Investor buys Galleria mixed-use complex in a bet on Houston's office recovery
A Houston company has picked up its first urban trophy office/retail asset in the Galleria area as some real estate investors are still taking a bet on Houston's office market.At first blush, an office property less than 30 percent occupied in a city struggling to fill an expanding pandemic-era pool of excess office may not seem like an obvious choice for investment. But Dhanani Private Equity Group sees it as an opportunity.
“Given the uncertainty over the near-term leasing environment, investors in Houston are favoring deals with minimal leasing risk and stable cash flows and continue to pay above market pricing for certain newer assets leased to credit tenants,” said Itziar Aguirre, director of market analytics at CoStar. “I expect this trend will continue into next year.”
“Galleria Park is the first significant office transaction to close [in Houston] since interest rates began to significantly rise in April/May and shows investor commitment to efficient, well-located office buildings despite the new hybrid work environment,” Marty Hogan of JLL, who marketed the property for sale along with JLL's Rick Goings, Ryan Olive, Bailey Black and Susan Hill, said in an email.
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