DALLAS-New York City-based partners SMA Equities and Moinian Group have added two more leases to the finished stack in a fast-paced bid to boost occupancy at 2100 Ross, where they are marking their fifth month as titleholder. The 843,728-sf high rise is poised to pass the 80%-leased mark.

"We have close to 80,000 sf signed or in the midst of signing since we bought it," says Sina Mahfar, principal of SMA Equities. He tells GlobeSt.com that a pair of full-floor tenants will be closing on their class A deals in two weeks.

Until then, the team is basking in its latest win: the law firm of Wick Phillips. The 18-attorney firm will move Nov. 1 into 11,580 sf on the ninth floor of 2100 Ross, vacating 7,080 sf of sublease space in Lincoln Plaza at 500 N. Akard St. The deal has been in the market six to nine months. Wick Phillips has inked a six-year, stair-stepped lease, bumping 2100 Ross' ninth floor to full.

"This just worked out for them," Jeff Staubach, vice president of Dallas-based Staubach Co. says, citing price and location near the Arts District as the dealmakers. "It's a good value for Downtown."

Staubach says Downtown buildings outweighed Uptown's due to the price differential, ranging from 30% to 50% in per sf costs for class A stock. "We glanced at Uptown, but the pricing is significantly higher," he says. The high rise's space is being marketed at $16.50 per sf to $19 per sf plus electric.

In the second win, Haas Petroleum Engineering Services Inc., an oil and gas consulting firm, has added 1,966 sf in a co-terminus lease with a two-year term to double its headquarters space on the 18th floor. The firm also subleases space from Ernst & Young LLP, the building's largest tenant with 244,000 sf in its grasp through June 2009.

Haas Petroleum gets keys Oct. 1 to the extra space, says Celeste Signor, vice president with CB Richard Ellis in Dallas. She, CBRE senior vice president Dennis Barnes and former senior vice president Malcolm Ross represented the JV owners in both transactions. Bruce Hecht, executive vice president and managing principal with Swearingen Realty Group LLC in Dallas, is Haas Petroleum's tenant rep.

"The amount of activity we've had on this building is amazing," Mahfar says. "I'm very surprised about the amount of activity that I see Downtown." And, he adds, the pace is equally as brisk at his other two CBD holdings: Renaissance Tower at 1201 Elm St., which is jointly owned with Moinian, and Republic Center at 325 N. St. Paul St., a wholly owned SMA asset.

DALLAS,TX-Within days of the prepayment lock-out coming to an end, IPC US REIT and PNL Cos. have turned over the deed to the 843,728-sf 2100 Ross Ave. for $73 million to long-time partners, Moinian Group and SMA Equities. The contract went down Dec. 29, 2006, but the plan all along was to wait out the lock-out.

"We put it under contract and bided our time since then," Dan Levitan, managing director of Dallas-based PNL Cos., tells GlobeSt.com. "Even with the defeasance penalty, we hit the Treasuries at the appropriate time." He says the timing was so on target that securities were bought April 16, one day before the interest rate dropped and four days after the conduit loan's lock-out provision ended.

IPC and PNL bought the high rise in late 2004 for $56.3 million, re-branding the 33-story San Jacinto Tower to 2100 Ross and undertaking a multimillion-dollar makeover. The intent was a long-term hold.

The odds for an early sale were on the owners' side--with capital still free-flowing, interest in Dallas still cresting and value-add left in the building's 76% occupancy at a time when rental rates are climbing. With the Toronto-based REIT looking for a buyer, it was an opportune time to sell its lone Dallas deed and close out the PNL partnership.

"It was time to take advantage of investors' interest in the CBD and the timing was good for us," Levitan says. "We feel confident due to the location and the improvements that we've made to the property that the new owner will benefit."

Ernst & Young LLP is the lead tenant with 244,000 sf leased through June 2009. CB Richard Ellis, which will continue to lease and manage the high rise, occupies 100,000 sf. The wild card is E&Y, which has yet to declare its intention and is being heavily courted by owners of new buildings in the Arts District and Uptown.

Levitan says 2100 Ross was "never mass marketed." He and John Alvarado, managing director of investment sales for Jones Lang LaSalle, worked out the deal directly with the New York City-based JV, which also owns Renaissance Tower at 1201 Elm St. SMA Equities, led by Sina Mahfar, separately owns Republic Center at 325 N. St. Paul St. and the Overlook in Las Colinas at 251 O'Connor Ridge in Irving.

