A partnership of the Morgan Group of Houston and Dallas-based Trammell Crow Co. has the bid to beat. The duo offered to pay $31.7 million in the first round, which took place in October 2003 and garnered 13 offers. Five other bidders were selected from that process to compete in the mid-May finale.
VeriQuest Cos. Inc. of Houston with an initial bid of $30 million made the list as did a partnership of Archon Group and the Staubach Co. with $29.3 million. Fort Worth's Trademark Property Co. threw its hat in the ring with a $28.5-million bid. Trustee Josef Marom, who represents a group of investors from Bellaire, TX, placed a bid of $27.8 million in the fall make it to the final round. The Houston firm of Wallace/Halpin LLC got into the circle with an initial offer of $27.5 million.
The 24-acre campus is located on the north side of Richmond Ave., about one block north of Southwest Freeway. The complex is located in one of Houston's most affluent residential and commercial areas.
"This is a once-in-a-lifetime opportunity to acquire a property with the dense residential borders of West University, River Oaks, Highland Village and the Galleria submarket," Jim Wallace of Wallace/Halpin said in a press release. The campus has three office buildings totaling 323,605 sf, a 44,832-sf elementary school and a 4,500-sf central HVAC plant that provides chilled water and services to the entire complex.
Doug Elliott and Phil Arnett with the Houston office of CBRE/Trione & Gordon are handling the disposition of the property for the school district. The district is planning to build a replacement facility and close the elementary school. Though a timetable is not set in stone, Arnett tells GlobeSt.com that the district will likely vacate the property in less than two years.
Wallace says the delayed occupancy is the only kicker to the deal. Regardless of how long the wait is to redevelop the property, however, he says his firm is determined to walk away as the successful bidder.
Elliott says the May 14 winner will be given a contract with time for due diligence before the property closing. The school district required a $750,000 bid deposit at the onset of the process and is mandating cash at the closing.
The school district secured independent appraisals from a pair of Houston-area firms. TN Edmonds & Associates estimates the property is worth $38.5 million while Integra Realty Resources puts the value at $36.1 million. Demolition costs for the parcel are anticipated to cost nearly $750,000.
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