Sellers Testing Waters in Dallas with Two Major Office Offerings
Real Estate Alert reports: The past three years have seen the near-stagnation of commercial real estate sales in Dallas’ central business district (CBD). According to data aggregated by Real Capital Analytics (RCA), Real Estate Alert recently stated that, “While trades in [CBDs] nationwide have soared by 239% last year, they plunged by 75% in Dallas, to a paltry $9 million.” That office market has posted lackluster fundamentals and been slow to return to growth, despite being a culturally-vibrant and demographically-growing Texas city. Importantly, the entire Dallas metropolitan area placed 13th in RCA's annual 2010 ranking of markets by sales volume.
As 2011 begins, however, Dallas’ CBD may be showing signs of life as two major office deals come to market with heavily-competitive pricing. The first is the 1.2 millon-square-foot Plaza of Americas, currently owned by a Blackstone-led partnership, which is marketing the property for more than $120 million. That would be $97 per-square-foot, at a 7.5% cap rate. The second is the 509,000-square-foot One Arts Plaza, which developer Lucy Billingsley is hoping to sell for as much as $150 million. That would mean nearly $300 per-square-foot and a cap rate of 6.5%. Both sales would be significant outliers in comparison to the average Dallas office trade along multiple dimensions.
Though there are plenty of naysayers doubting the achievability of those sales prices, both sellers are optimistic given the market’s recent momentum, improvement in pricing, and competition in the nation’s most popular metros that many believe will soon force buyers to secondary markets. In addition to being well located, both complexes are also standouts within the Dallas CBD, each featuring unique amenities and appealing long-term tenants. Whether the sellers chose the right time to sell these showcase properties will be told in time.
View the full article on Real Estate Alert: Sellers Testing Waters in Dallas with Two Major Office Offerings
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Posted by: Nina Turner