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Capital Commercial Strikes Deal for Two Office Buildings in Houston

Posted July 8, 2024

Capital Commercial Investments, a real estate investment firm known for acquiring big office campuses in Texas and retrofitting them to lure Fortune 500 companies, has added to its portfolio in the Lone Star State.

The Austin, Texas-based firm has purchased One Westway, a two-story, 98,223-square-foot office building at 11125 W. Equity Drive North, and Two Westway, a three-story, 95,700-square-foot office building at 11025 Equity Drive, in Houston for an undisclosed sum. The acquisition closed on Friday, with Capital Commercial having another four buildings in the Lone Star State either under contract or about to go under contract.

“We are looking for more Class A buildings in noncore locations with an occupancy dislocation,” Doug Agarwal, founder and president of Capital Commercial, told CoStar News in an exclusive interview. He confirmed the number of buildings the real estate investment firm has under contract, as well as the deal that closed on Friday, but he declined to immediately share details about the pending deals.

The two buildings in Houston, along with a parking garage, were last appraised for $17.55 million and owned by an entity named FFII TX WESTWAY LP with a registered address in Minnetonka, Minnesota, according to the Harris County Appraisal District.

The seller was Founders Properties of Minneapolis, Gary Carr, the Dallas-based broker at Newmark who oversaw the marketing of the properties, told CoStar News.

Capital Commercial is betting on continued in-migration into Texas to fill up office vacancies in the suburban office location, Agarwal told CoStar News. The firm has made a name for itself by retrofitting the former J.C. Penney campus in the Dallas-Fort Worth region. It is also planning to redo the behemoth campus once occupied by Exxon Mobil, which relocated its headquarters to the greater Houston region.

The company was one of the first to add outdoor pickleball courts as an office amenity to The Park at Legacy, which houses workers from J.C. Penney and NTT Data. Agarwal, an avid pickleball player, said he is considering adding two or three additional courts to the basement of the building, which spans about 200,000 square feet with 20-foot clear heights to the ceiling.

The former Exxon Mobil campus has been rebranded as The Reserve. Capital Commercial is in the design phase of redoing the property with construction expected in the second half of 2025. (CoStar)

Likewise, Agarwal and his team are putting together design considerations for the Exxon Mobil campus that the company purchased at the end of 2022. Capital Commercial is considering extending the Las Colinas Urban Center with the campus, with potential use for life sciences companies with everything from refrigeration to meet research and development needs and onsite data centers. The design phase is expected to be completed by year’s end, the team told CoStar News, and construction scheduled to begin in the second half of 2025.

Meanwhile, Agarwal said Capital Commercial is seeing two to three times more traffic on would-be office leasing than his team saw a year ago. He’s got big projects, such as The Park at Legacy, offering him some real-time perspective, with two large tenants and eight smaller tenants looking at the revamped campus.

If those tenants end up taking space at the Plano, Texas-based office campus, Agarwal said it could total 600,000 square feet of leases before the end of the year and the so-called stabilization of the hub anticipated by the end of 2025.

“People are tired of not making decisions, and workers are coming back to the office and there’s not enough room for them,” he told CoStar News, adding his team has personally seen companies once downsizing their leasing plans circling back seeking additional office space. “We are here to help everybody.”

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