Despite Sagging Market Stats, KBS Nabs 504,000-SF Dallas Office 

The one-two punch of the credit crisis and the recession has significantly slowed office building sales in many cities, and Dallas is no exception. But KBS Realty Advisors pulled off the biggest commercial real estate buy in the city so far this year, with its purchase of Providence Towers, a 12-story, 504,700-square-foot office tower from CB Richard Ellis Investors L.L.C. The sales price was not disclosed. Located in the Far North Dallas Tollway submarket, Providence Towers is a familiar city landmark, featuring polished red granite exteriors and a nine-story entrance arch that splits the building into identical east and west towers. Onsite amenities at the property include a five-story underground garage, full-service deli, conference facilities and an executive fitness center. The property is currently 87 percent leased, with a tenant roster that includes Hilton Hotels; petroleum consulting firm Degolyer & MacNaughton; and real estate service firms Transwestern and Henry S. Miller. Since its completion in 1986, Providence Towers has received several renovations, including more than $3 million in capital improvements since 2006. KBS represented itself in the purchase, while Gary Carr and Russell Ingrum of CB Richard Ellis represented the seller. KBS made its move in the face of some weakening Metroplex office fundamentals, although the economy is faring better than many other areas. According to a first quarter report on the Dallas office market from Cushman & Wakefield of Texas Inc., negative absorption was 789,394 square feet. Leasing activity dropped sharply, by 43.4 percent, with just over two million square feet leased, compared to 3.5 million in the same period last year. Year-over-year vacancy remained constant, at 22.6 percent. Largely due to the construction of new office towers in the Turtle Creek/Uptown and Legacy/Frisco submarkets, asking full-service rental rates in all building classes was $20.75 per square foot, an increase of 3.8 percent over the same period last year. KBS owns approximately 39 million square feet of office, industrial and flex space in Texas.