PM Realty Buys Greenway Plaza Site for New Mixed-Use Development

By Georgiana Mihaila, Associate Editor

Having recently broken ground on what could become Houston’s tallest apartment building—the 2929 Weslayan project—PM Realty Group has now purchased a 4.97-acre site with plans for a two-phase, mixed-use project.

PM Realty Group and its equity partner, the INDURE Fund, closed on the 3333 Richmond Ave. property on Nov. 16 but only recently released information about its plans. Located in the Greenway Plaza submarket, at the southeast corner of Richmond Avenue and Buffalo Speedway, the site includes an existing 97,000-square-foot office building, a two-story parking garage, surface parking and approximately three acres of excess land.

The mixed-use development will include a 400,000-square-foot, 18-story, Class A, LEED-certified office tower; a 3.5:1,000-density, seven-level structured parking garage; and an amenity package including a ground-floor restaurant and terrace atop the parking structure that will be accessible to office tenants. This phase of the development is scheduled for groundbreaking in late 2013, with a completion anticipated in late 2014 or early 2015.

According to a company release, the 400,000-square-foot Class A office building is already 20 percent pre-leased to two tenants, one of them the seller of the property, Solvay America Inc. The company—represented in the transaction by Trey Strake, Tim Relyea and Matt Trozzo of Cushman & Wakefield Inc.—will occupy approximately two floors in the new building.

The second phase of development will call for the demolition of the existing 97,000-square-foot structure in order to make room for a single high-rise tower comprising a full-service hotel on the bottom half and a 250-unit high-end apartment building on the top half. The hotel and apartments will be joined by a high-end-resort-styled amenity deck, to which both hotel guests and apartment residents will have exclusive access.

PM Realty Group has selected an architectural design team consisting of Elkus Manfredi, lead design architect; Sasaki, lead landscape design architect; OJB, landscape architect of record; and Kendall Heaton, architect of record. It has commenced the full design process.

The development team will be led by industry veteran Dan Leverett, executive vice president & managing director of development for PM Realty Group.

Image courtesy of PM Realty Group

$21M Houston Sale Marks Weingarten Realty’s Exit from Industrial Sector

By Georgiana Mihaila, Associate Editor

In a move to reinforce its position as a shopping center owner, manager and developer, Weingarten Realty Investors has closed on the sale of its interest in three industrial joint ventures to Exeter Property Group’s Fund II.

The move is consistent with Weingarten Realty’s previous announcement concerning its decision to sell the company’s industrial division. “The completion of this portfolio sale marks our exit from the industrial business and positions Weingarten as a pure-play retail REIT. We will continue our commitment (to) building shareholder value through the repositioning of the retail portfolio into core markets with high barriers to entry and strong growth potential,” stated president & CEO Drew Alexander.

The ventures include a total of nine properties, aggregating approximately 2.6 million square feet of building area, all of it in Houston. The sale price totaled $21.1 million, including $7.8 million of secured debt that Exeter assumed as part of the transaction.

Houston-based Weingarten Realty made public its intent of selling off its entire industrial portfolio back in April, when the company sold almost all of its industrial assets to DRA Advisors in a $382 million deal; 52 industrial properties spread out through Tennessee, Florida, Texas, Virginia and Georgia traded hands at the time, with the remainder to be sold in the most recent transaction.

The company also sold two non-core retail assets in October, including Burbank Station, located in a suburb of Chicago, and Johnston Road Plaza in Charlotte, N.C. Including the recent sale, Weingarten’s dispositions have totaled $631 million this year.

W.P. Carey Affiliate Buys KBR Tower for $174.6M

By Georgiana Mihaila, Associate Editor

The 1.04 million-square-foot KBR Tower in Houston’s Central Business District, along with its adjacent 1,500-space garage, have traded hands for $174.6 million; the buyer is Corporate Property Associates 17-Global, a public non-traded REIT affiliate of W. P. Carey Inc.

Allied Advisors both represented buyer CPA®:17 – Global in securing acquisition financing and advised the seller, a joint venture between Brookfield Office Properties and Kellogg Brown & Root Inc. (“KBR”)

KBR is also the main tenant of the 40-story building, occupying 87 percent of its namesake tower. In February 2010, KBR signed an industry-leading 20-year net lease renewal and expansion with Brookfield for 1.2 million square feet at KBR Tower and the adjacent 500 Jefferson St. garage, widely considered to be the largest U.S. office lease since fall 2008.

