The joint venture of Hines and Ivanhoé Cambridge has received $450 million in refinancing for Texas Tower, a 1.2 million-square-foot high-rise in Houston. Wells Fargo and Morgan Stanley provided the loan package, in a deal arranged by Newmark on behalf of the owners.

The 47-story building came online in 2021 with the aid of a $317.6 million construction loan provided by New York Life Insurance Co. back in 2018, CommercialEdge shows. At that time, Texas Tower was the largest office project under construction in Houston. The property later became subject to a four-year $267 million note, originated by Ivanhoé Cambridge in 2023, according to the same source.

READ ALSO: Top 5 LEED Platinum-Certified Buildings in the US

This loan marks the first time in two years when a multi-tenant office building outside New York City has secured financing in the CMBS single-asset, single-borrower market, stated Newmark Co-President Jonathan Firestone in prepared remarks.

A high-rise in downtown Houston

Located at 845 Texas Ave., Texas Tower is in Houston’s central business district and has access to interstates 45 and 10. The George Bush Intercontinental Airport is some 20 miles away.

The building was 95.0 percent leased at the time of the deal and serves as Hines’ global headquarters. Its tenant roster also includes Vinson & Elkins, Morgan Stanley, Cheniere Energy Inc. and Clifford Chance, among others.

The LEED Platinum-certified Texas Tower features floorplates ranging between 30,438 and 31,255 square feet, 24 passenger elevators and 1,500 car parking spaces. Amenities include a conference center, rooftop garden and fitness center.

Newmark Co-Heads of Global Debt & Structured Finance Jordan Roeschlaub and Jonathan Firestone, Vice Chairmen Clint Frease and Blake Thompson, Managing Director Travis Bailey, Director Peter Mavredakis and Associate Director Tim Polglase secured the financing package.

Newmark landed the number one position in Commercial Property Executive‘s 2025 top commercial mortgage brokers. The firm provided loans totaling more than $48.4 billion during the 12 months ending in September 2024 and increased its originations volume by 79.6 percent year-over-year.

The post Hines, Ivanhoé Land $450M Refi for Houston Trophy Tower appeared first on Commercial Property Executive.

Apple is working on a 250,000-square-foot AI server manufacturing facility in the Houston area as part of a four-year, $500 billion investment in the U.S. Completion is scheduled for 2026.

The firm will use the factory to produce servers for Apple Intelligence, its AI system for iPhone, iPad and Mac computers, previously manufactured outside the country.

Apple’s $500 billion plan also includes hiring around 20,000 new employees across the U.S. Targeted sectors feature R&D and software development, as well as AI and machine learning.

READ ALSO: Industrial Real Estate’s Future Depends on Adaptability

The technology giant also intends to grow its U.S. Advanced Manufacturing Fund from $5 billion to $10 billion. The fund’s expansion includes a multibillion-dollar commitment from Apple to produce advanced silicon in TSMC’s Fab 21 facility in Arizona, where it already employs more than 2,000 workers.

Also part of the $500 billion investment, Apple will establish a new manufacturing academy in Michigan and expand its R&D investments to advance innovative fields like silicon engineering. The firm will also expand its data center capacity in North Carolina, Iowa, Oregon, Arizona and Nevada.

Long-time partners

Apple will develop the new factory together with long-time partner Foxconn, according to Reuters. Last year, the subsidiary of Taiwan-based Hon Hai Precision Industry Co. acquired an industrial facility and additional land to boost its AI server production in Houston. This expansion project is expected to bring $225 million in capital investment.

Foxconn also owns a 3,000-acre, multi-building development in Wisconsin dubbed Science and Technology Park, which focuses on advanced manufacturing and data infrastructure production, and a 6.2 million-square-foot industrial facility in northeast Ohio, used for electric vehicle production.

One of the strongest manufacturing markets

Houston is home to more than 7,000 manufacturers with a total annual production worth more than $75.1 billion, according to the Greater Houston Partnership. The metro also ranks second in the U.S. for manufacturing GDP.

Houston’s industrial pipeline at the end of last year reached 12.4 million square feet, the third largest nationally, surpassed only by Phoenix (22.4 million square feet) and Dallas (18.9 million square feet), according to the latest CommercialEdge report. The market’s vacancy rate clocked in at 7.2 percent as of December, 80 basis points below the national average.

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New York Life Real Estate Investors has sold 515 Post Oak, a 274,583-square-foot, Class A office building in Houston, to Dallas-based EY Ventures LLC. JLL worked on behalf of the seller and procured the buyer. 

New York Life REI came into possession of 515 Post Oak in 2022, according to CommercialEdge information. The previous owner, Spear Street Capital, had defaulted on the $44.5 million loan provided by the lender in 2019.

The property covers a 3-acre site at 515 Post Oak Blvd., east of Houston’s 610 West Loop. The location is also near interstates 10 and 69. Downtown Houston is some 8 miles east away.

Completed in the 1980s, the 12-story building has since undergone renovations worth more than $1 million. Improvements included upgrades to the fitness center, tenant lounge, onsite cafe, conference areas and parking. The mid-rise was awarded the LEED-Silver certification 10 times, most recently in 2023. 

The tenant roster features TopSpot, Greater Houston Community Foundation, Luxe Portfolio, Edge Realty Partners and Shale-Inland Holdings LLC. The building was 74 percent leased at the time of sale.

Senior Managing Director Jeff Hollinden and Managing Director Kevin McConn led the JLL Capital Markets Investment Sales and Advisory team representing the seller. 

Houston’s office investment volume reached $940 million year-to-date as of November 2024. Assets traded at $107 per square foot, below the national average of $179, a recent CommercialEdge report shows.

The post New York Life Division Sells Houston Office Asset appeared first on Commercial Property Executive.

James Campbell Co. has acquired the 663,882-square-foot Beltway Crossing Northwest industrial park in Houston. The deal also included a 7.4-acre land parcel, which may be developed into a 150,000-square-foot project. BGO previously owned the fully leased campus, CommercialEdge data shows.

In 2019, Sun Life Financial acquired a majority stake in both Bentall Kennedy and GreenOak Real Estate, merging the two entities into BGO. The resulting company assumed ownership of all existing assets throughout the U.S., including Beltway Crossing Northwest.

The property last traded in 2016, when Panattoni Development sold the park, according to CommercialEdge. That same year, the campus became subject to an acquisition loan of $30.1 million held by State Farm with a maturity date set for 2028.

READ ALSO: 5 Promising Opportunities in an Uncertain Market

Located at 11710, 11720 and 11810 N. Gessner Road, the campus is about 17 miles southwest of the George Bush Intercontinental Airport and about 30 miles northwest of the port of Houston.

The three-facility industrial park debuted between 2015 and 2016. The rear-load, 67,200-square-foot shallow-bay warehouse includes a 24-foot headway, while the two cross-dock facilities spanning 155,682 and 441,000 square feet feature 32-foot clear heights. The campus comprises a total of 174 dock doors and 10 drive-in doors.

The tenant roster includes Amazon, Wärtsilä North America—an operator in the marine and energy industries—and Advance Auto Parts.

Hawaii-based James Campbell Co. owns 93 industrial, office and retail assets throughout mainland U.S. The company recently closed another deal in Houston with the acquisition of the 2013-completed, 240,000-square-foot Point North Sort Center.

Industrial deals in metro Houston

Greater Houston’s industrial sale volume landed at $724 million in 2024, according to a report by Partners Real Estate. A total of 719 industrial and flex assets changed hands last year for an average of $115 per square foot. The average cap rate stood at 7.9 percent.

A significant metro Houston deal closed in December when Stonepeak acquired a 2.3 million-square-foot logistics collection from Starwood Capital Group. The six-asset portfolio in La Porte, Texas, traded for $244 million.

Two months earlier, MDH Partners purchased Link Logistics’ Cedar Port IKEA in Baytown, Texas. The 996,482-square-foot industrial park comprises two facilities that came online in 2017.

The post James Campbell Snaps Up 664 KSF Houston Industrial Asset appeared first on Commercial Property Executive.

A joint venture between Trammell Crow Co. and Clarion Partners has broken ground on the third and final phase of Weiser Business Park in Cypress, Texas. Upon completion in October 2025, this stage will add 628,012 square feet of speculative industrial space in two buildings, expanding the campus to 1.7 million square feet.

