The borrower, headquartered in Sugar Land, TX, bought what was the BakerHughes Inc. plant at 5301 Polk Ave., with plans toreposition the 75-acre asset. "They ended up with a lot of gooddiversification of tenancy," comments Robert D. LaRue, principalwith Live Oak Capital Ltd., who arranged for financing through OhioNational Life Insurance Co. "There isn't a lot of roll, either,though they've gone in and reworked some of the leases." The maintenants are Grant Prideco Inc., Baker Oil Tools, a subsidiary ofBaker Hughes, and Pipeco Services.


LaRue tells that Pelec Development's owners weren'tunder any deadline to refinance the asset, but decided the time wasright. "They still had another year-plus to go on the existingloan," LaRue comments. "They decided they weren't likely to getcredit for that last 5% of remaining space anyway, so they went forit." He says other lenders were interested in the project given itstenant base and location near the Houston ship channel. Ultimately,the Cincinnati-based Ohio National Life provided the best rate andterms through a fixed-rate loan with a 20-year amortization.


In the meantime, Pelec Central City's owners aren't planning tosell the complex any time soon. LaRue says the asset is an olderone, built in the 1950s, and it has a mixed bag of buildingsranging from 5,000 square feet to 138,000 square feet. The benefit,however, is that it has appealed to the smaller users.


"It's in a strong submarket as well," LaRue adds. "Thatsubmarket has been 95% leased for the past ten years. This was aterrific opportunity for these guys when they bought it a couple ofyears ago."

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