You might be thinking, “How can I buy me some prime Greenway Plaza real estate from the city for, say $12.50 a square foot?” If, as expected, city council approves the sale in tomorrow’s meeting, that’s the amount Lakewood Church will pay for the Southwest Freeway building it’s currently leasing.
Lakewood took out a 30-year lease on the property — which formerly served as home court for the Houston Rockets, first as the Houston Summit, and later as the Compaq Center — in 2001. Lakewood prepaid the entire $11.8 million lease amount, then spent more than $80 million to turn the former basketball arena into a proper TV-worthy megachurch. But the key to Lakewood’s current real estate good fortune is the lease extension it negotiated: an option to extend the lease for an additional 30 years for $22.6 million.
Since the city likely won’t receive any income (or tax revenue) from the property until the year 2061, city real estate managers think selling the 606,000-sq.-ft. property on more than 7 acres at 3700 Southwest Fwy. to the church is a good idea. The price? A value only net-present-value adherents, real-estate appraisers, and the Lakewood faithful could love: $7.5 million.
Feeling a little inspired by the church’s ability to swing such a deal? It is yet another testament to the remarkable real-estate skills of Houston’s leading property-investment guru, Lakewood Church pastor Joel Osteen. In this passage from his latest book, It’s Your Time, Osteen virtually screams, “GET IN FIRST, BUY LATER”: