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HOUSTON-An unfinished industrial project on Houston’s East Side has been sold to a California development group, funded by the well-known Maxwell Drever, in a plan to restart construction that’s been stalled for a year. Argus Realty Investors LP has paid between $13.5 million and $14.5 million for the Portwall Distribution Center.

The project came to a halt when a Houston developer and partner, AEW Capital Management of Boston, dissolved their partnership, Portwall Associates. Before the project was abandoned, Portwall completed a 205,000-sf warehouse and started work on a 191,250-sf warehouse near the intersection of Loop 610 and Interstate 10, rising as the area’s first new construction in two decades.

J. Drever, vice president of acquisitions for San Juan Capistrano, CA-based Argus, tells GlobeSt.com that several other groups attempted to buy the project. Argus, led by principal Maxwell Drever, has been in talks since July. The acquisitions VP says it was a great opportunity to buy a good project at value. He tells GlobeSt.com that it was bought for $30 per sf and at a below-market price.

So far, Argus has cleared five liens placed against the property after construction stopped; got new building permits because the old ones expired; and secured a $4.38-million construction loan to finish the second phase. Comerica Bank-Texas provided the financing.

Trevor Gordon, Argus’ vice president of marketing, says the larger warehouse is being set up to sell to a syndicate of 1031 Exchange investors. The disposition plan for the second phase, ticketed for completion in spring 2003, is up in the air. Gordon says it’s not likely to trade until it’s leased, which most likely will be six to eight months after work wraps up.

Michael Hill of Michael Hill Properties in Houston handled the sale. The property is relatively close to the Port of Houston, Englewood rail yard, CBD and Bush Intercontinental Airport in a submarket that’s 95% occupied with limited developable land.

David Ho of Argus Realty’s Houston office is tasked with the leasing. In the completed warehouse, Vallen Safety Co. leases 110,000 sf while Unidare, a global industrial company, occupies 65,000 sf. But, Gordon confides, Unidare is negotiating for more space.

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