Transwestern/South Korean Partnership Buys State Farm Project for Over $800 Million

Transwestern partnership has purchased the 2.2 million SF State Farm Insurance campus in a sale-leasedback valued at more than $800 million. — A Transwestern partnership has purchased the new 2.2 million SF State Farm Insurance campus in a sale-leasedback valued at more than $800 million.

DALLAS – A partnership of Transwestern Investment Group and Seoul, South Korea-based Mirae Asset Global Investments Co, has acquired the new 2.2 million-square-foot State Farm Auto Insurance campus near Dallas for approximately $825 million in a sale-leaseback.

The partnership acquired the four primary office/retail towers, with connected structured parking garages, located in the CityLine development, a 186-acre, mixed-use project developed by KDC, near the Bush Turnpike and U.S. Highway 75in Richardson.

The Transwestern partnership – called Corporate Properties Trust I LP – will own the properties through a REIT. The entity was created to allow long-term stable ownership of high-grade, fully leased institutional properties, a structure which benefits the tenant and the investors. The investment will be managed by a wholly owned subsidiary of Transwestern Investment Group.

The transaction is one of the largest transactions ever completed in North Texas, according to veteran real estate reporter Steve Brown of the Dallas Morning News. Brown also serves as president of the National Association of Real Estate Editors (NAREE).

The sale, with its $359 per square foot price tag, was one of Dallas’ biggest deals ever on a per-square-foot basis.

“We are pleased to partner with Mirae on this notable project,” said Laurie Dotter, president of Transwestern Investment Group. “With the formation of Corporate Properties Trust I, we will provide our investment partner attractive, long-term investment returns generated primarily from the office leases with an outstanding, investment-grade tenant, State Farm.”

Mirae has provided its clients, institutional and retail investors in Asia, with other attractive real estate investment opportunities in the U.S. In the last four years, Mirae has acquired institutional-quality real estate assets in Chicago, New Jersey, Washington, D.C., Seattle and Hawaii.

“It was a valuable opportunity for Mirae to partner with Transwestern in pursuing this long-term, high-quality investment,” said Chang Hoon Choi, head of Mirae’s Real Estate Business Unit. “This investment is consistent with our strategy to enhance our global footprints, and we look forward to working together on new initiatives going forth.”

In an interview last week, before the State Farm deal was announced, Dallas-based Transwestern executive Michael Hardage noted that Dallas has attracted significant investor interest recently.

Foreign investors and institutions that focused only on coastal property in years past are doing deals in Dallas, said Hardage, a managing director of investment services in Transwestern’s Dallas office. “We have capital looking at the city that has never looked at Dallas before,” Hardage said.

Located at 1150, 1201 and 1251 State St. and 3661 N. Plano Road, the State Farm buildings will house approximately 8,000 State Farm employees. Some State Farm employees have already moved in.

The CityLine development will also ultimately include 1,700 apartment units, a 150-room boutique hotel, an entertainment center, a medical office facility, a Dallas Area Rapid Transit rail stop, retail, restaurants and a 3.5-acre park.