The Galleria submarket sale closed with IBM buying out itsmaster lease, working up another for significantly less space andadding five years to the term. Danny Miller in the Houston officeof CB Richard Ellis Inc. tells GlobeSt.com that IBM's master leasewas set to expire Dec. 31, 2006.

The Shorenstein Co. of San Francisco acquired the asset in 1981in a sale/leaseback with IBM. Shorenstein's broker, RobertWilliamson of Granite Partners in Houston, says the tables turnedwhen a Houston team for Grubb & Ellis Co. introduced a buyerfrom Miami. IBM, clutching a first right of refusal, bought thebuilding and flipped it at the closing table to Radler, saysWilliamson. He adds that IBM contributed funds at closing to cancelthe master lease.

The Armonk, NY-headquartered IBM went from occupying the entire17-story building through the early 1990s down to two floors or50,000 sf. IBM has managed to sublease 170,000 sf, but 35% balanceof the class A space remains empty.