Costco Plans $13M Revamp Of North Dallas Office Building

When Costco bought a North Dallas office building late last year, some speculated the retailer may tear it down to get at the land underneath. But now, Costco has taken a step to keep and renovate the decades-old property.

The retail giant and design firm MG2 Architecture filed plans to perform a nearly $13 million renovation of the 198,000-square-foot North Central Plaza I and 590-spot parking garage at 12655 North Central Expressway, the Dallas Business Journal reported.

In November, Costco struck a deal with Hartman SPE, a subsidiary of Silver Star Properties REIT, to buy the 10-story building for $14.25 million. The four-acre property is adjacent to a 152,000-square-foot Costco store that it built in 2017.

Renovations call for $7.73 million in tenant improvements to about 34,400 square feet of office space. An additional $3.6 million will go toward maintenance, upgrades and repairs throughout the building, while $1.5 million is set aside for garage maintenance and security enhancements. A further $80,000 has been allotted for the construction of a pedestrian path.

Costco’s long-term plans for the site, including its own use of office space, are unclear. Exact upgrades were not disclosed in filings with the Texas Department of Licensing and Regulation and are subject to change.

The sale of North Central Plaza I sheds light on Costco’s acquisition strategy. The company has purchased a similar office building in Oklahoma City for a new operations center and a small building in Springfield, Virginia, adjacent to a store for potential expansion, the outlet reported.

Meanwhile, Houston-based Hartman SPE filed for Chapter 11 bankruptcy protection in September and has since been on a selling spree to remedy its financial troubles. Elsewhere in Dallas, Hartman has received approval from bankruptcy court to sell the Gateway Tower, at 8111 Lyndon B. Johnson Freeway, for $14.1 million to Hamilton Commercial.

—Quinn Donoghue