A real estate investment firm that plans to spend $3.5 billion in cash mostly on discounted U.S. office properties over the next three years has made its first foray into Dallas, with the purchase of an office tower for roughly 45% of the price from the last time the building sold.
Real Capital Solutions bought the Tower at Park Lane, a 20-story, more than half-a-million-square-foot office building at 8750 N. Central Expressway for $66 million in cash. The office building last traded for $120.5 million in 2017.
The investor based in Colorado is looking for discounted office properties in major U.S. cities with markdowns ranging from 40% to 70%, in a move banking on the dislocation of the country's office market at a time when tenants are demanding space with high-end finishes or that's walkable to sought-after retail spots.
The deal marks the first of what could be several purchases that Real Capital plans to make in Texas markets like Dallas, Austin and Houston in 2025, Chief Acquisitions Officer Adam Abeln said in an interview. Besides Texas, Real Capital is looking at opportunities in Florida; Atlanta; Minneapolis; Chicago; and California, he said.
"We are continuing to see opportunities in Dallas, as well as other markets, with a lack of liquidity on the banking side that has caused an overcorrection of the office market," Abeln said. "A lot of office properties, like the Tower at Park Lane, is functionality sound, but no bank wants to lend on an office building, and that's creating quite a bit of opportunities in the next two to three years."
The Dallas office tower had been on the market since July 2024, and Real Capital was one of 15 bidders on the property, Abeln said. Real Capital's all-cash offer helped it get a leg up on other bidders, Abeln said.
In 2025, Abeln said Real Capital plans to deploy $1 billion into primarily discounted office properties, with the remainder of the $3.5 billion of capital expected to be spent before the end of 2027. The firm is able to make all-cash offers on office properties, giving distressed owners a certainty of closing in a move that has given Real Capital a competitive edge on some deals, he added.
"We are close to the bottom, if not at the bottom, on the office side, it really depends on the market, but we are seeing more competition," Abeln said. "More bidders are coming out, agreeing with our strategy, but they are going up against our cash bids."
Along with entering the Texas market, Real Capital has expanded its presence in the Denver market with the $20 million acquisition of Belleview Tower, a 12-story, more than 200,000-square-foot office building at 7887 E. Belleview Ave. in Louisville, Colorado. The price tag represents less than 50% of the property's 2019 sale price, the firm said.
Business plan
Real Capital is creating a business plan around its office building purchases, with the firm having a low-cost basis in what is otherwise a competitive offering for tenants circling the market, Abeln said.
For example, Real Capital bought the Tower at Park Lane in Dallas for about $129 per square foot, with competitive deals in the city trading for roughly $300 per square foot, he said. That discount gives Real Capital the ability to offer reduced rental rates to potential office tenants or additional tenant improvement allowances or a boost of leasing commissions for brokers.
"Tenants are concerned about the financial health of the ownership group behind their office space and their capital stack," Abeln said. "They don't want to lease space in a building about to go into foreclosure, they want to lease space from a well-capitalized firm. This gives us the ability to attract tenants from other buildings."
Real Capital's Dallas office purchase includes the attached six-story parking garage and is in walking distance to retail hub The Shops at Park Lane, making Tower at Park Lane closer to more high-end shopping than any other office building in Dallas, Real Capital said in a statement.
The building's largest office tenants include Texas A&M University-Commerce, Match.com and Topgolf. Topgolf and Texas A&M are expanding their footprint in the building, Real Capital said, adding that it also plans to deploy a speculative suite program to meet the growing demand for move-in ready spaces.
Real Capital is planning to invest about $13 million in improvements to the office building, with a new lobby, fitness center and the addition of a third floor of speculative suites and back-of-house amenities meant to elevate the tenant experience, the company said.
Abeln said he's already noticed that tenants circling the Dallas market want a larger office space, and Texas hasn't been as impacted by the shift to remote work because employers in the state want their employees in the office. He said his firm is already talking to potential tenants in the Dallas-Fort Worth region about leasing space.
"Dallas is one of the top-five job growth markets in the United States, and the office buildings haven't been hit hard on the work-from-home stance," he added. "A lot of tenants occupy office space in Dallas compared to other markets."
For the Record
CBRE's Russell Ingrum and Patrick Benoist brokered the deal.