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TIER REIT Sells 3-Building Office Complex Near Downtown Houston

Dallas Firm Flips Loop Central to Griffin Partners, Also Acquires Remaining Partnership Interest in Domain 8 in Austin
April 4, 2018
Pictured: Loop Central III at 4828 Loop Central Dr. in Houston.

In a pair of transactions, Dallas-based TIER REIT (NYSE: TIER) sold the three-building, Class A Loop Central office complex near downtown Houston, and acquired the remaining partnership interest in the Domain 8 office building in Austin.

Griffin Partners, a locally-based real estate investment, management and leasing firm, purchased the 574,944-square-foot complex on Loop Central Dr. in southwest Houston, near Loop 610 and U.S. 59, with the help of a five-year, floating rate acquisition loan secured through Global Atlantic Financial Group, an entity founded by Goldman Sachs, and Connecticut-based Wheelock Street Capital LLC.

UniversalPegasus International, Linebarger Goggan Blair & Sampson, LLP, Well Care Health Plans and Easterseals anchor Loop Central, which traded for roughly $72.9 million, or about $127 per square foot, according to CoStar information.

TIER REIT also acquired the remaining partnership interest in Domain 8, an office building totaling 291,000 square feet in The Domain in Austin. The Dallas-based investor was a co-developer on the project and originally held a 50 percent stake in the building that is fully leased primarily by Facebook and Amazon.

With this deal, TIER REIT CEO Scott Fordham said the trust is refining its presence in Texas, giving the REIT an ownership of more than 75 percent of the office space in The Domain, a 1.2 million-square-foot micro submarket in Austin.

TIER REIT is planning to deliver Domain 11 by the end of the year, adding another 324,000 square feet of office space to the submarket. The trust also plans to build up to 900,000 square feet of additional office space with the help of three office buildings -- Domain 9, Domain 10 and Domain 12 -- that are fully designed and permitted for construction.

A construction timeline for the three additional buildings was not immediately disclosed on Wednesday.

HFF represented TIER REIT in its sale of Loop Central, and helped procure the buyer. HFF’s Jeff Hollinden, Wally Reid and Cameron Cureton helped Griffin Partners secure the debt and equity for the deal.

Griffin Partners wanted to buy Loop Central because the city’s "overall resiliency," and recent bounce in job performance, said Andrew Montgomery, an executive vice president and head of acquisitions for the real estate investment firm.

Montgomery said he expects the job performance to be a leading indicator and early preview of the continued momentum in the Houston office market.

For more information on the sale of Loop Central, please see CoStar Comp #4192755. For additional information on the partial interest purchase of Domain 8, please see Comp #4196905.

Candace Carlisle, Dallas-Fort Worth Reporter  CoStar Group   
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