HOUSTON—The office market has recorded a marked increase in investment activity this year. Even with the continued slowdown in leasing activity and rising vacancy, investors have re-entered the market with the notion that better yields can be realized in Houston relative to other major metros. Year-to-date transaction volume is approximately $1.47 billion, a significant increase from 2016, which recorded just $330 million worth of transactions, according to JLL research.
An example of that increased investment activity is the sale of 2525 North Loop West, a 136,325-square-foot office building. 2525 Inner Loop LP purchased the property from Lykes Building Holding Associates and Smetana Texas Realty Associates. Sean Finn, the new owner, plans to implement a capital improvement program with hopes of attracting medical-office tenants. He also plans to bring retail space to the adjacent pad sites on the property.
This property complements previous investments made by Finn in the area, including 2707 and 2727 North Loop West and the 24-acre Brookhollow Campus at 4400-4550 Dacoma St. These assets amount to more than 1 million square feet of investment in the immediate area.
Features of the class-B office building include parking, conferencing facilities and on-site property management, all set within the 4.5 acre Pinehollow Office Park. Located just inside the 610 Loop, near the interchange of Interstate 610 and US Highway 290, 2525 North Loop West offers access in and out of the city, and to Houston's multiple business centers. The surrounding area provides a variety of amenities including dining, retail and services within a five-mile radius of the property.
Managing director Rudy Hubbard, senior vice president Kevin McConn and vice president Rick Goings led the JLL team on the transaction.
“The northwest office submarket has suffered like other submarkets in Houston due to depressed energy prices. However, investors are taking a serious look at the northwest because of its proximity to the CBD and the Galleria. I think we can look forward to new developments and capital improvements that will enhance otherwise older assets in the area,” Hubbard tells GlobeSt.com. “Overall, deals in the marketplace have been competitive. Investors are looking for assets in Houston with the thought that we've seen the bottom and now is the time to re-enter the market.”
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
