Hartman vREIT XXI Inc., a publicly registered non-traded real estate investment trust, has purchased a suburban office building located in the Houston, Texas submarket of Katy Freeway West for $5.1 million, or approximately $65 per square foot.
Located at 11211 Katy Freeway, the 6-story, approximately 78,000-square-foot property is currently 68 percent leased to a diverse mix of tenants with staggered lease expirations.
“11211 Katy Freeway is an attractive value-add investment for vREIT XXI that allows us to continue adding value to shareholders while effectively serving the needs of current and prospective tenants in the Katy Freeway West submarket,” said Al Hartman, chairman and chief executive officer.
Located 15 miles west of downtown Houston, Katy Freeway West is the second largest office submarket in the city’s metropolitan area (after the central business district), with more than 28 million square feet. Most of the office inventory is along the Katy Freeway (Interstate-10) between Beltway 8 to the east and Texas Route 6 to the west, with a substantial corridor running south along Dairy Ashford Road.
Major energy tenants in the metro area include ConocoPhillips, Shell Oil, BP America, and Citgo. This submarket is also home to the largest concentration of engineering firms in Houston, and most cater to the energy sector. Some of the large engineering tenants in the metro area include Worley Parsons, Foster Wheeler, and McDermott International.
Hartman vREIT XXI is a Texas-centric REIT formed to acquire, develop and operate a portfolio of value-oriented commercial properties—those with potential for growth in income and value from re-tenanting, repositioning, redevelopment, and operational enhancements.
As of September 30, 2018, the REIT’s portfolio consists of two properties with an investment cost of $20.5 million, according to Summit Investment Research. Hartman vREIT XXI broke escrow on December 1, 2016 and has raised approximately $30.4 million in investor equity since inception, as of the third quarter of 2018.
Since 1983, Hartman and its affiliated entities have sponsored 23 programs and acquired interests in more than 90 real assets totaling approximately $660 million as of December 31, 2017, the company said.
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