Novel Office nabs asset near Greenway Plaza
Office vacancy hovering around 25% in Houston; upgrades planned to 14-story building
A beleaguered office sector didn’t stop Novel Office from acquiring a Class A property near Greenway Plaza in Houston.
The Dallas-based firm, led by CEO Mali Subbiah, paid an undisclosed amount for the 14-story, 225,000-square-foot building at 3555 Timmons Lane, roughly six miles southwest of downtown, Bisnow reported. The seller was Unilev, which bought the property in 2012.
Novel Office plans to make several upgrades to the building, including lobby renovations, turnkey build outs and spec suites.
The property, valued at nearly $32 million by the Harris County Appraisal District last year, was about 70 percent leased at the time of the sale, according to Transwestern. The average office occupancy rate in the downtown area is 75 percent.
While many investors are steering clear of office assets in Houston amid rising vacancies, plummeting leasing activity and distress, Novel is bullish on the Greenway Plaza area, “where there is a high demand for office spaces,” said Novel senior vice president Abhishek Kumar.
“With detailed renovation plans, an excellent leasing team, and a strong leasing strategy, we are confident in our ability to meet tenants’ needs and position this property as a highly sought-after option in the market,” Kumar told the outlet.
It’s possible that Unilev’s decision to sell stemmed from its financial troubles with another Houston office building. The firm’s $80 million loan on One Riverway was moved to special servicing in June, and the building’s largest tenant announced plans to vacate the building around the same time.
At 3555 Timmons, Novel hopes the move-in ready offices will help overcome remote-work trends and lure employees back to the office. The building’s amenities include a conference center, tenant lounge, training room and food service, the outlet said.
Few office properties have changed hands in Houston since last year, but Harris County recently paid $26 million for the downtown building at 1010 Lamar Street, with plans to consolidate various county offices.