Transwestern Banks $41M for Energy Square Plan

DALLAS-Transwestern Investment Co. has secured $40.6 million in fresh capital to replenish its till from the 908,588-sf Energy Square acquisition and set up a fund to carry it to stabilization. Today’s 80% occupancy of the class A office trio is much like it was in May 2003 when it changed hands.

New York Life Investment Management LLC cleared co-terminus loans with four-year terms and one-year extension options at a market-rate, fixed-rate interest. “The financing provides the ability to earn out additional funds as the occupancy improves,” Michael Kelly, a New York Life director, tells GlobeSt.com.

The Chicago-based Transwestern shopped the deal, but New York Life had “a little bit of an advantage” by agreeing to partition the package into mezzanine and first mortgage vehicles, Kelly says of a transaction winding up and down in 75 days. The inside details from the split of the package to the in-place interest rate aren’t being divulged, but the lender is saying two office buildings secure the first mortgage and a pledge of an ownership interest in the third collateralizes the mezz component. Whittaker Johnson with Holliday Fenoglio Fowler LP in Dallas arranged the financing through New York Life’s Tim Monroe and Leslie Cassingham.

Dallas’ soft office market didn’t go unnoticed by the lender. But, Kelly emphasizes, New York Life is confident in the strength of the Transwestern team, which has its affiliate in charge of leasing … and a property with a gateway positioning along a new high-speed rail line.

Transwestern Investment bought the trio of office buildings through Aslan Realty Partners II LP, its fully discretionary fund with $680 million in equity commitments from 31 institutional partners, including New York Life. The plan from the onset was to place debt against the property, which sold in the mid-$65-million range and included a loan assumption.

The trio’s flagship is the 296,000-sf Triton Building at 6688 N. Central Expressway, which was vacant at sale time. Its sisters are the 253,000-sf One Energy Square at 4925 Greenville Ave. and 356,000-sf Two Energy Square at 4849 Greenville Ave.