Wakefield, MA-based Franklin St Properties has distributed a letter to shareholders seeking approvals to sell Galleria North, the sixteen-story, Class “A” office tower in Dallas, Texas, for a gross sales price in the aggregate of at least $86 million.
Franklin St Properties acquired the asset on October 14, 2004, five years after it delivered, for $68.5 million. On January 9, 2014, the company’s Board of Directors made the decision to try to sell the property and retained CBRE, Inc. to facilitate the potential asset trade.
Galleria North, which offers 379,518 rentable square feet on approximately 4.8 acres of land at 13737 Noel Road, was 88 percent leased as of March 31, 2014.
DealerTrack, the building’s largest tenant, leases 133,873 square feet, or approximately 35% of the building. The commencement date of its lease, which includes a portion of the second floor, and all of the third, fourth, fifth, sixth and seventh floor, was August 1, 2012. DealerTrack’s lease expires on May 31, 2023.
EmCare is the second largest tenant and leases 109,863 square feet, or approximately 29% of the building. Its space consists of portions of the 12th floor and 13th floors, and all of the 14th, 15th and 16th floors.
Additional tenants include CRC Insurance Services (24,907 square feet), Real Foundation (17,311 square feet), Griffith Davison (10,948 square feet), U.S. Bank (10,814 square feet), Chicago Title Insurance Company (9,657 square feet), Insperity Support Services (6,149 square feet) and Murphy’s Deli (2,199 square feet).
Galleria North is located in the southern section of the Far North Dallas Submarket in a micro market known as the Galleria section of the Lower Tollway portion of the Far North Dallas Submarket. The Galleria Area has struggled to keep existing tenants and to attract new tenants, in part due to the reconstruction/widening of the LBJ interstate freeway and resultant fear of growing congestion, according to a recent report from Franklin St Properties.
Total revenue from the building increased by approximately $1.2 million to $1.9 million for the three months ended March 31, 2014 compared to $0.7 million for the same period in 2013. Franklin Street continued its suspension of dividends for the first quarter of 2014, however, due to the fact that the property is not expected to generate positive cash flow for the near term due to the costs related to leasing.