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Real Estate Real Deals: Acquisitions, expansions, leases

Real Deals: Acquisitions, expansions, leases

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DATA CENTER INVESTOR

BUYS IRVING FACILITY

Coldwell Banker Commercial Advisors DFW’s Data Center Group has completed its first transaction in the Dallas-Fort Worth market, securing a 136,000-square-foot, Tier IV-designed facility for a new investor in the field, SkyWalker Property Partners.

The property is located at 6001 Campus Circle W. in Irving, the longtime data center and back-office hub for a multinational financial services firm. Ryan Crabtree, vice president of CBC Advisors’ growing data center group, represented the buyer of record, Tech the Halls LLC, and is now leasing the facility for the locally based investment group.

“I’ve been watching that property for a couple years after hearing the occupant might move its data center operation to Omaha,” Crabtree said. “It’s a rare opportunity because of the existing infrastructure of power and fiber.”

In the mid-1980s, the two-story structure was expanded to 136,000 square feet from 40,000 square feet and outfitted with five back-up generators totaling 8,100 kilowatts of power, 8,500 kilowatts of transformer power from two substations and fiber networks for 20 suppliers, including five long-haul providers. The transaction included all electrical, mechanical and information technology equipment plus a two-acre ground lease with Dallas Fort Worth International Airport to provide additional parking. The seller was represented by Steve Berger of CBRE.

Dallas-Fort Worth is a leading market for the data center industry, ranked second only to Northern Virginia for demand, absorption and specialized construction. Strong demand this year is attributed to an influx of hyper-scale cloud providers and data center/back office technology expansions by Fortune 500 companies, many of which are headquartered in Irving. Crabtree’s prospective tenant list also includes digital or crypto currency firms, which are gaining acceptance as values soar on U.S. and foreign stock exchanges.

“This is a Tier IV facility, the highest possible ranking. The space could be re-commissioned in a short time. Ideally, we’d like a single tenant, but we could accommodate two or three,”

Crabtree said. “The existing power and connectivity at the property builds in a competitive rental rate.”

The make-ready to date includes exterior enhancements and an updated security system. The interior will be altered as needed. It presently is configured with a 74,500-square-foot data raised floor, 34,0000 square feet of office space and 27,500 square feet of infrastructure space, including a generator plant, and loading dock.

SkyWalker Property Partners’ new asset, situated on 4.7 acres, is adjacent to a Dallas Area Rapid Transit station. Close by are high-tech campuses for telecom giant Verizon and QTS, a provider of collocation, cloud and IT services in North America, Europe and Asia Pacific.

“This transaction represents a strong start for CBC Advisors DFW’s data center group in Texas and SkyWalker Property Partners’ investment in the industry,” said Crabtree.

GRAPEVINE FIRM IN VENTURE

TO BUY SAN ANTONIO HOTEL

2GR Equity, a real estate investment firm based in Grapevine, has made an equity investment into a joint venture with San Antonio-based Phoenix Hospitality Group, a hospitality development and management company. The new venture acquired the 149-room Hotel Indigo on the River Walk in San Antonio on November 27.

PHG will be responsible for hotel operations, including overseeing major interior and exterior upgrades.

This is 2GR’s second hospitality investment in the San Antonio market; the first was a 138-room Hilton Garden Inn and attached conference center.

2GR Equity principal and cofounder David Gregory said, “With the recently completed $325 million expansion/renovation of the Henry B. Gonzalez Convention Center and the room night demand that comes along with that, we believe the San

Antonio hospitality market has its best years ahead of it.”

This is the 26th transaction closed by 2GR Equity since it was formed in March 2011. The firm has now provided joint venture equity on commercial real estate transactions representing about $286 million in total capitalization.

Wise Foods expands

In north fort worth

In a six-month turnaround, the 214,650-square-foot Railhead Business Station has reclaimed its 100 percent occupancy with the expansion of a North Fort Worth tenant, Wise Foods Inc.

The company is up and running in 33,673 square feet at 800 Railhead Road, one of three distribution warehouses in the class A industrial project owned by Sun Life Assurance of Canada. Wise Foods has leased overflow space for its nearby Northern Cross Boulevard warehouse.

“Activity was exceptionally strong on this space. There is a large demand for this size space in the market,” said Nick Talley, senior vice president and managing partner of Dallas-based Bradford Commercial Real Estate Services. “It feels good to have regained full occupancy within six months.”

Talley’s new deal shores up the three-building project through 2019. “Demand is so strong that owners are achieving incremental rent growth and fewer tenant concessions market-wide,” he added.