Commenting on the acquisition, W. P. Carey Executive Director Chad Edmonson noted, “We are extremely excited to work with a great tenant like KBR as well as complete yet another transaction with an affiliate of Brookfield. In addition, as an important location for KBR, it meets our criteria of acquiring critical facilities leased to established corporate tenants on a long-term basis. The property’s prime location in Houston’s CBD was also a positive factor in our overall analysis of the investment.”

KBR Tower, located at 601 Jefferson St. in downtown Houston, is currently 99.8 percent occupied, with the majority leased by KBR and the balance occupied by a mixture of office and retail tenants.

The 40-story building was completed in 1973. The Energy Star-certified building is part of the master‐planned Cullen Center complex, which is adjacent to the downtown YMCA and the Downtown Club at The Met sports and wellness club. Cullen Center is surrounded by numerous Metro stops and offers access to the freeway system.

Image courtesy of Blair McFarlain via Wikimedia Commons

2929 Weslayan Multifamily Project Adds 5 Stories, Gets Construction Loan

By Georgiana Mihaila, Associate Editor

The 2929 Weslayan development that just broke ground at the northeast corner of Weslayan and West Alabama will be taller than expected, as new plans for the tower include an extra five stories. When developer PM Realty Group first announced the project last year, 2929 Weslayan consisted of 35 stories; the new plan could make it the tallest rental tower in the city upon completion.

But this was not the sole recent achievement for the project; according to an official announcement. Holliday Fenoglio Fowler L.P. has arranged a construction-permanent loan on behalf of partners PM Realty Group and the INDURE Fund—a commingled real estate fund managed by National Real Estate Advisors—securing the loan through Pacific Life. The HFF team representing the borrower was led by senior managing director Whitaker Johnson, managing director Rob Rizzi and director Cameron Cureton.

“PM Realty Group has proven adept in developing best-in-class multi-housing properties, and this project, in one of the top-performing apartment markets in the country, will be no exception,” said Rizzi. “The property’s prime location, along with its unmatched level of finishes and amenities, is sure to raise the bar for Houston luxury apartment options.”

Due for completion in the first quarter of 2015, 2929 Weslayan will be a 254-unit, 40-story building with 12,156 square feet of ground-floor retail and a 547-space parking garage. Community amenities will include a fitness center, a pool lounge and club area, a cabana, a fire pit and room service from the on-site restaurant. The RTKL-designed tower will be located on a 1.7-acre site on the northeast corner of Weslayan Street and West Alabama Street near the Highland Village Shopping Area and the affluent residential area of River Oaks.

While Houston-based PM Realty Group is a leading national real estate company strategically present in 30 markets, 2929 Weslayan is the company’s first multifamily development in its hometown.

Image Courtesy of MHN Online

Houston Club Moves to One Shell Plaza, Plans Multimillion-Dollar Club Renovation

By Georgiana Mihaila, Associate Editor

The 118-year-old Houston Club has recently entered into an agreement with the Plaza Club to relocate to the Plaza Club’s current location on the 49^th floor of the One Shell Plaza.

In an attempt to provide their combined members a reinvented club, while also retaining the historic name “The Houston Club”, the two will invest in a dramatic $3.5 million onsite renovation project, scheduled to start this month.

“The Houston Club has served as a meeting place for Houston’s business and civic leaders since 1894,” said Matt Alford, president of the Houston Club. “I believe this change of venue, along with the combining of the clubs’ memberships and the extensive renovations, will allow the Houston Club to be an even larger part of Houston’s business and social culture. I am very proud to be a part of this exciting evolution.”

The new Houston Club will feature amenities such as a grand lobby surrounded by floor-to-ceiling-window views of downtown, a stylish “Anytime Lounge”, power boardroom with state-of-the-art technology including HD video conferencing and world-class business amenities for high level and critical meetings, and technology-equipped “Touchdown Rooms” for private calls, interviews or impromptu meetings with clients. Also accommodated will be Allen’s Landing—an all-in-one, innovative focal point for dining and networking in a variety of stylish settings with a few nods to the past, including club memorabilia and regional artifacts.

In addition, the new club space that is to be designed by global architecture, design, planning and consulting firm Gensler will offer an expanded private event space that is designed to accommodate up to 200 guests.

No exact date for the relocation of the Houston Club to the 50-story tower has been announced, but according to Club officials the Rusk Street location will remain open until the end of the year.

