December 1, 2020
An investment partnership led by Houston-based Triten Real Estate Partners has purchased 1111 Fannin, a soon-to-be-vacant downtown office tower across from the GreenStreet entertainment complex and a few blocks west of the Discovery Green park.
"The location is great," said Scott Arnoldy, managing partner at Triten, which purchased the property with Taconic Capital Advisors
The tower, he added, has floor-to-ceiling glass, a stone façade and ceiling heights that will compete with downtown's nicest office buildings.
"It’s got great bones to work with," Arnoldy said of the 17-story office tower that was built in 1971.
JP Morgan Chase leases the 428,629-square-foot building but is expected to move out next year, allowing the new owner to consider redevelopment options. Aside from office, that could include multifamily, life sciences space or a mix of uses.
If appreciable office demand returns post-COVID-19, the building could serve as a headquarters or as a home for multiple tenants.
“When you have an attractive purchase price, it does give you some flexibility,” Arnoldy said.
The purchase price was not disclosed, but Arnoldy said it was as much as 15 times below what it would cost to build it new.
A team with JLL Capital Markets represented the seller, a trustee for a commercial mortgage-backed securities trust. The building was recently valued at $21 million, according to a November report citing servicer data from Trepp, a securities data firm.
HPA Architecture out of Chicago has been hired to help design options for the building, Arnoldy said. The company has designed office projects for technology companies including Microsoft and Google and has experience with older buildings.
Triten, a real estate development and operating company with offices in Houston and Dallas, is a partner in the M-K-T Heights development and the owner of a six-acre site in the East End where it is planning an upscale retail and residential complex.
Taconic Capital is an institutional investment firm with offices in New York London and Hong Kong. The company was founded in 1999 by former Goldman Sachs partners Frank Brosens and Ken Brody. The company has more than $2 billion of real estate holdings totaling approximately 20 million square feet of space.