HOUSTON-Younan Properties Inc. has paid about $77 million to claim the 381,327-sf Two Westlake Park office building. According a broker involved with the transaction, Younan's acquisitions are reflective of a trend that will continue well into the fourth quarter.
As reported in recent weeks, Younan had planned to close on the 98%-leased Energy Corridor building at 580 Westlake Park Blvd. before the month passed. The 17-story, class A building brings the buyer's Houston holdings to 1.7 million sf. As for the seller, it is the last asset in the city in a nationwide disposition by Chicago-based Wind Realty.
Zaya S. Younan, chairman and CEO of the Los Angeles-based investment group, says more local assets will be put under contract in the next quarter. The target submarkets are the Energy Corridor and CBD. “We plan to buy three million sf in the next six months in Houston,” he says. “If we see the market fundamentals continuing to go forward, we'll continue buying assets.”
Ken Page, executive director in Houston for Cushman & Wakefield of Texas Inc., tells GlobeSt.com that Younan's acquisitions are reflective of a trend in which a multitude of buyers are flocking to the area to take advantage of the region's fundamentals. “We're seeing new people coming in here who haven't been here for a long time,” he says.
The C&W team, which included senior director David Chuoke and associate director Scott Myers, received dozens of offers for the 25-year-old Two Westlake Park on 5.5 acres, according to Page. He says Younan's experience in the market helped him to win the bid. Younan's ability to finance the deal also was a plus.
“There's still money out there to buy, but not always a lot of good debt,” Page explains. “The underwriting's tightened up. When someone comes along who can deliver the financing, he has the edge.”
Page adds that a cutback on financing also means construction is impacted so it's not easy to get new product out of the ground. As a result, vacancies are tighter and deliveries are fewer–a combination of forces that make the area attractive to investors like Younan. “Our fundamentals are great,” Page says. “There's incredible demand, strong absorption and not a lot of buildings currently under construction. Those that are, are leased up even before completion.”
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