Lexington Ready to Sell 1M-SF-Plus of Office

Rusty Tamlyn, senior managing director in Houston for Holliday Fenoglio Fowler LP, tells GlobeSt.com that the New York City-headquartered Lexington is offering the three buildings, totaling 1.27 million sf, either as a portfolio or as individual assets. Tamlyn, teaming with HFF managing director Daniel Miller and associate director Michael Parker, says the San Antonio complex, the largest of the three buildings, is 100% leased to Orlando-based Harcourt Inc. It consists of office and warehouse space near the intersection of US Hwy. 281 and Loop 1604.

Both the Harcourt building and the other two Lexington assets are expected to draw strong interest from a broad spectrum of prospective buyers. Tamlyn says they are the kind of assets that appeal to a number of types of investors. All three are 100% occupied, with substantial terms remaining on their leases and "investment-grade credit tenants" in place.

Tamlyn says the buildings "will appeal to groups looking for strong credit and term with very little maintenance obligation." As a result, he expects bidders will include public and private REITs that specialize in net lease properties, other net-lease specialists, 1031 exchange buyers, tenant-in-common sponsors and institutional investors looking for deals with long-term leases held by credit tenants. The properties are being marketed on an un-priced basis and will be delivered to purchaser free and clear of debt.

The Harcourt property consists of a two-story office building totaling 146,180 sf and a distribution building comprising 413,078 sf, situated on a 92.3-acre parcel. The buildings, completed in 2001, are located about 10 miles north of Downtown San Antonio.

The two Houston properties are the UK-based Western Geophysical Co.'s 554,385-sf office campus and 157,790-sf Ikon Office Solutions building. The Western Geophysical property is located at 10001 Richmond Ave. and 3600 and 3750 Briarpark Dr.; the Ikon Office Solutions property at 810 and 820 Gears Rd.

Western Geophysical subleases 100% of the property, which serves as the headquarters for its seismic operations, from Houston-based Baker Hughes Inc. Ikon, headquartered in Malvern, PA also is the sole occupant of its building.