Image courtesy of Hines

Crescent Buys 993-Acre Property for New Master-Planned Community

By Georgiana Mihaila, Associate Editor

Following the acquisition of 993 acres in northeast Houston, Crescent Resources L.L.C. revealed plans to introduce its residential division to the Houston market. The newly acquired land, just one mile from Lake Houston and 25 miles northeast of the city’s central business district, will accommodate a new master-planned community.

While planning is still underway, Crescent Resources envisions a community of as many as 2,259 single-family homes, 540 apartment homes, 50 acres for neighborhood retail and commercial uses, and a 40-acre site for a future school.

According to an official company statement, the community will feature several family-friendly amenities. “We are developing a plan that is uniquely suited to Houston and sets a new standard for a master-planned community in the market. Our plans will take a desirable location – close to major transportation options, terrific schools and jobs – and transform the property into a great place to call home,” said Steve Yetts, senior vice president of Crescent Resources.

Located 10 miles east of the George Bush International Airport, the Harris County property is in the Humble Independent School District, which was recognized by the Texas Education Agency for above-average standardized test scores and high graduation rates in 2010 and 2011. It is also within close proximity to the Sam Houston Parkway and Highway 59, as well as three miles south of Atascocita Town Center.

Charlotte-based Crescent Resources, a diversified real estate development and operating company, is no stranger to the Texas market; Crescent Resources is the developer of communities at the Twin Creeks Country Club and Rough Hollow, both near Austin. The company also developed Circle West Campus, an apartment community serving the students of the University of Texas in Austin. Earlier this month, in partnership with Dallas-based Taylor Duncan Interests Inc., Crescent acquired 250 acres for a new single-family residential community in Oak Point, Texas, just north of Dallas.

Beacon Pursues Texas Properties, Snags One City Centre

 By Georgiana Mihaila, Associate Editor

Following its purchase last month of Ashford 5, 6 and 7—a 560,000-square-foot office portfolio located in Houston’s Energy Corridor—Beacon Investment Properties has now closed on One City Centre, a Class A office building located in the heart of Houston’s Central Business District.

The Hallandale Beach-based company partnered with Menorah Mivtachim and Psagot, two leading Israeli financial institutions, in the purchase of the 609,000-square-foot tower. Neither buyer Beacon Investment Properties nor seller Behringer Harvard has released any financial details of the transaction.

“The acquisition of One City Centre represents an attractive opportunity and reflects BIP’s strategic decision to expand our existing presence in the major markets in Texas,” said Claudio Dombey, managing partner of Beacon Investment Properties. “We continue to partner with both international institutions and high-net-worth investors in acquiring stable, income-producing assets,” he further commented.

Located at 1021 Main St., connected to the CBD tunnel system and adjacent to the light-rail station, One City Centre is a prestigious address with significant convenience. The 31-floor, extensively renovated office building recently achieved LEED Gold certification. Currently 84 percent occupied, One City Centre is anchored by Waste Management and Energy XXI.

Beacon Investment Properties is a private real estate investment and management operator with a portfolio totaling more than 6 million square feet and valued at $1 billion. Headquartered in Hallandale Beach, Fla., with offices in Dallas, Houston and Charlotte, the firm specializes in the acquisition and management of commercial properties located in the submarkets of large MSAs in the Southeast and Midwest.

The most recent acquisition is meant to highlight Beacon Investment Properties’ long-term commitment to the Texas office market.

Image courtesy of Beacon Investment  Properties

Upscale BLVD Place Project Gets First Residential Component

By Georgiana Mihaila, Associate Editor

While merely a few weeks ago local newspapers were reporting the construction start of phase II of the BLVD Place mixed-use development, Hanover Co. is now announcing that it will be adding a luxury apartment tower to the high-profile project.

To this end, the Houston-based developer recently closed on the purchase of 1.2 acres on Post Oak Lane, where an urban-style, 29-story luxury apartment tower will rise. Dubbed Hanover Post Oak, the building will consist of 355 high-end apartments with units ranging in size from 650 square feet to the more than 3,000-square-foot units at the top of the tower.

With architecture firm Solomon Cordwell Buenz of Chicago in charge, the building is being designed with a contemporary look in order to complement the existing retail and office building at BLVD Place.

Hanover is highly familiar with the area, as the company has developed two other multifamily projects on the boulevard. And confidence in the current project is high, as construction started last month on another structure within BLVD Place, a 211,000-square-foot development that will include a Whole Foods Market, restaurants, shops and office space. The new building’s office component will be anchored by Frost Bank, which recently decided to lease 53,000 square feet in order to consolidate its Houston region headquarters there.

