The Howard Hughes Corporation (HHC - Free Report) recently expanded its office portfolio with the acquisition of several properties in The Woodlands, Texas and West Houston Energy Corridor. The properties were purchased for an aggregate of $565 million from Occidental Petroleum Corporation (OXY - Free Report) .
Specifically, at The Woodlands, a 28,000-acre master planned community (MPC), Howard Hughes acquired two Class AAA towers — The Woodlands Towers at The Waterway — offering the company around 1.4 million square feet of office space and a warehouse spanning 125,000 square feet. It also acquired 9.3 acres of developable land at the community. The prime location of the land in The Woodlands Town Center overlooking Interstate 45 North provides scope for meaningful future commercial development.
Further, in the West Houston Energy Corridor, Howard Hughes bought Occidental's Century Park campus, a 63-acre, 1.3-million-square-foot premise enclosing 17 office buildings. It plans to immediately remarket the campus for sale. This move is in line with the company’s recently announced strategy to shed non-core properties and redirect resources to grow its core business of MPCs.
Moreover, the acquisition at The Woodlands increases Howard Hughes’ office portfolio in the community by roughly 50%, making it the largest stakeholder at the community. In fact, the company owns 2.5 million square feet of office space in the market that is currently 94% leased.
With companies on the lookout to relocate and expand in the MPC, Howard Hughes’ exposure to the most sought after, best-in-class office space in Woodlands will enable it to cater to the demand for premium office space.
The company will also be relocating its corporate headquarters to the 595,000-square-foot tower situated at 9950 Woodloch Forest Drive in the MPC.
Per management, "These iconic towers have long been a beacon at the entry to The Woodlands Town Center and The Howard Hughes Corporation is extremely proud to bring them into our portfolio."
Over the past year, shares of this Zacks Rank #1 (Strong Buy) company have gained 29.5%, outperforming the industry’s rally of 18.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
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