KBS Sells Millennium Tower in Dallas

KBS Realty has sold the 351,683 square-foot Millennium Tower, one of the most prestigious and recognizable office properties in Far North Dallas, to Gaedeke Group, a Dallas-based real estate firm. KBS Realty, which was represented in the sale by the CBRE team of Gary Carr, John Alvarado, Erick Mackey, and Robert Hill, acquired the building in 2008 from RREEF. The sale price and terms of the deal were not disclosed.

Carr, CBRE vice chairman, said the property was highly sought-after by institutional and private investors nationwide. "Millennium Tower is one of the highest quality suburban assets in the city," he said. "We are pleased to see Gaedeke buy it because of the quality of the ownership. This building has always been owned by quality investors."

"We have looked at many buildings through the years, but this one stood out as a premier class office building," says Glenn Lickstein, president of Dallas-based Gaedeke Group. "This is an excellent addition to our existing portfolio of class A office properties."

The 14-story, 351,683-square-foot office building at 15455 N. Dallas Parkway has been institutionally owned since its completion in 2000 by Dallas developer Wynn Jackson. As of January 2014, the property will be 97.8% occupied, with major tenants including Dresser Inc., a subsidiary of General Electric Co. Going forward, leasing will be handled by Belinda Dabliz, vice president at Gaedeke, according to a D Real Estate Daily report. On-site property management will be led by Debra Spears, who previously oversaw Banner Place.

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Wells Fargo Breaking Ground on $125M Expansion

Wells Fargo is breaking ground on a 410,000 square foot expansion of its Chandler campus along the Price corridor in Arizona, a $125 million expansion project that will double the size of its footprint in the area. The Chandler expansion will provide space at 2600 S. Price Road for approximately 2,500 employees, adding two four-story buildings, a four-story parking garage, event center plus a café. Future phases of campus development could add another 920,000 square feet of office space and additional parking.

"The buildings will provide room for 2,500 additional team members, giving us the ability to relocate team members and the flexibility for growth," Lori Brown, a local Wells Fargo spokeswoman, said in an email to the Phoenix Business Journal. Wells Fargo employs about 13,000 people in the Valley, about 2,500 of whom work at the Ocotillo Corporate Campus on Price Road, Brown said. The bank is the fourth-largest employer in Chandler, according to the city's website.

Wells Fargo has had a corporate office on the Price Corridor since 2004, but did not want to build until it had sufficient staff, so most of the employees that would move to the new section are working in temporary locations elsewhere, Leo Bauman, vice president and manager at Wells Fargo, said in a Maguire Co. study conducted earlier this year.

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WRIT Disposes of $307M in Medical Properties

Washington Real Estate Investment Trust (WRIT), a metro-DC-based equity real estate investment trust founded in 1960, announced that it had completed two separate sale transactions to complete the first phase of the disposition of the company's medical office portfolio. During an earnings call last month, company officials said the medical building selloff was a move to raise capital rather than borrowing to expand. WRIT reported two deals totaling $307.2 million covering about 877,000 square feet of medical office space, plus another 216,000 square feet of office space, much of it filled with medical tenants.

"As planned, the structure of this large transaction has provided WRIT the flexibility to redeploy the sales proceeds into assets that are aligned with our current strategy. We look forward to executing the two remaining medical office sales transactions in the next few months," said Paul T. McDermott, President and Chief Executive Officer of WRIT.

The first sale transaction included 2440 M Street, Alexandria Professional Center, Woodholme Medical Office Building, 9850 Key West Avenue, 15001 Shady Grove Road, 15005 Shady Grove Road, 6565 Arlington Boulevard, 19500 at Riverside Office Park, 9707 Medical Center Drive, Woodholme Center, CentreMed I & II, Ashburn Farm I, II and III, 8301 Arlington Boulevard and Sterling Medical Office Building. The second transaction included 4661 Kenmore Avenue, a land parcel that is being utilized as off-site/overflow parking for one of the medical office buildings, Alexandria Professional Center, located in Alexandria, Virginia. The sole buyer in these transactions was Harrison Street Real Estate Capital. WRIT’s remaining medical office properties are also under two additional contracts with Harrison Street Real Estate Capital and are projected to close as follows: Woodburn I & II on or about January 31, 2014 for approximately $79 million, and Prosperity I, II and III on or about January 31, 2014 for approximately $114.6 million.