Work on the BLVD Place development started in 2009, with high-end restaurants, shops and office space. Future plans for the 21-acre project in the Galleria area at the corner of Post Oak Boulevard and San Felipe include an upscale boutique hotel and as many as 1,000 high-rise multifamily units.

Image via http://www.blvdplace.com

Behringer Harvard, Trammell Crow Bring Luxury MF Project to Inner Loop

By Georgiana Mihaila, Associate Editor

Two well-known developers—Behringer Harvard and Trammell Crow Residential—have partnered to bring a new luxury multifamily development to the West University submarket of Houston’s Inner Loop.

The project is planned for a 2.5-acre tract of land recently purchased by Behringer Harvard. Development plans include the razing of existing 1970s-vintage housing at 3810 Law St. to make way for a new luxury multifamily community with 231 apartment homes called Allusion West University. The site offers proximity to prominent employment centers including Greenway Plaza, the Galleria, Texas Medical Center and Houston’s central business district. Approximately half a mile south of U.S. Highway 59, the property also provides convenient access to the most traveled traffic arteries in Houston, including Interstate 45, Interstate 10 and Loop 610.

“This project involves a prime infill location in a desirable area with high barriers to entry, especially for apartment construction,” said Mark Alfieri, COO of Behringer Harvard Multifamily REIT I Inc. “We expect this development to attract business professionals who appreciate an extensive list of amenities and luxurious urban lifestyles.”

The new community will comprise a four-story residential building constructed over a two-story parking garage. Averaging 877 square feet, the apartments will be built to condominium-quality specifications and offer as many as two bedrooms and two baths. Units will feature granite countertops with tumbled-stone backsplashes, 42-inch hardwood cabinetry with under-cabinet lighting, kitchen islands and stainless steel appliances including flat-top stoves and double-door refrigerators. Common-area amenities will include a cyber cafe, business center, state-of-the-art fitness center, resort-style pool and dog park.

Trammell Crow Residential will serve as developer of the property, while an affiliate of the firm will be the general contractor.

This is the second multifamily project announced for the Inner Loop area within the past month, following Hanover Co.’s 424-unit garden-style community planned near the intersection of Bissonnet and Kirby.

KKR, Hines, Pinto Realty Partners to Develop 971-Acre Master-Planned Business Park

By Georgiana Mihaila, Associate Editor

Kohlberg Kravis Roberts & Co. has teamed with Hines and Pinto Realty Partners to develop a 971-acre master-planned business park at the corner of Beltway 8 and Interstate 45 in Houston.

Located in the heart of Houston’s North and Northwest submarkets, where industrial vacancy rates are some of the lowest in the country, Pinto Business Park is Houston’s largest development-ready business park in Houston. With drainage, detention, roads and infrastructure already designed, the site is shovel ready, with tracts available for immediate construction and delivery.

According to an official release, the development program includes an immediate focus on build-to-suit transactions and individual land sales to corporate end users. When fully built out, the park represents an opportunity of 9 million square feet. Tenants will benefit from the business park’s location, which is proximate to Bush Intercontinental Airport, downtown and the Port of Houston.

“Pinto Business Park will offer manufacturing clients the benefits of a large-scale, controlled business park setting and distribution clients the benefit of a second-to-none location that has frontage and eight access points on the city’s main connections to Houston and its surrounding markets,” said Palmer Letzerich, managing director at Hines.

Under the terms of the agreement, Hines and KKR have exclusive rights to develop the business park, which is owned by Pinto Realty Partners, a subsidiary of Cockrell Interests Inc. The partnership will primarily look to pursue an industrial build-to-suit strategy for credit tenants.

The joint venture is highly confident in the development’s success, given the low vacancy rate, ongoing positive absorption, increasing values and moderate new construction currently characterizing the Houston industrial market.

“We are looking forward to leveraging the partnership’s development capabilities and access to capital on a site that we have owned for over 20 years,” said Ernie Cockrell, managing director of Pinto Realty Partners. “With entitlements and development capital in place, now is the time to transform a best-in-class site into a best-in-class development.”

The Houston office of Studley Inc. has been hired to represent Pinto Business Park and attract tenants.

Niagara Bottling to Build 356 KSF Facility in Lakeview Business Park

By Georgiana Mihaila, Associate Editor

Niagara Bottling will soon be headed to the Houston area, as the bottling company recently purchased a 25.7-acre site in Trammell Crow Co.’s Lakeview Business Park in Missouri City, Texas.

