The largest office sale of the year just occurred in North Texas.
An Arizona-based real estate firm affiliated with former Phoenix Suns owner Robert Sarver has purchased the 2.2-million-square-foot CityLine office complex in Richardson.
This transaction represents North America’s largest office sale by consideration and square footage this year, according to a news release from commercial real estate firm Newmark Group Inc.
CityLine is a mixed-use campus that offers luxury living, professional suites, a vast array of dining, city parks, and events, such as painting classes, concerts, markets, and happy hours, per its website.
Comprised of four office buildings, roughly 120,000 square feet of retail space, and a 42,000-square-foot office medical building, the complex is located in the heart of Richardson at the intersection of U.S.-75 and President George Bush Turnpike.
“CityLine is a dynamic development, well-situated to reap long-term appreciation, as the Metroplex continues to grow north,” stated Newmark vice chairman Chris Murphy.
“CityLine provided investors with capital preservation, coupled with significant upside opportunities,” Murphy added.
Regarding the overall size of the transaction, MSCI Real Capital Analytics says the office sale is the largest in 2023 based on square footage and purchase price.
“This transaction is the largest office sale in the nation this year and involved extensive outreach for both debt and equity globally, creating a competitive process despite the large scale,” said Kevin Shannon, co-head of U.S. capital markets for Newmark Group and one of several team members who represented the seller in the transaction.
The CityLine office complex was owned by a partnership between a South Korean investment fund, Mirae Asset Global Investments, and Houston-based Transwestern Investment Group.
While Newmark Group did not provide the terms of the sale or name the buyer, The Dallas Morning News reported that the undisclosed buyer was a firm associated with Sarver — based on county records and documents pertaining to the property purchase.
The largest tenant in the CityLine complex is State Farm Insurance, which occupies more than 2 million square feet between the four office buildings. However, the Illinois-based insurer earlier this year attempted to sublease more than 400,000 square feet in the complex in an effort to scale back its “business area needs.”
Still, Newmark stated that office employment in North Texas remained close to historic highs at the end of August 2023.
“The continued strength and growth in the market’s office employment reflect an enduring appetite for office assets,” the firm said in its release. “The Dallas-Fort Worth office market’s long-term outlook remains positive and competitive given the market’s strong economic fundamentals, such as a diversified labor pool and continued office-using jobs growth.”
Overall, the DFW metroplex reported 1.28 million office workers in August, marking a 67.6% increase compared to 2010 and a 21.5% increase compared to 2019 employment levels.
