Fenway Capital Advisors, Waterfall Asset Management Invest in Dallas-Fort Worth
A partnership between Fenway Capital Advisors and Waterfall Asset Management have teamed up on their second Texas deal together, this time buying an iconic gold-clad office complex in Dallas with plans to revamp the buildings.
The deal to purchase Campbell Centre closed Friday and shows the confidence of the partnership in the future of the Dallas-Fort Worth office market as companies and residents migrate to the nation's fourth-largest metropolitan area. While terms of the deal were undisclosed, real estate professionals with knowledge of the deal say the property sold for about $105 million, or about $120 per square foot.
The seller of the roughly 870,000-square-foot gold-glinting office buildings, with two mezzanine-level structures between the 20-story towers, was Manhattan-based Haberman & Haberman.
The new owners plan to embrace the design and gold glint of the office complex that has a high profile in Dallas.
"Everyone knows them, we just want to rebrand them a bit," Patrick Tribolet, managing partner of Fenway Capital, said in a phone interview with CoStar News. "It's early days, but our general plan is to upgrade, modernize and reposition the buildings."
Tribolet, who is based in Dallas, said he's been eyeing Campbell Centre since before the pandemic, with it being one of the iconic properties in Dallas that has "lost some of its luster over the last couple of cycles" but has potential. The late 1970s-era office complex sits along the North Central Expressway, minutes from downtown and Uptown Dallas and accessible to growing areas of East Dallas.
"We want to create a work environment tenants can be proud of in the buildings, and we have a lot of ideas, we just have to figure out what we want to do," Tribolet said.
Tribolet declined to share the terms of the acquisition or how many dollars the partnership could invest in transforming the towers.
Fenway Capital, with an office in Dallas and an office in Solana Beach, California, has a history of buying and repositioning what the firm calls mismanaged or under-invested assets in markets with strong fundamentals across the western United States, according to its website.
"The migration trend to Dallas is anticipated to continue and this is a great asset," said Patti Unti, managing director in charge of commercial real estate equity for Waterfall Asset Management, a New York-based private equity firm, in an exclusive phone interview with CoStar News. "We like to invest in great assets in great locations with a best-in-class local operator like Fenway Capital."
The two buyers previously teamed up together to buy Blockbuster's former headquarters, data center and distribution center in a northern Dallas suburb in December 2019. Since Blockbuster's demise, the office and industrial property called Texas Crossing has been transformed into a multi-tenant, mixed-use development with about 700,000 square feet of industrial space and 160,000 square feet of office and data center space.
The partnership also worked together on a real estate deal in San Diego in April 2019.
"This is a good sign showing there are great things to come in Dallas with them coming to the marketplace with such a sizable transaction," said Creighton Stark, an executive vice president at Colliers International with decades of capital markets experience, in a phone interview. He was not involved with the deal but worked with Waterfall Asset Management when they bought another Dallas property called Citymark near Uptown in 2019.
The deal also makes way for what Stark said he expects will be "a lot more velocity" in terms of deal transaction volume in the third and fourth quarters this year.
"There is so much pent-up demand for transactions, with a lot coming from coastal cities," Stark said. "As people leave their bunkers in their basements of New York and Los Angeles, they see what's happening in Dallas-Fort Worth and Texas and see this as an opportunity. There was a lot of capital sidelined during the pandemic and investors were not able to deploy those funds and now they have the opportunity to do so in 2021."
Dallas-Fort Worth ranked as one of the two top destinations for real estate investment by large investors, following Austin, Texas, in a recently published CBRE survey. The survey also showed a preference by investors for secondary markets in the Sun Belt, especially for discounted properties. But one top CBRE broker said it could be a difficult proposition to find those coveted discounted properties given some owners could be reluctant to sell at this time.
For the Record
Evan Stone of Dallas-based Goodwin Advisors and Gary Carr of Newmark represented the seller, Haberman & Haberman, in the Campbell Centre deal. The two brokers were at CBRE at the time the property was initially marketed in 2019