Kaizen Development Partners Offloads McKinney Office Asset

A McKinney office building traded hands, giving rare insight into how suburban office sales compare to similar transactions in hotspots like Uptown.

Kaizen Development Partners offloaded an 8-story, 190,000-square-foot office building at 7300 State Highway 121, deed records show. The property was built in 2022 as part of District 121, a mixed-use development with restaurants and a hotel.

Colliers’ Randall Book, Jason Roth and Jack Beare represented the buyer, Eckard Enterprises, which is an oil and gas firm based in Allen.

Traded reported that the building sold for $66 million, or $346 per square foot. That rate is less than half of what a similar building in Uptown fetched earlier this year.

In August, Atlanta-based Cousins Properties bought the 292,000-square-foot The Link in Uptown for $218 million, or more than $746 per square foot. The property was delivered in 2021.

Meanwhile, a 2008-built office property in Uptown sold for more than $588 per square foot when German investor Union Investment Real Estate sold 2000 McKinney to Crescent Real Estate. The German investor said in a release that the sale price topped the property’s $291.5 million valuation, putting the price per square foot for the 485,000-square-foot building at around $600.

The sales comparison shows even trophy offices in the ’burbs aren’t fetching the same prices as new builds in Uptown, which has become the nexus of built-to-suit office development for financial services firms, nicknamed Y’all Street.

Office markets in the North Dallas suburbs have performed particularly well as companies look to locate near where employees live.

The Allen-McKinney submarket had a vacancy rate of 20.1 percent, the lowest rate on the Dallas side of the Metroplex except for Preston Center, where vacancy was just 7.9 percent, according to a recent report from Avison Young.

Uptown’s vacancy rate hovers around the overall level for the Metroplex, at 25.5 percent. It also has more than four times the office inventory as Allen-McKinney.