.

"Once we're able to secure a tenant within one of our projects, we want to provide them with excellent customer care and service and give them all the reasons in the world to stay with us," he said.

Phil Puckett of Trammell Crow said the biggest challenge in putting a deal together for Neiman's was the "economics, which changed almost daily."

"Just when you thought you had a final building selected, another revised offer would be submitted by a downtown building," he said. "It was a challenge to find exactly where the bottom of this market was.

[gc]

Homebuilder to move all its D-FW subsidiaries into Westway One
Christine Perez - Senior Writer
http://dallas.bizjournals.com/dallas...y8.html?page=1

With a goal of creating a one-stop shop for customers, Lennar Corp. is moving all of its Dallas-Fort Worth subsidiaries under one roof, including its homebuilding, design, mortgage and title companies.

Miami-based Lennar (NYSE: LEN) has leased 62,000 square feet in Westway One, north of LBJ Freeway in the far northern edge of Las Colinas, where it will employ about 175.

The company's Design Studio affiliate is taking about 6,000 square feet on the first floor. All other subsidiaries, including American Mortgage Co. and North American Title, will occupy the second floor.

Since entering the Metroplex market in 1991, Lennar has quickly grown to become the area's fourth-largest homebuilder, according to the Dallas Business Journal's 2003 Book of Lists. The company focuses on first-time and move-up buyers, with prices ranging from about $120,000 to $275,000 or more.

Lennar plans to build about 2,500 homes in Dallas-Fort Worth this year under its Lennar Homes, NuHome, and Village Builders brands.

Lennar and NuHome fall under the company's "everything's included" platform. Village Builders, which is new to the Metroplex this year, and replaces the U.S. Home brand, allows buyers to customize designs.

Nora Hogan and Robert Deptula with NAI/Stoneleigh Huff Brous McDowell represented Lennar in its complicated real estate deal, which involved rolling nine leases under six corporate names into one. Because Lennar builds throughout the Metroplex, the search concentrated on a central location, Hogan said.

"Competition for the transaction was fierce," she said. "In the end, the focus came down to Farmers Branch, Irving and Coppell."

Westway One, a four-story, 265,000-square-foot facility at LBJ Freeway and Olympus Boulevard, was one of the few speculative office facilities to be built last year. It was developed by Champion Partners and is owned by State Farm Insurance Co.

The landlord's broker, Chris Taylor with Capstar Commercial Real Estate Services, has taken Westway One from completely vacant to more than 90% leased -- a feat in this market, Hogan said.

Other tenants include IndyMac Bank, which took about 42,000 square feet, and the University of Phoenix, which signed on for 40,000 square feet.

"Champion is very good at developing office buildings that give tenants what they want," Taylor said.

Signage rights and nearby retail and restaurants were key elements in the Lennar deal, said Jeff Shirley, the company's Texas regional vice president. A large lobby also was important.

"With the title company we have quite a bit of consumer traffic, especially during the last week of the month, when most closings occur," Shirley said. "We're going to have great seating areas and serve food and beverages and do some soft entertainment, such as clowns for children."

Deborah Bridge with Dallas-based SGDesign is designing Lennar's new interiors. Construction bids are still being collected.

Shirley said Lennar hopes to begin occupying the new space in the first quarter of 2004.

"The usable square feet we have, compared to the rentable square feet, is a good equation for us," he said. "Being in the same location clearly should improve efficiency, productivity and also be good for morale."

[gc]

Allied Domecq to open regional base in Las Colinas
http://dallas.bizjournals.com/dallas...25/daily9.html

Allied Domecq Spirits & Wine North America announced Monday it will open a regional headquarters office in Irving.

The global spirits, wine and restaurant company has leased 13,800 square feet in the Central Tower building of The Towers at Williams Square in Las Colinas for its Southern regional headquarters.

The property is owned by TIAA Realty Inc., a wholly owned subsidiary of Teachers Insurance and Annuity Association, and leased and managed by Cousins Properties Inc. of Atlanta.

"Williams Square has the convenience and image we want for our regional headquarters," Tex McCarthy, president of Allied Domecq Spirits said in a statement. "The building's quality and proximity to Dallas-Fort Worth International Airport were key factors in our decision to locate here."

Mark Dickenson represented the landlord in the real estate transaction. Perry Jones, vice president of Property Advisers Realty, and Jerry Reis, president, represented Allied Domecq.

