Real Capital to raise $400 million in first fund after nabbing discounted office tower
By Candace Carlisle
CoStar News
Investment firm Real Capital Solutions plans to raise $400 million next year as part of its first fund to acquire U.S. office properties.
The Colorado-based real estate investment firm is plotting its future bets on office space on the heels of its purchase of an 18-story, 464,289-square-foot office property known as Walnut Glen Tower at 8144 Walnut Hill Lane in Dallas. The $26.1 million deal closed on Monday. Real Capital purchased the property in a short sale from the lender, Bank of America.
The North Dallas office building last traded for $73 million in 2016, with an outstanding loan balance on the books of about $36 million, Real Capital Solutions Chief Acquisitions Officer Adam Abeln told CoStar News.
“With a lot of these lenders looking to get office loans off their books, we were able to acquire this property for about $10 million less than the loan balance at a good basis,” Abeln said. “This wasn’t a broken building; it was a broken capital structure.”
The acquisition price of Walnut Glen Tower reflects a 64.25% discount on the property’s last sale, which will allow Real Capital to invest in comprehensive upgrades and a new leasing plan. The firm plans to revamp the building’s lobby, conference center and fitness center, as well as move-in-ready office suites.
Walnut Glen Tower is about a mile away from Real Capital’s initial Dallas area acquisition, the Tower at Park Lane, bought for $66 million last year. The better-than-expected leasing success at the Tower at Park Lane gave the firm confidence in buying Walnut Glen Tower, which is losing its largest office tenant, insurer Marsh McLennan, on the building’s top floors.
The professional services firm is leasing four floors at the Galleria Dallas, with work expected to be complete in 2026. The firm’s planned exit has yet to be reflected in the building’s overall lease rate of 74%. The move will open top-of-building signage to a new would-be tenant beginning in April, Abeln said.
“Dallas is one of the top U.S. markets for job growth, and we are seeing new businesses come in looking to lease space,” he added.
Real Capital was one of the early adopters in reinvesting into the office sector, Abeln said.
“We started buying offices 15 months ago, and we have closed on 10 deals,” Abeln said. “We won’t be able to replicate these prices. We are pretty much at bottom with still a lot of bad loans on the bank books.
“I think in the next 36 months, we’re going to see some incredible buys in the office space, and we plan to pounce on it,” he added.
Raising the firm’s first-ever fund next year totaling $400 million, Abeln said, opens the firm’s investment strategy to retail and institutional investors. He said the firm hopes to launch the fund in mid-2026.
Up to the launch of this fund, he said Real Capital has been 100% internally funded. The firm owns about 80 properties totaling over $2.7 billion of assets under management.
“For us, the question isn’t, Is office coming back? It’s, How quickly will values snap back?” he said. “We are starting to see values coming off the bottom. We are buying at values and discounts we won’t see for another decade or two.”
For the Record
Cushman & Wakefield has been tasked to lease and manage Walnut Glen. JLL’s Jonathan Napper was the investment sales broker that worked on the deal.
