TCC Lands Redevelopment Site in Galleria

(To read more on the multifamily market, click here.)

HOUSTON-La Scala Apartments, a 142-unit class C multifamily property in the Galleria submarket, has been sold to Trammell Crow Co., which plans to raze and rebuild the five-acre site with a 380-unit complex. The redevelopment is set to get under way in first quarter 2007.

The dealmakers aren’t discussing the final price for 7510 Burgoyne Rd., but comparable class C properties in the area have sold for upwards of $18,000 per door. Harris County assesses the complex at $4.1 million.

Todd Stewart, senior vice president in Houston for CB Richard Ellis, tells GlobeSt.com that equivalent land prices in the area can range from $30 per sf to $50 per sf. TCC’s redevelopment strategy is becoming common among developers wanting to take advantage of Houston’s market fundamentals.

“Land prices have been escalating over the past two years so developers are looking for infill sites with already existing buildings,” says Stewart, who represented TCC’s investment arm, Wentwood Capital Fund I LP. “That’s what this deal was about.”

In anticipation of the sale, seller GC 127 Voss Holdings LLC of Tacoma, WA began emptying the asset prior to the closing. “The property right now isn’t too far from empty and occupancy is very low,” Stewart says.

Besides Stewart, the CBRE team included executive vice president Craig LaFollette, senior vice president Todd Marix and senior associate Tre Banks. Calls to TCC were not returned by press time.