Allied Domecq Spirits & Wine North America is the Westport, Conn.-based division of Allied Domecq PLC, a marketing-driven brands business that operates globally in spirits and wine and quick-service restaurants. Allied Domecq's North American brands include Kahlua, Malibu flavored rum, Canadian Club, Courvoisier, Midori, Dunkin' Donuts, Baskin-Robbins and Togo's.

[bloodandpopcorn]

GC, I'm still very impressed by how you seem to be on top of everything, as far as articles relating to the area go! it seems that you read them before anyone else and get them posted us here for all to learn from. It's really a great luxury for the rest of us, so, I just wanted to say thanks.

[gc]

Market-Rate Deal Fills Perot Space
By Connie Gore - Aug 26, 2003 12:42PM
http://www.globest.com/RMIZSPF7FJD.html

DALLAS-Finish-out plans are being fine-tuned for a 23,789-sf tenant who agreed to fill the empty class A office space of Ross Perot Sr. at 12377 Merit Dr. in Dallas. Lakeside Square's retooled floor will be ready to turn in November or early December.
EXCO Resources Inc., now in a class B building at 6500 Greenville Ave., added roughly 5,000 sf to its headquarters size with a long-term signing with Equity Office Properties. Bundling the deal were Equity's in-house broker Andy Smith and tenant reps, John Shaunfield, Robert Mohr and Gianni LaBarba, all with Mohr Partners Inc. in Dallas. Pierce Goodwin Alexander & Linville Architects Inc.'s Dallas office is doing space planning for the full makeover, which has yet to go out for bid.

Shaunfield tells GlobeSt.com that the oil and gas company looked for six months and had five buildings on the short list when Equity came up with the winning economic package. "They traded up and the neat thing is their rental rate is going to be cheaper per square foot," Shaunfield says of a contract that went for a fixed rate instead of a stair-stepped cost. "We thought that area (Park Central) was the best value for the money." The search, for the most part, focused on Richardson-Plano, South Central Expressway and Park Central.

In Park Central, office space is being quoted at a low of $14 per sf for class B buildings to $17 per sf for class A. The final contract, Shaunfield says, "was reflective of the submarket."

EXCO Resources acquires and develops oil and natural gas fields. In addition to Texas, it operates in Louisiana, Colorado, Mississippi and Alberta, Canada.

[gc]

Trizec Hits Triple: 62,500 SF at Two Galleria
By Connie Gore - Aug 27, 2003 12:56PM
http://www.globest.com/RMI5AAZKVJD.html

DALLAS-A trio of leases, totaling 62,500 sf, has backfilled practically all the space emptied in February by Triad Hospitals Inc. at Two Galleria, where occupancy once again has soared to 97%.
Triad vacated floors 19, 20 and 21 in the 24-story, class A office building. "The appeal of those floors was their location at the top of the building," De De Willis, in-house leasing representative for the Chicago-based building owner, Trizec Properties Inc., explains to GlobeSt.com. "We did a triple hit that backfilled that gap."

The largest contract, spanning 10 years and nine months, was penned by Fischer & Co., which will relocate from about 15,000 sf on two floors in One Galleria in early November. Willis says Fischer was checking out market options when Triad walked out the door, jumpstarting talks for part of the space. The corporate real estate firm, with Ted Uzelac as the deal's negotiator, has tapped the 22,538 sf or the entire 19th floor for its new address.

Eland Energy Inc., a privately held oil and gas company, took 22,458 sf or all of the 20th floor in a 10.5-year signing. Eland, which just moved into the office from Campbell Centre along Central Expressway, was represented by Jo Thompson of NAI Stoneleigh Huff Brous McDowell's Dallas office.

The next move-in comes Tuesday when Everest Partners LP gets keys to 17,653 sf in an 11-year commitment for the 21st floor. Jack Griffin of Barclay Commercial in Dallas negotiated for Everest, which is relocating from a class B building at the corner of Preston Road and LBJ Freeway. The firm is an international outsourcing company.

"We were fortunate to have the right space available in the area's premier office property to fill their space needs," Thom Ridnour, Trizec's regional vice president in Dallas, said in a press release.

Willis says "aggressive rental rates" were supported by low tenant improvements for all three offices. The 430,000-sf building, with a $21 per sf quoted rate, is one of three in the one-million-sf Galleria Towers complex, bought four years ago by Trizec. At last count, One Galleria was 82% occupied and Three Galleria, 78% leased.

