News Article | 11/13/2007

Daimler, Hillwood Pen 204,000-SF Office BTS

FORT WORTH-Hillwood and Daimler Financial Services Americas are replacing a 75,344-sf lease in the under-construction Heritage Commons II with a 204,000-sf build-to-suit. The class A office building will break ground in 30 days to meet the summer 2008 occupancy requirement.

The Farmington Hills, MI-based Daimler Financial plans to put 650 employees into the three-story building, including 180 from its Daimler Truck Financial center in Lisle, IL and 35 more from several other US locations of Mercedes-Benz Financial. Until the build-to-suit is done, the 440-employee Mercedes-Benz collections and remarketing operation and Chrysler Financial Services will continue to share a 130,000-sf building at 2050 Roanoke Rd. in Westlake in the Circle T Ranch section of the 17,000-acre AllianceTexas. The division is part of transfer of Chrysler assets to Cerberus Capital Management.

Steve Aldrich, vice president of Hillwood Properties, tells that the Daimler building will sit on an 18-acre tract that Hillwood had earmarked for a 240,000-sf, two-building office project. Daimler will be getting a front-row seat along Interstate 35W, driving Hillwood to a nearby site so it can get some spec office space on the ground. He says Heritage Commons I at 13,600 Heritage Parkway and 114,7110-sf Heritage Commons II at 13601 North Freeway are pushing 95% occupancy due to deals in the pipeline that will backfill nearly all of Daimler’s reserved space, which was preleased in August with a 10-year agreement.

“It was a very fast-moving deal,” Aldrich says. “We all had to make decisions quickly.” If all goes as planned, he adds that Hillwood will soon be building a 150,000-sf spec office for its long-time business strategy to have ready-to-go space for landing new deals.

Aldrich says Daimler’s original lease was ripped up and replaced it with another long-term pact. “This is the ultimate case of flexibility. With our ownership of the land, it allows us to make decisions quickly,” he says. “It’s a great problem to have.”

Aldrich says demand for Heritage Commons’ office space has picked up as more retail space delivers in Alliance Town Center and soon-to-start projects of neighbors. The office space is being marketed at $20 per sf plus electric.

UGL Equis Corp. of Chicago represented Daimler in the build-to-suit lease as it did for the original pact. “The de-merger has given us the opportunity to take a clean sheet of paper approach to our operations and re-engineer the way we serve our dealers and retail customers in the US market,” Klaus Entenmann, president and CEO of Daimler Financial Services Americas, explains in a press release. The US headquarters will remain in Farmington Hills.

BOKA Powell of Dallas is designing the build-to-suit. Hillwood Construction Services is the general contractor. And the Hillwood parent is the owner and developer.