Cadence Bank provided construction financing, which according to CommercialEdge clocked in at $32.5 million. Cadence also issued a note of $31.9 million for the previous phase, which debuted in 2023 and added 521,600 square feet to the industrial park.

Seeberger Architecture provided design services for phase three, which comprises two facilities. A&F General Contractors is also part of the development team. The same crew worked on Weiser Business Park’s second phase.

READ ALSO: Industrial Real Estate’s Future Depends on Adaptability

The duo will feature a cross-dock configuration and 36-foot clear heights, as well as a combined total of 136 dock doors and eight ramp doors. The two buildings will pursue LEED certification upon completion.

The 130-acre Weiser Business Park rose on the site of the former Weiser Airpark, which opened in the mid-1940s and shuttered its operations in 2019. Carrying the addresses 14311 and 14281 Fallbrook Drive, the last two infill construction sites are 24 miles northwest of downtown Houston.

Buildings one through four are 93 percent leased. The tenant roster includes Western Post, a warehousing operator based in China, and Pratt Industries, a packaging manufacturing company, as well as R.S. Hughes, a distributor of industrial supplies, among others.

Metro Houston’s industrial starts outpace deliveries

Greater Houston’s industrial pipeline encompassed 11.5 million square feet of space underway in December, according to a Cushman & Wakefield report. Speculative industrial developments accounted for 95 percent of the total under-construction space.

During 2024’s last quarter, construction starts clocked in at 4.0 million square feet, outpacing industrial deliveries—which landed at 2.0 million square feet—for the first time since 2022’s fourth quarter, the report shows.

The market’s vacancy rate stood at 5.5 percent at the end of 2024, a 120-basis point decline compared to 2023, the same source reveals. This drop was due to less supply hitting the market last year. Just 16.4 million square feet of industrial space debuted in 2024, as opposed to 35 million square feet in 2023.

As deliveries dwindled and vacancy tempered, new projects may take root in select submarkets this year, Cushman & Wakefield predicts. One industrial development that broke ground earlier this year was the 463,000-square-foot Patriot Business Park in Houston’s Northern submarket. Investment & Development Ventures and Standard Real Estate teamed up for the campus, which is slated for delivery in 2025’s third quarter.

The post Trammell Crow, Clarion Kick Off 628 KSF Industrial Project appeared first on Commercial Property Executive.

Lincoln Property Co. has completed Maverick Distribution, a 435,680-square-foot industrial facility in Houston. The Class A property was developed in a joint venture with HIMCO and is currently available for lease.

Texas Exchange Bank provided a $28.5 million construction loan originated in September 2023, according to Harris County public records. The same source shows that Lincoln Property Co. purchased the development site in 2022, from The National Realty Group Inc. The development team included Powers Brown as architect of record and EE Reed as general contractor.

Maverick Distribution is at 18239 Aldine Westfield Road, covering a 26-acre lot. The property allows easy access to interstates 45 and 69, as well as to Beltway 8. George Bush Intercontinental Airport is within 4 miles from the property, downtown Houston is within 18 miles and William P. Hobby Airport is within 30 miles. Notable corporate neighbors in the area include Amazon, Coca Cola, Sysco and Farouk Systems, among others.

The property includes 40-foot clear heights, being the first asset with such ceiling capacity in the North Houston area. The building was designed to meet highly technical needs of advanced logistics companies. It also includes cross-dock configuration with 102 overhead doors, ample column spacing, ESFR sprinkler systems and 70-foot speed bays. Additionally, Maverick Distribution features ample parking spaces, with 289 vehicle parking spots and 134 trailer parking spots.

Lincoln Property Co.’s Executive Vice President Kevin Wyatt, Leasing Representative Robert Willard and Associate SuAnna Sanchez are leading leasing efforts for Maverick Distribution. The property has spaces that are divisible to as much as 100,000 square feet or can be used by a single tenant.

Houston’s industrial pipeline

As of December last year, Houston’s pipeline had 12.4 million square feet underway, a recent CommercialEdge report shows. The metro ranked third among top U.S. markets, outpaced only by Phoenix (22.4 million square feet) and Dallas-Fort Worth (18.9 million square feet).

Recent developments include GreensPORT Logistics Park, a two-building, 535,478-square-foot project that broke ground in October. Developed by Jackson-Shaw, the complex is expected to come online in the third quarter of this year.

In recent months, Hines also broke ground on Grainger’s Houston Texas Distribution Center, a 1.2 million-square-foot project in Hockley, Texas. The property will become one of Grainger’s largest facilities, hosting about 400 employees in the first year.

The post Lincoln Property JV Delivers Houston Facility appeared first on Commercial Property Executive.

The maritime assurance and risk management firm DNV USA has signed a 62,779-square-foot lease at The Offices at Greenhouse, a 208,809-square-foot office property in Houston’s Energy Corridor submarket. The company will relocate from its current location in Katy, Texas.

The deal brought The Offices at Greenhouse to 74 percent occupancy, leaving 52,334 square feet available for lease. The tenant roster includes Patten Title Co., SPB Hospitality, Med Sales Institute and DSWi, among others, CommercialEdge shows.

Located at 19219 Katy Freeway, the property has access to Interstate 10. Downtown Houston is 23 miles away, while William P. Hobby Airport is some 34 miles southeast.

Transwestern’s Executive Managing Director Doug Little, Vice President Jack Scharnberg and Senior Vice President Kelli Gault worked on behalf of Capital Commercial Investments. JLL’s Senior Vice President Collin Grimes represented the tenant.

READ ALSO: What’s Defining Office in 2025?

Capital Commercial Investments acquired the asset last year. The company paid $17.6 million to seller KBS Realty Advisors in July, according to CommercialEdge. The property traded at $86.6 per square foot, a notable discount from the previous sale, closed in 2016 at $47 million, or at $231.4 per square foot, the same source shows.

After the acquisition, the owner commenced a capital improvement strategy at the property. Upgrades are ongoing and include the addition of EV charging stations, a fitness center and renovations of the outdoor spaces.

Built in 2014, the five-story Class A property has a LEED Silver certification and includes 40,000-square-foot floorplates, a tenant lounge, a conference center and 900 vehicle parking spots. Additionally, the building features car wash or detailing services, as well as bike storage.

In November last year, the company made another purchase in the same submarket when it picked up Energy Crossing II, a 327,404-square-foot office building, from Invesco Real Estate. At the time of the sale, the property was 30 percent leased.

Rising vacancies in Texas

The Southern region’s office markets registered high vacancies throughout 2024, with Texas markets posting some of the most notable surges of year-over-year increases, a recent CommercialEdge report shows. As of December, Houston’s office vacancy rate stood at 24.5 percent, above the 19.8 percent national average but it was the second-highest in the region, after Austin’s 27.9 percent rate.

Recent deals in Houston include Brookfield Properties’ 259,774-square-foot renewal agreement at its Allen Center office campus. Plains Marketing LP, a tenant at the property since 1992, extended its commitment through 2036.

In December, Prescott Group inked a 94,179-square-foot leasing deal with Ezee Fiber at its 567,333-square-foot building, currently undergoing upgrades. The tenant will consolidate two Houston locations into a large headquarters at the property.

The post Capital Commercial Inks 63 KSF Lease in Houston appeared first on Commercial Property Executive.

The Texas Heritage Marketplace name applies to both the 750,000-square-foot regional shopping center and to the larger mixed-use project, which will eventually also encompass 550 apartments in two communities, plus almost 300,000 square feet of medical office space and self storage units.

The 165-acre site is at the southeast corner of I-10 and Texas Heritage Parkway.

NewQuest’s own architectural team aimed at creating a walkable environment with ample green space. The focus of this is a huge Heritage oak tree that was saved from the path of the recently completed parkway and relocated to the center of the development. (The Heritage oak is a hybrid of the English oak (Quercus robur) and the Bur oak (Q. macrocarpa).

READ ALSO: What’s in Store for Retail in 2025?

NewQuest reportedly has spent about 10 years preparing for this project, biding its time till the right point in the area’s rapid population growth—56 percent since 2020—and until the 6.5-mile Texas Heritage Parkway was completed. The latest trigger was the developer having secured Target as a 149,000-square-foot anchor tenant.

