Class A Suburban Office Building for Sale in Houston

Thursday, February 9, 2017

Holliday Fenoglio Fowler, L.P. (HFF), on behalf of the owner, is marketing for sale Intellicenter, a premier Class A suburban office building totaling 160,407 square feet in Houston, Texas. Located at 4650 Westway Park Boulevard in Westway Park, a top-performing, three million-square-foot west Houston micro market, the LEED Silver property features sustainable design principles that enhance demand from corporate clients and highly-functional floorplates designed to accommodate medium to large tenants.

Developed in 2007, Intellicenter was part of a green initiative by Koll Development Company that produced several similar buildings across the country. The building was awarded LEED Silver Certification from the U.S. Green Building Council at the time of development, and the property features Tate access flooring, underfloor air distribution in all work areas and six per 1,000-square-foot parking surrounding the building. The interior lobby is consistent with Class AA buildings in the market and complete with a custom style terrazzo floor, modern lighting with wall washers throughout and a combination of crystallized glass and mahogany accent panels. Additionally, the property earned the Energy Star label for operating efficiency in 2010, 2011, 2014, 2015 and 2016.

The three-story suburban office property for sale is currently 100 percent leased to The Travelers Indemnity Company (Travelers) and Cameron with 7.2 years remaining average lease term; however Cameron is expected to vacate 25 percent of the NRA in October, offering a value-add opportunity to re-lease the space. 

Houston Suburban Office Building for Sale Investment Highlights

  • Globally-Recognized Tenancy with Market-Leading Company: Travelers provides a range of commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals around the world. The Travelers Companies has produced an industry-leading return on equity (13.8 percent), returned $35 billion in excess capital to the shareholders and grew dividends at an average annual rate of 10 percent. The company is broken into Business and International Insurance, Bond and Specialty Insurance and Personal Insurance, with Business and International Insurance accounting for more than 60 percent of net earned premiums in 2015. While the majority (about 95 percent) of the company’s business is in the United States, Travelers continues to expand beyond the U.S. border and has operations in the United Kingdom, Canada, Brazil, India, China and Ireland.
  • In-Place and Long-Term Cash Flow with Upside Opportunity:  Intellicenter is currently 100 percent leased through October 2017 when Cameron vacates its 40,288-square-foot space. This provides strong year one NOI of $2,329,650 and long-term cash flow resulting in limited downside risk with significant upside potential. The upcoming vacancy on the second floor is complete with a corridor and can be demised down to approximately 10,000 square feet. The floorplate design (six 25,000-square-foot pods on three floors) has proven to be an efficient layout for tenant demand in the West Belt submarket.
  • Located in Supply-Constrained Westway Park and Significant Barriers to Entry:  Currently 89 percent leased, Westway Park has remained fundamentally strong since the early stages of its development in 2000. With average occupancy of 95 percent over the last five years, Westway Park has been the preferred location for many large companies and corporations and stands out from the West Belt submarket on fundamentals. Over the last five years, the average occupancy in the Westway micro market has been 600 bp higher than West Belt as a whole. Within Westway Park, no land sites remain for future development and land prices continue to rise in the surrounding area. Over the last 60 days, leasing activity has been significant, with approximately 100,000 square feet leased to three tenants.
  • Houston Economy is Heading in the Right Direction:  The Dallas Fed’s Houston Business-Cycle Index, which measures the local unemployment rate, nonagricultural employment, inflation-adjusted wages and inflation-adjusted retail sales, has grown an annualized 1.8 percent over the past five months, suggesting that the Houston economy is already in recovery mode. Despite depressed oil prices over the last two and a half years, the city has continued to add jobs since the oil downturn began, with 14,600 jobs added in 2016. Sublease space in Houston’s office market declined for the first time since third quarter 2014, shedding nearly 1 million square feet in fourth quarter 2016. Specific to the West Belt submarket, sublease space declined nearly 50,000 square feet.

For more information on Intellicenter or other commercial properties for sale in Houston and the surrounding areas please contact HFF Director Trent Agnew or Senior Managing Director Dan Miller in HFF’s Houston office.

Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp, a Texas licensed real estate broker.     

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