[gc]

SBC moving from office in Arlington
By Andrea Jares
Star-Telegram Staff Writer

ARLINGTON - SBC Communications is moving as many as 300 workers from its Arlington location to downtown Fort Worth.

The company is expected to complete its move in November from the Arbors of Brookhollow at 2201 E. Lamar Blvd., where it leases 85,893 square feet. Operations are moving to 116 Houston St., which SBC owns.

The move is a matter of streamlining expenses in today's uncertain economy, SBC spokeswoman Amanda Ray said.

No jobs are being cut, she said, and no changes are planned at the Fort Worth location as a result of the consolidation.

"In this instance, there is space in the facility for people who will be relocating," Ray said.

The Arlington office handles maintenance calls from companies such as Birch Telecom and AT&T that lease lines from SBC.

SBC occupied all but 28,520 square feet of the 2-story, 114,413-square-foot building.

When SBC signed the lease in fall 2000, it was one of the largest office leases in Arlington. Other tenants in the building include Midland Loan Services, law firm Baker, Brown & Dixon, and Datalex, a technology company.

Jim Maibach of Peyco Southwest Realty said the office market in Arlington has been picking up in the past two months.

The building is only a few years old and has amenities, such as underground parking and high-speed wiring, that make it desirable.

Maibach said that the area is one of the most active in Arlington in terms of tenant interest and that new buildings are planned or under construction nearby.

"I think they will recover from that vacancy," Maibach said. "I don't know if it will be a big block at the same time."

Office vacancies in Dallas-Fort Worth at midyear were at 21.2 percent, compared with 21.1 percent in the first quarter.

Stream Realty Partners, which markets the property, and CB Richard Ellis, which represents SBC in real estate transactions, did not return phone calls Thursday seeking comment.

SBC owns 40 staffed facilities in Tarrant County.

[gc]

Metroplex office leasing surges
Activity is best news for market in three years; bottom has been hit, brokers say
Christine Perez - Senior Writer
http://dallas.bizjournals.com/dallas...15/story1.html

Has Dallas-Fort Worth's struggling office-leasing market bottomed out?

Real estate brokers think so, after reporting a burst of activity that could signal a recovery at last.

In recent weeks, the Dallas office of Cushman & Wakefield of Texas Inc. has signed 10 deals totaling about 124,000 square feet. Carr- America Realty Corp. inked two new leases and two renewals for a total of 122,300 square feet. And Equity Office Properties lured three new tenants to the Park Central submarket for a total of 50,000 square feet.

Brokers at Cousins Properties, Capstar Commercial Real Estate Services and Transwestern Commercial Services also say leasing activity is on the rise.

It's the best news to hit the Metroplex since the office-leasing market went into a tailspin about three years ago. Since then, the overall vacancy rate has climbed about 10 percentage points to 26%.

No one is expecting a rapid rebound, however.

"We are on the road to recovery, but it's a long and arduous path," said Bill Lokey, vice president of leasing at Cousins Properties. "Still, we're a lot further along than we thought we'd be six months ago."

Lokey handles leasing at Millennium Center, an 835,000-square-foot office complex in Las Colinas, one of the hardest-hit submarkets in the Metroplex. He has signed 197,000 square feet in new leases and renewals so far this year, and expects to close on at least 130,000 square feet in transactions before the end of December.

"Things are definitely picking up," he said. "The market has hit rock-bottom in terms of economics, and deal flow has increased in what is traditionally a slow time of the year. Tenants that could have made choices six months ago were advised to wait until the market hit bottom, and that's why you're seeing activity in the third quarter that normally isn't there."

Most of the Millennium leases have been in the 3,000- to 7,000-square-foot range. Lokey said these deals often mean better economics for landlords, because smaller tenants typically pay higher lease rates and require fewer tenant-improvement allowances.

"There are few 12,000-square-foot to 15,000-square-foot deals out there, and certainly no 50,000-square-foot to 100,000-square-foot tenants ready to sign a lease," he said. "Those deals are still about 12 months away."

One of the largest transactions to close in recent weeks was a 143,000-square-foot, 10-year renewal at Cityplace Center by Residential Funding Corp., which had been in the building for nine years. The landlord's broker, Duane Henley with Prentiss Properties, said RFC looked at many other options in the market, but in the end decided to stay put.

It's a familiar tale these days. Even companies whose leases don't expire for a number of years are going to the negotiating table, said Jack Eimer, head of local operations for Transwestern Commercial Services.

"The new buzzword is blend-and-extend," Eimer said. "Tenants with several years left on their leases want to extend for another five years and convert their rates downward. We're seeing a lot of brokers bring their tenants to market with those aspirations."