Patience is a virtue

Texas Heritage Marketplace might be part of a pattern for NewQuest. In the 1990s the developer acquired a 65-acre site in Tomball, Texas, also in metro Houston, but didn’t break ground on The Grand at 249, a 404,256-square-foot retail center there, until years later. In October 2023, Commercial Property Executive reported that the center had reached 96 percent preleasing.

Metro Houston’s overall economy is doing well, with job growth of 1.8 percent, above the national average 1.4 percent, year-over-year, according to a fourth-quarter report from Cushman & Wakefield.

The retail market, naturally, is thriving. Though average vacancy bumped up slightly, to 5.4 percent in the fourth quarter, closing 2024 significantly below historical averages.

In the Katy submarket specifically, vacancy was 4.7 percent on an inventory of 31.4 million square feet. Asking rents were up a landlord-pleasing 7.3 percent year-over-year, to $24.82 NNN asking, Cushman & Wakefield reported.

The post NewQuest Breaks Ground on $400M Mixed-Use Project appeared first on Commercial Property Executive.

Developments and completions in metro Houston were below national figures as well. About 1.8 million square feet were under construction as of November, accounting for 0.7 percent of total stock. In terms of deliveries, less than 1.4 million square feet came online in the first eleven months of the year.

The metro’s investment volume remained steady, registering $940 million during the same period. However, assets traded well below the $179 per square foot national threshold, also due to several foreclosures in the metro.

Developments and completions remain below national figures

As of November, Houston’s underway pipeline consisted of almost 1.8 million square feet. This accounts for 0.7 percent of the metro’s total stock, faring better than Washington, D.C. (0.4 percent) and Phoenix (0.4 percent), but slightly below the 0.8 percent national index. Boston (3.6 percent) and Nashville (3.6 percent) had the largest share of under-construction space out of total inventory.

The market’s share of office space in the development and planning phases stood at 1.9 percent of existing stock, still under the national figure (3.0 percent). Atlanta (2.3 percent), Dallas (4.9 percent) and Austin (12.9 percent) were some of the more active metros.

One of the largest projects underway in Greater Houston is Building 5 within the South Campus Research. The University of Texas System is developing a seven-story, 600,000-square-foot office and research facility, expected to come online in the third quarter of 2027.

In terms of completions, Houston’ office sector saw roughly 1.4 million square feet coming online year-to-date as of November, accounting for 0.5 percent of its total stock. This figure was also lower than the national average, which stood at 0.6 percent, and represented an almost 50 percent drop year-over-year.

Among other major markets, the metro fared betted than Denver (1.3 million square feet) and Phoenix (646,629 square feet) but trailed behind Austin (2.1 million square feet) and Dallas (2.8 million square feet).

Earlier this year, Skanska completed 1550 on the Green, a 28-story, 382,000-square-foot office building in the city’s downtown. The high-rise is LEED Platinum-certified and has ground-floor retail space.

Office-to-residential conversions gain traction

Last year, CommercialEdge introduced the Conversion Feasibility Index, a tool powered by Yardi designed to evaluate the potential of converting office buildings into multifamily residences. As the trend of office-to-residential adaptive reuse gains traction, the CFI offers crucial insights for investors.

While Texas metros may not rank among leading U.S. markets for repurposing buildings, Houston currently has 152 office properties—totaling 24.9 million square feet—with a score higher than 75, placing them as Tier I and II candidates for potential conversions.

Earlier this year, DeBartolo Development completed the $100 million office-to-residential conversion of 1801 Smith Street, a 20-story office building in downtown Houston which had a CFI score of 86, indicating that the asset bore strong conversion potential. Dubbed Elev8, the residential property now features 372 luxury units.

Additionally, the company is currently working on another adaptive reuse project: the conversion of a 19-story office high-rise totaling 827,596 square feet. Upon completion, the development will generate 311 apartments.

More Houston assets doomed to foreclosure

Houston’s office investment volume year-to-date as of November clocked in at $940 million. The metro was surpassed by markets such as Austin ($990 million) and Atlanta ($1.1 million), while Denver ($768 million) and San Francisco ($747 million) were at the opposite pole.

Assets traded at $107 per square foot on average, well below the $179 national figure. Manhattan ($379 per square foot) remained the most expensive market, followed by Washington, D.C. ($213 per square foot) and the Bay Area ($293 pe square foot).

In November, The National Bank of Kuwait sold the Twentyfour25 Galleria for $27 million, after it foreclosed on the 285,000-square-foot office building. The previous owner, an entity associated with Jetall Capital, defaulted on a $51.7 million loan.

Earlier this summer, Interra Capita Gorup acquired The Esperson Buildings, two properties spanning 600,000 square feet, following foreclosure. The firm paid $12 million for the assets, previously owned by Contrarian Capital Management.

Houston’s vacancy rate decreases year-over-year

Houston’s office vacancy rate at the end of November clocked in at 24.3 percent, a 120-basis-point decrease year-over-year. Despite the drop, the metro’s share of available space was considerably larger than the 19.4 percent national figure.

Among other secondary markets, Austin (27.7 percent) fared worse, while Dallas (23.0 percent) and Atlanta (17.8 percent) performed better.

In September, Enterprise Products Partners signed a 23,537-square-foot leasing agreement with Frost Brown Todd at its 1.3 million-square-foot 1100 Louisiana St. The legal counselors will occupy a full floor at the high-rise.

Greater Houston’s listing rates as of November reached $30.2, posting a 0.8 percent growth year-over-year. This figure was also below the $32.9 U.S. index, but closer to peer metros Dallas ($30.5) and Nashville ($31.0).

Coworking inventory remains constant

Houston’s office shared space inventory as of November totaled 4.5 million square feet across 229 locations. This accounted for 1.8 percent of the market’s total inventory, slightly below the 1.9 percent national rate.

The metro’s inventory was on par with Dallas, but surpassed Philadelphia (1.5 percent) and Austin (1.7 percent). Miami remained in the lead, with 3.7 percent of its total stock designated as coworking space.

Regus remained the largest coworking operator in the metro, with 574,106 square feet across 34 properties. The Cannon (444,341 square feet) and Workstyle Flexible Offices (372,169 square feet) rounded up the top three.

The post Houston Office Figures Lag Behind National Metrics appeared first on Commercial Property Executive.

BKM Capital Partners has acquired West Belt Business Park, a five-building industrial park totaling 260,887 square feet for $34.1 million in Houston’s Westchase submarket. Longpoint Realty Partners sold the property, CommercialEdge shows.

JLL negotiated on behalf of the seller while the buyer represented itself. The buyer secured a $27 million bridge loan originated by LoanCore Capital, with a maturity date set for 2027, according to Harris County public records.

The industrial park last changed hands in 2021, when Longpoint Realty Partners picked it up from Triten Real Estate Partners.

READ ALSO: Top 5 Emerging Industrial Markets in 2024

The acquisition marks BKM Capital Partners’ first investment in Texas, expanding its footprint to seven states in the Western region of the country. Dating back to 1978, West Belt Business Park includes five one-story buildings at 10611 and 10641 Harwin Drive. The approximately 15-acre asset is close to Interstate 69 and 26 miles from William P. Hobby Airport, while being 31 miles from George Bush Intercontinental Airport.

The light industrial buildings include spec suites ranging from 770 square feet to 23,000 square feet and a total of 436 vehicle parking spots. BKM Capital Partners purchased the property at a 41 percent discount to replacement cost and plans to invest $3.3 million in capital improvements, such as roofing and architecture enhancements, or operational upgrades such as parking spaces, landscaping, signage and tenant upgrades, according to the company.

Additionally, West Belt Business Park is fully leased with an average lease term of 2.9 years. Tenants at the industrial park include Witmart, Matrix Power Technologies, Great Plains Supply, Sifax Global and BuildStrong Academy, among others, according to CommercialEdge.

JLL’s Senior Director Charlie Strauss, together with Director Lance Young and Capital Markets Analyst Clay Anderson represented the seller during negotiations.

Recent industrial deals in the metro

Houston’s investment volume reached $2.8 billion year-to-date through November 2024, ranking third nationally, a recent CommercialEdge report shows. Assets in the metro changed hands at an average sale price of $108 per square foot, making it one of the most affordable metros in the Southern area.

Recent notable deals in the metro include Stonepeak’s $244 million acquisition of a six-property logistics portfolio. Starwood Capital Group sold the 2.3 million-square-foot asset with facilities situated close to the Port of Houston.

