The complex, being renamed to the Centre at Cypress Creek, includes three office buildings totaling 487,591 sf and a manufacturing building at 20445-475 Compaq Center Dr. According to Macfarlan partner John Jenkins, the buyers plan to convert the manufacturing building to office space. When completed, the entire complex will have about 630,000 sf of offices.
"We are buying it to reposition it and bring it back in its original class A setting," Jenkins tells GlobeSt.com. "It's an infill setting that has not been available to the market for 20 years. Northwest Houston has just taken off. Demand for office space is extremely strong."
Hewlett-Packard last year sold the complex to Houston developer Don Hand. Brenda Pennington, principal of locally based Brenda Pennington Commercial Real Estate, who listed the property, says the seller "had too many other irons in the fire" to devote attention to the complex after seizing an unexpected opportunity to buy it. "It was not part of his annual projection so he decided to put it back on the market," she explains.
According to Pennington, the offering drew attention from investors and users. "There was great interest from large users, including educational groups, energy companies and technology companies," she says. "But there were also many investors who wanted upside potential."
Jenkins says the project offers the largest available block of contiguous class A office space in the Houston area. He says redesigning of the manufacturing building into office space will begin in four to six months. Macfarlan has contracted with locally based Transwestern to lease and manage the complex. According to Transwestern senior vice president Michelle Wogan, the existing office space will be ready for delivery in about 90 days.
Ross Cannizaro, a senior associate in the Houston office of Marcus & Millichap, and investment specialist Kyle Findley, also in Houston, brought in Macfarlan. Cannizaro and Findley also ended up representing the seller.
Holliday Fenoglio Fowler LP arranged acquisition financing and joint venture equity totaling about $100 million for the purchase, renovation, and repositioning. Buchanan Street Partners provided $20 million of equity financing. It is second time in two months that Macfarlan has partnered with Buchanan. They previously spent $20 million for an industrial building in Raleigh, NC.
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