SAN ANTONIO-With the landmark deal now complete, Chase Merritt plans to spend another $20 million on preparing 879,743 sf of 70%-filled office and flex space for lease-up. The days-old purchase, made possible with equity from Fairfield, CT-based GE Capital Corp., is just the beginning of Chase Merritt’s plans for Texas.
Chad Horning, CEO of the Newport Beach, CA-based, tells GlobeSt.com that the company has $110 million of assets under contract in Houston and it’s looking hard in Dallas. In San Antonio, the strategic focus is office and industrial. “We’re both sellers and buyers in Austin,” Horning adds, saying the main goal is usually long-term holds. “We’ll buy all types of assets, as long as they’re well-located, good quality and with a deal size of $35 million and higher.” In the past nine months, Chase Merritt has closed on six acquisitions in Texas.
Reportedly the largest real estate deal in recent years in San Antonio, the portfolio was bought from local developer, Darren Casey Interests Inc. The final price isn’t available, but flex properties are selling for $47 per sf to $55 per sf and office buildings are going for as much as $90 per sf. Wrightwood Capital of Chicago provided acquisition financing.
Horning says the joint venture buyers were interested in the assets long before they were introduced to the market. He says the buildings are in good condition so the $20-million cap-ex pool primarily will be used for tenant-improvement allowances and brokers’ commissions.
Todd Mills, senior vice president with CB Richard Ellis’ San Antonio office, represented the seller. David Held, a CBRE senior vice president, is leasing the office buildings and Stream Realty LP’s local team will lease the flex space. Transwestern’s local office will manage the properties.
The portfolio consists of: