Tag: Commercial Real Estate

10/02/07 10:30am

Ghost of Ghost of Katrina Haunts Apartments

Buying and Selling, Commercial Real Estate, Crime, Cypress Station

The Retreat at Cypress Station

When it was shopped around to investors last year, there weren’t too many offers for the Retreat at Cypress Station, a 296-unit apartment complex on an 18-acre site north of FM1960 near I-45. How come?

Hendricks & Partners’ principal Jim A. Hearn says the two-year-old asset at 18200 Westfield Place Dr., assessed at $22.7 million by Harris County, was on the market with another brokerage firm about one year ago, but was pulled due to lack of buyer interest. “By luck, this property was in lease-up during Hurricanes Rita and Katrina and the owners took on a significant number of corporate leases,” Hearn explains. As the corporate leases ran out, he says vacancies went up. “Some of the buyers were spooked,” he says.

What would happen when all those Katrina-era leases expired? Boo!

Apparently, some residents were spooked as well—by local crime. Back in January, an anonymous resident posted this gem about the complex to the Apartment Ratings website:

The shooting that occured on Wednesday was due to a damn drug deal.. If I understand correctly, the resident will NO longer be living here… BE SMART, take your damn valuables out of your vehicle and keep an eye out for your neighbors… This is a very good property for the area, yes you pay for it… It is worth it…

Well, now only 20 percent of the apartments are vacant. And the complex has just been bought by a fund managed by Boston’s TA Realty Advisors—even before Allied Realty Services, the company that built it, was able to put it back on the market.

TA Fund Wins 296 Units With Pre-Emptive Move [Globe St.]
The Retreat at Cypress Station: Shooting and Car Break Ins [Apartment Ratings]

77090, Apartments, Buying and Selling, Commercial Real Estate, Crime, Cypress Station

Buying and Selling

09/28/07 8:41am

The 1031 Exchange Buyer Advantage

Commercial Real Estate, Financing, Office Buildings, Real Estate Investing

Parkview II, 333 Cypress Run, Houston

Everyone knows having money gives you a big advantage when you try to make money. But think about the advantage already owning real estate gives you when you’re trying to buy real estate.

Imagine a buyer bidding against a crowd of competitors on a pair of fully-leased West Houston office buildings—say, Parkview I and II:

“They’re not active buyers and they had a specific need with 1031 exchange money,” says Marty Hogan, associate director in Houston for Holliday Fenoglio Fowler LP. Texas is a non-disclosure state so he won’t discuss the sale price of the 333 Cypress Run properties, but local experts confirm that similar class B buildings are trading for $110 per sf to $120 per sf.

Hogan says the assets attracted 10 offers, with a partnership from Greenwich, CT ending up with the deal because it offered a short due diligence and certainty of close. “The buyers also had a large amount of equity and the purchase wasn’t contingent on financing.” Hogan tells GlobeSt.com. “Given the market at this time, they weren’t high-leveraged buyers looking to get 80% to 90% of the purchase price financed so that was appealing.”

Sure, a lot of cash in the transaction is going to be pretty attractive to a seller. But other aspects of 1031 exchange requirements—if the buyer knows that’s what you’re doing—give like-kind-exchange buyers a decided advantage in any market: The seller knows you’ve got time constraints to complete the deal. And that you’ll likely have to pay a lot of taxes if you can’t pull it off. You look like a sure thing.

Of course, if the seller knows that you have no other 1031-exchange options available and the terms of your deal aren’t fully worked out yet, that’s another story.

KBS Sells 176,471-SF Duo to 1031 Exchange Buyer [Globe St.]

Photo: Parkview II

1031 Exchanges, 77094, Buying and Selling, Commercial Real Estate, Financing, Office Buildings, Real Estate Investing

09/21/07 10:23am

Supermod Boulevard Place: Replacements First

Commercial Real Estate, Condos, Demolitions, Development Strategy, Galleria, Highrises, Hotels, Leasing, Mixed Use, New Construction, New Construction: Residential, Office Buildings, Proposed Developments, Retail, Shopping Centers

Aerial View of Blvd Place

Having trouble leasing upscale retail space in your giant mixed-use redevelopment project? No prob. Just build sleek new quarters for your existing tenants first. When they move, demolish their old building and build your new project in its place. Somebody else has gotta sign up by then, right?

The Houston Business Journal gives some details of Wulfe & Co.’s plans at the Galleria-area Boulevard Place:

The first building will rise at the project’s southern boundary, at the northwest corner of Post Oak Boulevard and Ambassador Way. The 70,000-square-foot building will house seven tenants currently in the Pavilion on Post Oak and Fashion Place retail centers that are relocating to Blvd Place — including Cafe Annie, Americas and Hermes. Once the tenants move, the older retail centers will be demolished and the remainder of Blvd Place will go under construction.

Retail, of course, is just part of the picture. There’s a hotel, condos, and an apartment building in the project . . .

Wulfe would not disclose the hotel name because the hospitality company wants to make the announcement, probably in about a month. However, he did reveal that the 225-room luxury hotel will include 175 to 200 high-end condominiums on the upper floors.