"The sale of their MOBs, like the sale of their industrial portfolio two years ago, was excellent from a strategic, pricing and timing perspective," John Guinee III, managing director with brokerage and investment banking firm Stifel Nicolaus & Co. Inc., told Commercial Property Executive. But having half-a-billion-dollar to play with in pursuit of a new investment strategy may not be as simple as it seems. "The WRIT challenge is what to do with the proceeds, as the DC-area real estate investment sales market remains hot with a disconnect between pricing and fundamentals–high versus uninspiring," Guinee added.

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Chinatown Office Portfolio Sold for $95.5M

Dadourian Management, a wholly owned subsidiary of Dadourian Export Corporation, sold three office buildings in Manhattan's Chinatown neighborhood in two all-cash transactions with an aggregate value of $95,500,000. George Comfort & Sons, Inc., with ASB Real Estate Investments, purchased 164-168 Canal Street in an all-cash transaction valued at $61,900,000, or roughly $1,239 per square foot. The Oved Group purchased 40-42 Elizabeth St. and 159-165 Canal St. for $33.6 million, equating to approximately $1,142 per square foot, according to a CoStar Group report.

"These three excellent properties are situated on busy corners of a street and in a neighborhood that is really taking off. Having three buildings available at the same intersection generated a ton of initial interest, with investors and developers looking both at buying the properties individually and as a package," said Massey Knakal CEO Paul Massey, Jr., who exclusively handled these transactions with Robert Burton and Nick Petkoff. "Ultimately, we wound up in competitive bidding situations and sold 159-165 Canal Street and 40-42 Elizabeth Street as a package, and 164-168 Canal Street separately. The family that sold the buildings had the security of knowing that they had reached out to the entire market and that they were getting the highest prices and best terms available," Paul added.

164-168 Canal Street is a six-story building that contains approximately 49,950 square feet and is currently 70% leased by credit tenants Citibank and NY Life & Co. 40-42 Elizabeth Street is a five-story renovated office building containing approximately 24,425 square feet, with two ground floor retail stores with 16 office units above, and the basement is used for storage and mechanicals for the building. 159-165 Canal Street is a two-story building containing approximately 5,000 square feet on a 100.17' x 25' lot. It consists of six ground floor retail tenants anchored by First Republic Bank, with office tenants above.

For more news and information visit Blumberg Capital Partners.

CCIT Acquires $202M of Net Lease Office Properties

Cole Capital, the private capital management business of Cole Real Estate Investments, Inc., announced that it had acquired five single-tenant corporate properties by Cole Corporate Income Trust, Inc. (CCIT) for a combined price of approximately $202.1 million. The properties include facilities in San Jose, Colorado Springs, St. Louis and Houston and are now part of Cole's office portfolio, which consists of 63 wholly owned properties located in 25 states, totaling approximately 11.6 million square feet with an aggregate purchase price of approximately $1.7 billion.

"These latest acquisitions are consistent with CCIT's strategy of securing mission-critical properties nationwide that are essential for corporate operations," says Thomas W. Roberts, EVP and head of real estate investments at Cole Real Estate Investments, Inc. in a GlobeSt.com article. "These 'necessity' properties boast credit-quality tenants, long-term leases, valuable rent increases and varied industries, while providing geographic diversification to the expanding CCIT portfolio."

The new acquisitions include:

LATTICE SEMICONDUCTOR CORPORATION – San Jose, CA MSA
CCIT acquired a 98,874-square-foot two-story, Class A office building leased to Lattice Semiconductor Corporation. The facility serves as a development center and product design facility for Lattice, and activities at the property include research and development, as well as prototype product manufacturing and testing. There are approximately 12.9 years remaining on the initial lease term, plus a renewal option.

FEDEX CORPORATE SERVICES – Colorado Springs, CO MSA
CCIT acquired a 155,508-square-foot three-story, Class A office building leased to FedEx Corporate Services, Inc., with a guaranty from FedEx Corporation. The property is the primary facility used by FedEx for the development and programming of various technologies that the company uses to route and track its delivery services. The lease has approximately 11.0 years remaining, plus renewal options.

