Crescent Real Estate chairman John Goff and Crescent Court (Crescent)
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Crescent Real Estate took its name from one of the Texas-based firm’s earliest acquisitions — a mixed-use office complex in Dallas named the Crescent.
The company has managed the 1.3 million-square-foot property in Uptown for decades, but ownership of the three office towers and retail building has changed hands a few times. In March, Crescent Real Estate bought back its 19-story namesake property for the third time, from a group led by JPMorgan Chase.
The $655 million reacquisition was financed with a $465 million senior CMBS loan and $60 million in mezzanine debt from Goldman Sachs and Deutsche Bank, along with an additional equity contribution of $172 million from Crescent.
Rating reports provide an inside look at the complex’s finances and rent roll.
At the time of the latest financing, the Crescent was 87 percent leased to law, financial and technology firms, with no single tenant taking up more than 8 percent of the rentable space, according to a DBRS Morningstar report.
The largest tenant at the complex with 77,000 square feet, law firm McKool Smith, was founded in Dallas in 1991 and moved to the Crescent soon after. The second and third largest office tenants are also law firms — New York-based Weil, Gotshal & Manges and Miami-based Holland & Knight.
Stephens Real Estate, which has 37,000 square feet, pays among the highest gross rents per square foot at $58.24, according to the report.
Sitting on one of the larger parcels in the submarket, the Crescent is “an iconic property and the focal point of the Uptown district,” DBRS analysts wrote in their rating of the associated CMBS securitization.
The three-story retail building at the north end of the complex, known as the Courtyard Building, is anchored by upscale bridal salon Stanley Korshak, which pays 6.5 percent of sales in lieu of base rent. The salon “typically performs well because of the adjacent Crescent Court Hotel, which includes luxury wedding and event space,” according to DBRS.
The three 18- and 19-story interconnected office towers, known as the Crescent Towers, feature ground-level retail as well. The five-story, 226-room Crescent Court Hotel is also owned by Crescent Real Estate but is not part of the loan collateral.
The complex has weathered the pandemic well, with rent collections standing at 98 percent as of March. Fewer than 5 percent of tenants, mostly retailers, have requested rent relief, which accounts for less than one percent of revenue.
With $3.5 billion in assets under management and $5 billion in purchasing power in its two Invitation Funds, Crescent Real Estate is an active player in the Uptown area.
Fort Worth-based Crescent Real Estate completed the 530,000-square-foot, 20-story office tower at McKinney & Olive in 2016, and last year wrapped up the redevelopment of 200,000 square feet of office space at 2401 Cedar Springs.