Wulfe also said it is “pretty definite” that the apartment building will be developed by Houston-based Hanover Co. An industry source says Hanover plans to buy Wulfe’s land for a 55-story apartment tower, making it the second-tallest building in the Galleria area behind the Williams Tower.

But what about the rest of that retail?

Whole Foods Market Inc. announced last year that it will build a 78,000-square-foot flagship store at the southwest corner of Post Oak and San Felipe. There are currently no other new tenants signed.

No other new tenants signed? That leaves just over 350,000 square feet of planned retail space in the development still available. No word in the article either about the 120,000 square feet of boutique office space, mostly on two stories above the retail. And construction is scheduled to start next month.

Wulfe joked at last week’s Commercial Real Estate Women luncheon that come Oct. 1, “somebody’s going to be shoveling something” at the site . . .

After the jump: renderings of that superbig, supermod Whole Foods that ate Eatzi’s, plus more Boulevard Place images.

77056, Apartments, BLVD Place, Commercial Real Estate, Condos, Demolitions, Development Strategy, Galleria, Highrises, Hotels, Leasing, Mixed Use, New Construction, New Construction: Residential, Office Space, Proposed Developments, Retail, Shopping Centers, Whole Foods

Commercial Real Estate

08/27/07 8:34am

Houston Pavilions: Woulda Coulda Shoulda

Condos, Development Strategy, Downtown, Mixed Use, New Construction, Nightlife, Office Buildings, Parking, Proposed Developments, Retail, Shopping Centers

Houston Pavilions Aerial View, Downtown Houston

If you’re curious why the developers of Houston Pavilions, the $70 million mixed-use development under construction downtown, decided not to mix anything other than office space with their 360,000 square feet of retail and “entertainment” space, you’ll be interested to read the comments L.A. developer Bill Denton made to the CoStar Group:

[Entertainment Development Group] put the site under contract in January 2004, then three surface parking lots and a multi-level parking garage sitting on just over 4 acres, and the project has evolved ever since. “We originally planned for a hotel/condo component, but at the time, the city was just finishing off convention center hotels and hotel occupancy was only 52%; now its difficult to find a hotel room in Downtown Houston. So, we changed the plan into two residential towers, which stuck until 12 months ago. Demand on the residential was tremendous, but because of the mixed-use and density, we would have had to do subterranean parking, which blew the economics of the residences out of the water. So now its 200,000 square feet of office space, and based on demand for that so far, I wish we could do 400,000 square feet.”

77002, Commercial Real Estate, Condos, Development Strategy, Downtown, Houston Pavilions, Mixed Use, New Construction, Nightlife, Office Space, Parking, Proposed Developments, Retail

Demolitions

08/24/07 7:43pm

MainPlace: Hines’s 46-Story Green Pipe-Wrench Dream

Downtown, Green Design and Development, Highrises, Office Buildings, Proposed Developments

View of MainPlace, Hinesâ€™s Proposed 46-Story LEED Silver Office Building on Main Street in Downtown Houston It rises dramatically from the center of Downtown to face the morning sun. And the renderings sure make it look like a sleek, giant pipe wrench, the business end looking out over Houston’s industrial east side. Yep, there’s nothing the head office won’t be able to fix!

It’s MainPlace, a 46-story, one-million-square-foot green spec office tower, planned for most of the block surrounded by Fannin, Rusk, and Walker, at 811 Main.

The developer is the Hines CalPERS Green Fund, established by Hines and the California retirement fund to develop “sustainable” office buildings around the country. The core and shell, they promise, will be given a LEED-Silver rating by the USGBC. Don’t worry too much about all that, though: tenants will presumably be free to decorate their interiors with the usual endangered rainforest hardwoods and petroleum-based finishes.

That’s a five-story atrium up there on the 39th floor, facing a “sky garden.” Enjoy those trees in the rendering while you can; eventually, the engineers will start to think long and hard about hurricanes. More details and lots more zoomy pics, including closeups of that ~~pipe-wrench jaw~~ sky garden, after the jump.

77002, Commercial Real Estate, Demolitions, Green Design, Green Development, Highrises, Historic Preservation, MainPlace, Office Buildings, Proposed Developments

Commercial Real Estate

08/16/07 10:43pm

Council Bowls Over, So No More Street

Condos, Leasing, Lofts, Mixed Use, New Construction, New Construction: Residential, Proposed Developments, Rice Village

Rendering of Sonoma in the Rice Village, Showing Bolsover Street

Ignoring the objections of snooty inner-loopers who think they’re somehow entitled to a continuous grid of streets, City Council voted yesterday to let a block of Bolsover in the Rice Village become two private circular driveways and a restaurant patio. The deal nets the city a whopping $1.5 million—the price of a couple of small luxury condos, maybe.

That’s the last hurdle for Sonoma, which appears to have gained two stories since its last appearance here. Developer Randall Davis claims buyers have “reserved” all but four of the 225 condos. There’s also 125,000 sq. ft. of retail and office space in the complex.

