Hurricane Harvey-Damaged Office Complex Sells For $78.4M
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Eldridge Place has a new owner.
Granite Properties acquired the three-building, 825K SF portfolio from TIER REIT Inc. for $78.4M, the companies announced. The complex is in the Energy Corridor. It suffered damage from Hurricane Harvey in 2017, but has been fully repaired, Granite said.
Plano-based Granite Properties is spending $20.6M to renovate the buildings' lobbies and make mechanical updates, which include raising the electric source to protect the properties from future weather events, according to the company's release.
The firm is also adding several on-site amenities such as a conference center, a fitness center and a café. Renovations will be made throughout this year.
The Eldridge Place portfolio includes:
- One Eldridge Place, at 777 North Eldridge Parkway, is a 12-story, 239K SF building, which is 62.1% leased.
- Two Eldridge Place, at 757 North Eldridge Parkway, is a 14-story, 279K SF building, which is 77.9% leased.
- Three Eldridge Place, at 737 North Eldridge Parkway, is a 13-story, 306K SF building, which is 71.1% leased. The tower will be available for a full-building user in 2020. It features a commercial kitchen, a cafeteria, a large lunchroom, a conference and training center and a customer lounge.
“With the continued recovery of the Houston economy and Houston’s solid job growth, we’re working to expand our Houston portfolio with high-quality assets in great locations, like Eldridge Place,” Granite Executive Managing Director Scott Martin said. “As real estate owners, we look forward to providing a customer-centric work environment that enhances productivity and fosters community."
The Energy Corridor acquisition brings Granite's footprint to 2.3M SF of Class-A office product in Houston. The company also owns and operates 3355 West Alabama, 2925 Briarpark, Weslayan Tower, 24 Greenway Plaza, Granite Tower 290 and Briarpark Green in Houston.
In addition to the sale price, Dallas-based TIER REIT will receive additional insurance proceeds related to the Harvey destruction, including a claim for the loss in value attributable to the storm. The ultimate timing and amount to be collected for the remaining claims are currently undetermined, according to a release.
“The disposition of Eldridge Place enables us to move forward by significantly reducing our Houston presence and reallocating the capital in more accretive ways, including our build-to-core development program at The Domain in Austin, Texas,” TIER REIT CEO Scott Fordham said in the release.
The Energy Corridor’s overall office vacancy stands at 28% for the fourth quarter, according to JLL's quarterly office market research. The submarket absorbed 311K SF in Q4. Houston’s total office vacancy was 23.4% at the time.
HFF's Jeff Hollinden and Martin Hogan represented the seller. Scott Martin and Paul Bennett represented the buyer in-house. Steve West will lead leasing efforts for Eldridge Place.
UPDATE, FEB. 1, 5:18 P.M. CT: The story has been updated to clarify that all hurricane damage to Eldridge Place has been repaired.