Lionstone re-purchases two Texas office properties

The Houston-based firm has re-acquired the Waterway Plaza I & II on behalf of its Cash Flow Real Estate Partners One fund for $83 million.

The Lionstone Group has re-purchased the Waterway Plaza I & II office buildings in The Woodlands, Texas on behalf of its Cash Flow Real Estate Partners One (L-CFRE) fund. According to data from Real Capital Analytics, the Houston-based private real estate investment firm acquired the two Class A office buildings, located at 10003 Woodloch Forest Drive, from a joint venture between Triple Net Properties and Daymark Realty Advisors for $83 million. 

Lionstone previously owned the buildings from 2003 to 2005, having purchased the properties on behalf of the Oregon Public Employees Retirement System for $42 million. The firm then sold the asset to the joint venture between Triple Net Properties and Daymark for $74.1 million. 

The two buildings, which comprise 366,000 square feet of space, are about 95 percent leased by tenants that include Huntsman Corp, Charles Schwab, Northern Trust and UBS. Approximately 18,000 square feet of space currently is available for lease, with an additional 70,000 square feet of space available within the next 24 months.

“The investment has many of the attributes we look for to drive long-term occupancy, including high-quality improvements in a growing employment market near high-end residential neighbourhoods,” said Glenn Lowenstein, Lionstone chief executive, in a statement. “Our goal is to generate high cash returns with low volatility over the long term.” 

This is Lionstone’s sixth acquisition on behalf of its L-CFRE fund. The commingled fund, which targets office, multifamily, retail and industrial assets that meet certain yield, location and occupancy tests, has committed $190 million – or roughly 75 percent of the equity raised – over the last 24 months to purchase properties in such markets as Austin, Raleigh and Santa Monica. With leverage, the vehicle has the ability to acquire approximately $500 million of real estate. 

Lionstone was formed in 2001 by partners Lowenstein, Tom Bacon and Dan Dubrowski.