'Plenty of activity'
Nowhere is the trend more apparent than in Dallas' Central Business District, where some landlords are offering rates not seen since the last real estate downturn of the early 1990s. A number of law firms have taken advantage of current conditions. Many have threatened to build new corporate homes in Uptown but, in the end, every single firm has renewed.

Lawrence Gardner and Daryl Mullin with Cushman & Wakefield have been involved in three downtown deals in the past several weeks, renewing Meadows, Owens, Collier, Reed, Cousins & Blau L.L.P.'s 28,000-square-foot lease at Bank of America Plaza. They also represented a tenant in two subleases at Bank One Center.

"There is plenty of activity downtown, as tenants are going out early to leverage the market," Gardner said. "But it has to fit in with a company's short-term and long-term business strategies. If you lead with economics and focus on the real estate, it's not always the best thing for the client. It might not fit with their overall objectives."

Another submarket seeing a spurt of activity is Richardson/Plano, one of the first areas to collapse after tech and telecom companies began to falter in 2000 and 2001. Recent transactions there include a 68,000-square-foot lease to UICI in Plano Corporate Center II, and a 121,000-square-foot lease to Samsung Corp., which has taken space at Lookout Plaza in the Telecom Corridor.

Richardson also is believed to be the leading contender for one of the most hotly pursued deals making the rounds in Dallas -- a new regional headquarters for AAA Automobile Club of Southern California. According to local real estate brokers, AAA has set its sights on space in Lakeside Centre, formerly occupied by MCI/WorldCom.

Steady activity in Richardson is expected to continue, following Texas Instruments' announcement of plans to build a $3 billion chip factory in the city.

Far North Dallas continues to be a top performer and is the focus of two significant searches. The company behind Pizza Hut, Yum! Brands Inc., reportedly has narrowed its options to renewing at The Aberdeen off the Dallas North Tollway or moving a few miles south to Lincoln Centre. And Tenet Healthcare, which plans to consolidate several offices in Dallas, according to local brokers, is close to doing a 70,000-square-foot deal at Hall Office Park in Frisco.

Over in Park Central, meantime, fears about traffic jams caused by construction of the High Five interchange have dissipated, and Equity Office Properties has found success by marketing its Class A space to Class B tenants, said Andy Smith, managing director of leasing.

The company has signed deals with Lee Financial Corp., Exco Resources and Sirius Computer Solutions Inc. in recent weeks for a total of about 50,000 square feet.

"We're starting to see things pick up again, and we're optimistic that the rest of the year is going to be good," Smith said. "Doing deals breeds more deals. Everyone senses that we're at the bottom and, if they wait three or four or six months, they risk not being able to get the kind of rates they can get today."

At Transwestern, Eimer said his office is involved in more showings, proposals and negotiations, but he has not seen a huge pick-up in closings.

"We're hoping our activity is a sign of revenue-generating transaction volume that will be realized in the fourth quarter of this year," he said.

Companies may be moving about in the Metroplex, but a true market turnaround won't be realized until companies start hiring again, Eimer added.

"Employment is key," he said. "I don't think there will be any meaningful positive net absorption until we have sustained job growth."

Contact DBJ writer Christine Perez at cperez@bizjournals.com or (214) 706-7120.

[gc]

Mockingbird Station is Leo A. Daly's new home
Christine Perez
http://dallas.bizjournals.com/dallas...wscolumn3.html

Leo A. Daly, the international architecture and engineering firm, is moving its Dallas office from Lee Park in Uptown to the Offices at Mockingbird Station, signing a long-term lease for the entire 23,300-square-foot fourth floor. It's the largest deal at the property since Cushman & Wakefield picked up the leasing assignment in late 2001.

Built in 1978 and renovated two years ago, the 10-story, 140,000-square-foot building sits at the northeast corner of Mockingbird Lane and North Central Expressway within the bustling Mockingbird Station, a mixed-use project with about 200 loft apartments and close to 200,000 square feet of retail, including the Angelika Film Center & Cafe. The development also has a DART rail line station on site.

Sanders Thompson with NAI/Stoneleigh Huff Brous McDowell represented Leo A. Daly in the deal. Nancy Redden and Shannon Brown at Cushman & Wakefield represented the landlord.

Redden said about 40,000 square feet remain available.

"This is typically a small-tenant market, so we're excited to get a tenant of the size and stature of Leo A. Daly," she said. "Activity at the property has been very consistent, and we have several other deals in the works."

