HOUSTON-KBS Capital Advisors has sold Parkview I and II to a private investor from New England after investing $1 million into upgrading the 176,471-sf office portfolio. The buildings were fully leased at sale time.
“They're not active buyers and they had a specific need with 1031 exchange money,” says Marty Hogan, associate director in Houston for Holliday Fenoglio Fowler LP. Texas is a non-disclosure state so he won't discuss the sale price of the 333 Cypress Run properties, but local experts confirm that similar class B buildings are trading for $110 per sf to $120 per sf.
Hogan says the assets attracted 10 offers, with a partnership from Greenwich, CT ending up with the deal because it offered a short due diligence and certainty of close. “The buyers also had a large amount of equity and the purchase wasn't contingent on financing.” Hogan tells GlobeSt.com. “Given the market at this time, they weren't high-leveraged buyers looking to get 80% to 90% of the purchase price financed so that was appealing.”
Situated on 8.3 acres, the 21-year-old, 111,491-sf Parkview I at 330 Barker Cypress is solely leased to Alliance Engineering, a subsidiary of the Wood group, which has a long-term net lease. The 64,980-sf Parkview II, built 20 years ago, is multi-tenant, with the next leases set to roll in 2009. Hogan says the strategy calls for rent hikes as deals come due.
Hogan teamed with HFF senior managing director H. Dan Miller and managing director Robert E. Williamson to guide the sale. KBS is selling class B office assets in the city and reinvesting gain into class A office buildings, according to Hogan. As part of the portfolio shuffle, the Newport Beach, CA-headquartered KBS recently acquired the 196,217-sf 2200 W. Loop South office building in the near west submarket for $35 million. Likewise, the 224,630-sf class B Kirkwood Atrium II on the far west side has been on the market and will soon be under contract, Hogan says.
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