A longtime Dallas real estate broker is striking out to create an office investment firm, with the help of several undisclosed general partners, to snap up prime workspace properties in Texas and beyond while other buyers stand on the sidelines.

Creighton Stark, who most recently worked at Colliers, is looking to tap a new group of active buyers willing to tread where institutional investors and real estate investment trusts once dominated. The decision by Stark to launch StarkSouth Office Properties comes as the decline of larger office deals has reshaped the most-active buyer profile.

Traditionally, institutional investors and real estate investment trusts have been responsible for about 40% of acquisitions, with private buyers accounting for a similar share, said Chad Littell, CoStar's national director of capital markets analytics. Private buyers now make about half of all office purchases, according to CoStar data.

Initial estimates show that office investment sales volume had a sizable decline last year, with less than $35 billion worth of properties trading hands, according to a CoStar Market Analytics report. That level is "reminiscent of the post-Global Financial Crisis recovery," the report stated. Overall, "2023 office property sales volumes fell nearly 60% below 2022 levels, mirroring figures from 2010."

StarkSouth Office Properties will seek to buy what Stark calls "best-in-class office properties" in the stagnant office market. Now is the time to unleash his investment strategy to acquire space that is sought by companies and has amenities such as bars and restaurants that will draw employees back to their offices, Stark said.

"We want to buy office buildings in a Class A location and nice atmosphere at a good cost with a 1980s-vintage construction, giving it a nice value-add element," Stark told CoStar News. "I'm focused on putting these deals together and tapping into my off-market expertise to reach not widely marketed properties."

The rise of private buyers is tied to the uncertainty in the market, with banks and institutional investors pulling back from a sector that has been "too broadly" painted in a negative light, Littell said.

"Essentially, institutional investors are out of office, with the caveat being for deeply discounted valued buildings," he said in an interview. "If you are an office buyer today, outside of something already stabilized with a contractual income for the foreseeable future, you are buying at a discount to some metric."

Stark, who wants to build a national office portfolio starting in Dallas, said he wants to leverage his 25 years of experience to the market where dislocation has brought opportunities to some investors. In the past decade, the executive has completed 27 off-market deals in Uptown Dallas, including Cityplace Tower and Citymark.

Each StarkSouth general partner will add individual properties as Stark is able to identify them in off-market deals, he said, with each buying entity having its own limited partnership. In searching for properties, Stark said he would focus on older institutional-quality office buildings in so-called cool neighborhoods, such as Uptown and Preston Center.

"We want to be in places with high-barriers-to-entry where the dirt itself continues to appreciate," he said.