"Westchase is one of the hottest office markets in the region and the future of Houston's office real estate. You could refer to it as the central business district of West Houston," Scott Martin, Granite's managing director in Houston, says in a press release. The office building, 83% occupied at sale time, sits in an area with ample restaurants, retail centers, hotels, banks and entertainment venues. And, Martin says, "all of this comes without the headaches of congestion and construction."
The 22-year-old building on 6.5 acres is assessed at $25.2 million by the Harris County Appraisal District. The asset takes Granite's Westchase portfolio to more than 700,000 sf ... and it's looking for more in the 16.7-million-sf submarket, Martin tells GlobeSt.com. Its other Westchase holdings, each more than 90% leased, are an office tower at 2925 Briar Park, Columbia Center and Beltway Business Center.
Martin tells GlobeSt.com that his firm, which always pays cash for its assets, has spent $85 million this year on acquisitions, but has the capability to spend up to $100 million by yearend. He says the 2004 plan pushes the ante to $150 million, some of which will likely be spent in Westchase.
John Dailey of PM Realty Group in Houston says Alder Property Association of New York City sold the Highlands Insurance Building because it was the end of the normal hold period plus now clearly is an advantageous time to sell. The asset, which came to market in June, received more than 15 offers. Granite was selected, in part, for the ability to close quickly, without financing or an equity partner. The sale closed two days ago, just 35 days after Granite placed its contract, Dailey says.
The lead tenant, Highlands Insurance Co., occupies two floors in the 14-story office building, now in line for minor upgrades. The roster has a solid rent roll with limited exposure in the coming years, Martin says, who adds that was important given today's soft office market. Granite will manage and lease the property.
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