4100 Spring Valley
Acquisition Date | October 2006
Disposition Date | October 2013
Year Built | 1985
Class | B
Size | 153,387 square feet
Building Height | 10 Stories
Location | 4100 Spring Valley, Dallas, TX 75244
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Actual Multiple |
The Opportunity
When CREA acquired 4100 Spring Valley in October 2006, the Company netted two opportunities: First, a Class B office property with great potential that was 70 percent occupied with several near-term expirations, all at below-market rates. Second, a 33,000-square-foot land parcel with a ground lease set to expire approximately on year later. And CREA acquired the property for less than 50 percent of the replacement cost of the office building.
Situated at Spring Valley and Midway Roads, one mile from both the Dallas North Tollway and LBJ Freeway, 4100 Spring Valley is well positioned in the heart of Far North Dallas, the Metroplex’s hottest submarket.
The Strategy
CREA’s goal for the office tower was to significantly increase rents and lease the building’s vacant space. To this end, the Company executed a $1.4 million capital project that replaced and expanded the covered parking; resurfaced the parking lot; implemented a spec suite program; and updated the lobby, landscaping and monument signage.
At acquisition, the land parcel was leased to McDonalds Corporation and improved with a McDonald’s restaurant. CREA is completed a long-term ground lease with McDonalds, creating significant value by extending the term. In 2008 the ground lease was sold, reducing the overall basis in the building.
The Result
CREA positioned the asset for sale within the projected 36 month window. However, the economic collapse forced the CREA partnership to adopt a longer-term strategy. As part of that strategy, a renewal of the lead tenant was required to achieve maximum pricing for the asset. The asset was sold in October 2012 with investors’ equity returned.
