HOUSTON-Despite a difficult marketing period and a somewhat volatile escrow, Bixby Bridge Capital succeeded in disposing of the 268,760-square-foot Gateway I & II. The buyer out of southern California acquired the office complex in a seller-financed transaction for its value-add potential.
This didn't mean, however, that marketing and selling the complex at 15333 John F. Kennedy Blvd. was a slam-dunk. David Tuttle with CASE Commercial Real Estate Partners, who represented the seller with colleague Patrick Giles, acknowledges that the submarket in which the 1980s building is located – known as Greenspoint or even North Belt – has some negative perceptions attached to it.
"These are almost two different submarkets," he explains, pointing out that, while the western portion of the area has huge vacancies, North Belt East, near Bush Intercontinental Airport and east of the Hardy Toll Road, has less space – and a lower vacancy. "The building we sold is at the intersection of Sam Houston (the toll road) and JFK, and the directly competitive buildings in that section are all full," Tuttle tells GlobeSt.com.
Things didn't get a whole lot better during the escrow period."There were a lot of moving pieces during the escrow, including capital expenditures and leases in the pipeline," Tutle says. When CASE began marketing the building, occupancy was in the mid-60s. At the time of closing, occupancy stood in the mid-70s. "This one had some meat on the bone," Tuttle says. "The buyer was definitely looking for that upside."
The new owner will likely make some cosmetic upgrades, and Tuttle points out there is an adjacent four-acre parcel that is part of the deal, and that can be used for further development or additional parking. But one of the trends he found interesting about the process was that it was seller-financed.
"That was a large part of the story," Tuttle says. "We're starting to see traditional lenders coming back. A lot of hard money guys and direct lenders like Bixby, that have been owner-operators can move quickly and structure deals to suit the borrower's needs. That was important on this particular deal."
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