BH Properties, a Los Angeles-based commercial real estate investment firm, bought a 127,955-square-foot office building in Katy, west of Houston, that has stood vacant since 2015.
The firm purchased the building known as Mason Creek Office Center II at 21700 Merchants Way from Dallas-based Myers Crow & Savier last month for an undisclosed amount, according to the Houston Business Journal. The seller was represented by Jeff Hollinden of JLL Capital Markets, who also handled the $175 million sale of Marathon Oil Tower in 2018.
The three-story building was intended as the second phase of a two-building office project following the development of Mason Creek Office Center I. The 136,000-square-foot building at 21420 Merchants Way was leased entirely to Geico in December 2013 and serves as their Houston Claims Center.
The Myers Crow & Savier built the second, Mason Creek Office Center II, in 2015 exclusively for a single tenant like its predecessor but one was never found.
Houston and other Texas metro areas have weathered COVID-era real estate slumps better than most cities, but the market for single-tenant office space remains scarce.
“I think they held out for a single tenant probably a little too long,” Scott Henry, managing director of acquisitions at BH Properties’ Dallas office. “And what we’ve understood from the brokers handling the property (is that) there have been tenants interested in portions of the building, but not a full 130,000-square-foot tenant.”
Henry said he’s hopeful that the building will be able to attract a diverse pool of potential tenants, thanks to the location off the Katy Freeway and near the Grand Parkway. Katy, once dubbed the “city of churches” is one of many fast-growing south Texas suburbs and is renowned for its high school football team.
“As Katy continues to grow (with) more rooftops, commercial will continue to follow,” he said.
BH Properties focuses on investing in commercial properties that have high or full vacancy. In total, the firm owns more than 5 million square feet of office, industrial and retail space in Texas as well as commercial properties across the United States. Its portfolio includes four other commercial properties in Greater Houston. The Reserve at Park 10 in the Energy Corridor, which it acquired in 2019 and has since increased occupancy from 12 percent to 30 percent, Henry said.
[Houston Business Journal] – Maddy Sperling