EXCLUSIVE: Deal Closes for 156,146-SF Office Building

Acting for a Dutch pension fund, Intervest Co. from Addison, TX went with the highest of 11 offers for the all-cash listing of 1415 N. Loop West, a 13-story office building with a four-story parking garage, Martin O'Malley with Colliers Texas, tells GlobeSt.com. He says the deal's biggest hurdle was getting buyers comfortable with the property and the upcoming addition to the vacancy in a highly competitive office submarket. He says the asset was the last one in a portfolio bought five years ago and the fund's only remaining deed in Greater Houston.

O'Malley credits his partner, Nelson Udstuen, who previously leased the building while with another house as making the difference in the sales campaign by Intervest's third brokerage firm to attempt the sale. "He really understood the building. He was a big asset in overcoming that," O'Malley stresses.

O'Malley says the new owner is getting a tenant roster that's relatively stabilized, except for the local radio station that's set to exit a full floor in a month. The locally based Transwestern Commercial Services was retained to manage the holding, but leasing remains up in the air because the new owner is contemplating a conversion to office condos, O'Malley confides. If that plan doesn't pan out, O'Malley says "they shouldn't have any trouble maintaining the 60% occupancy and I expect they should see a nice steady fill up. They just have to do the work to lease it up."

O'Malley says the field of offers came from "classic value-added office buyers" in pursuit of a listing at less than half of its replacement cost. The winner teamed exchange funds from an office building sale in his homeport and new financing to make the close. At the list price, the cap rate was 7.3%.

The office building, positioned close to Loop 610, was developed in 1982 on a 3.4-acre tract. It was renovated in 1998. O'Malley says the asset traded "in good condition" with some repairs on the docket for the 436-space garage.