Done deals
IEDS leased 25,000 square feet at 1343 Roundtable Drive in Dallas. Henry Miller III with Henry Miller III Commercial Real Estate represented the tenant in the deal. Randy Wood was the in-house representative for the landlord, First Industrial Realty Trust.

Miner North Texas, LTD signed on for 17,500 square feet at 4755 McEwen in Dallas. Lease negotiations were handled by Jim Svidron of the Robert Lynn Co.
Consolidated Electrical Distributors Inc. took 15,700 square feet at 3209 Alta Mere in Fort Worth. Jeff Givens and David Barber with NAI/Stoneleigh Huff Brous McDowell represented the landlord, Cross Cos. Todd Lambeth with Bradford Cos. represented the tenant.

Contact DBJ writer Christine Perez at cperez@bizjournals.com.

[gc]

21,902 SF Tapped at Dallas CBD High-Rise
By Connie Gore - Sep 12, 2003 11:49AM
http://www.globest.com/RMI3Q3RCEKD.html

DALLAS-A 1700 Pacific tenant has settled into 15,485 sf or two-thirds of a floor with options for the balance at a Dallas CBD high-rise, which also cornered a newcomer to nudge the class A occupancy to 70% in the 1.3-million-sf building.
Enmark Services and Regency Gas Corp. exited 3,500 sf on the 16th floor for the 29th floor, which has been empty for 18 months. The related companies replaced a five-year lease, with a couple years left on the term, with a fresh one at a new rate and a new start date, Jim Yoder, principal for Dallas-based Trammell Crow Co., tells GlobeSt.com. But, he stresses, the duo needed to expand and most likely will need to do so again. The 10,000-sf balance of the floor is waiting, when and if it's needed, with an expansion clause built into the oil and gas companies' contract.

Yoder and Trammell Crow associate Jeff Eckert represent the building owner, F/PD Master Lease Inc., with Credit Suisse First Boston as the main player. Jack Moravcik, senior vice president of Swearingen Realty Group LLC in Dallas, negotiated the terms for the tenant.

Also, McGraw Hill Co. slid its Standard & Poor's team into 5,957 sf, taking a spot on the 16th floor but not the one vacated by Enmark and Regency, Yoder says. The publishing company exited part of its 8,000-sf Lincoln Plaza space, but Yoder plans, as will other building owners' brokers, to make a play for the team that was left behind.

McGraw Hill occupied space emptied nine months ago by Spinnaker Industries. "We backfilled that space pretty quickly," Yoder says.

Trammell Crow Co. leases and manages the high-rise, which has a quoted rate of $16 per sf plus electric. Steve Zimmerman, a Trammell Crow principal, was McGraw Hill's negotiator.

[gc]

GlobeSt.com EXCLUSIVE: Heritage HQ Lands in Uptown
By Connie Gore - Sep 18, 2003 10:46PM
http://www.globest.com/RMIY8NTCEKD.html

DALLAS-An Uptown office building, just put into mint condition with a $250,000-plus renovation, has secured a valuable longtime tenant from an upscale center in a neighboring district, with brokers stamping the largest new deal this year in the submarket.
Heritage Capital Corp. pared eight months of talks to four buildings. Taking the gold was 3500 Maple Ave., where one of the world's leading numismatic dealers will be getting its name advertised on top of the building and gaining two floors or 43,050 sf of locked-down, class A space in a 10-year lease at a CB Richard Ellis Strategic Partners' property.

Heritage's lease of about 26,000 sf on the second floor of 100 Highland Park Village in North Dallas will expire at year's end. Kicking in Jan. 1, 2004, the 3500 Maple Ave. lease was built with two steps in the rent at a going-in figure close to the building's marketed rate of $21 per sf plus electric, Jay Bailey, vice president of leasing for Capstar Commercial Real Estate Services, tells GlobeSt.com. "We made a good deal for the client in that we accommodated a high finish-out, but at the same time we did a really good deal for the owner," he says.

Heritage, a renowned dealer of rare coins, is taking the top two floors in the 18-story building to fill space vacated three years ago by Publicis, the world's fourth-largest communications company. Bailey says added security was instrumental in snagging the deal. The short list contained one building in Preston Center, two in the LBJ Freeway submarket and the Uptown winner. More security personnel and cameras, elevator restrictions and secured access to their floors are just part of the measures that will be put in place for the new lead tenant. "It's a hefty build-out," he stresses.

