01/13/2010

TIAA Fund Markets Trophy Dallas Complex

A TIAA-CREF fund is selectively shopping a Dallas office property valued at up to $210 million.

The 1.6 million-square-foot Lincoln Centre is being pitched to a handful of core investors via CB Richard Ellis.

In a plus for would-be buyers, the trophy property has a low-rate assumable mortgage equal to more than 70% of the estimated value. The interest-only $153 million loan, with a 5.5% coupon, matures in February 2016.

TIAA acquired the three-building complex for $255 million in December 2005 from MetLife via its TIAA Real Estate Account fund. The complex is about 86% occupied at an average rent of about $17/sf. The largest tenant, Atmos Energy, occupies roughly 170,000 sf. Other tenants include chemical company Valhi Corp. and law firm Griffith Nixon.

Lincoln Centre, which was completed in 1984, underwent some $15 million of renovations in 2004. The complex, which includes a fitness center, a conference center and garages, shares a campus with the 500-room Hilton Dallas Lincoln Centre, a luxury hotel that is separately owned and not part of the offering. The complex is at the intersection of the Dallas North Tollway and LBJ Freeway, roughly 10 miles north of downtown Dallas.

This is the latest in a series of offerings by TIAA Real Estate Account, an open-end vehicle set up in 1995 that had $9.3 billion of net assets as of last May, according to the most recently available data. Last year, the fund listed about a half-dozen office properties valued at some $200 million. But it does not appear that any of those buildings have been sold yet. V

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