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SMA Equities Pockets Overlook at Las Colinas

By Connie Gore

IRVING, TX-With 12 other investors jousting for the win, SMA Equities has come out on top with the deed to the Overlook at Las Colinas. Sources say the just-closed deal for the class A office building, overlooking the Four Seasons Resort and its TPC golf course, was sealed at roughly $150 per sf.

The uptick in the Las Colinas office market proved to be an extra boon, with the 95,510-sf building's occupancy climbing 7% and its class A rate gaining up to $1 per sf as SMA headed into the final negotiating stretch with Hartford, CT-based Cornerstone Real Estate Advisers, an affiliate of Massachusetts Mutual Life Insurance Co. When the dust settled, SMA began its reign of the urban center prize at 251 O'Connor Ridge Blvd. with 92% occupancy and new rates of $19 per sf to $21 per sf.

"The play in this building is more a long-term hold. The long-term prospects for it are very good," says John Alvarado, managing director of investment sales for Jones Lang LaSalle. "There are leases in place that are already well below market. The owner has to hold onto those leases for a couple years and then they'll flip to higher rents."

Transwestern retained the leasing assignment, bringing the Bruning law firms, now at 3102 Maple Ave. in Dallas, to the three-story building's top floor as the acquisition pushed toward closing. The building primarily houses smaller offices in a niche mix of regional and local firms heavily weighted by the financial services' industry. The lead tenant is Darling International Inc., which has its headquarters in 26,772 sf.

Alvarado says the new owner, like the tenants, was drawn to the location. "It's a very unique location, overlooking the golf course and Four Seasons," he says. "It's one of the few irreplaceable locations in Irving because of that."

Alvarado tells GlobeSt.com that SMA Equities' principal Sina Mahfar brought other partners to the deal as he so often does, syndicating the equity and taking down new debt to make the close. "He did that in this case as well. And, did it very quickly," he says, adding the equity partners are all New York-area investors.

JLL's Jack Crews, also a managing director, and Alvarado began the sales campaign under the Trammell Crow Co. name and edged it right up to the finish line as a CB Richard Ellis team. It closed it two days ago, rolling the fourth deed in the Dallas area into the New York City-based SMA's portfolio.

Crews says the Overlook's marketing lasted 30 days, with the interest being stirred by the building's quality and location as well as the residential construction that's underway or on the planning docket for a long-time favored pocket of regional offices and headquarters for corporate America. Cornerstone owned the 22-year-old building, situated on 4.67 acres, nearly a decade.

March 8, 2007

JV's Uptown Pitch Targets Downtown Landmarks

By Connie Gore

DALLAS-With talk these days on the city's "new entrepreneurial buyers," a well-subscribed crowd of the Who's Who in the brokerage community was introduced first-hand to the dealmakers behind the New York City powerhouses, SMA Equities and the Moinian Group.

About 200 attended last night's invitation-only "martini party" in the Ghostbar on the 38th floor of the W Hotel in Victory, a cosmopolitan setting with a clear view of SMA-Moinian JV's stake in Downtown Dallas. The high-brow event was a low-key pitch to encourage brokers to bring their deals to the JV's Downtown properties: Renaissance Tower at 1201 Elm St. and 2100 Ross Ave. Sina Mahfar and Samy Mahfar, principals with SMA Equities, and Daniel Gohari, vice president and director of commercial assets for the Moinian Group, hosted the event, which was orchestrated by its brokerage firm on the ground, CB Richard Ellis.

The Mahfars started to invest in the city five years ago. The Downtown residential population was minimal and the inner core crammed with empty or nearly empty high rises. The city's rebirth is well under way, with many brokers crediting the new crop of owners like the SMA-Moinian JV with leading the charge.

"We're becoming a 24-hour city," Moody Younger, CBRE's managing director, told the crowd. "And these guys have been visionaries and have had foresight."

Samy Mahfar says the Downtown traction is particularly evident at SMA's Republic Center, an office complex at 325 N. St. Paul St. converted to mixed-use. He says Gables Residential started leasing the redeveloped tower in January and 40 of 229 apartments already are filled as the project pushes toward completion.

It was Sina Mahfar who put the JV's continued investment into perspective, crediting the Moinian Group "for believing and supporting the ever-growing Downtown Dallas." And, the JV isn't done--it's close to closing on yet another piece of Dallas real estate.

