Songy, Carlyle Purchase 430 KSF Houston M-U Property
- Apr 01, 2013
Galleria Plaza, a 428,300-square-foot mixed-use property in Houston has come under new ownership. Songy HighRoads L.L.C. and The Carlyle Group acquired the high-profile office and retail asset from Chase Merritt L.P. and PCCP L.L.C.
Rules are rules and all parties involved are honoring the confidentiality agreement associated with the trade of Galleria Plaza and, therefore, remaining mum on the transaction price tag. However, David Songy, CEO and Co-founder of Songy HighRoads, offers a bit of perspective, telling Commercial Property Executive, “We did acquire it below replacement cost.” The partners purchased the complex with a three-year loan through Bank of America Merrill Lynch – CMBS, orchestrated by real estate services firm HFF, which also marketed the asset on behalf of the seller.
Galleria Plaza, occupying 7.6 acres in Houston’s bustling Galleria submarket, encompasses five structures, including the 217,000-square-foot TeleCheck Plaza office tower and the 179,500-square-foot office building at 5333 Westheimer. The remaining buildings consist of retail space, with Sage Plaza offering 20,100 square feet; Michaelyndon’s on the Boulevard totaling 8,800 square feet; and Region’s Bank totaling 3,900 square feet. The office segment and retail component are approximately 96 percent and 88 percent leased, respectively.
Galleria Plaza features another offering: room for growth. Songy HighRoads and Carlyle are in the early stage of development plans. “We’re conducting a feasibility analysis as to how much additional square footage can be built on the site with respect to the size of the building and the associated parking that it would need,” Songy added. “We have two big parking decks on our property so we’re trying to determine what type of use would be best to work with the parking that exists.”
Currently, the team is considering adding a new property type to the mix at the mixed-use destination. “For, example, we have office buildings on the property and they’re full, but at night they’re not full so we’re thinking that we could develop residential or hotel, or both,” he concluded. “Based on our reconnaissance we think there is demand for either product. The market is really expanding so the timing is very good and this location is just really, really top notch.”