HOUSTON-A local developer has obtained $15.4 million in financing for the acquisition and improvements of Interchange Business Park. The 296,000-sf complex's purchase was financed by GE Real Estate as part of its push into Houston.
Angel-McIver LP acquired the class B, eight-building Interchange Business Park from a German company, operating as Interchange Center LP. More importantly from the buyer's point of view is that the park at 8820-30 Interchange Dr. is adjacent to the 109-acre Six Flags AstroWorld site that Angel-McIver bought about a year ago.
"That's the reason we liked the deal," explains Lance Wright, regional director of GE Real Estate's North American Lending. "It's next to the Medical Center and they own the big site." He says Angel-McIver is planning a mixed-use development on the site so "this property is a complement to that development."
Wright tells GlobeSt.com that the loan is structured to fund the acquisition and 100% of the future tenant improvements, leasing commissions and asset upgrades. The five-year loan is interest-only, with a competitive spread over the five-year Treasury. The loan-to-value ratio is 80%.
The capital expenditure pool will come in handy because the center is 70% leased, with much of the tenancy on short-term agreements, according to Wright. "We're anticipating a lot of rollover, which is why we had the reserve to improve the property and hopefully raise rents at some point," he explains.
Wright says GE wants to finance more deals in Houston and throughout Texas because of market liquidity and relatively inexpensive asset prices. CB Richard Ellis brokered the real estate transaction. Tom Melody, executive managing director and James Tramuto, vice president with CBRE/Melody in Houston, arranged the financing.
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