H&R Real Estate Investment Trust, 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.