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This Week's Houston Deal Sheet

Houston fell out of the top markets for foreign investment this year, after a few years in the spotlight.

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Houston ranked third in 2014 and fifth last year for foreign investment in real estate, according to AFIRE (Association of Foreign Investors in Real Estate). This year, we dropped to 11th in the US and from sixth to 27th place globally. AFIRE CEO Jim Fetgatter (pictured) says foreign investment into the US should pick up, especially thanks to recent legislation providing relief from certain FIRPTA taxes. 60% of respondents say the US has the most stable and secure real estate investments, and 46% say we have the best opportunity for capital appreciation. (The second-closest is Brazil, with 17% of the vote.) The top US cities for foreign investment this year are New York, Los Angeles, San Francisco, Washington, DC, Seattle and Boston.

SALES

Superior Granite & Marble by Vivaldi purchased a 30k SF facility at 19720 Aldine Westfield Rd. Lee & Associates’ Stephen Kuper repped seller DFJ Aldine Westfield.

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Extra Space Storage purchased A-Alamo Storage, a 77k SF, 919-unit self-storage facility at 3535 Katy Fwy. Marcus & Millichap’s Dave Knobler and Chico LeClaire listed the asset. The duo received over 100 inquiries, including all of the self-storage REITs and some non-self-storage institutional groups. Dave says the activity is emblematic of demand for well-positioned, high-quality self-storage assets today. Tim Speck is the firm’s broker of record in Texas.

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Mexssubs International purchased a 15k SF facility at 21245 FM 529 in Cypress. Lee & Associates’ Jon Sellers and Mike Spears repped the buyer, and Colliers’ Bill Byrd repped seller West 529 Industrial Park.

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An undisclosed out-of-state buyer purchased Devon Office Park in a 1031 exchange. The 27k SF building is at 17300 El Camino Real. Marcus & Millichap’s Derek Hargrove and Justin Miller repped the seller; its Juan Cuevas repped the buyer.

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An Austin investor purchased 8301 Braniff, a 45k SF, three-building industrial warehouse next to Hobby International Airport. A partnership with RE/MAX’s Sky Pulford and his son, Sterling Construction CEO Chad Pulford, purchased the properties and 2.75 acres for $12/SF in late 2013, spent the same in renovation, leased at $0.55 to 100% occupancy, and sold for $48/SF. Sterling Construction handled the rehab, and Sky handled leasing/selling. They retained one acre for future industrial construction; Sky leased 1,600 SF of it to Verizon for a cell tower on a 25-year lease with options.

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RMM Properties purchased a 46k SF office/warehouse at 8300 Tilgham St from seller MWF Investment Properties. Southwest Realty Advisors’ Steven O’Connor, Marc Drumwright and Justin McGee repped both parties.

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An undisclosed private investment group acquired the former Dailey Oil Tools 60k SF office building in Conroe Waterfront Center. Colliers’ Tom Condon Jr. and Jason Tangen repped the seller, CCAC Conroe Holdings. Colliers’ Michelle Soderberg and Todd Edmonds repped the buyer, and Texas State Title’s Cody Sobieski coordinated closing.

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Core Fitness purchased a 10k SF office/warehouse building in Spring Cypress Business Park. Betz Commercial Brokerage’s Gloria Parrino repped the seller, Arnold and Norma Rodriguez Family LP.

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Strategic Storage Growth Trust (sponsored by SmartStop Asset Management) purchased three self-storage facilities totaling 196k SF and 1,400 units for $27M. The properties are in Kingwood, San Antonio and Colorado. The local property is at 1671 North Park Dr; it includes 470 units and 60k SF.

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St. Bernard, a Dallas-based retailer specializing in ski gear, is expanding to Houston. A 12k SF store will open in River Oaks District in early spring. CBRE UCR’s Dean Vandergriff reps St. Bernard; his colleague Sasha Levine helped secure the Houston site.

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Eureka Brewery leased 22k SF at 914 W 18th in the Heights. RE/MAX’s Sky Pulford repped the landlord, and Centric Commercial’s Simon Ha repped the tenant. Sky says the area is rapidly going from industrial to high-end townhome residential. Brewery operations will start in mid-2016, and a tap room will open in 2017.

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Colliers’s Barkley Peschel repped the landlord in four leases at the Rotunda Building (5819 Highway 6) in Missouri City.

Texas Children’s Hospital inked 4,857 SF. Baker Katz’s Traci Holman and Jason Baker repped the tenant.
The Speech and Learning Center renewed and expanded to 1,972 SF.
Transact NAP renewed and expanded to 3,796 SF.
Trivest leased 2,600 SF on the first floor.

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MORGAN opened Pearl Woodlake, a 376-unit luxury multifamily community in Westchase. Construction started in early 2014. Units range from 607 to 1,551 SF, and rents range from $1,250 to $2,600.

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Two new hotels opened in Westchase at the end of December, Country Inn & Suites and SpringHill Suites by Marriott. The first (at 2451 Hayes Rd at Westheimer) is a 71-room upper mid-scale hotel, and the second (at 5851 Rogerdale Rd at Harwin) is a 112-room property. Both are designed to appeal to young professionals, who are poised to take the lead in business travel by 2020.

FINANCING

BMC Capital’s Jada Jordan arranged a $2.2M non-recourse acquisition loan for a Fresenius medical care property in Pasadena. It featured a 10-year fixed term with 4.28% interest rate.

THIS AND THAT

Allied Orion was selected to manage The Block at Montrose, five apartment buildings totaling 62 units at 1504-1528 California St. Keener Investments owns the property.

Related Topics: Deal Sheet