Niagara Bottling L.L.C.—the largest family-owned and second-largest bottled water company in the United States—plans to build a new 356,000-square-foot water bottling plant on the property. The new facility will house water processing, bottle manufacturing, warehousing and a distribution facility. According to a release, initial construction will include two bottling lines.

In accordance with most of the existing Niagara bottling plants, the development will incorporate vertical integration, which means everything from the manufacturing of the cap and bottle to the actual process of bottling the water will occur within the plant.

“Niagara Bottling’s new plant will be the largest building in the Lakeview Business Park to date,” said Jim Casey, senior managing director of Trammell Crow’s Houston business unit. “In conjunction with the land sale to Niagara Bottling, we will be completing the remaining streets and drainage infrastructure for the business park, under the oversight of Sean Nolan, TCC vice president of development management.”

According to Bob Graf, economic development coordinator of Missouri City, Niagara’s move will create 98 new jobs within the first year of operation. Over the next 10 years, the company will generate more than $65 million in new taxable value and $8.6 million in Houston-area vendor purchases.

Lakeview Business Park is a 157-acre development of Trammell Crow Co. and affiliates of Crow Holdings Realty Partners IV L.P. Lakeview offers users a master-planned business park environment with opportunities for build-to-suit facilities. The light industrial development is set in a natural environment with mature trees and neighboring lakes, conveniently located near the Sam Houston Parkway, U.S. Highway 90-A and the Fort Bend Parkway, providing easy access to the Greater Houston area.

Image: Lakeview Business Park aerial via http://www.lakeviewbp.com

Two Briar Lake Plaza to Be Anchored by Samsung Engineering

By Georgiana Mihaila, Associate Editor

After landing Samsung Engineering as anchor tenant, Behringer Harvard REIT I is now ready to develop the final phase of Houston’s BriarLake Plaza: a 332,000-square-foot, Class A office building.

Two BriarLake Plaza will be constructed on a 1.5-acre site at the corner of W. Sam Houston Parkway and Briar Forest Drive in the heart of the Westchase Management District, one of the strongest office markets in Houston. It will consist of 332,000 rentable square feet in 12 stories of office space, built on top of a seven-level parking pedestal.

Half the space slated for development at Two BriarLake Plaza has been pre-leased to Samsung Engineering America Inc. to serve as its North American headquarters. Based in Seoul, South Korea, Samsung Engineering is a global engineering, procurement, and construction and project management company delivering services to hydrocarbon, industrial and infrastructure customers.

Designs for the construction of Two BriarLake Plaza reflect the goals of achieving a minimum LEED Core and Shell Certified Silver designation from the U.S. Green Building Council and operating under the EPA’s Energy Star standards. New development at the complex will be guided by the same outstanding architectural and engineering teams that were directly involved in the construction of One BriarLake Plaza.

Two BriarLake Plaza will add a deli, a fitness center and a conference center to the BriarLake complex, shared by both properties. When construction is completed in the first quarter of 2014, the BriarLake Plaza complex will comprise more than 830,000 rentable square feet of office space.

Behringer Harvard REIT I Inc. acquired the adjacent One BriarLake Plaza in September 2008. One BriarLake Plaza comprises 502,410 rentable square feet of office space built on a 9.3-acre site. With its exceptional location and amenities, One BriarLake Plaza has consistently ranked among the most desirable office properties in Houston, and for several years it has been one of the best-performing office properties owned by the REIT. One BriarLake Plaza is 100 percent leased to tenants including Apache Corp., Samsung Engineering America, Microsoft, PetroChina and Zurich Insurance.

Image: One Briar Lake Plaza via www.onebriarlakeplaza.com

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Phillips 66 Chooses Westchase District Site for New Global Headquarters

By Georgiana Mihaila, Associate Editor

Independent downstream energy company Phillips 66 has released plans that it will soon start building its new global headquarters at a 14-acre site in the Westchase District.

The property—soon to be acquired from an affiliate of Thomas Property Group Inc.—is located off Beltway 8 West, between Westheimer Road and Briar Forest Drive. Set in one of the most desirable business sections of the city, the site will place the new Phillips 66 headquarters near many of Houston’s top companies.

“We searched for several months for the right site to build a headquarters campus where our employees and future employees can come together to work, and develop their skills and talents,” said Greg Garland, chairman & CEO of Phillips 66. “This property is conveniently located in the Westchase District and a location that aligns with our commitment to making our company a great place to work.”

The company is currently working on a design for the headquarters and intends to begin construction when plans are finalized and permitting is in place. The campus will include office space, conference and training facilities, along with wellness and dining options. Once ground is broken at the new site, construction is expected to take between 24 and 36 months.

