Wednesday, September 23, 2015
Behind CBRE’s massive multimillion-dollar redo of Galleria Towers
Not every kind of investor can buy a property for more than $300 million and invest even more millions to bring it back to its former glory, but CBRE Global Investors has a fund for that.
"We see this as an amazing opportunity to restore a landmark in the Dallas metro area to an iconic position and we're excited about making that happen," said Claudia Walraven, senior director within CBRE Strategic Partners U.S. Value 7, which is the fund that acquired Galleria Towers.
"We plan some pretty heavy re-positioning with this particular asset," Walraven told the Dallas Business Journal."For us, this will be a significant re-positioning effort compared with other properties we've bought."
Galleria Towers fits perfectly into the fund's focus of adding value to the property and its tenants, she said. The fund is also part of one of the largest brokerage firms in the world, which helps bring enough funding and know-how to re-invest in massive properties like Galleria Towers.
The Class A towers are considered a value add property because by the end of the month Dallas-based FedEx Office plans to move into its new West Plano campus within the $2 billion Legacy West development and leave about 200,000 square feet of space in Three Galleria Tower.
After FedEx Office leaves the tower, it will leave the complex about 60 percent occupied, Walraven said. In North Texas, the average occupancy rate is 82.1 percent with an average asking rate of $20.75 per square foot, according to CBRE research.
Walraven said the upgrades would help bring new office tenants to the towers. She declined to share the terms of the acquisition or amount of money being spent on the renovations of the towers.
The fund has hired Dallas-based Entos Design to oversee the architecture of the renovations. Walraven said the fund has yet to hire a general contractor.
CBRE's Celeste Fowden, Shannon Brown and Kenzie Kilgore were also hired by the fund to oversee the future leasing of Galleria Towers.
Candace Carlisle/Dallas Morning News