MetLife Sells 50% Stake in Houston’s Wells Fargo Plaza to NY Fund
- Nov 10, 2011
November 10, 2011
By Nicholas Ziegler, News Editor
In a move to “diversify its portfolio,” MetLife Inc. announced that it has completed the sale of a 50 percent interest in Wells Fargo Plaza to New York State Common Retirement Fund. Financial terms of the deal were not disclosed.
As per terms of the deal, MetLife will retain both asset management responsibilities as well as the remaining 50 percent interest in the 71-story property. “Selling a partial interest in Wells Fargo Plaza is an excellent opportunity for MetLife to diversify its portfolio while still holding a stake in this top tier property in a strong market,” Robert Merck, senior managing director and head of real estate investments for MetLife, said.
The approximately 1.7 million square feet of the Class A tower are located in Houston’s Central Business District and are 96 percent leased to 37 tenants in the energy, legal and finance industries. MetLife has been an owner of the property since the office’s construction in 1983. Holliday Fenoglio Fowler L.P. represented MetLife on the transaction, and Clarion Partners advised the Common Retirement Fund.
Trends show that the move could be a lucrative one for the fund, as the city’s office market – especially for Class A space – will become much more landlord-favorable in the coming quarters.
A recent market report by services firm Jones Lang LaSalle sees the Houston market as one of the strongest in the country, mainly due to the area’s focus on the energy industry. “Tenants remain active and continue to canvass the Houston market for high-quality spaces,” the report noted, and “until new buildings are delivered, concessions will continue to dry up and effective rates will increase in Houston’s strongest submarkets” – including the Central Business District.
MetLife holds more than $60 billion of assets in its real estate portfolio. The New York State Common Retirement Fund exists to finance benefits of retired state and local government employees, police officers and firefighters.