George Jennings of Holt Lunsford Commercial represented Wise Foods in negotiations for a long-term, triple-net lease. The expansion space includes 1,712 square feet of office space, 24-foot clear height and full sprinkler system.

Railhead Business Station, developed in 2007, is situated at the crosshairs of Loop 820 and Interstate 35W, part of the 633-acre Railhead Industrial Park.

LEASES

Progenitec has leased 2,400 square feet of industrial flex space in the Dipert Building, 7301 W. Pioneer Parkway, Arlington, from 7301 LLC. Chris Mendez of Coldwell Banker Commercial Advisors DFW represented the landlord.

Vincent Le has renewed 1,875 square feet of retail space at 410 Grapevine Highway in Hurst. Chris Mendez of Coldwell Banker Commercial Advisors DFW represented the landlord, Vikade, in the direct deal.

Biagi Warehousing Inc. has renewed its lease for 179,875 square feet of industrial space at 605 110th St. in Arlington. Transwestern’s John Brewer represented the landlord, Prologis, in the transaction. Matt Dornak of Stream Realty Partners represented the tenant.

Send real deals to Robert Francis at rfrancis@bizpress.net.

Most expensive streets in the U.S.

Of course, San Francisco, New York and Boston lead the way in the list of the 25 most expensive streets in the United States, but Texas is has a few streets in the mix: Congress Avenue in Austin (No. 10), McKinney Avenue in Dallas (No. 14) and Main Street in Houston (No. 21). According to JLL’s 2017 Most Expensive Streets study, which looks at the priciest U.S. office space, those high-profile strips command an average asking rent of $48.65 per square foot, a 46.9 percent premium compared with the rest of the country. In Dallas, McKinney Avenue in Uptown is demanding upwards of $62 per square foot.

“Dallas’ Uptown is a desirable location for employment and living,” said Walter Bialas of JLL Research. “[Locating in] one of the original ‘live, work, shop, play’ environments in DFW, these companies are positioning themselves to attract top talent and retain employees. It’s certainly not unique in the grand view of what’s happening in commercial real estate, but it’s an excellent example of thoughtful urban planning, which has made this area what it is, and something that’s being implemented in other areas. It’s become a model for good planning both locally and nationally.”

Here are the Top 10, with notes from JLL:

1. Sand Hill Road, San Francisco: Home to some of the most prominent venture capital firms, Sand Hill Road is one of the Bay Area’s most high-profile business addresses. Rents average $119.38 per square foot and have hit as high as $185.

2. Fifth Avenue, New York: Average rents reached $116.04 per square foot, with top rents of $185 coming at a 157.9 percent premium compared with the rest of the market, helping propel Fifth Avenue up one place from the previous report.

3. Mission Street, San Francisco: Mission Street is home to a blend of prominent tech and financial services tenants, making it one of the best-recognized addresses in San Francisco. With an average asking rent of $93.68 per square foot, Mission Street’s ranking rose by two spots since 2015.

4. Main Street, Boston: An address here comes with average rents of $90 per square foot, a list-topping 143.6 percent premium compared with Boston at large. Vacancy is also in the mid-single digits at a minuscule 5.3 percent.

5. Greenwich Avenue, Fairfield County, Connecticut: Rents average $86.53 per square foot, with top rents coming in at $101, a whopping 177.4 percent premium compared with the rest of Fairfield County.

6. Pennsylvania Avenue, Washington, DC: Pennsylvania Avenue not only serves as the address of the White House, it’s also home to a variety of prestigious law firms and lobbying organizations and offers some of the best views in Washington, DC. At $80 per square foot, sharing a street with the White House and the Capitol means paying a 95.1 percent premium compared with the rest of the market. The street maintained its ranking from 2015.

7. Ocean Avenue, Los Angeles: Rents average $78.20 per square foot and vacancy is just 7.1 percent.

8. Boylston Street, Boston: Boylston Street is the premier office market in Boston’s CBD. The area attracts primarily financial and legal services firms. At $68.87 per square foot, Boylston Street was supplanted from its previous ranking at No. 7.

9. Royal Palm Way, West Palm Beach: Staying put in the ninth spot on the list, Royal Palm Way averages $61.80 per square foot, a 96.1 percent premium compared with the rest of West Palm Beach.

10. Congress Avenue, Austin: Traditionally home to financial and state government users, Congress Avenue has been transformed by a wave of new office, multifamily and retail developments into one of the market’s most dynamic corridors. A newcomer to the list’s top 10, Congress Avenue averages $55.20 per square foot and boasts a 9.5 percent vacancy rate.

For more information:

www.us.jll.com and look under the “research” tab


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