HOUSTON-Granite Properties Inc. has sold its 386,277-sf 363 North Belt building to an institutional pension fund advisor. The Northeast-based buyer, which represented itself, paid $45 million to acquire the office space in an all-cash deal.

Rusty Tamlyn, senior managing director with Holliday Fenoglio Fowler LP’s Houston office, says the 26-year-old asset on 363 N. Sam Houston Parkway attracted a great deal of interest from private companies and institutional investors. For one thing, the 19-story asset in the Greenspoint submarket was stable at 95% occupancy, with its lead tenant, Newfield Exploration Co., entrenched through long-term lease. In addition, bidders liked the conversion of lease rates from gross to triple net, a trend that is impacting much of the Houston office market.

The growing cost of new building construction also prompted a lot of interest. “The replacement costs on something like this are huge; this building would cost $200 per sf to reproduce,” says Tamlyn, who with HFF’s senior managing director Dan Miller and Paul Bennett, in-house representative with the Plano-based Granite Properties, handled 363 North Belt’s listing and marketing efforts. Tamlyn tells GlobeSt.com that the North Belt’s submarket on the area’s north side has a 4% vacancy rate for A-class buildings. “This one was stable, with long-term credit tenant Newfield taking up 40% of the space,” Tamlyn adds.

He says the new owner has no plans to infuse huge amounts of capital in the building, as it isn’t necessarily. The building was renovated in 2002, though the elevators might be upgraded at some point. Local company Moody Rambin Interests will take control of leasing from Granite Properties. “Granite doesn’t handle third-party leasing,” Tamlyn says.

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