Brookfield Asset Management Buys Houston Center for $875M

Brookfield Asset Management, Toronto, acquired the 4.2-million-square-foot Houston Center in downtown Houston for $875 million.

The Houston Chronicle reported the purchase price, which Brookfield did not disclose. The newspaper said Brookfield is now downtown Houston’s largest commercial landlord, owning nearly 12 million square feet.

HFF, Houston, represented the seller, institutional investors advised by J.P. Morgan Asset Management, New York. The firm also secured acquisition financing for the office and retail complex. HFF Senior Managing Director Jeff Hollinden, Executive Managing Directors Scott Galloway and Mark Gibson and Senior Director Trent Agnew represented the seller.

“Both domestic and offshore investors were attracted by the deal size, strength of the location, diversified tenancy and the overall resiliency of the Houston economy and office market,” Hollinden said.

The largest property in Houston’s central business district, Houston Center includes three high-rise office towers and a 16-story office building atop 196,000 square feet of retail. Currently 71 percent leased, the property’s largest tenants include LyondellBasell Chemical Co. and law firms Norton Rose Fulbright and Haynes & Boone.

The property occupies a 6.5-block, 9.2-acre site within walking distance to the Houston MetroRail, the George R. Brown Convention Center and the Toyota Center and Minute Maid Park sports stadiums.

Last month Brookfield closed a $3 billion commercial real estate finance fund, Brookfield Real Estate Finance Fund V. BREF V targets mezzanine debt investments through financing for high-quality properties in major U.S. markets.

More than 60 investors including public and private pension plans, sovereign wealth funds, financial institutions, endowments and foundations contributed to the fund and Brookfield committed $400 million to BREF V to align its interests with other investors.