KBR Tower in Houston Sold for $174.6M

Downtown Houston's KBR Tower has a new owner this week as Brookfield Office Properties, along with joint venture partner KBR Inc., sold the office building to Corporate Property Associates 17-Global, a public non-traded REIT affiliate of W. P. Carey Inc. for $174.6 million. Brookfield originally acquired its stake in the tower as part of the Trizec portfolio in 2006. A team led by Richard Rudd and Kent Peters of Allied Advisors represented Brookfield on the building sale, according to a Houston Chronicle article. The company also represented the buyer in negotiating and structuring acquisition financing with UBS Real Estate Securities.

"These dispositions continue our active capital recycling program over the past two years in which we have sold seven mature or non-strategic assets and reinvested proceeds into higher-yielding strategic opportunities," said Dennis Friedrich, chief executive officer of Brookfield Office Properties.

"Houston's Central Business District's major office towers are a very much sought-after investment for all types of investors," said Richard Rudd, president of Allied Advisors. "KBR Tower represents investment maturity. Investors want quality, stability and security of cash flow. The fact that the building is located in Houston is a very good thing right now."

Located at 601 Jefferson Street, KBR Tower boasts over one million square feet of headquarter and office space, with KBR occupying about 900,000 square feet in the tower, along with an adjacent 1,500-space parking garage. At the time of the sale, which closed Nov. 16, the property was 99.8% leased to seven tenants, according to a Houston Business Journal article.

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