Friday , 30 September 2016
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Metzler to Pay $435 Million for 1000 Main Building

The 1000 Main building

The 1000 Main building

HOUSTON – Metzler Real Estate has agreed to pay $435 million, or $520 per square foot, for the 36-story 1000 Main Tower in downtown Houston, after the first buyer withdrew from the deal late last year in the wake of falling oil prices, according to Real Estate Alert.

Seattle-based Metzler is working with a German investor, Union Investment Real Estate GmbH of Hamburg on the deal. Metzler Real Estate was founded by the Bankhaus Metzler organization which traces its root in German banking back to 1674.

Bernard Branca, senior vice president in CBRE’s Houston office, is marketing the 837,000-square-foot building, which was formerly known as Reliant Energy Plaza. The tower, which is 99 percent leased, was developed by Richard Everett of Century Development and it is now owned by Invesco.

Last December, LaSalle Investment agreed to pay $450 million ($537 per SF) for the 1000 Main building in downtown Houston – a price which would have been the highest ever paid in Houston on a per square foot basis.

But the rapidly falling price of oil spooked LaSalle and it withdrew from the deal at the 11th hour. LaSalle was not alone, as worry spread through the market.

West Texas Intermediate, which was trading at $108 per barrel in June is now trading at $50 a barrel. A number of energy firms have announced layoffs and sliced spending budgets for 2015 drilling, which is negative news in Houston, the Energy Capital of the World.

Metzler’s deal is significant, but it leaves intake the all-time record per square foot sales price. For the record: Houston’s all-time record per square-foot price is the sale of the Hess Tower, located near downtown’s Discovery Green park. The H&R REIT, a Canadian group, bought the Hess Tower in 2011 for $442.5 million or $524 per square foot.

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