Houston's Marathon Oil Tower Sold

Hanover Real Estate Partners, based in Greenwich, Connecticut, announced this week that it had sold the Marathon Oil Tower to CBRE Strategic Partners US Value 6, a fund sponsored by CBRE Global Investors. Terms of the deal and purchase price were not disclosed, but the property is appraised at $214 million according to the Harris County Appraisal District. CBRE's brokers Bernard Branca, Jared Chua and Russell Ingrum advised CBRE Global Investors on the acquisition.

"We sought an opportune time to sell this truly unique trophy asset and believe this attractive transaction makes sense for both parties," commented Hanover Real Estate Partners managing partners Reed Miller and Ken Boyle. "We enjoyed working with CBRE Global Investors to consummate this sale and are pleased to come to an agreement that creates immediate value for our investors."

"Houston ranked second in the nation in net absorption in 2012, and the Galleria submarket in particular is experiencing dramatic recovery," Vance Maddocks, president of CBRE Strategic Partners U.S., said in a statement announcing the sale. "Given its location within a major growth corridor, Marathon Oil Tower is a great fit with our fund's strategy, and with our strength of ownership, we will be able to add value for tenants and our investors."

The 1.2 million square-foot, 41-story office building at 5555 San Felipe was 93% leased at the time of sale, with 60% leased to Marathon Oil Corp. Hanover took over responsibility for the management and oversight of the property from Lehman Brothers Inc. in 2003. Hanover announced last July that it had committed $5 million in capital improvements to the property, including fully modernizing the building's 40 elevators, installing card-key access security turnstile system, retrofitting the building's parking garage lighting and making improvements to the asset's cooling tower and drainage system.

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