HOUSTON – In a rare acquisition opportunity, Farha International Inc. has closed on Monroe Medical Plaza, snapping up a high-profile, professional-services destination near William P. Hobby Airport on Houston’s south side.
The 74,501-sf medical and retail project is situated at 8525 Gulf Freeway, a 6.79-acre tract with an unobstructed view of 250,000 vehicles per day traveling Interstate 45. David Luther, executive vice president of Houston-based NewQuest Properties’ Investment Sales Division, represented the buyer, a local investment group claiming its first asset in the South Houston/Hobby Airport submarket.
“My client placed a strong offer to get the attention of the seller, who’s owned it more than 20 years,” Luther says. “It’s a stabilized asset with a high number of medical tenants who are deeply invested at this location.”
Monroe Medical Plaza is 90.7% leased to 10 tenants. The largest lessees are Harris Health Clinic, Grifols-BioMat Plasma, Children 1st Dental Surgical, Fresenius Dialysis Center and Fresenius-US Vascular Surgical. The center also features Sun Loan, Emancipet and two restaurants.
“It truly is a unique asset in this submarket because of the high number of destination-oriented medical tenants with hospital-quality build-outs with top-of-the-line equipment and back-up generators,” Luther says.
Farha International has made the close with 1031 Exchange funds and traditional financing from a local bank. The deal was completed within 60 days during a tumultuous time in the financial markets, with the Federal Reserve imposing two interest rate hikes as the buyer worked through the due diligence period.
“We kept the buyer engaged because we understood the yield that he wanted to achieve and pivoted on other loan terms such as amortization to achieve the same return despite a higher rate,” Luther explains.
Austin-based Monroe Casco Ltd. has parted with a prominent three-building asset featuring an interstate-fronting pad site leased to Ninfa’s Restaurant. John Indelli of JLL and Daniel N. Casey of Casco Realty Advisors Inc. represented the seller.
Farha International is picking up the play with two vacancies, totaling 6,958 sf, and upside in the rollover of below-market-rate leases. “There are several ways to grow the net operating income now, and in the future,” Luther points out, “including carving up a couple acres fronting the freeway and ground-leasing the sites to create even more value.”
Monroe Medical Plaza is positioned at the junction of Interstate 45 S and Monroe Boulevard, less than two miles from Hobby Airport. Farha International will lease and manage the mixed-use project, which was completed in 1979 and renovated in 2005. The five-mile trade area is densely developed with a daytime population of nearly 309,000 and more than 300,000 residents.
“Properties at this intersection rarely come to market,” Luther says. “Farha International acted quickly and decisively because of Monroe Medical Plaza’s irreplaceable location and prominent long-term tenants.”
CENTRAL TEXAS LEASES
Guitar Center and Music & Arts have leased 9,289 sf and 2,599 sf of retail space, respectively, in Creekside Town Center, located at the intersection of Interstate 35 and FM 106, New Braunfels, from NewQuest Properties. Kevin Sims and Nick Ramsey of NewQuest Properties represented the landlord. Lilly Golden of Evergreen Commercial Realty represented the tenants.
SOUTH TEXAS LEASE
Visionworks has leased 2,874 sf of retail space in the Shops at Spring Town Center, located at the intersection of FM 2920 and Kuykendahl Road, Spring, from NewQuest Properties. Andrew Alvis and Kevin Sims of NewQuest Properties represented the landlord. Zac Hoffer and David Stukalin of The Retail Connection represented the tenant.