The Houston REIT again touts the takedown as an "irreplaceable corner," just like its other recent buys in the metro. The newest portfolio member at 1905-1919 W. Gray St. is fully leased center anchored by a Bank of America along with a freestanding, 15,130-sf Walgreens that boasts an annual sales volume pushing $9 million, according to Tenel Tayar, AmREIT's acquisitions vice president.
The infill asset sits in River Oaks, an affluent section of the city dotted by multi-million-dollar homes. Bakery Square's per sf rate--$27--is a good barometer of the asset's value in the market. The tenant roster includes T-Mobile International, Blockbuster Inc. and Boston Market Corp. The weighted average remaining lease term is 4.9 years. Walgreens lease doesn't expire until Oct. 31, 2056.
Tayar says the off-market trade typifies the REIT's buying strategy. "When we find a good opportunity, we negotiate directly with ownership," he says. The deal closed with cash and the assumption of long-term debt. Anticipated net operating income contribution is about $820,000.
Tayar says a combination of factors led to the decision to pursuit the purchase, but the most important is it meets the firm's definition of an "irreplaceable corner." Bakery Square is flanked by traffic signals at both Dunlavy and Woodhead plus it sits in a high-traffic area, he explains. Demographics and the synergy from Weingarten Realty's River Oaks Shopping Center clinched the deal. "The stability of the area is quite attractive to national retail tenants," he says. Lyle Cowand and Rudy Hubbard, both with Houston-based Transwestern Commercial Services, brokered for the seller, a partnership of private investors.
According to GlobeSt.com sources, Trammell Crow Co. was managing the asset for Ram Realty Services of West Palm Beach, FL. The sources say land in the Bakery Square vicinity has been selling for $175 per sf to $200 per sf, translating into a near $7-million check at the closing table.
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