Brookfield Office Properties Inc. announced this week that it had sold a 90% interest in Heritage Plaza, the 5th tallest building in Houston with 1,150,000 square feet of leasable space, to AEW Capital Management. AEW acquired a 41% stake in the building from Brookfield for $118 million, with the remaining 49% coming from an affiliate, according to a GlobalPost article. Brookfield acquired Heritage Plaza in December 2010 in a deal that valued the building at $286 per leasable square foot.
"This transaction aligns with Brookfield's strategy of creating value in an asset through proactive leasing and asset management and then extracting proceeds for use in other endeavors, such as our various development and redevelopment initiatives," said Dennis Friedrich, chief executive officer of Brookfield Office Properties.
"Led by the energy sector, Houston has consistently been one of the fastest growing metro areas in the nation," said Dan Bradley, portfolio manager for the AEW Core Property Trust. "Rapid job growth and expanding business activity have supported very strong demand for office space and we believe this investment capitalizes on these trends."
Heritage Plaza at 1111 Bagby Street is a Class AA office complex that is currently 98.4% leased, up from 84% leased when Brookfield took control of the building. Situated on the western perimeter of downtown Houston, tenant amenities include ample on-site parking and a fitness center.
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