Franklin Street Properties Acquires 629,000-SF Signature Landmark

Franklin Street Properties won't comment on the acquisition of the high rise at 3200 Southwest Freeway from Peak Phoenix Tower LP. Also unable to discuss the sale is the locally based Hines, which remains in place as the tower's property manager and leasing agent.

According to Darrell Betts of the Betts Farber Southwest Regional Investment Group with Grubb & Ellis Co. in Houston, the building's sale is simply one example of an extraordinarily active Greenway submarket on the city's near southwest side. "Investment sales were huge in that market during 2005," he tells GlobeSt.com, "and it's not showing any signs of slowing down. It looks like the level of interest in that submarket will be strong, if not stronger, during the first quarter of this year."

Phoenix Tower, built in 1984, is situated on about 2.5 acres. It is 92% leased to tenants like Washington Mutual, Champion Technologies, Allen Boone Humphries Robinson and Phillips & Akers.

In late December, the 580,875-sf 5 Houston Center, which was 95% leased at sale time, traded for $166 million to the Atlanta-based Wells REIT II Inc. Though Phoenix Tower isn't part of the CBD like Houston Center, it's considered a signature landmark in the Greenway Plaza submarket, offering an equally impressive address near the city's ritziest sections of River Oaks and West University.

Franklin Street Properties and its affiliates now own 1.3 million sf of class A office space in the Houston area with the Phoenix Tower acquisition and another 155,000 sf under construction. "They're a well-known group that has just acquired what's considered a premier building in an active market," Betts adds.