German Fund Buys 70% of 840,000-SF Reliant Energy Plaza

Century Development LLC and Pinto Realty, developers of the one-year-old high rise, are holding firm to the 30% balance of the structured partnership. "They were looking for permanent financing," Thomas A. Nye, HRO's chief investment officer, tells GlobeSt.com. The German fund, marking its second big ticket recapitalization in five months, intends to be a long-term holder of the 1000 Main St. mixed-use asset, he says.

Nye won't confirm the rumored buy-in cost. He did confide the deal came about from a longtime relationship that HRO president and CEO John S. Moody has with Century Development, led by Richard Everett, chairman and CEO and also chairman of the Central Houston Inc., and Pinto Realty. The new equity player stepped in as construction financing was coming to a close. The Haus-Invest Global buy-in was the guarantee needed for the Met Life mortgage financing, arranged by the Houston offices of LJ Melody & Co. and NorthMarq Capital Inc.

The 36-story Reliant Energy Plaza contains 781,000 sf of office space, 52,000 sf of restaurant and retail space and a 1,566-space parking garage. Space is quoted at $26 per sf to $28 per sf, with a $27 per sf finish-out allowance. Century Development, with its headquarters on site, stays rooted as property manager.

"It's a nice new building with a lot of long-term contracts with high-quality tenants," Nye says. The 95%-leased building holds the Reliant Energy headquarters; other major tenants are Marsh USA, UBS Investments & Financial Services and the law firm of LeBouef Lamb Greene & MacRae.

The New York City-based HRO is the US asset manager for Commerz Grundbesitz Gesellschaft, adviser to Jaus-Invest Global. The open-end fund, launched in March, has raised $1.5 billion to date in a push to acquire $3 billion to $5 billion of office, retail and multifamily properties in the next three to five years. About 50% of the raised capital should land in the US, Nye says. There are no more Texas contracts in hand, but HRO "continues to look" as it's doing in all major US cities.

In March, the fund made a similar play in HRO's homeport. The group completed a $400-million recapitalization for the one-million-sf Manhattan Mall, a mixed-use asset in Midtown. The buy-in shifted Lehman Brothers' co-owner stake to the fund and set up a JV with Argent Ventures LLC, which like Century remained in place to lease and manager the property.