HOUSTON -(Realty News Report) – CP Group, Florida-based real estate investor and developer has acquired the 28-story Five Post Oak Park office tower in Houston’s Inner Loop.
The 567,000-SF tower is on the north side of San Felipe, across the street from the St. Regis Hotel. At one time, the building’s anchor tenant was Amegy Bank, which occupied about 175,000 SF before Amegy moved a few blocks away to a new building on Loop 610, where the Micro Center store once stood.
After the Amergy bank departed, building owner Shorenstein Properties LLC launched a renovation effort, which was completed in 2017.
In the sale to the Florida group, JLL Capital Markets’ Jeff Hollinden and Rick Goings represented the seller.
The acquisition of Five Post Oak Park was completed via a joint venture with funds managed by Miami-based Rialto Capital Management, LLC the third in a recent series of strategic partnerships between Rialto Capital and CP Group.
“Five Post Oak Park captures the essence of what many companies are looking for in their workspace today: high-quality offices in neighborhoods offering abundant residential and retail options,” said Angelo Bianco, Managing Partner at CP Group. “Our repositioning plans will modernize the interior finishes and design and add coveted amenities within the building including a top-tier restaurant, coffee bar, and concierge services to improve our tenants’ quality of life.”
The office building, 4400 Post Oak Parkway, is part of the 43-acre Post Oak Park business park, which is located just north of the upscale River Oaks District retail, dining and entertainment development.
The transaction is CP Group’s first in the Houston market since 2014.
“We have been looking for the right time and opportunity to re-enter the Houston market. Five Post Oak was Goldilocks; it checked all of the boxes – right location, strong tenant mix, desirable nearby amenities, quality construction, and a stabilized basis that is a substantial discount to replacement cost,” said Brett Reese, Senior Vice President at CP Group.
In addition to its private park and immediate hotel proximity, Five Post Oak Park offers amenities, including a conferencing facility and a 3,000-SF fitness center. CP Group’s planned improvement program calls for the modernization of the building’s lobby – including the addition of a new coffee shop and restaurant space – along with the development of an outdoor patio connecting to its adjacent green space.
The transaction is CP Group’s first in the Houston market since 2014. Office investment activity in Houston was been slow in 2020, but has ticked up slightly in 2021. But office occupancy has been declining for over a year. The sale of the Five Post Oak Park would be one of the largest building sales in Houston in recent years.
David Baker, executive vice president at Transwestern, is leading the property’s office leasing team. The building, which is about 65 percent leased, has the Avison Young commercial real estate firm as a key tenant. The UBS wealth management firm is an anchor tenant. *(Footnote 1)
The Houston acquisition transaction marks CP Group’s fifth in 2021 and its third joint venture with Rialto Capital this year.
In June, CP Group and Rialto Capital announced the acquisitions of CNN Center, the iconic tower in downtown Atlanta, and One Biscayne Tower, a 38-story office property in downtown Miami. In 2018, the joint venture also acquired Boca Raton Innovation Campus, the former IBM research and development facility that has been reinvented as the preeminent hub for technology and life sciences in the region.
CP Group, formerly known as Crocker Partners, is one of the country’s premier owner-operators and developers of commercial real estate. The organization now employs nearly 200 employees and has a portfolio spanning more than 14 million square feet. Headquartered in Boca Raton, Florida, CP Group has regional offices in Atlanta, Miami, Jacksonville, Dallas, and Washington DC.
Designed by Morris Aubrey Architects, the Five Post Oak Park, completed in 1982, was developed by The Winter Company. ** (Footnote 2)
In 2002 Crescent Real Estate, a Fort Worth firm led by John Goff, and an affiliate of GE Pension Trust bought Five Post Oak Park for $65 million. In 2008, Shorenstein Properties bought the building, which is about a quarter-mile from Loop 610.
In the fall of 2014, Shorenstein put the Five Post Oak Park building on the market. The whisper price for the tower was $185 million.
In the summer of 2014, West Texas Intermediate crude peaked at $107 a barrel, and the Houston economy was humming. Then came the infamous Thanksgiving Day OPEC meeting. Saudi Arabia failed to support a motion to dampen oil production. Oil prices nosedived, energy firms slashed their work forces. And Houston’s office market collapsed and it’s never fully recovered. And demand for Shorenstein’s Five Post Oak Park building dried up, like the rest of the commercial real estate market.
*Footnote 1: The UBS Group wealth management firm is a key tenant with building signage at in the Five Post Oak Park building in Houston. The Houston building had been owned by Shorenstein. In downtown Nashville, UBS occupies 138,000 SF in a 29-story Shorenstein-owned building called the UBS Tower.
**Footnote 2: The Five Post Oak Park, completed in 1982, was developed by The Winter Company, which acquired the site from Tenneco Realty, which was represented by in-house staffer Chuck Jacobus, who later served as Mayor of the City of Bellaire. Representing The Winter Company was Bill McDade and Sid Smith of the Horne Co.
July 23, 2021 Realty News Report Copyright 2021
Image: Courtesy: CP Group. Photo credit Mabry Campbell.
For more about Texas real estate, check out the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins. Available on Amazon http://tiny.cc/4a2g6y
Houston 2020 Ebook version https://tinyurl.com/4xm7z8b5
File: Florida Investors Buy Tower