Howard Hughes Corp. Acquires Two Office Buildings In The Woodlands
The Dallas-based company acquired two vacant Class-A office buildings adjacent to its Hughes Landing development. The portfolio included four- and six-story buildings totaling 257K SF with views of Lake Woodlands, and excess land that provides space for the development of an additional office asset, for $53M.
"We currently have very little office space available to lease in our existing portfolio at Hughes Landing," Howard Hughes Corp. President Grant Herlitz said in a release. "This acquisition is an excellent example of The Howard Hughes Corp.'s unique ability to respond to market demand and create value for our shareholders."
The company announced plans to pursue new tenants for the buildings immediately and begin construction on its next office building. The assets, which were delivered in 2002 and 2012, were owned and occupied by the seller and were subject to deed restrictions that Howard Hughes Corp. (the master developer of The Woodlands) holds the unilateral rights to modify.
Demand for office space in The Woodlands is picking up. The vacancy rate dropped to 8% in Q2 from 10.2% the previous year, according to Avison Young data.
"The ability to purchase these buildings below replacement cost provides us with instant Class-A inventory at a lower cost, at a time when we are seeing significant demand for space," Herlitz said.
"This acquisition adds to our already dominant market position in the region and strengthens our control over the supply of office space in The Woodlands," Howard Hughes Corp. President of the Central Region Paul Layne said.