Somera Road Buys Kansas City Office Asset
- Jan 31, 2019
HFF has orchestrated $60.2 million in bridge financing for Somera Road Inc.’s purchase of City Center Square. The New York-based company purchased the approximately 657,000-square-foot office building in downtown Kansas City, Mo., from David Werner Real Estate in an off-market transaction.
TPG RE Finance Trust provided Somera with a floating-rate acquisition loan. “Lenders liked (City Center’s) attractive basis, the TOD location on a streetcar stop, in addition to the strong office market fundamentals coupled with the robust urban renewal and continued growth,” Leon McBroom, director with HFF, told Commercial Property Executive.
City Center Square sits at 1100 Main St. in Kansas City’s central business district, occupying an entire city block. The 30-story tower, which first opened its doors in 1977, also features 30,000 square feet of ground-level retail space.
The new owner plans to use proceeds from the loan to rebrand and reposition the property. “This is a rare opportunity to completely renovate a building into a trophy office tower in a downtown Kansas City market that is currently experiencing a resurgence,” McBroom added.
McBroom was joined in representing the borrower by fellow debt placement team member Mark Katz, a senior managing director with HFF.
Kansas City attraction
Kansas City’s office market continues on an upswing. Vacancy rates hovered at record lows and rental rates rose 3 percent in 2018, according to a report by commercial real estate services firm Newmark Knight Frank. The fourth quarter of 2018 marked the 21st consecutive quarter of increased asking rental rates. The positive fundamentals remain a magnet for investors.
“Capital is really buying into the downtown Kansas City resurgence, and that includes lenders,” said McBroom.
Image courtesy of HFF