In October last year, MDH Partners purchased a 996,482-square-foot distribution center in Baytown, Texas. Dubbed Cedar Port IKEA, the property includes two facilities fully occupied by Ikea and is part of Cedar Port Industrial Park, the largest master-planned industrial park in the country.

The post BKM Capital Enters Texas With $34M Industrial Buy appeared first on Commercial Property Executive.

Energy company Plains Marketing LP has extended its 259,774-square-foot lease at Brookfield Properties’ Allen Center office campus in Houston. The tenant has been occupying space at the 1.2 million-square-foot Three Allen Center building since 1992 and its new commitment will last through 2036.

The owner had in-house representation together with CBRE, while Cushman & Wakefield assisted Plains Marketing in the negotiations.

Allen Center’s tenant roster includes Guard and Grace, Mendocino Farms, Talos Energy, Freeport LNG and Castex Energy, among others, according to CommercialEdge.

Located at 500 Dallas St., 1200 Smith St. and 333 Clay St., the property is in Houston’s central business district. Allen Center has access to Interstate 45 and is 20 miles south from the George Bush Intercontinental Airport.

A renovated campus

The 3.2 million-square-foot Allen Center has been under Brookfield Properties ownership since 1996. The company had acquired the three-building asset from MetLife Real Estate Investment, CommercialEdge shows.

Completed between 1972 and 1980, the property underwent renovations finalized in 2021, which included an upgrade of the lobby and common areas, as well as its connections to the outdoor green spaces. Among its amenities is a tenant-only suite dedicated to breastfeeding mothers, as well as a wellness studio. The Allen Center received the LEED Gold and Energy Star certifications.

Cushman & Wakefield Vice Chairmen Trey Strake and Chris Oliver, together with Executive Managing Director David Guion, worked on behalf of the tenant. Brookfield Properties Vice President Tyler Merritt, alongside CBRE Executive Vice President Bubba Harkins, Senior Vice President Kristen Rabel and Senior Associate Jenny Sealy, represented the ownership in the lease negotiations.

The post Brookfield Lands 260 KSF Renewal at Houston Campus appeared first on Commercial Property Executive.

Radler Enterprises Inc. has purchased Legacy at Fallbrook, a 207,029-square-foot Class A office building within Houston’s Cypress West submarket. JLL negotiated on behalf of the seller.

CommercialEdge shows that EQT Exeter was the seller, which has owned and operated the property since its 2017 purchase from Liberty Property Trust.

Legacy at Fallbrook rises five stories at 10720 W. Sam Houston Parkway North. The LEED Gold-certified asset is currently 96 percent leased by tenants such as Intermodal Tank Transport, M/I Homes, Asurion and Stewart Title Co.

Completed in 2015, the building offers amenities such as a conference facilities, a fitness center and a full-service deli, as well as 1,034 parking spots. The 20-acre property is 14 miles from George Bush Intercontinental Airport and 21 miles from downtown Houston.

Additionally, Legacy at Fallbrook includes an approximately 13-acre lot for future office or industrial expansion or development, while being close to U.S. Route 290, Texas State Highway 240, Interstate 10 and to Beltway 8.

Managing Directors Kevin McConn and Marty Hogan with JLL represented the seller in the transaction.

Houston’s latest office deals

Year-to-date through November, Houston’s office investment volume reached $940 million, with office assets changing hands at an average sale price of $107 per square foot, a recent CommercialEdge report shows. On a national level, the market placed 12th in the top 25 U.S. office markets.

Recent office deals in Houston include Capital Commercial Investments Inc.’s purchase of a 327,404-square-foot building in the Energy Corridor area. Invesco Real Estate sold the property, while JLL brokered the deal. During the same period, the brokerage represented BGO in the sale of a three-building office complex in northwest Houston. The buyer of the nearly 400,000-square-foot property was Interra Capital Group.

The post Radler Enterprises Buys Houston Office Asset appeared first on Commercial Property Executive.

Investment & Development Ventures and investor Standard Real Estate have broken ground on Patriot Business Park, a three-building industrial campus in the North Houston submarket. Delivery is expected in the third quarter of 2025.

The partners teamed up for the development of this project—initially dubbed Veterans Memorial Business Park—in August. Located at 10326, 10328 and 10330 Veterans Memorial Drive, the site has immediate access to Beltway 8 and Interstate 45.

When complete, the campus will include three front-load buildings of 219,000 square feet, 151,000 square feet and 93,000 square feet, each with 32-foot clear heights. Key features include ESFR sprinkler systems and advanced design specifications tailored to accommodate tenants as small as 46,000 square feet.

Stream Realty Partners Managing Director Tyler Maner and Executive Vice President Jeremy Lumbreras are overseeing leasing efforts at the property.

Strong construction activity in Houston

About 3.3 million square feet of industrial space started construction in the third quarter of 2024, accounting for about one-third of the total 10 million square feet of space under construction last year across the Houston market, according to a Cushman & Wakefield report.

One of the projects that broke ground then was Blue Ridge Commerce Center, a five-building, 1.4 million-square-foot campus developed by Trammell Crow. Completion is expected this summer.

The report also noted the metro’s industrial demand has remained “exceptionally consistent, posting 8.4 million square feet of new leasing activity during Q3 2024.” The North submarket, with 2.3 million square feet leased, and Northwest submarket, with 1.8 million square feet leased in the third quarter, recorded the highest demand totals for the second consecutive quarter, accounting for nearly half of the quarter’s total leasing activity.

Stream Texas deals

Stream Realty Partners has been active in its home state of Texas. The firm’s Senior Vice Presidents Forrest Cook and Jeff Rein, together with Associate Connor Land, will spearhead the leasing efforts for Ironhead Commerce Center, a four-building, 906,271-square-foot industrial park in Northlake. The property is being developed by a partnership of Alliance Industrial Co. and Barings.

In Dallas-Fort Worth, Stream’s Senior Vice Presidents Sarah Ozanne and Mac Hall and Vice President Lena Thomas will manage leasing efforts at 635 Exchange, an industrial project of about 600,000 square feet. Creation and PGIM Real Estate are partners in the development that is slated to break ground this summer.

The post IDV, Standard Break Ground on Houston Industrial Park appeared first on Commercial Property Executive.

WMF Investments sold the asset, according to CommercialEdge data. The acquisition was financed by Veritex Community Bank. Partners Capital’s Asset Management team plans to undertake significant capital improvements to boost both the functionality and aesthetic appeal of the property.

Completed in two phases in 2000 and 2002, Dixie Farm Business Park encompasses eight buildings spread on some 14 acres. The property features 36,900 square feet of retail space, insulated ceilings, climate control, 17-foot and 22-foot clear heights, loading doors and approximately 315 parking spaces.

READ ALSO: Industrial Sales Prices Inched Up in 2024

Partners Opportunity Fund V targets high-quality industrial, retail and office properties in major Texas and southeastern U.S. markets. During the past eight years, Partners Capital sponsored seven funds, executed more than $600 million in transactions, and currently manage a portfolio exceeding 1.4 million square feet in these regions.

Houston’s industrial scene

Located at 15255 Gulf Freeway, Dixie Farm Business Park is in Houston’s Clear Lake submarket. The property is near Interstate 45, which allows easy access across the Houston metropolitan area.

Houston has ranked third nationally in industrial sales volume, with approximately $2.8 billion during the first 11 months of 2024, according to a recent CommercialEdge report. The metro was also among the regional leaders in square footage under construction, with more than 12.3 million square feet.

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The sale price for the La Porte, Texas, portfolio situated less than 8 miles from the Port of Houston was $244 million, as reported by IPE Real Assets.

The properties are located at: 359 Old Underwood Road; 359 Pike Court; 10100 Porter Road; 10052 Porter Road; 10051 Porter Road and 10025 Porter Road.

Stonepeak continues to invest in supply chain real estate anchored by essential port infrastructure because of its mission-critical role in local and national supply chains, according to a company statement.

READ ALSO: Top 10 Markets for Cold Storage Development

The Port of Houston is the fifth-largest container port in the U.S. Over the next five years, the port plans to invest $1.7 billion to modernize and expand. The region also has an extensive rail network anchored by Union Pacific, BNSF and CPKC.

