HOUSTON-So far this year, Boxer Property has acquired 10 office buildings totaling more than 2.3 million square feet. The local company has four more buildings totaling 550,000 square feet under contract and plans to search out at least a couple more acquisitions by year end.
“This is our most active year for acquisitions by far,” says David Kayle, a member of the firm’s acquisitions team. “This is the most square feet we’ve ever acquired in one year. We’re buying bigger buildings and taking advantage of distress in the market. It’s a great opportunity.”
In total, Boxer Property owns and operates over 12 million square feet of commercial real estate across the US. Andre Pereira, who shares the firm’s acquisitions responsibilities with David Kayle, tells GlobeSt.com the company has partnered with an institutional investor to make the buys, all of which have closed on an all-cash basis. Most of the company’s deals have closed within 45 days.
“A lot of investors say they can’t find distressed opportunities because they thought trophy assets would be distressed,” Pereira says. “We’re not focused on those assets. We’ve been focused on B quality buildings.”
For example, Boxer Property recently closed on 12808 West Airport, a three-story, 150,578 square foot office/tech building in Sugar Land Business Park. The class B property, which is 50% occupied, marks the firm’s entrance into the Sugar Land submarket.
Boxer Property acquired the 1980s-era building from KBS Realty. Ken Page and G. Scott Myers of the Houston office of Grubb & Ellis represented the seller.
Pereira says the building has a fair amount of vacancy because it has several large chunks of space. “We’re going to chop up space and get it ready to go,” he says.
The Sugar Land buy comes just days after Boxer Property acquired One Northwest Centre, a six-story, 151,835 square foot building at 13831 Northwest Freeway in Houston. The company bought the 1980s-era building, which is 50% occupied, out of foreclosure from Western National Life. Previously, the property was owned by BGK Group.
Darrell Betts, previously with Cushman & Wakefield of Texas Inc. and now with Avison Young, and David Chuoke with Cushman & Wakefield, represented the seller.
Boxer Property manages and leases its own portfolio and has an in-house construction group including interior designer and space planner. “That’s one reason why we are able to buy buildings that are 40% leased,” Kayle says.
The firm’s model for efficient building leasing and management has attracted a number of building owners and compelled it to establish a new line of business – third-party leasing and management. Currently, the company handles a third-party portfolio of 3.5 million square feet in major markets across the US.
“This is a line of business where we’re seeing a lot of growth with various owners, from small REITs to private individuals,” Kayle says.
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