After emerging as an independent downstream company in May, Phillips 66 relocated its corporate offices from the ConocoPhillips campus in the Energy Corridor to temporary headquarters at the Pinnacle Westchase building. The company has approximately 14,000 employees worldwide.

Image courtesy of Phillips 66

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Mill Creek Residential Buys Two Top Apartment Communities

By Georgiana Mihaila, Associate Editor

In a move toward establishing its strategic presence in Houston, Mill Creek Residential Trust acquired two apartment communities in two distinct urban infill locations.

One of the two assets is La Tour Fontaine, a Class A community set in a core infill location in the Galleria submarket—one of the strongest rental markets in Houston. Consisting of 162 apartment homes, the community offers one- and two-bedroom apartments with an average size of 1,051 square feet and a multi-level parking garage.

The second property is The Place at Greenway community, located within walking distance of Greenway Plaza, one of Houston’s largest employment districts, with more than 4 million square feet of office space and a workforce of approximately 22,000. The community, composed of 219 apartment homes, offers one- and two-bedroom configurations and covered parking throughout.

The acquisitions reinforce Mill Creek’s “buy where we build” strategy to build critical mass in markets characterized by solid employment fundamentals, job growth and consumer demand and where the company has communities under construction or in planning. Mill Creek also acquired the 208-unit Woodmoor community in Austin.

Mill Creek’s dedicated acquisitions group comprises four professionals, who work closely with the company’s local partners to identify strategic investment opportunities. Wes Dickerson, managing director of East Region acquisitions, oversaw the Texas transactions. “A core element of Mill Creek’s acquisitions strategy is to provide multiple rental options to our customers,” he said. “Our ‘buy where we build’ approach allows us to offer both existing and brand-new communities within the same submarket, which extends our reach to a larger customer base and ultimately creates a distinct competitive advantage for the company.”

Image via http://www.theplaceatgreenway.com

Kinder Morgan Tower Hits the Market; HFF Hired to Market the 1 MSF Building

By Georgiana Mihaila, Associate Editor

Following Hines’ recent announcement that the company is looking for a buyer for its iconic Williams Tower, another high-profile Houston office tower has hit the market.

The 32-story Kinder Morgan Tower in downtown Houston is now also up for grabs, and owner Kinder Morgan Inc. has named Holliday Fenoglio Fowler L.L.P. to market the property. No details have been released concerning the asking price, but industry experts believe that the debt-free property could trade for as much as $400 million.

Kinder Morgan Tower is located at 1001 Louisiana in downtown Houston. The 1 million-square-foot building underwent a ground-up renovation, completed in 2012, meant to bring the property up to current Class A, LEED Gold standards.

The architecturally significant building had previously served as the headquarters of El Paso Corp., until El Paso was acquired by Houston-based Kinder Morgan in May 2012. The property is the new global headquarters for both the Kinder Morgan family of companies and the now-separate EP Energy, which also leases space in the tower. Following a future sale, Kinder Morgan will remain on site under a long-term lease.

Kinder Morgan Tower occupies two full city blocks and features a structured parking garage, state-of-the-art conference facilities, retail amenities and a health club.

The HFF investment sales team representing the seller is led by senior managing directors Jeff Hollinden, Robert Williamson and Grady Roberts. HFF is marketing the property in conjunction with Studley, Kinder Morgan’s leasing representative. The Studley team is led by corporate managing director Aaron Howes.

Kinder Morgan is the largest midstream and the third-largest energy company in North America, with a combined enterprise value of more than $100 billion. It owns an interest in or operates approximately 75,000 miles of pipelines and 180 terminals. Its pipelines transport natural gas, gasoline, crude oil, carbon dioxide and other products. Kinder Morgan Inc. (NYSE: KMI) owns the general partner interest of Kinder Morgan Energy Partners L.P. (NYSE: KMP) and El Paso Pipeline Partners L.P. (NYSE: EPB), along with limited partner interests in KMP, Kinder Morgan Management L.L.C. (NYSE: KMR) and EPB.

Image via Foursquare

GID Kick-Starts Regent Square Project with Luxury Apartment Tower

By Georgiana Mihaila, Associate Editor

GID Development Group’s 4.2 million-square-foot mixed-use Regent Square development now has a starting point, as the company has begun construction on The Sovereign high-rise apartment tower.

The 290-unit luxury tower is to be set in the very heart of the Inner Loop at 3233 W. Dallas; its 21 stories will offer panoramic views of the Downtown Houston skyline, Buffalo Bayou, Memorial Park, River Oaks and the Galleria. The building aims at becoming Houston’s most advanced high-rise residential product and is designed to achieve a LEED Silver rating.

Houston-based Zeigler Cooper Architects is behind the design of The Sovereign; the firm made an effort to for the building to blend into the surrounding neighborhood by using a mix of glass, brick and stone treatments, referencing both traditional and contemporary architectural elements. JE Dunn will serve as general contractor.

The 290 luxury units will feature 10-foot ceilings and contemporary kitchens with gas cooking, granite countertops and stainless steel appliances. Marble and tile bathrooms are to provide five-fixture layouts, with separate bathtub and shower areas, double vanities and low-flow toilets. Units will also feature expansive windows, generous balconies and modern conveniences such as under-counter wine/beverage refrigerators.

GID Development states that the project will feature the largest, most sophisticated set of amenities in the market, with more than 48,000 square feet of indoor and outdoor features creating a resort-like atmosphere oriented toward health, fitness, relaxation, socializing, entertainment, private functions and a variety of regularly programmed events.  Additionally, residents will have access to the Sovereign Club, which will span the entire eighth floor—42,000 square feet—and include both indoor and outdoor activity space, ranging from a yoga studio and cyber lounge to private cabanas, a Zen garden and a 75-foot resort-style pool lined with palm trees.

According to an official release, through a pioneering development agreement from the City and Tax Increment Zone 5, Regent Square and The Sovereign will be reimbursed for critical improvements to the public infrastructure in the area. These improvements will include burying overhead utilities, upgrading drainage in the area and creating wide, pedestrian-friendly sidewalks with mature street trees. Bank of America provided the construction financing.

The Sovereign—slated for completion in March 2014—is merely the first phase of the 24-acre Regent Square master plan, a 4.2 million-square-foot mixed-use project to be developed by GID Development Group. Regent Square has been designed as Houston’s most visionary and ambitious walkable mixed-use district, featuring residential apartments and condominiums, retail shops, restaurants, theaters and entertainment venues, office space, parks and courtyards, along with gracious tree-lined streets and sidewalks.

Hines Hires JLL to Market Iconic Williams Tower

By Georgiana Mihaila, Associate Editor

Hines has put its 64-story Williams Tower on the market, hiring Jones Lang LaSalle Inc.’s Houston office to find a buyer for the iconic tower.

The 1.4 million-square-foot tower was built by Hines in 1983 as the tallest skyscraper in the world outside of a CBD; in 2008, the building was purchased by Hines REIT. The 64-story tower is currently more than 95 percent leased, with a tenant roster that includes Williams, Hines, Rowan Cos., Quanta Services and Cadence Bancorp.

Designed by renowned architects Philip Johnson and John Burgee, the tower was created in the art deco style. Clad in silver gray reflective glass and anodized aluminum, the sleek tower is accented by columns of bay windows made of non-reflective glass and podium setbacks on two lower floors and four higher levels. A 7,000-watt, revolving beacon atop the building can be seen for miles around, creating a virtual urban lighthouse.

“Williams Tower is a special asset to Hines REIT and Hines,” said Charles Hazen, CEO of Hines REIT. “Not only is it one of the REIT’s most significant investments, it is also the global headquarters for Hines and we wanted to choose the right firm to help us market the asset. We believe that the time is right to sell this asset and generate returns for our investors, and we selected Jones Lang LaSalle because of its outstanding reputation and access to major investors around the world, who we believe will be attracted to this world-class property. JLL’s global capital markets team will include leaders from Houston, the U.S. and international markets.”

Hines REIT is a Houston-based public real estate investment trust sponsored by Hines. Hines REIT currently owns interests in 57 commercial properties, which contain 26.8 million square feet of leasable space.

For more on the sale, see “Houston’s Iconic Williams Tower Goes Up for Grabs” on www.cpexecutive.com.

Image Courtesy of Hines

CapLease Finances $40M Woodlands Acquisition

By Georgiana Mihaila, Associate Editor

CapLease Inc. announced it has closed long-term financing on The Reserve at Sierra Pines, the 175,000-square-foot Class A office building located in The Woodlands that it recently purchased for $40.5 million.

CapLease obtained a $22.4 million first mortgage loan, a non-recourse loan from a life insurance company that was priced at a coupon of 3.7 percent, with a 10-year term, a 30-year amortization schedule and the first four years interest only.

