Real Estate Rumblings
Korean investors are believed to be behind the $480 million purchase of the 46-story BG Group Place office tower in downtown Houston, in a deal organized by Invesco Real Estate, a Dallas-based firm that represents major real estate investors, according to Real Estate Alert, a highly respected real estate investor newsletter.
The $480 million sales price represents one of the highest sales prices in Houston’s history.
According to people in the investment community, Invesco is buying the skyscraper on behalf of the National Pension Service of Korea or a similar Korean organization, the newsletter reported.
Korean money has been reallocated and invested in U.S. realty in a fast pace recently because of political unrest and the nuclear threat from North Korea.
“Koreans have been coming to the U.S. and they are buying assets,” said CBRE's Bernard Branca. “We are seeing a lot of Korean buyers.”
“Koreans have been coming to the U.S. and they are buying assets,” said Bernard Branca, senior vice president of office investments for the CBRE real estate firm in Houston. “We are seeing a lot of Korean buyers.”
The 973,000-square-foot tower is expected have a final sales price of $485 per square foot, the second-highest per square-foot sales price ever in Houston, Real Estate Alert reported.
The record sales price in Houston was set when H&R REIT paid $524 per square foot or $442 million for the 845,000-square-foot Hess Tower in 2011.
The highest dollar price was set when the 1.8-million-square-foot One and Two Shell Plaza sold for $550 million last summer to an affiliate of Enterprise Products, Real Estate Alert said. The sale is expected to close soon.
BG Group Place is 92 percent leased. The BG Group energy firm is the largest tenant, with KPMG and the BakerHostetler law firm also having large offices. The building, completed in 2011, is located at 801 Main Street. Pickard Chilton was the architect.
In developing BG Group Place, Hines anointed Main Street as a viable venue for new office development today. Years ago Main Street had been ceded to transit domination, making Main Street not much more than an elongated bus stop. But Main Street has enjoyed a revival in recent years as METRO rail arrived and new development has occurred.
Hines has proposed to build another Main Street tower on Block 69 at the southeast corner of Main and Texas Avenue, just a couple of blocks from BG Group Place.