Monday, April 23, 2012

Office space: Two Valley high rises increase occupancy

By Dave Hendricks, The Monitor, McAllen, Texas
McClatchy-Tribune Information Services

April 22--MCALLEN -- The Austin-based developer behind the Sam's Club on North10th Street bought the Wells Fargo building in Edinburg last month, doubling down on the Trenton Road corridor.
Cielo Realty Partners purchased the nearly 60,000-square-foot building in March, said Rob Gandy, managing partner at Cielo Realty. His firm quickly signed two major tenants, insurance company New York Life and managed care providerMolina Healthcare, bringing the building's lackluster 34 percent occupancy up to about 80 percent.
"We got a good feel of the Trenton-10th Street-McColl area," Gandy said. "We liked the demographics. We thought that there's definitely an opportunity to buy something at a good basis."
The three-story building, which sits two blocks away from the company's Valencia Marketplace development at the intersection of North 10th Street and Trenton Road, was a good fit, Gandy said, and growing traffic along Trenton makes the property a smart investment.
"I think that's only going to increase, so obviously we like Trenton," Gandy said.
For competitive reasons, Gandy declined to release the purchase price. In 2012, the Hidalgo County Appraisal District assessed the land and building at nearly $3.7 million, down from a high of nearly $6.2 million in 2008.
Occupancy also jumped at the 215,000-square-foot Neuhaus Tower after NAI Rio Grande Valley, a commercial real estate brokerage, began managing the property.
McAllen's tallest building has changed hands numerous times, going from McAllen State Bank to Texas State Bank to JPMorgan Chase and eventually an investment firm called Brookfield Asset Management. Occupancy had fallen to 40 percent, saidMike Blum, broker and managing partner at NAI RGV.
"So you had a series of ownership changes, and none of them had an interest in the building," Blum said, but improvements to the 33-year-old property and local management have gradually boosted occupancy to 68 percent.