SERVICENOW – San Jose, CA MSA
CCIT acquired a 148,866-square-foot three-building office complex leased to ServiceNow, Inc., a leading provider of cloud-based services that automate enterprise IT operations. The property serves as an operations facility for ServiceNow with an emphasis on research and development, as well as corporate functions. There are approximately 10.4 years remaining on the initial lease term, plus renewal options.

MAGELLAN HEALTH SERVICES – St. Louis, MO MSA
CCIT acquired a 232,521-square-foot three-story, Class A office building leased to Magellan Health Services, Inc. Magellan uses the property as a national technology, administrative and customer care center, and it is the main corporate location for the entire company's marketing, printing, production and mail operations. There are approximately 11.2 years remaining on the initial lease term, plus a renewal option.

TGS-NOPEC GEOPHYSICAL COMPANY – Houston, TX MSA
CCIT acquired a 97,295-square-foot three-story, Class A office building leased to TGS-NOPEC Geophysical Company. TGS-NOPEC Geophysical Company is a geophysical mapping company serving the oil and gas exploration and production industries. The property serves as TGS-NOPEC's headquarters for U.S. operations, as well as the home office for the global CEO. The lease has approximately 11.9 years remaining, plus renewal options.

For more news and information visit Blumberg Capital Partners.

Parmenter Realty Partners Buys The Tower at Cityplace

Miami-based Parmenter Realty Partners announced this week that it had purchased The Tower at Cityplace in Dallas, Texas, marking the company's tenth investment in Parmenter Realty Fund IV. While the final purchase price was not disclosed, HFF, which sold the building on behalf of the owner, Dallas-based CPT Fee Owner LP, announced that it has arranged $100 million in financing for the property through GE Capital Real Estate, the proceeds of which were used to acquire the asset with a future funding component for leasing and capital expenditures. According to a Dallas Morning News report, real estate brokers speculate that the building went for more than $135 million.

"We are pleased to add The Tower at Cityplace to our Parmenter Realty Fund IV portfolio," said Darryl Parmenter, Chairman and CEO of Parmenter Realty Partners. "This iconic building was built with the highest design quality and standards and is the perfect asset to round up Fund IV before we launch our Parmenter Realty Fund V in January 2014."

The 1.3 million-square-foot office tower was originally built in 1988 less than a mile north of downtown Dallas and the Arts District. As part of the purchase, Parmenter Realty Partners plans to develop 600,000 square feet of restaurants, shops and residential space surrounding the 42-story office and retail tower at 2711 N. Haskell Avenue. Parmenter said it also plans to implement a comprehensive capital improvement program consisting of the renovation of the building's common areas as well as completing other capital projects to enhance the property's trophy stature.

"Uptown's vacancy rate currently stands at 11 percent and is projected to be single digit by the end of the year," said Spence Sowa, Senior Vice President of Acquisitions at Parmenter Realty Partners. "With limited new construction in the surrounding submarkets and an increasing demand for a live-work-play environment, The Tower at Cityplace is strategically positioned to take advantage of the growing market trend."

For more news and information visit Blumberg Capital Partners.

Credit Suisse Group Buys Adam Grant Building for $105M

Jones Lang LaSalle Capital Markets announced this week that it had facilitated the sale of the Adam Grant Building in San Francisco on behalf of Seagate Properties. Credit Suisse Group shelled out about $105 million for the Adam Grant building at 114 Sansome Street, a transaction that valued the historic property for more than $560 a square foot, according to real estate sources, reported the San Francisco Business Times. Terms of the deal were not disclosed, but public records show that Seagate Properties paid $67 million for the property in 2007.

"The Adam Grant Building is a one of San Francisco's premier landmark office buildings, and it offers the desirable combination of strong income stream security and significant upside potential," said Michel Seifer, Managing Director at Jones Lang LaSalle.

Originally built in 1908 and expanded in 1926, the Adam Grant Building is a 180,000 square-foot office building located in the center of the San Francisco financial district. It is recognized by San Francisco's Historic Preservation Commission as a Category I historically significant building, which is defined as a structure with great individual importance and excellent architectural design. The property has also received an "A" rating from the Foundation for San Francisco's Architectural Heritage, recognizing it as one of the most important buildings in the city.

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