Canada’s H&R REIT Agrees to Buy Houston Office Building for Record Price

H&R Real Estate Investment Trust (HR-U), the owner of almost 300 office, industrial and retail properties across North America, agreed to buy Hess Tower in downtown Houston for $442.5 million.

The 29-story office building, the newest tower in the city’s downtown section, is fully leased to New York-based oil company Hess Corp., Toronto-based H&R said in a statement today.

The price is a record for a Houston office building on a per-square-foot basis, according to Real Capital Analytics Inc., a New York-based property-data provider. The 844,763-square-foot (78,481-square-meter) tower was completed in June.

H&R said it has obtained a commitment for a $250 million mortgage with a 4.5 percent interest rate for the planned purchase, which has a capitalization rate of 6.6 percent. A capitalization rate is derived by dividing a property’s annual net operating income by its purchase price.

The company rose 0.6 percent to C$23.73 ($22.84) today in Toronto trading. H&R has 38 office, 117 industrial and 133 retail properties.

To contact the reporter on this story: Brian Louis in Chicago at

To contact the editor responsible for this story: Kara Wetzel at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.