Wednesday, April 16, 2008

Callison Takes One Floor With 12-Year Lease

Design firm Callison will shift from Uptown to Downtown in mid-June, signing a 12-year lease for a 23,177-sf floor in the 1.2-million-sf Fountain Place. The deal has gone full circle in three months.
Callison initially looked only at Uptown, but then turned its sights to Downtown too, pitting new buildings against existing and finally giving the nod to the 26th floor of the 60-story landmark at 1445 Ross Ave., according to John Amend, owner of Dallas-based Amend Group. He teamed with J.W. Amend to represent. Callison, which be doubling its office with the move from 2325 N. Akard St.
Amend says the dealmakers were the high rise's quality, location and amenities like plentiful parking. "They ended up liking Fountain Place better than any place," he says.
Amend tells GlobeSt.com that Callison got "a healthy allowance" to retool its floor, one of three under consideration. "It was a market deal," he says, adding the confidentiality pact bars him from discussing financials. He acknowledges the signed deal does have bumps in the rate, which would be expected due to the length of the lease. In addition, Callison will take charge of its own space planning and construction management. The building's quoted rate is $24 per sf to $30 per sf plus electric.
Kirby White, leasing director for Crescent Real Estate Equities LP, says the floor is part of the 300,000 sf that locally based Hunt Co. vacated in December 2007, creating the trophy's largest opening in decades. And, he adds, Callison is the first architectural firm to set up shot in the building since shortly after it opened in 1984.
With Hunt at its new Downtown headquarters, White has a 215,000-sf contiguous block in the mid-rise elevator bank and another 35,000 sf scattered on other floors, also mid-rise space. He says the pipeline is holding two expansions for 5,000 sf and 8,500 sf and two more deals that would push the in-play total to 20,000 sf. The Callison signing took occupancy to 68%.
White says there are no renewals for four years. "That's a good thing because every lease will be net positive absorption," he points out. "We have good activity, but it's not likely to be all one deal. We're optimistic there's one deal out there that will make a significant difference and we'll fill in with others around it."
White credits IM Pei's iconic design, his only one in the Downtown, and the 1,000-space, underground three-level parking area and 343-spot surface lot as playing integral roles in Callison's decision. "An architectural firm appreciates good architecture," he says. Callison, totaling 800 professionals, also has offices in Seattle, New York City, Los Angeles, Shanghai, London and Mexico City.
White says Fountain Place has weathered similar, if not worse, economic storms in the past. It was 76% leased in 1990 and it hit 95% by 1995, staying at that level and sometimes pushing 99% occupancy in the past 12 years. "The comfort level I have is it's fared well in a much more difficult time," he says. "It has a good track record."