DALLAS – Gaedeke Group LLC has acquired the 351,683-sf Millennium Tower from KBS Realty Advisors in an all-cash transaction, besting investors from coast to coast aggressively vying for one of the most prestigious and recognizable office properties in Far North Dallas.
"We have looked at many buildings through the years, but this one stood out as a premier class office building," says Glenn S. Lickstein, president of Dallas-based Gaedeke Group. "This is an excellent addition to our existing portfolio of class A office properties."
Millennium Tower's impressive steel crown has long been a landmark within the Middle Tollway Corridor, with its 14-story building and adjacent seven-story parking garage boasting immediate access to the Dallas North Tollway at its intersection with Arapaho Road. In January, the trophy asset will be 97.8% occupied, possibly the highest tenancy of its nine class A competitors in the submarket.
Located on 3.4 acres at 15455 N. Dallas Parkway in Addison, Millennium Tower has been institutionally owned since its completion in 2000 by Dallas developer Wynn Jackson. KBS Realty acquired the property in June 2008 from RREEF.
"Millennium Tower is one of the highest quality suburban assets in the city," says Gary Carr, vice chairman of CBRE, whose team marketed the property for the California-based seller. "It was highly sought after by institutional and private investors nationwide. We are pleased to see Gaedeke buy it because of the quality of the ownership. This building has always been owned by quality investors."
Gaedeke Group, fueled by a strong pride of ownership, is highly regarded in commercial real estate circles for providing impeccable tenant services and top-quality office environments by investing new capital, sound management principles and sustainable practices to achieve peak operating performance portfolio-wide. The majority of its portfolio is Energy Star-rated, as is Millennium Tower, and several properties are LEED-certified, including the prized One McKinney Plaza in Uptown.
Since 2009, KBS Realty has invested $1.6 million into capital improvements at Millennium Tower. The second floor was outfitted with a fully equipped fitness center, including showers and locker rooms, conference facility and tenants' lounge. The upgrades also included corridors and public areas on the majority of floors, the HVAC system and speculative offices suites. The property also features a full-service deli on the ground floor, Regus-operated executive center on the sixth floor and hospitality-like amenities, including concierge and shoeshine service.
Millennium Tower has it all – location, city-wide prestige and premium finishes, inside and out, resulting in a quality tenant mix of professional and business services, energy firms, technology, real estate, insurance, legal services, transportation and construction services. The largest tenant is Dresser Inc., a subsidiary of General Electric Co., which occupies 44,115 sf or 12.5% of the property. Leasing will be handled by Gaedeke vice president Belinda Dabliz; on-site property management by Debra Spears, who was previously responsible for Banner Place.
From an investment standpoint, Gaedeke stands to benefit in the coming years from in-place rents averaging more than 10% below market rate. Middle Tollway Corridor rents are predicted to increase 8.3%, on average, in the next five years, according to CBRE Econometrics Advisors.
Millennium Tower's CBRE marketing team also included John Alvarado and Eric Mackey, both senior vice presidents, and Robert Hill, senior financial analyst.
"We are constantly seeking to upgrade and invest in our portfolio," says Lickstein, who led Gaedeke's negotiating team. "We are definitely looking to buy more buildings in our existing markets of Dallas, Miami and Washington, D.C., and add some new markets, such as Boston, New York and Atlanta."
Gaedeke Group, founded in 1995, is a full-service real estate firm that provides investment, acquisition, management, leasing construction management and portfolio management services. Headquartered in Dallas, Gaedeke's current portfolio encompasses three million square feet of class A office properties in Arizona, Florida, Tennessee, Texas, Washington, D.C. and Germany.