HOUSTON-Option One Realty, retaining the reins as property manager and leasing agent, has collected about $5.2 million for a 36,000-sf shopping center in the northwest submarket.

The local developer pushed occupancy to 80%, setting up a roster of “mom and pop” tenants, before selling Langham Creek Shopping Center to a private investor from Calgary, Canada, Jerry Goldstein with Marcus & Millichap’s Houston office tells GlobeSt.com. The closing price for the newly completed center nudged the $5.2-million ask, he says.

Goldstein says the off-market trade was the buyer’s second retail purchase in Houston. The center went under contract before it was completed, taking six months to reach the closing table, he explains. Goldstein, who single-handedly steered the transaction, says the Canadian investor used 1031 Exchange funds from a San Diego shopping center sale and secured a loan with a Houston bank to make the close.

The Langham Creek center takes up three acres on the northeast corner of Hudson Oaks Drive and FM 529. It backs up to a residential subdivision in the Copperfield market. According to Goldstein, Option One Realty planned to flip the asset as soon as it was completed, but cornered a contract while it was still in lease-up. The seller will stay in place to finish the leasing job and oversee the property, he says.

Houston retail properties have been particularly attractive to 1031 Exchange buyers, mostly out-of-state investors turning around gain from sales on the coasts. Recent reports show yield on local properties are running 50 to 100 basis points higher than returns for comparable properties on either coast. Unanchored strip centers are trading at cap rates in the high 7% to 8% range, according to local reports.

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