GREENWICH, CT – Greenwich, Connecticut-based Hanover Real Estate Partners (“Hanover”), a privately held real estate investment company, today announced the sale of Marathon Oil Tower, one of Houston, Texas’ most iconic office buildings, to CBRE Strategic Partners U.S. Value 6, a fund sponsored by CBRE Global Investors. Terms of the transaction were not disclosed.
Reed Miller and Ken Boyle, Managing Partners for Hanover Real Estate Partners, commented: “We sought an opportune time to sell this truly unique trophy asset and believe this attractive transaction makes sense for both parties. We enjoyed working with CBRE Global Investors to consummate this sale and are pleased to come to an agreement that creates immediate value for our investors.”
Located at 5555 San Felipe Street in Houston’s Galleria submarket, the 41-story, Class-A property contains 1.2 million square feet of premier office space, above standard finishes and an attached granite-clad, 13-level parking garage. Marathon Oil Tower is generally regarded as one of the finest office buildings in Houston. The property is ideally situated in proximity to some of the City’s premier residential neighborhoods and directly adjacent to the prestigious Post Oak Boulevard corridor.
Hanover took over responsibility for the management and oversight of the property from Lehman Brothers Inc. in 2003. At that time, the property was 100 percent leased to Marathon Oil Company (“Marathon”) under a lease that expired in December 2006. In July 2004, Marathon had indicated a desire to reduce its overall square footage and began considering options for the relocation of its headquarters’ facility. Hanover immediately set about addressing Marathon’s space needs to ensure the company remained at the property. Hanover successfully negotiated a new 15-year lease with Marathon for approximately 650,000 rentable square feet or 60 percent of the total building. Hanover then implemented an aggressive leasing strategy to fill the space vacated by Marathon.
To help lease up the property, Hanover made significant capital improvements to the building, including renovating the lobbies, improving the building’s mechanical systems and making significant structural improvements. Hanover also realized significant cost savings by improving the building’s energy efficiency and achieved LEED Silver status. Hanover’s capital commitments and marketing efforts helped it secure long-term leases with a number of creditworthy tenants. The building is currently home to businesses from a wide range of industries, including insurance giant Aon Corporation, Houston-based wealth management firm Kanaly Trust Company, and engineering giant Baker Hughes Oilfield Operations Inc., among others. Marathon Oil Tower’s strong tenant base coupled with the strength of the Houston market made it an attractive acquisition prospect.
About Hanover Real Estate Partners
Hanover Real Estate Partners, Greenwich, Connecticut is owned by Reed Miller and Ken Boyle. Hanover is a national full service real estate investment company focused on owning, managing and operating institutional grade commercial real estate. Its portfolio includes properties in the office, hospitality, residential and retail sectors located across the United States. For its own account Hanover acquires and repositions valuable but often under-performing real estate assets and specializes in repositioning assets to realize untapped potential. Founded in 1981 and based in Greenwich, CT, Hanover approaches each asset from an owner’s perspective, priding itself on its strong operating and management capabilities strictly applied to each of its investments. The company currently owns and manages office buildings and industrial/warehouse, hotels and resorts. Please go to www.hanover-partners.com for more information.