Growing logistics portfolio

To date in 2024, Stonepeak has acquired 20 logistics assets totaling 7 million square feet including another Texas portfolio. The firm acquired two logistics assets providing a combined 1.1 million square feet in Fort Worth, Texas, in September from institutional investors advised by J.P. Morgan Asset Management. The company used a $57 million loan from PGIM Real Estate for the purchase. The assets are in the Alliance submarket of Dallas-Fort Worth, anchored by two rail lines, the BNSF Alliance intermodal terminal and the Fort Worth Alliance cargo airport.

Last month, Stonepeak purchased a 1.8 million-square-foot logistics portfolio with nine properties located near the Port of Jacksonville. The Florida port is also improving and expanding its critical infrastructure with a five-year investment of more than $1 billion. The portfolio is also near the CSX, Norfolk Southern and the Florida East Coast Railway, which are key railroad infrastructure support systems for the port’s traffic.

In April, Stonepeak acquired a three-building, 1.7 million-square-foot rail-served fully leased logistics portfolio at CenterPoint Intermodal Center-Joliet/Elwood—the largest inland port in North America—from CenterPoint Properties. The properties are adjacent to Chicago’s BNSF and Union Pacific intermodal terminals.

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Transwestern Real Estate Services announced Ezee Fiber has committed to 94,179 square feet in a 567,333-square-foot property owned by Prescott Group in the city’s Southwest Freeway submarket.

Tenants currently use this property at 5959 Corporate Drive primarily as an office and contact center building. Still, Todd Smith, chief technology officer of Transwestern’s Technology Properties Group, told Commercial Property Executive that this campus has significant immediate capacity for data center users. 

“This property with data center investment of up to and even beyond $500 million is feasible,” Smith said. “There’s room for the load of Nvidia chips and AI clusters today. MWs of capacity are there right now. There’s full fiber and power redundancy. And it’s ready to go to bring more power through separate vaults and separate lines if we need to.” 

READ ALSO: Placer.ai Office Index—October 2024 Recap

Transwestern’s Michelle Wogan and Paula Musa represented Prescott Group during lease negotiations. Wogan said this Houston Technology Center building is unique to the Houston market, given it has about 80,000 square feet of large floorplates and warehouse space, including four dock-high loading areas.  

“It’s the best of both worlds—office and warehouses/basements—something no other site in Houston can provide,” Wogan told CPE. 

“It’s an easy location to get in and out of and is full of the amenities that tenants such as Ezee Fiber wanted: a tenant lounge, a full-service onsite restaurant, conference rooms, a fitness center, move-in-ready office space, onsite security and onsite management.” 

Smith said the building (developed in 1977) was used for many large call centers for a long time, “but that’s an industry that has fallen on hard times lately,” and the fiber needed for those applications still exists. 

Meanwhile, Ezee Fiber will consolidate its two Houston locations into a single, larger corporate headquarters at the property, which can facilitate the thriving company’s expanding operations and ongoing growth in the market. 

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A joint venture between Constellation Real Estate Partners and a real estate fund advised by Crow Holdings Capital has signed US ELogistics Service Corp. as a tenant at Constellation Post Oak, a 424,011-square-foot industrial park in Houston.

The logistics firm will fully occupy the property’s Building 1, which measures 302,825 square feet. Colliers represented the landlord, while Lee & Associates negotiated on behalf of the tenant.

Located at 14942-15012 S. Post Oak Road, Constellation Post Oak comprises the cross-dock Building 1, featuring a 36-foot clear height, and the front-load Building 2, a 121,186-square-foot facility with a clear height of 32 feet.

READ ALSO: E-Commerce Growth Revives Industrial Market

Both buildings share a 220-foot truck court, with an extra 185-foot court pertaining to Building 1. Parking includes a total of 270 car and 52 trailer spaces.

The 2023-completed campus is currently 82 percent leased. Signage manufacturing company D&R Signs also recently committed to 44,978 square feet at the property, with the assistance of Stream Realty Partners.

The 33-acre property is less than 7 miles from U.S. Route 90 and Interstate 69. The Port of Houston and the William P. Hobby Airport operate roughly 20 and 13 miles away, respectively.

Colliers Principals & Executive Vice Presidents Zack Taylor and Barkley Peschel represented Constellation Real Estate Partners. Lee & Associates Executive Principal Robert McGee negotiated on behalf of US ELogistics Service Corp.

Metro Houston industrial vacancy tightens

Greater Houston’s industrial leasing activity totaled 8.7 million square feet in the third quarter, according to a Colliers report. The volume marked an 18.7 percent decrease over the quarter.

Despite the drop, the metro’s vacancy rate dipped 40 basis points quarter-over-quarter, clocking in at 7.0 percent in September, the report shows. Less product hit the market, Houston witnessing just 2.8 million square feet of industrial deliveries in the third quarter, the lowest level since 2018.

In one of September’s deals, Ares Management secured a full-building lease at its 192,400-square-foot infill distribution facility. Safespill agreed to occupy the space.

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Invesco Real Estate was the building’s previous owner, according to CommercialEdge data. The transaction’s dollar value was not disclosed.

Energy Crossing II was completed in 2014 on a 5.47-acre site at 15011 Katy Freeway. The eight-story property offers flexible floorplates averaging 42,648 square feet. Amenities include LEED Platinum certification, a fitness center and an on-site parking garage. The building is currently about 30 percent leased; JLL described it as positioned to capitalize on the office market’s “flight-to-quality” trend.

The building’s major tenant currently is MODEC Inc., at 168,400 square feet, according to CommercialEdge data. Founded in Tokyo in 1968, the company is a worldwide supplier and operator of offshore floating platforms for the oil and gas industry.

READ ALSO: Return-to-Office Traffic Reaches Record Level

The site is adjacent to I-10, providing access to Beltway 8 and Westpark Tollway, as well as downtown Houston, the Galleria, the George Bush Intercontinental Airport and several premier residential areas, including The Villages, Briar Forest and River Oaks.

The JLL Capital Markets Investment Sales and Advisory team that represented the seller was led by Managing Director Kevin McConn and Senior Director Rick Goings.

Middling market

Houston’s office market presents a mixed picture, with modest positive net absorption in the third quarter, ending a four-quarter streak of negative absorption, according to a new report from JLL. Overall vacancy is 26.4 percent, however, and the report described recent leasing activity as moderate.

The West Houston submarket (Katy Freeway East, Katy Freeway West and Westchase) saw 630,997 square feet of positive absorption, far outpacing the Houston region as a whole.

In June, Howard Hughes Holdings Inc. secured a $130 million refinancing package for 9950 Woodloch Forest Drive, a 601,000-square-foot Class A office building in The Woodlands, Texas, from Wells Fargo and Argentic Real Estate Finance. The deal was significant for being Howard Hughes’ largest debt maturity in the following two years.

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JLL Capital Markets represented the seller and procured the buyer, locally based Interra Capital Group. The transaction highlights the area’s strong demand for Class A office assets, of which there is a limited supply in Houston.

“The trophy office segment continues to outperform the market, with 848,000 square feet of positive absorption at the end of the third quarter 2024,” Wade Bowlin, principal & managing director for Avison Young’s Houston office told Commercial Property Executive.

Tenants are increasingly drawn to these high-quality buildings, which offer superior amenities and modern features in prime locations, according to Bowlin.

“However, there is a limited supply in the Houston market, and within the next few years, just 543,000 sf of new office space is under construction and slated for delivery, causing strong demand for the limited options available.”

READ ALSO: How AI Firms Are Reviving Office Space Demand

Remington Square was completed in 2008 and 2015. The site comes with a restaurant with catering, a fitness center with locker rooms, a tenant lounge, and a conference facility on a 16.78-acre parcel that has room to develop a fourth building.

The property is situated along Beltway 8 at 10603, 10613 and 10713 W. Sam Houston Parkway, near 16.2 million square feet of retail space, as well as executive and employee housing options.

Managing Directors Kevin McConn and Marty Hogan and Senior Director Rick Goings led the JLL Capital Markets Investment Sales and Advisory team that represented the seller in the transaction.

Flight-to-quality trend drives investment

“While quality alone is no longer a guarantee of property value, retention and appreciation of performance due to shifting office sector dynamics, it remains the best hedge in an office market that is finding its new equilibrium inventory size given the quasi-permanent downward change in office space demand due to flexibility in work locations,” Ermengarde Jabir, Moody’s director of Economic Research, told CPE.

