Local Firm Buys Office Asset in Highly Vacant Houston Submarket

A local real estate firm’s acquisition of the Tower at 290 could bring fresh blood to Northwest Houston, an office submarket with very high vacancy.

DZMI bought the 246,000-square-foot building, at 13430 Northwest Freeway, from Dallas-based Granite Properties.

The buyer plans to renovate the 12-story building, which was constructed in 1982 and renovated in 2015, according to the Harris Central Appraisal District. Plans call for enhancing amenities and renovating common areas to meet the demand for higher quality office space.

The sale price wasn’t disclosed. Its taxable value is estimated at $13.4 million this year, up 10 percent from last year, according to the Harris Central Appraisal District.

Tenants include Amegy Bank, IDS Engineering Group and Sowells Consulting Engineers among others. Stream Realty Partners agents Matt Asvestas and Danielle Rothchild will handle leasing.

This acquisition marks DZMI’s second purchase in the past six months. The firm, founded by David Z. Mafrige, previously acquired the World Houston Place, an eight-story Class A office building in North Houston. Located at 15710 John F. Kennedy Boulevard, 15 minutes north of Downtown Houston, it spans 216,900 square feet with a taxable value of $11.3 million.

Houston’s office market has been soft this year, according to Savills. Leasing surged 16 percent in the first quarter, totaling 2.3 million square feet. However, that represented a 6 percent decline year-over-year.

Vacancy in the Northwest Far submarket, where Tower 290 is located, sat at 43.3 percent in the first quarter, the highest in Greater Houston, according to Savills. The submarket’s average office rent is $24.27, compared to the metro’s overall average of $31.46.

But the submarket snagged some big leases in the first quarter. Offshore drilling company Seadrill Americas leased 64,000 square feet at 11025 Equity Drive, and drilling services and technology firm Patterson-UTI leased 25,000 square feet at 10713 W Sam Houston Parkway North.