Houston-based Baker Katz LLC has joined the flock of commercial developers scooping up valuable assets at a fraction of their appraised cost.
The retail brokerage purchased a 40,000-square-feet property containing a 12,000-square-foot building at 1805 Ella Boulevard for roughly half of the property’s 2015 listed value, said Kenneth Katz, co-founder of Baker Katz. A purchase price wasn’t disclosed, but the building was appraised at $786,399 in 2015, according to Harris County Appraisal District records.
The building’s sole tenant is Houston-based Foodarama. Foodarama has at least five years remaining on its lease. The property is in Timbergrove, a subdivision slightly northwest of the Heights and the Rice Military area.
“The (original) value was twice what we paid – (it’s) what a multifamily developer could have afforded to pay for the site around a year ago,” said Neal Wade, development partner with Baker Katz. Wade said a multifamily developer would’ve had trouble developing the site, though, based on Foodarama’s existing lease term and the lack of surrounding land.
The deal closed in March. The seller was a private family, and this was their only property in Houston, Wade said. Baker Katz doesn’t have much flexibility in terms of renovating the center until Foodarama leaves, and the firm bought the property at a “relatively low return,” Katz said, given the lack of investments that can be made while Foodarama occupies the space. However, Wade said that Baker Katz couldn’t have afforded the property around a year ago, back when Houston’s multifamily market was red hot and developers were more likely to place more competitive bids on properties.
“That’s helped us be a little more competitive in this area,” Wade said.
The Timbergrove subdivision is mostly made up of older ranch-style homes, Wade said, but the homes have experienced rapid price appreciation in the past several years. Timbergrove has become more attractive to young people and is experiencing the same growth and revitalization that the Heights is going through, he said. The shopping center and its returns “only have room for growth,” Katz said.
Baker Katz currently has two other properties in the Heights area: a shopping center at Shepherd Drive and Interstate 610, and a retail center at Yale Street and 19th Street.
In a similarly advantageous deal, Houston-based Moody National Cos. recently bought the Hampton Inn Houston hotel at 11333 Katy Freeway for $8 million in cash in April. Brett Moody, the company’s founder and CEO, estimated the property was worth around $16 million.
Original article can be viewed here.
Archives
- July 2022
- June 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- August 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- October 2019
- September 2019
- August 2019
- May 2019
- April 2019
- February 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- December 2014
- November 2014
- August 2014
- July 2014
- May 2014
- April 2014