HOUSTON-Locally based Lionstone Group has closed on its acquisition of 712 Main Street, striking a deal with Brookfield Asset Management Inc. for the historic office building. This deal marks the first time the 794,186-square-foot building has traded hands on an individual basis since it was built in 1929.
Originally built by Jesse H. Jones for Gulf Oil and National Bank of Commerce, the CBD building expanded in 1948 and 1950 to its current size. As such, "between mergers and acquisitions, it was eventually owned by Texas Commerce Bank, then by JPMorgan Chase," explains H. Dan Miller with HFF. Brookfield acquired the building from JPMorgan Chase in early 2010 as part of an overall, 16-building portfolio sale.
Miller and HFF colleague Trent Agnew marketed and sold the property on behalf of Brookfield. Miller tells GlobeSt.com that the marketing process didn't change, but it did attract a different group of buyers, those that target historic buildings.
"We received numerous offers, well over a dozen," Miller says. Lionstone ended up with the asset based on price, capital source and amount of upfront due diligence performed, Miller adds.
The office tower is the Texas headquarters for JPMorgan Chase's southwest banking operations and is currently 85% leased to 43 tenants. Transwestern has been retained by Lionstone to manage and lease the property. Miller says Lionstone will invest capital to upgrade the building as well.
He goes on to suggest that there are only three other buildings that are true competitors to the one just sold: the 542,000-square-foot 919 Milam (sold this year to Credit Suisse); the close to 600,000-square-foot Esperson Buildings and the 375,000-square-foot 1001 McKinney. The competitive factors arise from these buildings' locations to Houston's rail line and underground tunnel access, as well as the age.
"In a city not known for its preservation of historical buildings, it was an honor and pleasure to be associated with this sale," Miller says. "They don't make buildings like that any more."
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