In the context of the flight-to-quality trend, the adage of ‘location, location, location’ rings truer than ever, Jabir observed.  

“Firstly, a quality office building in a metro where the general work culture is to go into the office more often than not is a prime property,” Jadir continued. “Then, beyond that, the location within a metro that provides easy access to commuters, whether via public transport or car, is also highly sought after. The obvious physical characteristics of a building are primary in determining quality, including age/newness, architecture, amenities, etc.”

Tenant quality also factors in as part of quality, with investors seeking office buildings of the highest physical quality along with stabilized properties with high occupancy rates and strong projected NOI growth, Jabir explained. Mixed-use properties and neighborhoods also play a key role in the flight to quality, as cohesive communities offering a live-work-play model tend to foster stronger demand resilience.

Carrie Szarzynski, senior managing director & head of management services at Oakbrook Terrace, Ill.-based Hiffman National, said that Houston and other Texas cities continue to lead the nation in office occupancy, and tenants are gravitating to buildings that check all the boxes for finishes, amenities and concierge-level management services.

“We’re increasingly finding that on-site conveniences such as food and beverage offerings, fitness centers and social lounges are must-haves for companies in search of buildings whose common areas can serve as an extension of their own private offices,” Szarzynski said.

“This flight to quality has made it essential for landlords to offer a high-touch, high-tech workplace experience that’s differentiated from home and other remote work environments.”

Earlier this month, a Class A office building in Houston, Twentyfour25 Galleria, sold in a bankruptcy deal for $27 million.

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Twentyfour25 Galleria, a 285,000-square-foot Class A office building in Houston, has sold for $27 million.

Hilco Real Estate, appointed by the U.S. Bankruptcy Court for the Southern District of Texas, brokered the Chapter 11 Bankruptcy deal of behalf of the property’s trustee, during a one-month marketing period, with the initial minimum bid price starting at $7.3 million.

The bankruptcy sale was scheduled earlier this year, when The National Bank of Kuwait attempted to foreclose on the property, owned since 2013 by Jetall Capital, The Real Deal reported.

The asset changed hands later, in 2018, with the new ownership being associated with the seller, according to the same source. At the time of that sale, The National Bank of Kuwait issued a $51.7 million loan, CommercialEdge shows.

READ ALSO: 5 Strategies for Distress Buyers

Completed in 1979 and upgraded in 2016 and 2020, the 11-story property features six passenger elevators, 24,700-square-foot floorplates and 938 parking spots.

Amenities at Twentyfour25 Galleria include an atrium, a conference room, a fitness center, shower facilities, food services, on-site restaurants and an outdoor courtyard with seating space.

Located at 2425 W. Loop S., the nearly 2.5-acre property is across Interstate 610, within Houston’s the Galleria area in the Uptown District. Downtown Houston is 8 miles away and George Bush Intercontinental Airport is some 26 miles northeast.

Foreclosure deals on the rise

Defaults and office loan delinquencies are on the rise, with more than $260 billion in office loans maturing this year or set to mature by the end of 2026, according to a CommercialEdge report. Maturing loans will affect 30 percent of all office notes and more than 12,000 properties, located mostly in core submarkets.

In a similar recent deal in Houston, Interra Capital Group bought The Esperson Buildings. The two historic office properties changed hands for $12 million, following the foreclosure on a Metropolitan Life Insurance Co. loan.

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DNA acquired the shopping center in 2014, for $15 million, according to CommercialEdge data. Citibank originated a $10.5 million CMBS loan, which had a 2024 maturity date.

La Michoacana is the anchor tenant at Mason Village Shopping Center. The roster also includes a mix of local and national retailers, such as Harbor Freight, Freebirds, Jiffy Lube, Weight Watchers, Rice Bowl and Jason’s Deli.

Completed in 1978, Mason Village Shopping Center encompasses four buildings spread across some 10 acres.

READ ALSO: Inside the Retail Stores of the Future

Senior Managing Director Ryan West, Senior Director John Indelli and Analyst Clay Anderson led JLL’s Investment Sales and Advisory team that worked on behalf of the seller.

Mason Village Shopping Center is at 21923 Katy Freeway, at the intersection of Mason Road and Interstate 10, within the West Houston submarket. The area’s daily traffic count reaches approximately 45,000 vehicles, according to JLL.

Houston’s retail market steady through third quarter

Houston’s retail market has been bolstered by recent job growth in the region. In the third quarter this year, 979,263 square feet of retail space came online, marking a 35.6 percent increase compared to the previous quarter, according to a recent Cushman & Wakefield report.

The metro’s vacancy rate was unchanged for ten consecutive quarters, at 5.3 percent, below historical averages, making the search for suitable spaces challenging for tenants, the same source shows. Year-to-date through September, over 2.7 million square feet of retail space has been delivered, primarily in three submarkets: Far Northwest (340,778 square feet), West/Northwest (324,093 square feet), and the Katy area (107,262 square feet).

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The Wideman Co. has appointed Partners Real Estate to lease Jones on Main, an 886,000-square foot office campus in downtown Houston. Partners Senior Vice Presidents Vince Strake and Lesley Rice will spearhead all leasing activity at the Class A property.

Wideman acquired the asset in May from Lionstone Investments, CommercialEdge data shows. CBRE was previously in charge of leasing.

The property was developed in phases between 1915 and 1951 and underwent multiple cosmetic renovations in 1987, 2002 and 2017, according to the same source. The LEED Silver-certified complex consists of four interconnected buildings rising 10, 13, 16 and 37 stories.

The 37-story building was the tallest skyscraper in the city until 1963, when the Exxon Building came online. The high-rise was previously known as the Gulf Building and the JPMorgan Chase Building as it houses the bank’s headquarters.

READ ALSO: What the AI-Driven Hiring Surge Means for CRE

Jones on Main features almost 20,000 square feet of retail space, 24 passenger elevators, a rooftop terrace and a cocktail lounge, as well as the 20,000-square-foot Finn Hall, a food hall currently undergoing a transformation. Planned upgrades include an upscale restaurant and a vinyl-record listening lounge, together with office space improvements and the creation of new spec suites.

Located on almost 2 acres at 708 and 712 Main St., the transit-oriented property is close to a host of dining and retail options and within walking distance of the JPMorgan Chase Tower. George Bush Intercontinental Airport is within 21 miles.

Houston’s vacancy rate above the national average

Despite the return-to-office policies, Houston’s office vacancy rate at the end of August clocked in at 25.9 percent, according to a recent CommercialEdge office report. The figure was well above the 19.4 percent national average. The metro’s average listing rate was $30.01, slightly below the $32.78 U.S. amount.

Back in April, Sovereign Partners tapped Partners Real Estate as exclusive leasing agent for San Felipe Plaza, a 980,742-square-foot tower also in Houston. Strake and Rice are part of that leasing team as well.

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MDH Partners has acquired Cedar Port IKEA, a 996,482-square-foot industrial distribution center in Baytown, Texas, near Houston. JLL represented the seller, identified by CommercialEdge as Blackstone’s Link Logistics.

Also known as Cedar Port Distribution Park, the asset is fully leased to Ikea and consists of two similar facilities: Building A, of 495,462 square feet, and Building B, of 510,020 square feet. 

Both Class A warehouses came online in 2017 and feature 32-foot clear heights, large 190-foot truck courts, ESFR sprinkler systems, abundant trailer parking and future rail capability.

READ ALSO: E-Commerce Growth Revives Industrial Market

Located at 4762 and 4830 Borusan Road, the industrial campus is only 2 miles from State Highway 99 and some 13 miles from Barbours Cut Container Terminal, offering regional connectivity and streamlined access to the Port of Houston.

The property is part of Cedar Port Industrial Park, reportedly the largest master-planned, rail- and barge-served industrial park in the U.S. The 15,000-acre campus features heavy utilities and tenants such as Walmart, GE, DHL and The Home Depot.

JLL Industrial Group Co-Lead & Senior Managing Director Trent Agnew, Senior Director Charlie Strauss and Director Lance Young led the Capital Markets Investment Sales and Advisory team representing Link.

Balanced growth

For the first time in more than 18 months, construction of industrial space in metro Houston rose quarter-over-quarter to a total of 8.8 million square feet, according to a third-quarter report from JLL.

