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HOUSTON-A local investor, with a “buy one per year” strategy, has acquired the 69,106-sf Trans Texas Building in the Greenspoint submarket, using 1031 Exchange funds from the sale of 150 condo units near Bellaire. The upside is an 83% vacancy due to the energy company’s sale.

Gillett Properties, led by Boyd Alexander, was one of seven offers on the table for the near $3-million sale of the class B office building at 1300 N. Sam Houston Parkway, says Ralph Tullier, vice president in Houston for Dallas-based Trammell Crow Co.’s investment sales division. In a three-month start to finish, the deal closed at close to the ask and passed to the highest bidder, he says.

“I think the improving job market and perception of the future office market helped sell this building with occupancy where it was,” Tullier tells GlobeSt.com. He says the building was labeled as surplus after Trans Texas sold the business to a competitor.

Alexander, Gillett’s president, says he expects it will take one to two years to fill the empty space. His team’s already courting prospects, but the full marketing package won’t be ready to hit the streets for one, maybe two, months. The new owner has placed a $14 per sf to $14.50 per sf gross rate on the space. The 1300 N. Sam Houston building, historically owner-occupied, has six tenants in a layout that “lends itself to subdivision,” according to the buyer.

Alexander says the 15-year-old firm is known for buying high-vacancy properties, paying all cash and placing debt when occupancy reaches stabilization. “The sale of those condo units allows us to do a 1031 Exchange to purchase 1300 N. Sam Houston,” he says.

Alexander says the three-story building, bought in top shape, reminds him of a 168,000-sf “true see-through” that took 18 months to get to 80% occupancy and two years to hit 90%. “Our track record on that property contributed to our excitement abut 1300 N. Sam Houston,” he says. The firm owns five office buildings and two shopping centers in Tennessee, Mississippi, Alabama and Texas.

Tullier and TCC vice president Rusty Tamlyn represented the seller, Trans Texas Gas Corp. Jim Gillett negotiated the buy side.

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