HOUSTON-An under-the-radar buyer from Long Island, NY has grabbed another South Texas retail deed, getting a class B asset in a classic class A location in West Houston. The 79,431-sf Ashford Village, tucked between two of the city's upscale pockets, was on the market nearly two months for $5.99 million, trading at an 8.5% cap rate.
The new owner's next move will be to put at least $100,000 into additional renovations at the 1801 S. Dairy Ashford St. property, developed in 1982 and upgraded three years ago, Gus Lagos, a vice president in Houston for Grubb & Ellis Co., tells GlobeSt.com. Buying as 1801 Dairy Ashford LLC, the New York investor used 1031 exchange financing from a local retail sale in an all-cash close, according to Lagos. He and Grubb & Ellis associate George Koucouthakis negotiated the buy side.
Lagos says the buyer, preferring to keep a low profile, has accrued a large portfolio in Southeast Texas of predominately retail product. For the newest portfolio piece, Center Real Estate Group of Houston has been hired to lease and manage it. Lagos says the center, anchored by a Tuesday Morning and Dollar General, has no leases coming due in the near term.
"The upside," Lagos says, "is in leasing the vacant space. The demographics are excellent. The plan is to re-renovate and re-tenant." When the renovation's done, rents could be boosted 5% to 10% based on the dynamics of its location, he adds.
The seven-acre holding is midway between Royal Oaks and Memorial submarkets. The seller is a limited partnership from Round Rock that bought the property, assessed at $4.3 million by Harris County, in December 2003. Robert Dube with Dube's Commercial Inc. in Austin was the listing broker.
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