News
For Rent: 535k SF
May 17, 2010
| With a little landscaping and new signage, KDC turned the recently vacated Blue Cross Blue Shield 535k SF block of space into 901 Central with triple net asking rents of $8.50 PSF, SVP John Brownlee tells us. | |
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| The white pick-up at left is apparently not included. We snapped the freshened up building at the SEC of Central Expressway and Spring Valley in Richardson on Thursday at a broker-developer luncheon. KDC assumed BCBS's 26-acre campus as part of the deal to develop (and own) the new 1M SF BCBS facility at 1001 E. Lookout Dr., John tells us. 901 Central features: 2,400 plug and play seats, dual feed power, a cafeteria, and 25k SF of raised access floor space/data center space. The building is ready for occupancy, John says, and though he'd like to find a single user, KDC is prepared to multi-tenant for a 100k SF user. | |
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| John, right, with Richardson Chamber of Commerce CEO Bill Sproull and Page Southerland Page biz development director Mary Miano, says KDC is accustomed to working with companies needing to dispose of surplus real estate. They did a similar deal with the 1.2M SF EDS (now HP) in late 2005 under a short-term sale/ leaseback. KDC re-developed and re-branded it The Campus at Legacy, now 80% leased to Denbury Resources, PepsiCo, Dr Pepper Snapple Group, St. Jude Medical, and McAfee, among others. “We've made over 700k SF of new leases in the project since EDS vacated in the spring of 2008,†he says. | |
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| A panel discussion on capital markets and CRE values served as the opening act for the broker lunch at 901 Central featuring CBRE EVP Gary Carr, JLL managing director Jack Crews, and HFF associate director Robby Rieke, who anticipates 2010 deal volume to increase. In 2008, there were $130B in sales nationally, but only $50B in 2009. In 2010, sales are up 50%, from 1Q09 to 1Q10. “We could see sales in excess of $100B in 2010. Investors are involved in multiple bid rounds to get that target asset,†he says. | |
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| Gary says buyers include private investors and non-traded REITs, which are the most aggressive buyers nationally right now. Also buying are public REITs, which raised record amounts of capital last year while in survival mode, and pension fund advisors, which have money and a timeline to follow. Last year, he says, people wondered where the distress and product were because there weren't a lot of monetary defaults. Loans were getting worked out, but as cash flows from operations decrease, owners won't be able to make debt service and lenders will come after the assets, he says. |
