Union Investment has successfully sold the Texas Capital Center office property to a US real estate company. The 21-storey building is centrally located in the Texas metropolis of Dallas, the fifth largest market for office properties in the USA. Union Investment acquired the property in 2016 for its open-ended real estate fund UniImmo: Global for around USD 226 million. In 2022, lead tenant Texas Capital reaffirmed its commitment to the building with an early 16-year lease extension through 2040.
The sale price, about which the parties have agreed not to disclose each other, is higher than the most recently determined expert value. The sales price achieved reflects both the market interest and the high attractiveness of Dallas in the North American office real estate market.
"We have successfully developed the Texas Capital Center over the past ten years or so, creating value for our fund investors. The landmark transaction demonstrates the high substance of our global real estate portfolio," says Adam Irányi, Head of Investment Management Global at Union Investment Real Estate GmbH.
"We see that institutional investors' confidence in the real estate markets is returning and that pricing is working again in many markets for properties with good substance," says Karim Esch, Chief Investment Officer of Union Investment Real Estate GmbH. "We are using this to sell large-volume, older properties in particular profitably and thus increase our room for manoeuvre in the new market cycle."
Central location in attractive surroundings
Built in 2008, the Texas Capital Center has 42,450 square feet of rental space and parking for up to 1,347 vehicles. Around 95 percent of the 21 floors are used for offices and a small proportion for retail. The office building impresses with its central location in Dallas' financial district and its close proximity to urban recreation areas such as Klyde Warren Park. A large part of the office space is leased to Texas Capital on a long-term basis. About 20 percent of the space is unlet at the time of sale.
Diversification of global portfolios
With this transaction, Union Investment is reducing the US office share in its portfolio. "US offices will continue to be a strategic building block in UniImmo's portfolio: Global. However, in line with the fund strategy, we want to diversify our overseas exposure and with more fungible property sizes," says CIO Karim Esch. Union Investment was advised on the transaction of the Texas Capital Center by JLL, Metzler and Mayer Brown.
