Wednesday, May 30, 2007

Value Add Project Downtown - One Dallas Centre

DALLAS-Younan Properties Inc., delivering the deal in time for Memorial Day, is unfurling a new strategy with its newest office asset, the 615,000-sf One Dallas Centre. Renamed Patriot Tower, the asset will receive a $20-million redressing that will include a 10,000-sf war museum in a bid to build character and purpose for the high rise.

Zaya S. Younan, chairman and CEO of the Los Angeles-based investment group, has paid $22 million or just less than $36 per sf for the 40%-leased class A high rise at 350 N. St. Paul St. Start to finish, the all-cash deal went full circle in 32 days because he wanted it to close before Memorial Day so he could put a new asset strategy to work--starting with I.M. Pei's 30-story design in the CBD. "We buy buildings, but they have no character. There's no connection," Younan tells GlobeSt.com. "I want to change that to give our buildings character. It's a new concept we are rolling out in the US."

In taking the deed yesterday, Younan has put Stream Realty Partners LP in charge of leasing. The seller, Colonnade Properties of New York City, had Jones Lang LaSalle at the leasing helm, with JLL managing director Evan Stone brokering the sale.

Younan, known for his value-add savvy, confirms that the 27-year-old Patriot Tower's vacancy is the largest one that he's assumed in Dallas, where he's amassed more than seven million sf of class A office space. "We don't see it as a challenge. We see it as opportunity," he explains. With that in mind, he's tagging the class A space at $15 per sf plus electric and rolling in brokers' incentives to get them in the door to "look and reassess" a building that's been "out of the game" for awhile, he adds. His target is 80% occupancy within one year to 18 months.

Younan is interviewing architects for the Patriot Tower makeover, aimed at returning it to class A plus status while maintaining the architectural integrity of the I.M. Pei & Partners' 448-foot design. If all goes as planned, work permits will be in hand within 30 days. The first work order is pointed at the outside. "It's going to get a good shower. It hasn't had a shower in eight years," Younan says, estimating it will take six months to one year to complete all that he's planned inside and out.

Younan plans to retain a history professor from local university to develop an interactive and educational museum from the Revolutionary War to the present-day Iraq War. In addition, there will be an honor wall for photographs and memorabilia of all company employees and relatives who served in the US Armed Forces. The decision to put the museum in Dallas was mortared in its high number of veterans and military families and abutting 10-story parking garage, which has enough room for tenants and museum-goers.

"That building is going to mean a lot to me because it's going to serve a lot of purposes," Younan says. "I'm an American by choice. I could never thank this country enough for all the blessings that I've had here. And, the soldiers are an important part of the fact that we live in such a beautiful country."

Patriot Tower is Younan's third Dallas CBD acquisition in one year. He says he's not holding any more Dallas contracts, right now, but he is holding two for Houston: Northbelt Corporate Center along North Sam Houston Parkway in the Greenspoint/Northbelt submarket and 6464 Savoy, a mid-rise with direct access to US Hwy. 59. The deals are slated to close in mid-June.

By: Connie Gore