Dornin Investment Group (“DIG”) sold 1250 Woodbranch, a 102,956 SF class B office building and 11931 Wickchester, a 61,977 SF class B office building adjacent to the Woodbranch property to two separate investor groups. The two multi-tenant office buildings, located just north of the 10 freeway in Houston’s energy corridor, were acquired by DIG in an off-market portfolio transaction in the second half of 2013. DIG sold the Wickchester building on September 4, 2018 to a local non-profit organization who planned to occupy one full floor and the Woodbranch building on October 1, 2018 to a new investor group managed by DIG. Despite the still-ongoing headwinds that were created by the oil market crash that began in 2014, DIG managed to deliver a 20.30% IRR and 1.58x multiple from the portfolio.
The new ownership group purchased the 1250 Woodbranch building through a 1031 exchange and is looking to capitalize on the rebounding Houston energy corridor market. The new ownership plans to invest approximately $1MM to upgrade the building’s interior and exterior common areas, including the lobby, conference room, corridors, restrooms, deli, and entry way. “DIG is excited to continue its ownership in the 1250 Woodbranch building as we believe in the long-term strength of the Houston market, especially for class B office space located in strategic submarkets. DIG will continue to improve, lease, and manage Woodbranch for the long-term” said Eric Entringer, Vice President of Capital Markets & Investors Relations at DIG.
Martin Hogan at HFF represented DIG in the sale of 11931 Wickchester and DIG represented itself in the sale of 1250 Woodbranch.
Woodbranch and Wickchester reside in the middle of the Energy Corridor office submarket where it is surrounded by some of the most influential and important energy related companies in the world. The property is less than a five-minute drive from exploration and production companies such as Conoco, Shell Oil, BP America, Citgo, Cabot Oil & Gas and Murphy Oil. Major energy service companies in the same area include Technip, the Wood Group, KBR, Schlumberger, Diamond Offshore, Transocean and McDermott International. The corporate synergy created within the submarket is not easily replicated; thus, increasing the level of importance placed on the property’s location for its current tenant base seeking the prestige and access to the Energy Corridor but at more reasonable rental rates than Class A.
About Dornin Investment Group
Dornin Investment Group is a real estate investment and asset management firm that invests in commercial and residential real estate in partnership with a broad base of institutional and private investors. The firm specializes in distressed, opportunistic, and value-add real estate investments in all major property types with a focus on office, flex, industrial, multifamily and hospitality properties. The company offers a full-service investment platform providing property management, leasing, construction management, and finance through its wholly owned affiliate Dornin Realty Advisors (“DRA”). For more information, visit www.dorningroup.com.