DALLAS-Grabbing its first deed in Texas, the New York City-based Moinian Group has partnered with a long-time business associate, SMA Equities, to come out on top in a fast-paced, high-priced race for the 1.7-million-sf Renaissance Tower. Industry sources say the CBD landmark brought $143.5 million as part of the clean-up action from the $8.9-billion takeover of Trizec Properties Inc. Moinian

"It's our first, but not our last," Steve Bederman, Moinian's executive vice president, promises GlobeSt.com. He says the team's been looking for awhile to get into Dallas. SMA Equities, also from New York City, has been in town since 2002 as the owner of the 1.1-million-sf Republic Center at 325 N. Paul St. "We had the benefit of their experience," he says. "It was an easy partnership. They're longstanding friends."

Bederman says the private JV "has no exit plan" for 1201 Elm St., the city's second-largest office building. "We buy assets that we really like and we keep them," he stresses. "We're really happy with this asset. It's a great asset in a Downtown market that's improving." The deal closed with a loan from Wachovia Bank.

The 56-story trophy, with its distinctive green "double X" lighting and five-point rooftop crown, emerged as "for sale" space in the shakeout by the New York City-based powerhouse of Blackstone Group and Brookfield Properties Corp. in their buyout of Trizec. The Cushman & Wakefield of Texas Inc. team of Andrea Peskind, executive director, and Brad Thornburg, director, represented the seller.

Renaissance Tower's new owners are starting out with 83% occupancy and weighted average lease terms of 81 months. The lead tenants are Blockbuster Inc., Neiman Marcus Group, Southwest Securities, Godwin Pappas Langley Ronquillo and Winstead Sechrest & Minick. The quintet, accounting for 49% of the space, has an average of 10 years remaining on each pact. In line with the takeover, Moinian plans to manage the prize, but has hired Trammell Crow Co. to lease it.

Bederman says the JV isn't planning any marked changes. "It shows beautifully. We don't have to anything different," he explains. "We just have to market it and lease it up."

The Dallas newcomer was part of an investment group that bought the Sears Tower in Chicago in 2005. Just three months ago, it bought four acres in Downtown Los Angeles for a residential-and-retail project. The firm is regarded as one of the industry's most active development firms, but Bederman says that's not part of the present-day Texas plan.

The 32-year-old Renaissance Tower underwent a $105-million makeover in 1991. The Crystal Court Atrium, a nine-story glass pyramid base, has 17 stores and restaurants at ground and below-ground levels. It also has a 12-story, above-ground parking garage with nearly 1,100 spaces.

"This high-profile, class A property is consistent with our overall commercial investment strategy of acquiring and developing high-profile commercial and residential properties in major markets nationwide and an excellent opportunity for our first venture in the resurgent Dallas CBD," Joseph Moinian, CEO and president, says in a press release.

Two New York investors have completed their purchase of one of downtown's largest skyscrapers.

The Moinian Group, a Manhattan developer, and SMA Equities purchased the 56-story Renaissance Tower from Trizec Properties for about $150 million.

Known for the lighted double Xs on all four sides, the glass-clad tower at 1201 Elm St., which has 1.7 million square feet, is second in square footage only to the 72-story Bank of America Plaza.

The building was constructed in 1974 and underwent a substantial remodeling in 1991.

"We had so much interest in this building that it really sold itself," said Cushman & Wakefield's Andrea Peskind, who along with Brad Thornburg negotiated the sale.

Renaissance Tower is more than 80 percent leased to tenants including Blockbuster Inc., the Neiman Marcus Group, Southwest Securities and Winstead Sechrest & Minick.

"Renaissance Tower is a remarkable property that has historically attracted some of Dallas' strongest tenants," said Joseph Moinian, CEO of the Moinian Group. He said the purchase is "an excellent opportunity for our first venture in the resurgent Dallas" central business district.

Moinian Group is one of the investors that purchased Chicago's Sears Tower in 2004. The company has a portfolio totaling more than 20 million square feet of office, residential, retail and hotel properties � the majority of which is in Manhattan.

SMA Equities, the other buyer in the Renaissance Tower deal, is part owner of downtown Dallas' Republic Center office, residential and retail complex.

Dallas' downtown among hottest

Pricing is competitive; buying trend shows no sign of slowing