HOUSTON-RiverOak Investment Corp. has made its first investment in the local market, paying $17.15 million for 16400 Park Row.
The Stamford, CT-based firm made the acquisition in partnership with TFO, a Bahrain-based wealth manager. The seller was Eastbourne Park Row, an associate of Fuller Realty Partners.
The three-story, 85,701-square-foot office/flex building, which is situated within the Park Ten Business Park in the Energy Corridor submarket, is fully-leased to Kraton Polymers. The firm, which produces engineered polymers, uses the class A building for its headquarters. It also houses Kraton’s new research and development facility and offers room for expansion.
The purchase price equates to a 9.5% cap rate on the first year’s net operating income. RiverOak expects cash-on-cash yields in the mid-teens starting in 2012, according to the firm.
RiverOak Investment has had it sights on the local market for some time. In fact, it previously made an offer on another office property in the Energy Corridor, but lost it to another bidder, according to George Yerrall of RiverOak. He and Derek Eakin, also with RiverOak, spearheaded the acquisition.
Yerrall tells GlobeSt.com that RiverOak jumped on 16400 Park Row as soon as it came on the market. Martin Hogan and Dan Miller of HFF’s local office marketed the 1980s-era property.
“We took a close look at Kraton, and we really liked what they are doing and their prospects, even though their credit is a tic below investment grade,” Yerrall says, adding that Kraton has a little more than 10 years left on its lease. “We made an offer right away and got the building under contact before it had been widely marketed.”
RiverOak Investment obtained a $10.3 million loan from Wells Fargo to fund the acquisition.
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