Local company buys office space in highly vacant Houston submarket

The acquisition of the tower at 290 by a local real estate company could bring fresh blood to northwest Houston, an office submarket with a very high vacancy rate.

DZMI purchased the 246,000-square-foot building, located at 13430 Northwest Freeway, from Dallas-based Granite Properties.

The buyer plans to renovate the 12-story building, built in 1982 and renovated in 2015, according to the Harris Central Appraisal District. Plans call for improving amenities and renovating common areas to meet demand for higher quality office space.

The sale price was not disclosed. Its assessed value is estimated at $13.4 million this year, up 10 percent from last year, according to the Harris Central Appraisal District.

Tenants include Amegy Bank, IDS Engineering Group and Sowells Consulting Engineers, among others. Stream Realty Partners agents Matt Asvestas and Danielle Rothchild will handle the leasing.

This acquisition marks DZMI’s second purchase in the last six months. The company, founded by David Z. Mafrige, previously acquired World Houston Place, an eight-story Class A office building in north Houston. Located at 15710 John F. Kennedy Boulevard, 15 minutes north of downtown Houston, it spans 216,900 square feet and has an assessed value of $11.3 million.

The Houston office market has been weak this year, according to Savills. Rentals jumped 16 percent in the first quarter, totaling 2.3 million square feet. However, this represents a 6 percent year-over-year decline.

The vacancy rate in the Northwest Far submarket, where Tower 290 is located, stood at 43.3 percent in the first quarter, the highest in Greater Houston, according to Savills. The submarket’s average office rent is $24.27, compared to the overall metro area average of $31.46.

But the submarket landed some significant leases in the first quarter. Offshore drilling company Seadrill Americas leased 64,000 square feet at 11025 Equity Drive, and drilling services and technology company Patterson-UTI leased 25,000 square feet at 10713 W Sam Houston Parkway North.