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HOUSTON-A two-building, 84,346-sf medical office complex has changed hands, with a Fort Worth-based investment group taking possession of Red Oak Medical Arts I and II from the local seller. The buyer has paid just north of $4 million for the 22%-occupied asset in a value-add play.

E. Logan Brown Jr., senior vice president with Grubb & Ellis Co.’s Houston office, says Delta Red Oak LP owned the 1980s-era complex at 17200-02 Red Oak Dr. for a little more than 1.5 years. The partnership decided to bring the three-acre complex to the sales block because of its location.

“The guy owns other buildings, but most of them are in Sugar Land, which is far south of there. It would take hours for him to drive to show the space. He didn’t have the time to fix them up and consequently, they languished,” says Brown, who brokered the deal between the seller and Klazuba Realty LLC. Also working on behalf of the seller was Grubb & Ellis associate Christopher Wadley.

Brown tells GlobeSt.com that the seller wanted a quick sale and he got just that: the entire process took less than two months. He says Klazuba, which primarily is an oil and gas company, beat four other offers for the complex because it had the cash and there were no financing contingencies. “They could move quickly,” he adds.

Brown says the new owner will redo the lobbies and much of the interior. Centra Asset Partners Inc. of Houston has been hired to manage, lease and oversee improvements. A budget has not been set for the improvements, but Brown says Klazuba wants to start upgrades almost immediately.

“The feeling of the buyer is that these are just a block down the street from the hospital,” Brown says. “They believe if they can fix it up, they’ll be well-positioned to get some doctor-tenants in there. There’s every reason to believe they should be able to lease that asset up.”

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