Cousins Buys Houston’s Post Oak Central, Atlanta’s Terminus Properties
- Feb 11, 2013
Cousins Properties, Inc., an Atlanta, Ga.-based real estate company, acquired Post Oak Central, a Class A office complex in the Galleria submarket of Houston, Texas, for $232.6 million from institutional investors advised by J.P. Morgan Asset Management. The company also formed a joint venture with institutional investors advised by J.P. Morgan Asset Management to purchase both Terminus 100 and Terminus 200, neighboring Class AA office towers in Atlanta’s Buckhead submarket, and acquired the remaining 80 percent interest in Terminus 200 from a fund managed by Morgan Stanley Real Estate Investing.
“This series of transactions is consistent with Cousins’ strategy targeting trophy office towers in prime locations within the strongest urban submarkets of the Sun Belt,” Larry Gellerstedt, Cousins’ CEO, told Commercial Property Executive.
Post Oak Central consists of three 24-story properties located at 1980, 1990 and 2000 Post Oak Blvd. The acquisition also included a two-acre parcel adjacent to the property that may be used for future development.
The towers were built between 1975 and 1981 and offer 1.3 million square feet, currently 92 percent leased by tenants such as Apache Corp., Stewart Information Services and GDF Suez.
According to Gellerstedt, Post Oak Central provides the company with an attractive entry into Houston’s Galleria submarket, a location it had been targeting for a while due to its solid in-place yield and significant development opportunity.
The Terminus transaction comprises two Class AA towers totaling 1.2 million square feet. Terminus 100 was attributed a value of $209.2 million, or $320 per square foot.
Terminus 200 was attributed a value of $164.0 million, or $290 per square foot.
“We were thrilled to affirm our ownership interest in Terminus 100 and 200, which are two of the best Class A towers in the Southeast,” Gellerstedt said. “It’s also a reflection of our long-term confidence in the steadily improving Buckhead submarket, where Class-A occupancy has increased by 10 percent since 2010, driven by 1.4 million square feet of absorption.”
Cousins’ net investment is expected to be approximately $206 million, after a new non-recourse mortgage for Terminus 200 is secured. The Company funded the transactions using proceeds from recent non-core asset sales.