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SUGAR LAND, TX-Ellman Cos. has paid $60.5 million to acquire the 528,856-sf One Sugar Creek Place from Unilev Capital Corp. It’s the Phoenix company’s first market play, but definitely not its last one.

According to dealmakers, Ellman plans to pour several million dollars into renovating the 25-year-old asset at 14141 Southwest Freeway, known locally as the Unocal Building. Work is slated to begin in early 2008 and take about 18 months to complete, Robert Coulter, Ellman’s executive vice president, tells GlobeSt.com.

Houston-based Chevron Corp. leases the entire building through March 2010 as a result of its buyout of Unocal Corp. In July 2006, the empty structure was put it on the sublease market. But earlier this year, Irving, TX-based Fluor Corp. came along and subleased 191,000 sf, striking a deal that expires at the same time as Chevron’s pact. Now that the deed’s changed hands, Ellman’s team will take over leasing and management.

Coulter says Ellman Cos. is focused on buying well-located office assets with vacancies or below-market leases that can provide upside through renovation and re-leasing. “We’re not looking for existing trophy buildings, but rather, buildings that because of their location, can be upgraded and attractive to tenants,” he says. The anticipated hold is five to seven years.

Coulter says Houston is Ellman’s primary target market although Dallas and Austin also are being eyed. “We love the dynamics of the Houston market and can buy at substantially less than replacement costs,” he says.

Marvin Stapper of M.M. Stapper Co. Commercial & Investment Real Estate and David Joachim, president of International Realty Concepts Inc., both in Houston, represented the Beverly Hills, CA-based seller. Thomas Swan with Amcal Southwest LLC in Scottsdale, AZ represented Ellman.

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