The Reserve at Sierra Pines is fully leased, with two single A-rated large corporate tenants occupying about 70 percent of the space. Approximately 61 percent of the square footage in the building is leased through May 2022 to Praxair Inc., an NYSE-listed company with a market capitalization of more than $30 billion and credit ratings of A/Aa2 from S&P/Moody’s.

An additional 8 percent of the space is leased through August 2017 to Dover Fluid Management Inc., a subsidiary of Dover Corp., another NYSE-listed company, with a market capitalization of about $10 billion and credit ratings of A/Aa2 from S&P/Moody’s. The remaining square footage is leased by three other creditworthy tenants.

Paul McDowell, chairman & CEO, stated, “This latest acquisition provides another example of the CapLease team’s ability to add high-quality assets in strong locations at better-than-average returns with significant upside potential. The Woodlands is Houston’s tightest submarket, with Class A vacancy rates historically in the mid single digits and currently at about 3 percent. With both the Praxair and Dover leases at below-market rents, this property provides us with the opportunity to meaningfully increase our yields when those leases roll.”

CapLease Inc. is a real estate investment trust that primarily owns and manages single-tenant commercial real estate properties subject to long-term leases to high credit quality tenants.

 Image courtesy of Loopnet

Fall Start Eyed for 66-Acre Project at Lake Woodlands

By Georgiana Mihaila, Associate Editor

The Woodlands Development Co. will soon begin construction on a 66-acre mixed-use development dubbed Hughes Landing at Lake Woodlands. Woodlands Development, an affiliate of the Howard Hughes Corp., envisions a dynamic destination that would include up to eight office buildings, a boutique hotel, high-end specialty retail, entertainment venues and multi-family housing.

 A fall construction start is scheduled for One Hughes Landing, the development’s first office building. Slated for completion in the fourth quarter of 2013, the eight-story, 195,227-square-foot Class A building is being designed by the Houston office of Gensler and will be a candidate for LEED Silver certification.

“Hughes Landing is well-situated at the upper east end of Lake Woodlands, just north of the well-established East Shore residential community,” said Paul Layne, executive vice president of master-planned communities for the Howard Hughes Corp. “Panoramic lake views and a planned boardwalk and pier will create a cosmopolitan, pedestrian-friendly setting where people will enjoy the opportunity to live, work, shop, dine and be entertained.”

 Howard Hughes Corp. is counting on the strong local office market to create demand for space at The Woodlands. The company’s latest office project at the Woodlands, 3 Waterway Square, will not open until June 2013, but it is already 90 percent leased to such tenants as Nexeo Solutions, Waste Connections and Energy Alloys.

The Woodlands, the 28,000-acre master-planned community 27 miles north of Downtown Houston, is home to more than 102,000 people and the workplace of nearly 50,000 people.

Image Courtesy of The Howard Hughes Corporation

Holliday Fenoglio Closes Industrial, Office Sales

By Georgiana Mihaila, Associate Editor

Holliday Fenoglio Fowler’s Houston branch announced closing the sales of both a four-building, Class A industrial portfolio and a 95,166-square-foot office property last week.

The four-building industrial portfolio was purchased by Industrial Income Trust for an undisclosed amount, debt free. Two of the four buildings are located within the Northwest 8 Business Park, which is situated along Beltway 8 less than two miles south of Highway 290. The other two buildings are located within Windfern Distribution Center near the intersection of Highway 290 and Gessner Drive.

Completed in 1999 and 2001, the distribution buildings are 93.3 percent leased and include a mixture of rear load, front load and cross dock buildings. The properties are leased to tenants such as Schlumberger Technology, Bayou Packaging, Core Laboratories L.P. and Specialty Rolled Metals.

The seller, a separate account client advised by Clarion Partners, was represented by HFF’s senior managing director Rusty Tamlin and associate director Trent Agnew.

HFF also mediated the sale of 1900 Yorktown, a 94,166-square-foot office property located just south of the intersection of Yorktown and San Felipe; the six-story building, which most recently served as home to the Art Institute of Houston, includes a nine-story parking garage with a total of 486 spaces. Buyer The Finger Cos. plans to demolish the building and develop a mid-rise, Class A multi-housing apartment community on the site. The Finger Cos. specializes in real estate development, with a focus on multi-housing properties. To date, it has completed more than 75 apartment communities in 13 cities, representing more than 25,000 units with a consistently strong return on investment.

HFF marketed the property exclusively on behalf of a national specialty finance company, with senior managing director H. Dan Miller, managing director Davis Adams and director Marty Hogan leading the investment sales team.