HOUSTON-Harris County officials have given a reprieve to a 127,568-sf telecom warehouse that it recently bought for about $4.3 million. The plan was to clip the building's corner to make way for overhead lanes at the intersection of Interstate 10 and US Highway 59, but now officials are having second thoughts.
Bob Gaskins, general manager for the county's right-of-way division, tells GlobeSt.com that the 2202 Nance St. property on the CBD's northeast corner is being eyed for its lease revenue potential and added office space for the county's IT and high-tech staffs. Gaskins says the plan started to change after Harris County acquired the holding from an affiliate of Principal Financial Group of Des Moines, which took over the building last summer from RPD Catalyst of Los Angeles.
According to Gaskins, the county went for the buy after estimates showed it would take about half of Principal's asking price to reconfigure the building for the road project. With the deed now in hand, officials are reviewing whether to keep the building intact and collect rents that conceivably could double the return of the purchase price.
The building has two tenants, one who signed just days before the sale to the county. Verizon Global Network took 13,580 sf in a lease that's been set up to expire simultaneously with the existing tenant's 20-year contract. For the last two years, Looking Glass Network, a fiber optics firm, has filled 20,000 sf.
L. Michael Wallace with Colliers International's Houston office says the building underwent a $1-million plus conversion into a telecom property about 3.5 years ago at the height of the fad. Once Principal's affiliate 801 Grand Avenue Capital LLC bought it, he and Colliers' Todd Edmonds were hired to find telecom or warehouse tenants for the space. They came up with the deal with Verizon, which was represented by Graham Horton in Dallas-based Staubach Co.'s local office, and then the single-story building sold to the county.
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