Sojourn Office Center Whitebox Real Estate
Caddo Holdings snapped up a 92,346-square-foot North Dallas office building. Seaboard Capital sold the 85 percent-leased Sojourn Office Center to Caddo for an undisclosed price.
Matthew Otte and John Michael-McGee of Whitebox Real Estate took care of the sale for Seaboard Capital, while Rubicon Representation’s Daniel Miller represented Caddo Holdings in the off-market transaction.
The investor’s move to buy the building, Otte says, is emblematic of a bifurcation in investment strategies in the office market.
“The sale of Sojourn Office Center is typical of the kind of market we are in and have been in for the past year or so, where there are two types of investors–those who acquire office buildings in amenity-rich, walkable areas that command, or have the potential to command, premium rental rates, and those who are looking for low-rise, less capital-intensive buildings with abundant parking surrounded by good demographics but not as many nearby amenities,” Otte said.
Sojourn fits in the latter category, which Otte describes as a solid hedge against the threat of a downturn.
“Investors are preparing for the next recession, whenever it comes, by investing in these two different types of office assets. The best buildings in the best submarkets should continue to retain and attract tenants for the most part, even through a downturn, while the low-rise assets in good locations will also be a draw for those tenants who are looking for more value now and in the years to come,” he said. “Office buildings that are not in a premium location and are on the higher end for rental rates will eventually have a problem staying leased.”
Otte said investors are becoming more cautious, but “there still seems to be plenty of capital out there looking for deals, and Dallas is a popular market.”