CRE firm bets big on suburban office space

Workspace Property Trust just nearly doubled its holdings in a single transaction

From left: Roger Thomas and Thomas Rizk of Workspace Property Trust in front of 919 Hidden Ridge Drive in Irving (Workspace Property Trust, Google Maps)
From left: Roger Thomas and Thomas Rizk of Workspace Property Trust in front of 919 Hidden Ridge Drive in Irving (Workspace Property Trust, Google Maps)

Workspace Property Trust just wagered $1.1 billion that suburban offices are the future of work in the U.S.

The Boca Raton-based commercial real estate firm just acquired a majority stake in about 8 million square feet across 53 suburban office buildings on 41 separate properties — five of the properties are located in the Dallas-Fort Worth metroplex.

The firm did not disclose its equity partner, but a Workspace representative said capital is being provided by “one of the world’s largest global investors,” according to the Dallas Morning News. The seller, Griffin Realty Trust, will remain a minority owner in the portfolio.

While most of the properties are far afield from the nation’s major urban markets, nearly 7 million square feet of the portfolio is leased by Fortune 1000 companies.

The acquisition has nearly doubled the size of Workspace’s holdings to 18 million square feet across 200 buildings in 22 major markets nationwide. In the DFW metroplex alone, the company has picked up a total of 840,000 square feet of office space.

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The five Dallas-Fort Worth properties in the portfolio are located in Arlington, Irving, and Fort Worth with two in Frisco.

Overall, the portfolio is mostly single-tenant office buildings in high-growth suburban markets— something North Texas has plenty of.

Workspace is reportedly confident that companies will be moving offices from city centers to the suburbs. The company’s co-founder and COO Roger Thomas said that more companies have been rethinking their presence in downtown markets, “driven by the redefinition of work as a result of the pandemic and the continued and unabated demographic shift to the suburbs” led by millennials.

“When Roger and I created Workspace in 2015, investing in suburban offices was a contrarian bet,” said co-founder Thomas Rizk. “But today, it is the clear solution for corporations looking to provide a safe, accessible, flexible, lifestyle-oriented, and community-based environment for their employees.”

— Maddy Sperling