Chase Merritt Takes Over 424,393-SF Value Add

Located on seven acres in the Galleria submarket, the four-building asset has about 20,000 sf of retail and the remainder is class B office. Cannon Management from Los Angeles paid about $36 million in early 2003 for the buildings, which are located at 5251 and 5333 Westheimer Rd., 2600 Sage Rd. and 5250 W. Alabama St.

Chris Dornin, chief investment officer for Newport Beach, CA-based Chase Merritt, says there is an opportunity to add an office tower to the site. "We're trying to fine-tune what's feasible, but the opportunity to build one there is very real," he tells GlobeSt.com.

Dornin says Chase Merritt's immediate goal is to focus on the upgrades, which include changes to common areas, parking structures, landscape and facade. Also on the drawing board is a name change. "This project is a good one to be repositioned and re-branded as a higher-class, higher-identity project," Dornin says. "It has great skin and bones and is in a phenomenal location so we're trying to reposition this as a superior asset to the current perception."

Dornin says negotiations are under way to expand several tenants. He says the 85%-occupied complex will have about 40% of its leases roll between now and 2010. "The 40% roll could be nothing in short order," he adds, pointing to cooperation between tenants and owner.

Senior managing directors Rusty Tamlyn and H. Dan Miller and associate director Martin T. Hogan of Holliday Fenoglio Fowler LP's Houston office represented the seller. Transwestern's Houston office has the leasing and management assignment for Four Corners. Financing was provided by GE Capital Corp. in Fairfield, CT and Pacific Coast Capital Partners LLC in Los Angeles.