Brookfield Closes on Heritage Plaza

by CoyDavidson on December 10, 2010

Second-highest sale price for an office building in Houston history

Brookfield Office Properties today announced that it has acquired Heritage Plaza – the 53-story, 1.2-million-square-foot trophy office tower in Houston’s central business district – from Goddard Investment Group LLC for $321.5 million (gross purchase price of $325 million net of $3.5 million of closing credits).

Rumors of the pending  blockbuster Houston office sale by Atlanta based Goddard surfaced last month. Brookfield, downtown Houston’s largest office owner, now has 10 properties totaling more than 10 million square feet in the city, that include Allen Center and Cullen Center.

“This acquisition is in keeping with our strategy of owning and operating the best-quality assets in our core markets,” said Dennis Friedrich, president and chief executive officer of Brookfield Office Properties’ U.S. Commercial Operations in a formal press release. “We are pleased to add one of the top institutional-quality buildings in the market to our strong and well-established Houston portfolio and operating platform at attractive investment terms.”

The sale reinforces strong investor demand for high quality office assets. Houston has been prominently mentioned as a primary gateway office market expected to attract investor interest, all though not on the same level as New York, Washington D.C., Boston and San Francisco. While Houston is not considered a first-tier office investment market, the heated competition for institutional grade office assets in cities such as New York and Washington D.C is driving up prices. The fact that Brookfield ended up acquiring the asset is not surprising, they are no strangers to the Houston office market.

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