CenterSquare Investment Management Fund acquired properties at the beginning of this cycle to capitalize big on Texas’ boom. Now it’s riding the economic wave by selling its local assets—the last two were 1301 Fannin and the Villas at Hermann Park—and preparing to start the process fresh, says CenterSquare managing director David Rabin. In ’06, the firm (an affiliate of BNY Mellon) started heavily weighting its $463M Urdang Value-Added Fund II on Texas to capitalize on our pro-growth business. It’s purchased five properties since. (It sold a Houston retail center in late 2012, an Austin apartment last year, and is targeting an Austin office sale for later this year.)
David says the Texas focus has contributed to the fund’s positive performance. It purchased 1301 Fannin, a 784k SF Class-A office, in ’07 in JV with Griffin Partners. During the eight years it owned the asset, it raised NOI 72%. The Villas at Hermann Park (pictured) are 320 Class-A units, and CenterSquare bought it in ’11 in JV with Falcon Southwest Cos. It’s since increased NOI by 21%. The firm is still bullish on Texas — it just bought a property in the Dallas suburbs, and David says it’s monitoring Houston for new value-add buys. (He thinks lower oil prices will converge with the robust development pipeline to create opportunities.)
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