Western Insurance building sold despite tough economy

After more than a year of watching offers come and go, owners of Fort WorthÂ’s Western Insurance Building have sold the 92,000-square-foot office building to New York-based Navika Capital Group.

The building, a Class B structure located at 5601 Bridge St. in the cityÂ’s Woodhaven area, sold for an undisclosed amount.

“We are very pleased with this building,” said Steve Fithian, managing director of Sperry Van Ness Visions Commercial and a member of the general partnership Keller Properties LP, that sold the building. “We had a lot of deals on the table and they went just as quickly as they came with the credit market in the shape it’s in, but in the end, we pushed it through.”

FithianÂ’s general partnership purchased the building from German investors in March 2006 with intentions to renovate the property and re-sell with a beefed-up tenant portfolio. Since purchasing the property, Fithian said

his group has renovated the buildingÂ’s lobby, added a deli and made aesthetic improvements.

Fithian and companyÂ’s plans seemed to have worked as the group, with the help of Sperry Van Ness, took an initial tenant occupancy of 76 percent at the time of purchase to its current 98 percent leased.

“Our goal all along was to buy an underperforming property and improve it and then downstream sell it,” Fithian said. “And we were looking for a building where we could move our offices.”

Sperry Van Ness currently leases 4,400 square feet in the building. Other building tenants include J & K Financial, Xerox and Region, an international company that specializes in executive suites.

According to the Tarrant Appraisal District, the Western Insurance Building property has an appraised value of nearly $7.1 million for 2008 compared to an appraised value of nearly $5.8 million in 2006, when FithianÂ’s group purchased the property.

“We took over management and leased up a lot faster than we anticipated and got higher rents than we anticipated,” Fithian said. “Of course, the ultra tight downtown Fort Worth office market didn’t hurt.”

The investment group put the property on the market in September 2007 an immediately had six offers – two for asking price. Then, Fithian said, the capital markets blew up.

“The deals just went away,” he said. “It was when the capital markets were first exploding and unfortunately, that blew up deals.”

The building went back to market in February and closed Oct. 29.

Aditya Jha, compliance officer for Navika, said the property was a

good opportunity in a blossoming office market.

“That is the kind of area we are interested in investing,” he said.

Fithian said his group will be looking to invest in another underperforming property in North Texas with a value-add component and Sperry Van Ness Visions will retain management of the Western Insurance property.