‘Very Much On Sale’: Houston Investment Partners Acquire Galleria-Area Office Building
LandPark Advisors and Porter Law Firm have partnered up to acquire a 16-story office building in Houston’s Galleria area, finding an opportunity to invest in a distressed asset class.
Porter Law Firm will move its headquarters to the building at 2603 Augusta Drive, taking 17K SF of the 245K rentable SF. Brad Porter, the firm’s owner and a real estate investor and attorney, said the transaction came about because he needed to expand and saw an opportunity to invest.
Despite the less-than-stellar headlines about Houston’s office market since the pandemic began, Porter told Bisnow he was excited to invest because “this asset type is very much on sale.”
“It is always a little scary to run into a burning building when everyone else is running out … but I looked at it as being an opportunity, and I had a need as well,” Porter said.
Porter enlisted LandPark Advisors, a Houston-based real estate management, leasing and investment company, to help him find an office space to support his firm’s growth. Porter Law Firm will move from its office at 2221 S. Voss Road this fall.
Though the buyers declined to disclose the purchase price, Porter said the building was a good deal from an investment standpoint, considering it was distressed with less than 50% occupancy. Porter Law Firm is growing rapidly, and 2603 Augusta provides flexibility to expand if that growth continues, he said.
Porter and LandPark have a decade-long relationship, as LandPark has managed and handled leasing for Porter’s other investments, he said. Porter is also a managing principal for Bridgewell, which has racked up nearly 3M SF in retail, industrial and other real estate transactions.
Porter sought out strategic partners and investors for the 2603 Augusta deal. After discussions with LandPark Advisors President Bill McGrath, the partnership decided to each take a floor of the building for their businesses upon their lease expirations, Porter said.
“We go way back. There’s built-in trust and a relationship on a friendship and a personal and business level,” he said. “Our visions were aligned.”
LandPark Advisors plans to lease up the building, leveraging its amenities, which include an updated tenant lounge, bourbon lockers, a fitness center and 24-hour security, a news release states. The partners also plan to add a pickleball court and golf simulator.
2603 Augusta benefits from not relying on one large tenant that could abandon it, leaving it with significant vacancy, Porter said. Instead, he sees opportunity in businesses looking to rightsize their office space.
“Instead of depending upon a bunch of 20K SF tenants, we were able to attract [smaller] tenants,” Porter said. “I’m seeing that that activity is still pretty robust.”
Since going under contract, LandPark Advisors has secured several leases that will significantly increase the building’s occupancy, the news release states. LandPark Commercial will handle management and leasing for the building.
“With the significant capital already invested in the property and our proven ability to secure high-end, creditworthy tenants, we are confident in achieving full lease-up and maximizing the value of this exceptional asset,” McGrath said in the release.
The partners purchased the building from Galveston-based American National Insurance Co., according to public records. American National was previously the lender for the building, in 2013 lending about $28M to 2603 Augusta Investors LP, records show.
American National acquired the building in 2023, according to Harris Central Appraisal District, which valued the building at $21M this year. American National did not respond to a request for comment.
