BNY Subsidiary Exits Houston Market
- Feb 12, 2015
CenterSquare Investment Management, the real asset investment subsidiary of BNY Mellon, announced its exit from the Houston real estate market with the sale of 1301 Fannin St. and the Villas at Hermann Park. The two assets were acquired through Urdang Value-Added Fund II (UVAF II), a $463 million value-added closed-end fund.
1301 Fannin St. is a 784,000-square-foot mixed-use office tower and data center located in Houston’s CBD. It was acquired in 2007 in joint venture with Griffin Partners and, along with the Villas at Hermann Park, represented one of UVAF II’s largest investments. Throughout CenterSquare’s eight-year hold period, the common areas and infrastructure were upgraded, achieving net operating income growth of 71.6 percent.
Located in Houston’s renowned Texas Medical Center, the Villas at Hermann Park were purchased in joint venture with Austin-based Falcon Southwest Cos. in 2011. Upgrades to the common areas and apartment interiors under CenterSquare’s ownership led to NOI growth of 20.5 percent.
CenterSquare is not crossing Houston off its list, however. “While we are out of Houston right now, CenterSquare plans to monitor potential new value-add investment opportunities in Houston next year as a robust development pipeline of new product converges with the approaching economic slowdown resulting from lower oil prices,” said David Rabin, managing director of private real estate, in an official statement.