Thursday , 29 September 2016
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Houston West Loop Building Sold to New Yorkers on Quest for National Expansion

1443 West Loop South building in Houston.

1443 West Loop South building in Houston.

New York A portfolio of buildings in Houston, Washington DC,  San Diego, and Sacramento have been purchased by a joint venture led by Princeton Holdings and the Bluestone Group, two commercial real estate investment firms based in Manhattan.

The four-property, 850,000-square-foot portfolio of office buildings are primarily leased to the federal General Services Administration (GSA).

The Houston property in this portfolio is the 1433 West Loop South, a 138,000 square foot office building near Houston’s Galleria. The Houston office of the U.S. Drug Enforcement Administration (DEA) is located in the building and a significant amount of high-rise construction is nearby, including the Amegy Bank building.

The Washington, DC property — 999 E Street NW — consists of 175,000 square feet of commercial space located within the sought-after East End submarket near Capitol Hill and the Verizon Center sports and entertainment complex. And the portfolio includes 8808-8810 Rio San Diego Drive, a two-building office complex in San Diego and the 358,407-square-foot office building at 1325 J Street in downtown Sacramento.

Princeton and Bluestone acquired the four assets from an Urban American partnership that elected to liquidate its remaining assets.  These four properties were part of a complex, larger multi-property financing.

“This transaction truly embodies what Princeton does best: rationalizing complex transactions to produce value for our partners and investors,” said Joseph Tabak, Chairman of Princeton Holdings, which is currently developing a four and a half block site in Brooklyn. With this latest deal, Princeton is now fully in the “early stages of a major national growth phase,” the company said.

“These locations are also very attractive to non-government tenants and that provides additional upside for us and our partners since private sector tenants will likely pay higher rents when these government leases expire,” said Eli Tabak, the co-founder of the Bluestone Group.

Another strength is the portfolio’s cash flow profile. While three of the properties – Houston, Sacramento and San Diego – are leased on a long term basis, the Washington, DC asset is a prime candidate for redevelopment.  Its development appeal also is enhanced by its location at the intersection of 10th and E Streets, directly across E Street from the existing FBI headquarters which will become one of the largest and most significant redevelopment sites in the District of Columbia.

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