HOUSTON-Hanover Real Estate Partners, based in Greenwich, CT, has sold the 1.2-square-foot Marathon Oil Tower to CBRE Strategic Partners US Value 6, a fund sponsored by CBRE Global Investors. With this transaction, Hanover effectively ends its decade-long hold on the41-story asset.
Hanover took over responsibility for the management and oversight of the property at 5555 San Felipe St. from Lehman Brothers Inc. in 2003. At that time, the property was 100% leased to Marathon Oil Co. under a lease that expired in December 2006.
In July 2004, Marathon had indicated a desire to reduce its overall square footage and began considering options for the relocation of its headquarters' facility. Hanover immediately set about addressing Marathon's space needs to ensure the company remained at the property. Hanover successfully negotiated a new 15-year lease with Marathon for approximately 650,000 square feet or 60% of the total building. Hanover then implemented an aggressive leasing strategy to fill the space vacated by Marathon.
During that period, Hanover made significant capital improvements to the building, including renovating the lobbies, improving the building's mechanical systems and making significant structural improvements. Hanover also realized significant cost savings by improving the building's energy efficiency and achieved LEED Silver status. Tenants include insurance company Aon Corp., Houston-based wealth management firm Kanaly Trust Co., and engineering firm Baker Hughes Oilfield Operations Inc.
“We sought an opportune time to sell this truly unique trophy asset and believe this attractive transaction makes sense for both parties," comment Hanover Real Estate managing partners Reed Miller and Ken Boyle. "We enjoyed working with CBRE Global Investors to consummate this sale and are pleased to come to an agreement that creates immediate value for our investors.”
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