News Article | 5/25/2007

Ernst & Young Ink 10-Year Deal for 150,000 SF

DALLAS-Ending an 18-month competition for the nod, Ernst & Young LLP is taking 150,000 sf to become the second-largest tenant in the under-construction 450,000-sf office trophy, One Victory Park. Few details are being released, but the deal carries a 10-year term for the upper floors of the 20-story structure.

Hillwood and Houston-based Hines Interests are joint venturing on the high rise, which has hit 85% preleasing with the E&Y deal. The lease ropes off at least the top four floors, possibly a fifth for E&Y’s 1,200 employees in its North Texas headquarters. E&Y will move in July 2009 in sync with its lease expiration at 2100 Ross and one year after the high rise delivers. The space is being marketed for $35 per sf.

The firm will lower the curtain on a 20-year stay in 2100 Ross, expanding through the years to nearly 200,000 sf on eight floors. E&Y, as would be expected, was one of the most highly chased deals in the market by the under-construction crowd and brokers with existing class A space to peddle, including its existing high rise.

Negotiations for One Victory Park turned hard and serious about two months ago, Clint McDonnough, E&Y’s Dallas office managing partner, tells “Each new building has attributes we really love,” he says. “At the end of the day, it’s making certain we attract and retain people. ‘People First’ is our motto.”

McDonnough says the silver LEED-certification, Hillwood’s amenity package for the Victory development in Uptown and space efficiencies that could be realized in the building skewered the win. The 2100 Ross in the CBD “has been a great building for us, but over the years we felt we needed a newly designed building and more efficient floor plates,” he says. “With the amenities and excitement of being in Victory, you can’t help but feel good about being in that location.” He adds that the multi-floor office will be mapped out as “a workplace of the future with an open neighborhood feel to stimulate collaboration.”

One Victory Park, with 20,000 sf of street-level retail, is slated to open in July 2008. The 85% preleasing, though, means Hillwood’s office leasing director Bill Brokaw is courting deals for a second office building. Under Hillwood’s agreement with Hines, it could build up to 800,000 sf. And Hines’ one-year-old initiative requires LEED-certified construction. One Victory Park is the only multi-tenant building in Dallas to carry the silver LEED-CS banner.

The law firm of Haynes & Boone is One Victory Park’s largest tenant, signing for 175,000. PlainsCapital Bank has reserved 50,000 sf. They and E&Y all have expansion rights. “But, we are still marketing the other space,” Brokaw emphasizes, adding it’s a safe bet that One Victory will be 100% filled when it delivers. “We see a lot of growth potential. That’s why we’re building the one next door.”

Phil Puckett and Chris Hermann with CB Richard Ellis and Carl Ewert and Larry Toon with Staubach Co. represented E&Y. Hines’ Clayton Elliott teamed with Brokaw to nail the deal.