Deliveries year-to-date have amounted to about 15 million square feet. However, occupancy gains in the third quarter outpaced completions nearly two-to-one, pushing total vacancy down to 7.1 percent, also per JLL.

Around the beginning of September, Safespill signed a full-building lease for Ares Management’s 192,400-square-foot Brittmoore Industrial Development, a Class A infill distribution facility in Houston. Transwestern Real Estate Services and Colliers represented the tenant and the owner, respectively.

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A joint venture between Urban Logistics Realty and Formation Interests—an investment fund advised by Crow Holdings Capital—has sold Urban District 290, a 238,200-square-foot, shallow bay industrial property in Houston. CBRE represented the seller.

According to the Harris County public records, BZO Wheels Houston acquired the asset, financing the purchase with two loans totaling $40 million, issued by American First National Bank.

The partnership broke ground on the two-building project in 2022 and the industrial park debuted one year later. Inwood Bank provided financing while Burton Construction served as general contractor. Powers Brown Architecture and Kimley-Horn provided architectural and engineering services, respectively.

READ ALSO: Why Light Industrial Properties Will Continue to Shine

Building 1 is a side-load facility measuring 64,800 square feet, while the cross-dock Building 2 encompasses 173,400 square feet. The industrial campus has a total of 45 dock-high doors, 30 trailer parks and three oversized drive-in ramps. Additionally, the park features 32-foot clear heights and ESFR sprinkler systems.

Located at 5610 Bingle Road, the infill industrial campus is less than 1 mile from U.S. Route 290 and 13 miles northwest of downtown Houston. George Bush Intercontinental Airport and Port of Houston are roughly 25 and 20 miles away, respectively.

CBRE Executive Vice Presidents Nathan Wynne and Jason Dillee negotiated on behalf of the partnership.

Houston’s lack of zoning leads to infill developments

Houston is the largest city in the U.S. without a formal zoning code. Without a clear delineation of different land uses, developers rely on codes, regulations and deed restrictions. Therefore, infill industrial properties may be more common and rise side-by-side with residential homes on the same block.

A partnership between Investment & Development Ventures and Standard Real Estate Investments is planning such a project. Construction on the infill, 463,000-square-foot development is slated to start by the end of the year.  

Changing hands in the Houston industrial market

Metro Houston’s industrial sales volume totaled $1.6 billion as of August, according to a CommercialEdge report. Assets traded at $106 per square foot during the first eight months of the year, below the national average of $132 per square foot.

In one of the interval’s larger transactions, KKR purchased a 12-building logistics park in southwest Houston for $234 million. Artis Real Estate Investment Trust sold the approximately 1.8 million-square-foot campus.

The market’s industrial rents grew by 4.0 percent year-over-year through August, once again lagging the national average of 7.2 percent, the same report shows. Meanwhile, the vacancy rate clocked in at 7.7 percent in August, above the national average of 6.7 percent.

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Hines has started construction on Grainger’s Houston Texas Distribution Center, a 1.2 million-square-foot development in Hockley, Texas. Delivery is scheduled for 2026.

The industrial supply company first announced plans for this project in February. Upon completion, the distribution center is set to be one of Grainger’s largest facilities and will employ about 400 members in the first year.

The facility will boost the company’s available inventory of industrial supply products in the market, expanding it from 150,000 to as many as 300,000 distinct items. The warehouse will store a diverse range of supplies, including hand and power tools, HVAC systems, lighting, power transmission devices, fluid power components and motors.

When complete, the Class A property will feature 36-foot clear heights, 52- by 50-foot column spacing and about 740 car parking spaces. The development is taking shape on 108 acres at the corner of Roberts Road and Hempstead Highway, just off Interstate 290. Downtown Houston is 35 miles away, while the George Bush Intercontinental Airport is some 39 miles southeast.

Houston’s growing industrial inventory

Houston had 6.7 million square feet of industrial space underway at the end of August, according to the latest CommercialEdge industrial report. The market’s vacancy rate that month was 7.7 percent, above the 6.7 percent U.S. average.

One of the currently underway projects in the market is a five-building, 1.4 million-square-foot campus developed by Trammell Crow. The Class A property is slated to come online next summer.

Also in Houston, Jackson-Shaw recently broke ground on GreensPORT Logistics Park, a two-building, 535,478-square-foot industrial development. The facilities will have front-load and cross-dock configurations and are expected to be delivered in the third quarter of next year.

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Jackson-Shaw is developing GreensPORT Logistics Park, a two-building, 535,478-square-foot industrial campus in Houston. The developer already broke ground on the project and expects delivery in the third quarter of next year.

Partners on the development include general contractor Burton, architecture firm Goree and civil engineer Kimley-Horn. Greystar-Thackeray is the equity partner, while Cushman & Wakefield is handling leasing efforts. Additionally, Comerica Bank provided a $27.6 million construction loan that matures in 2028, according to public records.

Building 1 will be a 149,477-square-foot, front-load facility with 32-foot clear heights. Upon completion, the warehouse will have three drive-in doors, 26 dock-high loading doors, 130- to 240-foot truck courts, 66 trailer stalls and 144 car parking spots.

READ ALSO: Why Light Industrial Properties Will Continue to Shine

The 386,001-square-foot Building 2 will have a cross-dock configuration and 36-foot clear heights. The development will have 90 dock loadings, 130- to 185-foot truck courts, 95 trailer spots and 216 car parking spaces. The facility will also be rail ready.

The two buildings will provide flexibility for multiple tenants. The campus is taking shape at 1823 Haden Road, providing easy access to Interstate 10. Downtown Houston will be within 14 miles, while George Bush Intercontinental Airport will be 25 miles away.

Cushman & Wakefield’s Executive Managing Directors Beau Kaleel and Brooke Swerdlow, along with Executive Director Michael Foreman, are taking care of leasing efforts.

Houston’s under-construction pipeline remains steady

Houston’s industrial sector had 6.7 million square feet of space under construction as of August, according to the latest CommercialEdge industrial report. The metro’s vacancy rate at the end of the same month clocked in at 7.7 percent, 100 basis points higher than the national average.

In August, Trammell Crow Co. started construction on Blue Ridge Commerce Center, a 1.4 million-square-foot industrial campus in Houston. The five-building project is scheduled to come online next summer.

A month earlier, Capital Development Partners completed Building II at Cedar Port Logistics Center in Baytown, Texas. The 800,405-square-foot facility is part of a 90-acre campus that broke ground in 2021.

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Hicks Johnson will begin occupancy in late 2025. It joins tenants including the building’s anchor, international law firm Norton Rose Fulbright, which began moving this summer, as well as global management consulting firm Boston Consulting Group, which is slated to take occupancy during the fourth quarter of 2025.

Located at 1550 Lamar St., 1550 on the Green features efficient floorplates, abundant natural light, a dedicated building concierge and visitor management system.

It has earned recognition as one of Houston’s most sustainable and healthiest office buildings. 1550 on the Green has achieved LEED Platinum V4, and is pursuing WELL Platinum, WiredScore Platinum and Fitwel certifications.

READ ALSO: Greater Houston’s Office Market Slowly Recovers

Senior Director of Originations at Nuveen Green Capital Sean Ribble told Commercial Property Executive the demand for greener buildings is not only about improving their environmental footprint, but also increasing their marketability and value, making them more attractive to tenants and investors.

“Integrating sustainable measures helps companies reduce operating costs while meeting regulatory standards,” Ribble said. “Additionally, attractive financing mechanisms like C-PACE have become more widely available to make greener, more sustainable buildings—which were once more cost-prohibitive—much more cost-effective.”

Sustainability goals drive site selection

Brenden McEneaney, senior vice president of sustainability client solutions at JLL, told CPE he sees increased demand for green space. However, the demand signal can be complex to discern against larger macro factors like interest rates and remote work.

“We still see evidence of a green premium for certified green space,” McEneaney stated. “However, we also see an increased emphasis on low-carbon performance specifically. JLL’s Green Tipping Point research forecasts a large, impending supply-demand imbalance. There is not enough available low-carbon space to meet the demands of corporate tenants who have made net zero-carbon corporate commitments.”

He also said that large organizations have increased interest in green leasing and site selection to align their space needs with sustainability goals.

