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CBRE Global Investors Sells Marathon Oil Tower at Substantial Discount

Baupost Group, M-M Properties Completes Purchase of 1.2 Million-SF High-Rise for $175 Million
February 8, 2018
CBRE Global Investors (NYSE: CBG) took a $70 million hit after the Los Angeles-based investment manager last week completed its sale of the Marathon Oil Tower in Houston to Boston-based Baupost Group and local firm M-M Properties for $175 million, or approximately $146 per square foot, according to local reports.

CBG paid nearly $245.5 million back in late 2013 for the nearly 1.2 million-square-foot, 41-story office tower that serves as Marathon Oil Corp.'s global headquarters. In early December, a Realty News Report article confirmed that CBG had entered into negotiations to sell the building to Baupost and M-M.

With Marathon Oil's lease scheduled to expire in 2021 - and no guarantee the American petroleum and natural gas exploration and production company would renew - coupled with below market rents throughout the building, CBG elected to get out from under the building now before the price was driven down any further, according to Real Estate Alert.

Marathon Oil Tower was built in 1983 at 5555 San Felipe St. in Houston's Galleria/Uptown. Designed by PGAL and developed by Mark Lee & Associates, the Class A tower is 90 percent leased with Marathon Oil occupying roughly 62 percent of the building. Additional tenants in the tower include Aon Corp., Group Dynamics International, The Welch Foundation and Univation Technologies.

Jeff Hollinden, Scott Galloway and Trent Agnew of HFF represented CBG in the disposition.

Please see CoStar COMPS #4128098 for more information on this transaction.
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