Fowler Property Acquisitions bought the 1 million-square-foot Kirby Collection, now known as Arrive Upper Kirby, for $182 million in a rare deal for a new-construction, mixed-use project in Houston's highly sought-after Upper Kirby area.
The property: The three-building project at 3200 Kirby Drive was seller New York-based Thor Equities' first development in Houston, and it was completed in 2018. The larger building on the property is a 25-story luxury residential tower totaling 199 units. The other two buildings comprise a 13-story tower with 182,000 square feet of office space and 61,000 square feet of retail space. Currently, the residences are 91% occupied, the offices are 100% leased and the retail is 87% leased.
The price: The deal equates to $425,000 per residential unit and $400 per square foot for the commercial space. There was high interest in the project when it hit the market after the onset of COVID-19, showing the Houston market was attractive to institutional and private investors alike.
Why it matters: This is San Francisco-based Fowler Property Acquisitions’ second real estate play in the Upper Kirby district and shows the investor is bullish on Houston even with the uncertainties of the pandemic. Fowler bought the nearby mixed-use West Ave in September 2018, which it similarly renamed Arrive River Oaks.
What they're saying: “In Houston, you don’t have a whole lot of multifamily high-rise combined with retail and commercial sales," said David Mitchell, vice chairman of Newmark’s Houston Multifamily Capital Markets team which represented the seller in the deal. "They are just so few of them. So, when we hit the market with it, it was right after COVID, and there was so much interest, from institutions to private folks. It was a rare mixed-use sale in Houston, and there were many buyers. It showed everyone around the country that Houston is going to come out of this pandemic in a good way.”
What's next: Trinity Property Consultants secured a capital budget for the new owner of $7.8 million for improvements to the property. Redwood Construction was expected to start construction on the upgrades to the 1-acre amenity deck this quarter.
CoStar's Impact Awards highlight the commercial real estate transactions and projects that have transformed their markets over the past year. The winners are chosen by independent panels of industry professionals who work in the markets they judge. A list of judges can be found here and the criteria for selecting winners can be found here.