After the jump, a revised aerial view of the new Bolsover dropoff.

77005, Commercial Real Estate, Condos, Leasing, Mixed Use, New Construction, Randall Davis, Retail, Rice-Village, Sonoma, Streets

08/10/07 7:29pm

River Oaks To Move West, Add Hotels, Apartments, Offices, and Shopping

Commercial Real Estate, Condos, Highland Village, Highrises, Malls, Mixed Use, New Construction, New Construction: Residential, Office Buildings, Proposed Developments, Retail, River Oaks, Shopping Centers

Street Perspective of Proposed River Oaks District Development by Oliver McMillan

Aerial View of Proposed River Oaks District Mixed Use Development The Houston Business Journal gives more details on the River Oaks District, a 15-acre, $600 million mixed-use development proposed for Westheimer just inside the loop, on the site of the Westcreek Apartments, between Highland Village and the Galleria. It’s hard to imagine River Oaks moving further west than that. Once you get to the other side of the loop of course, you might as well call yourself Tanglewood.

Two luxury hotels are on tap. The five-star properties will have a total of 500 guest rooms, and 150 condominiums for sale at the top of one tower.

Another building will hold 300 upscale apartment units. A 10-story office building with 250,000 square feet of space also is part of the mix. And since the Galleria is synonymous with shopping, the developer plans 350,000 square feet of mostly ground-level retail space.

San Diego developer OliverMcMillan says groundbreaking is scheduled for a good year-and-a-half from now. So there’s plenty of time for this project to morph into a more typical Houston-style mixed-use project: maybe a stylish Sam’s Club next to some shiny new apartments?

After the jump, plans and more flashy drawings!

77027, Apartments, Commercial Real Estate, Condos, Galleria, Highland Village, Highrises, Hotels, Mixed Use, New Construction, New Construction: Residential, Office Buildings, Proposed Developments, Retail, River Oaks, River Oaks District, Shopping Centers, Westheimer

08/07/07 11:05pm

Big, Expensive HISD Box To Be Replaced by Big, Cheap Costco Box

Commercial Real Estate, Demolitions, Development Strategy, Greenway Plaza, Mixed Use, New Construction, Proposed Developments, Retail, Shopping Centers, Sprawl

Former HISD Central Administration Building on Richmond

Proposed Costco on Richmond

The building was simply too big, too lavish, too expensive, too outmoded, and too hot a property for a school district to keep. The site was prime real estate, near the projected path of a new rail line, and perfect—said the buyers—for a dense “New Urbanist-style” mixed-use center. The big concrete box surrounded by parking just didn’t seem to make sense. So after HISD sold its Central Administration building on Richmond at Weslayan, Trammell Crow Co. had it razed last year to make the site ready for new, fresher, denser development.

And the new development is . . . a Costco! With an LA Fitness above it! Plus some outside-the-mall-style pad sites in a big surface parking lot facing Richmond! A small parking garage too. Oh, and an apartment complex tucked in back.

What happened?

[Trammell Crow project manager Craig] Cheney said the project had quietly shifted direction some time ago.

â€œWe looked around, and we had all these competing projects with integrated residential, office and retail, all competing for the same few retailers,â€ he said. â€œLife is too short to get into that kind of situation.â€

So the project â€” which had an initial design including a hotel, high-rise and garden homes, a bookstore, grocery store and other features integrated into one â€œvillageâ€ â€” took on a different form.

Shorter version: Costco wanted the site, so the developers jumped at the chance for some of that inside-the-loop big-box excitement.

After our jump, dreamy architect sketches of Paseo, the mixed-use European-style “lifestyle center” Trammell Crow and the Morgan Group waved in front of us for a brief, shining moment in our—yes, too-short lives.

77027, Apartments, Big Box Stores, Commercial Real Estate, Demolitions, Development Strategy, Greenway Commons, Greenway Plaza, Mixed Use, New Construction, Proposed Developments, Rail, Retail, Richmond-Avenue, Shopping Centers, Sprawl

Commercial Real Estate

07/26/07 8:05pm

The Beatles Slept Here

Downtown, Hotels, Proposed Developments, Renovations

Sheraton-Lincoln Hotel

And so, apparently, did Jack Ruby. The 28-story former Sheraton-Lincoln Hotel at 711 Polk downtown, vacant for more than 20 years and asbestos-free for almost nine, has a new suitor, reports the Houston Business Journal:

Omni [Hotels Corp.] said it and Atlanta-based Songy will transform the Houston hotel, near the George R. Brown Convention Center and what will be the new Houston Pavilions project, into an all-suites hotel featuring more than 400 suites, 30,000 square feet of meeting space and multiple culinary venues.

Other amenities will include a 13,000-square-foot wellness center with outside accessibility for nearby office workers, a fitness area with a Mokara Salon & Spa and personal trainers and nutritionists on staff to assist with creating customized wellness and fitness regimens.

After the jump, swank pix from the Sheraton-Lincoln’s sixties heyday.