The chase has ended with one of Uptown's more significant wins. "It's the largest deal, excluding some renewals at the Crescent, this year in Uptown," Bailey says. He and Trey Smith, another Dallas-based Capstar vice president, sat across the bargaining table from Heritage's team, Robert Deptula and Nora Hogan, both principals in the Dallas office for Fort Worth-headquartered NAI Stoneleigh Huff Brous McDowell.

Bailey says the 374,000-sf building's new and improved common areas, lobby and garage helped as much as the commitment for heightened security. The Los Angeles-based CB Richard Ellis Strategic Partners bought the building in November 2002 and immediately set about "increasing the profile" of the half-filled building, which is now 62% leased "and hopefully climbing," Bailey says, confiding he's talking to yet another full-floor prospect eyeing a move from the Dallas CBD. If that deal gels, occupancy goes up another 6%.

[tamtagon]

Okay, here's my educated guess (partly enspired by the RL THorton letter in another post) : Stories like the Heritage Capital Corp. deal will become common for the Uptown/CBD office market over the next couple years. Starting in 2005-6, we'll begin to see big plans for high rises again, similar to the 80s. By 2010, the boundaries between Uptown and the CBD will blur to a memory, and the surviving 'big plans' will effectively double the glamour shot of the Dallas skyline as Uptown officially joins the CBD with a handful of towers over 500 feet (Aceplace is ahead of his time?). Uptown will exploit the popular the mixed use design, paring office space with upscale living space.

Today's commonly defined CBD will see real growth in the next decade. Southside and Cedars neighborhood property, and that near the farmers market will remain low cost and run down until the affluent, top drawer office/residential space levels off between Oaklawn and the CBD. The 2010's will finally see the continuation of office tower canyons originating along Elm-Main-Commerce. In the next decade, buildings will be more single use oriented again, with residential towers lining the SE edge of downtown (along the Trinity levees, and deidcated office towers immediately north. The most affluent residential towers will edge the northern boundary of Oak Cliff, offering the best views.

Hopefully, DFW will host the 2020 Olympics.

[gc]

Wow, great vision. I like that!

[bloodandpopcorn]

That's a really nice vision, though I don't share your optomism. We'll grow I think/hope, but, not necessarily that quickly.

Also, is it more likley for america to get the 2020 Olympics than those that we just went out for a little while ago?

[gc]

Miller Road nabs new tenants, activity rises
Christine Perez - Staff Writer
http://dallas.bizjournals.com/dallas...wscolumn5.html

After sitting vacant for six months, leasing activity is picking up at Miller Road Business Center, a four-building, 382,000-square-foot complex at the corner of Miller Road and Jupiter Road in Garland. Built in March, the project was developed by Myers & Crow Co. on behalf of TA Associates.

Pro Spa Inc. leased 27,000 square feet, Kamko Hose & Pipe Inc. leased 14,000 square feet, and four more deals are in the works, said David Pearson of The Holt Cos., which represented the landlord in both deals.

Pearson said interest has picked up because lease rates were dropped.

"We had to come off our proforma considerably to get tenants in and create some excitement," he said. "With the market vacancy and negative absorption, we had to adjust our strategy to go for smaller, short-term deals and compete against second-generation space."

Pro Spa, which makes spa equipment, was represented in its lease by Cash McWhorter at Colliers International. Kamko, a hose and pipe distributor, was represented by Stephen Cooper at Robert Lynn Co. Both companies will take occupancy in October.

Done deals

- It didn't take Trammell Crow Co. long to find a replacement tenant for Leo A. Daly, which is moving from Lee Park Center at 3141 Hall St. to Mockingbird Station. Clarion Partners L.L.C. has signed for the 10,500-square-foot top floor and will take occupancy at the end of November. Barbara Bennett with Trammell Crow Co. represented the property owner, Ecom Real Estate.

- Atrium Cos. Inc. leased 19,500 square feet in The Plaza on Bachman Creek at 3890 W. Northwest Hwy. in Dallas. Al Hildreth with Hildreth Properties represented the tenant in the deal. Duane Henley with Prentiss Properties Ltd. Inc. represented the landlord.

- Consolidated Electrical Distributors Inc. has taken 15,700 square feet at 3209 Alta Mere in Fort Worth. Jeff Givens and David Barber with NAI/Stoneleigh Huff Brous McDowell represented the landlord, Cross Cos. Todd Lambeth with Bradford Cos. represented the tenant.