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HOUSTON-A New England-based life insurance company has sold the 217,381-sf Centre One after a 10-year hold. Area sources say the class A office building most likely has traded for close to $18 million, with known sales in the submarket selling at 8% to 8.5% cap rates.

Centre One, situated on 3.3 acres at 9800 Centre Pkwy., was 99% leased at sale time to Pacifica Cos. LLC of San Diego. According to Rudy Hubbard, managing director of Transwestern’s Houston office, there is no significant lease roll until 2011.

“Rental rates there are below market. When renewals begin, there should be a nice pop,” says Hubbard, who partnered with Transwestern managing director Eric Johnson and associate Leah Gallagher to broker the transaction between Phoenix Life Insurance Co. and Pacifica. The buyer also got a 3.3-acre surface parking lot right across the street. Hubbard says that, to his knowledge, Pacifica has no plans to do anything with the land at this time.

Hubbard tells GlobeSt.com that Phoenix Life Insurance opted to sell the asset because it had reached its stabilization goal. Centre One was introduced to the market about one year ago and was under contract until one of the main tenants, Howe Baker Engineers Ltd., announced plans to relocate to the Galleria as part of a consolidation.

A Cushman & Wakefield of Texas Inc. broker who’s subleasing Howe Baker’s 53,708 sf says the lease has three years remaining on its term. It has been confirmed that CDI Management Services has received a proposal to long-term lease about 40,000 sf of the space, but it’s not yet been inked.

“The engineering firms love this place,” Hubbard says. “They could get anywhere in Houston on the Westpark Tollway, Beltway 8 or Highway 59 so the mobility is fabulous.” Transwestern will continue to lease and manage Centre One on behalf of the new owner.

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