Younan Sheds Last Class B Office Asset

HOUSTON-Younan Properties Inc. of Woodland Hills, CA has sold its last class B office building in Texas to Houston-based G&W Investments LLC for close to the $4.5 million asking price.

The estimated $70 per-sf price for the Wilcrest Executive Building, better known as 800 Wilcrest, is “far below” replacement cost of more than $130 per sf on Houston’s west side, broker Sky Pulford of Re/Max Memorial Commercial Division of Houston tells GlobeSt.com. The buyer plans to occupy 18,000 sf on the mostly vacant third floor of the 63%-occupied structure. “That’s why the buyer bought it,” he says. G&W will use the space to expand its oil field-related engineering services division.

The Energy Corridor property was on the market 10 months. “I had three backups,” says the broker. “The first contract fell through in June due to financing issues.”

Pulford tells GlobeSt.com “an interesting twist” to the 800 Wilcrest transaction was that he recommended Lehman Brothers Small Business Finance to the buyers, since they would also be users, and the buyers obtained 15% down financing. The average asking gross rent is $15 per sf. Pulford, who negotiated for Younan Properties, says 27 tenants occupy the building. The buyer represented itself.

The transaction marks the second property Pulford has sold for Younan Properties in two years. He negotiated the 56,000-sf Parkway Medical Plaza to the Southern California-based Pomeroy Family Trust in August 2005 for $3 million or $53.57 per sf.

Pulford says Younan Properties, headed by Zaya S. Younan, continues to look for more class A office assets in Houston. The company’s entire Texas portfolio totals four million sf, of which 3.5 million sf is located in Dallas.