The buyer isn't saying what he paid for the class A and B buildings in the Energy Corridor and Westchase submarkets, but area experts say similar properties trade for $72 per sf to $75 per sf. Brian Hennessey, managing director of acquisitions and dispositions for EquityOption Properties, says market fundamentals and upside were the underlying reasons for acquiring the assets from locally based BMS Management Inc.
The portfolio is 80% occupied, across the board. Hennessey says in-place rents are a minimum of 20% to 25% below market. "With rental rates rising in Houston, we plan to bump the rents once the leases roll over," he tells GlobeSt.com.
In addition, Hennessey says the Woodland Hills, CA-based buyer plans to put $1 million into renovating common areas and landscaping. The company also has retained local firm, Moody Rambin Interests, to lease and manage the portfolio. The seller, who couldn't be reached for comment, had been managing the properties.
Hennessey says EquityOption is looking to acquire class A and class B properties with 70% to 90% occupancy. "We think Texas, for the foreseeable future, is experiencing good job and population growth," he adds.
The just-acquired assets average 25 years old. The properties are a 100,054-sf building at 1250 Woodbranch Park Dr.; 65,900-sf One Woodbranch Centre at 11931 Wickchester Lane; a 61,458-sf structure at 10200 Richmond Ave.; and Woodchase One at 2950 S. Gessner Rd. and Woodchase Two at 3030 S. Gessner Rd., totaling 120,000 sf.
Danny Miller in the Houston office of Holliday Fenoglio Fowler LP represented the seller. Countrywide Financial Corp. of Calabasas, CA provided acquisition financing.
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