8710 Freeport Parkway

8710_freeport_parkway_case

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The Opportunity

8710 Freeport Parkway was 71 percent occupied at acquisition in September 2004, providing abundant opportunity in an improving market. The property’s rent roll was weighted to large, credit-worthy tenants whose existing leases at above-market rates provided exceptional initial yields.

Located in DFW Freeport, an international business park in the Las Colinas submarket, 8710 Freeport Parkway offers 82,000-square foot floorplates and a coveted parking ration of over 5:1000.

The Strategy

Even though the building was 29 percent vacant, CREA’s team envisioned a creative solution that would add value over and above leasing the project’s vacant space: The Company undertook a complex process of restructuring a significant portion of the rent roll through lease buyouts and negotiating sub-to-direct lease conversions.

The CREA team completed a cost-effective capital project that improved common areas, landscaping, and monument and building signage. The Company also created an aggressive marketing plan targeting medium and large corporations seeking value and efficiency.

The Result

Through a series of negotiations, the CREA team facilitated the buyout of one major tenant, allowing a subtenant to go direct and expand into 50 percent of the building. All other subtenants also signed direct leases.

Twenty-one months after acquisition, 8710 Freeport Parkway was 100 percent occupied and sold for $134 per square foot, or approximately $39 per square foot over the acquisition price. The sale produced a market leveraged internal rate of return of over 45 percent.