According to McEneaney, this demand exists in the context of rapidly increasing energy and carbon emissions regulations, often with potential fines. “Increasing regulations, accelerating corporate commitments and additional requirements from capital partners on carbon performance—all these factors mean that sustainability, specifically carbon performance, will increasingly impact real estate values and demand,” McEneaney said.

Flight-to-quality trending

Michael Webb, counsel at Farrell Fritz P.C., said: “The success of 1550 on the Green may be illustrative of a larger national trend dubbed the ‘flight-to-quality.’”

“Since early 2022, the tristate region’s commercial office market has been driven by companies seeking, relocating to, and concentrating within metropolitan areas. These areas offer so-called Class A buildings with ‘green’ or LEED certifications, access to prime locations and transit, coupled with high-end, on-site amenities.”

He added that in a post-pandemic setting, companies seek spaces and environments that align with and reflect their ESG goals, support overall health and well-being initiatives. This new work environment encourages and incentivizes employees to engage in in-person collaboration.

Webb said the demand for green office space may be impacted by recent laws and regulations requiring building owners and operators to reduce emissions.

For example, Local Law 97 in New York targets the city’s largest buildings and requires owners to reduce their building emissions by specific dates or face monetary fines and penalties. In New York City, the expectation is that non-compliant buildings will become less favorable and desirable assets, Webb said.

Skanska used its Embodied Carbon in Construction Calculator, a tool for estimating and minimizing embodied carbon in building materials, to reduce climate emissions from materials used by approximately 45 percent on this project.

Wellness-focused amenities in demand

Engaging with tenants about sustainability and energy efficiency is becoming a key priority in the commercial real estate sector. This reflects a broader shift toward environmental responsibility and responds to the evolving expectations of investors and tenants. Strategies for effective tenant engagement can lead to more sustainable and energy-efficient buildings, offering mutual benefits for both tenants and property owners.

This guidance outlines practical steps for real estate managers to enhance property appeal and operational efficiency through collaborative efforts with tenants, focusing on shared sustainability and energy management goals.

Skanska’s 1550 on the Green offers a fitness center, a 9,400-square-foot penthouse function and conference space as part of its amenities package, along with premium ground-floor food and beverage offerings.

Tere Blanca, founder, chairman & CEO of Blanca Commercial Real Estate stated that as companies prioritize sustainability and their employees’ well-being, she has seen a significant shift in the demand for office spaces that integrate eco-friendly design and wellness-focused amenities.

According to Blanca, office tenants today expect more than just a workspace—they seek environments that align with their values, including sustainability. Green buildings offer a forward-thinking workplace solution that reflects a company’s commitment to environmental responsibility while providing employees a healthy, vibrant atmosphere.

The post Skanska Inks Lease at Sustainable Houston Tower appeared first on Commercial Property Executive.

Alterra IOS has acquired four industrial outdoor storage assets totaling 17 acres throughout Greater Houston. Lee & Associates and Partners Real Estate worked on behalf of Alterra in the transaction proceedings.

According to a company statement, Houston will maintain its role as a key component of Alterra IOS Venture III. In May, the investment vehicle closed at $925 million and surpassed its $750 million target.

A glimpse inside the four

Two of the newly purchased properties—which span 7.2 acres and encompass 50,000 square feet of warehouse space—are part of Bay 10 Business Park, a 225-acre industrial campus in Baytown, Texas. Adkisson Group previously owned the assets, according to CommercialEdge data.

Alterra will invest in capital improvements for the two facilities, with upgrades including a new speculative office and a reinforced concrete yard. Located at 8121 and 8223 Parkside Ave. in Baytown, Texas, the industrial properties are less than 3 miles from Interstate 10 and roughly 29 miles east of the Port of Houston.

The next asset on Alterra’s shopping spree was a 5-acre site in Pasadena, Texas, including 57,500 square feet of warehouse space. Following the closure, the buyer struck a 10-year, sale-leaseback deal with the former owner, which CommercialEdge identifies as Quala—an industrial chemical cleaning company.

Carrying the address 5100 Underwood Road, the facility is roughly 9 miles northwest of Pasadena’s Bayport Container Terminal and about 16 miles east of the William P. Hobby Airport. Moreover, the property features a rail spur which provides access to national rail networks.

The fourth acquisition Alterra closed in Houston is a property at 9002 Wayfarer Lane, just 3 miles from the William P. Hobby Airport. Platform Capital previously owned the 4.6-acre asset—CommercialEdge information shows—which also included 40,930 square feet of warehouse space. Furthermore, a trucking company renewed its lease at the facility, with the option for an additional five-year renewal.

Lee & Associates’ Houston brokerage team facilitated the purchase of the two properties at 8121 and 8223 Parkside Ave., while Partners Real Estate Partner Zane Carman worked on the acquisition of 9002 Wayfarer Lane. The sale of the property at 5100 Underwood Road closed in an off-market transaction.

Alterra’s industrial outdoor storage shopping spree

Alterra acquired more than 270 industrial outdoor storage assets throughout the U.S. as of September. The investor serves companies looking to improve their connectivity to store equipment, machinery, vehicle fleets and shipping containers, among others.

Just last month, Alterra closed a 14-acre infill IOS deal in Columbus, Ohio. In July, the company paid $22.4 million for three IOS properties spanning 28 acres in Greater Atlanta. At the start of the year, Alterra bought 17 IOS assets encompassing 44 acres with the seller—TruGreen—committing to a long-term leaseback agreement for all 17 properties.

The advantages of IOS investments

According to GreenPoint Partners CEO Chris Green, investing in industrial outdoor storage has a series of benefits. He posited that the niche is set apart by low ongoing capital expenditure and tripe-net, multi-year leases to single tenants.

Moreover, Green pointed out that the sector’s profitability is expected to increase in the foreseeable future due to low supply—the IOS space is becoming scarce and communities are less likely to zone land for this use—and ballooning demand driven by logistics firms and construction businesses.

Houston’s industrial transactions break the $1 billion mark

Although The Port of Houston’s container traffic increased by 21 percent year-over-year through May, according to a report by Avison Young, The Energy Capital of the World’s industrial price per square foot landed at $107 during the first seven months of the year, below the national average of $135, CommercialEdge’s latest report shows.

Houston’s industrial investment volume clocked in at $1.2 billion year-to-date through July, the same report reveals. The market was among the few whose volumes climbed over the $1 billion mark, with noteworthy mentions including the Bay Area’s $2.5 billion activity, which netted the market its top spot, and Dallas-Fort Worth’s $2.4 billion volume, which took second place.  

The post Alterra Buys 4 Houston-Area IOS Assets appeared first on Commercial Property Executive.

It’s the company’s entry into the Texas market, expanding its colocation capabilities across the U.S. The two data centers—HOU1 and HOU2—provide over 500 MW of new potential capacity.

The transaction was funded with equity commitments from Manulife Investment Management (on behalf of Manulife Infrastructure Fund II, Manulife Infrastructure Fund III and its affiliates), Serverfarm’s majority shareholder, and other minority shareholders. CBRE Data Center Capital Markets exclusively advised the seller.

Serverfarm said in a release that the first phase of one campus is preleased to a large customer, and both campuses are attracting intense interest from hyperscalers and other technology companies.

READ ALSO: More Data Centers, Please!

Serverfarm’s HOU1 data center facility has a current capacity of 350,000 square feet and a line-of-sight of 410 MW of customer capacity. The HOU2 data center campus spans nearly half a million square feet in two buildings and has secured customer capacity to scale to 100 MW using existing grid power.

The sites have a combined acreage of 250 acres, and both campuses have on-site substations with unused available capacity. This uniquely positions Serverfarm to serve the Houston metro at an unprecedented scale, the firm said in a release.

Houston is the seventh-largest U.S. metro economy, home to 7.3 million people, and boasts a GDP of over $630 billion. According to Serverfarm, the central location, skilled workforce, energy infrastructure and business-friendly regulations and tax environment make Houston and the broader Texas area leaders in digital and energy transformation.

Vacancy levels reaching all-time lows

Carl Beardsley, US Data Centers Leader, JLL Capital Markets, told Commercial Property Executive: “Existing data center sites with immediate capacity are in high demand due to a combination of vacancy levels reaching an all-time low and power lead times continuing to push out across the country.”

He added that many data center site requirements prioritize timing to procure the power over being in a top five data center market as generative AI deployments are more location agnostic, prioritizing timing to get the power versus being in a certain latency zone.

Bo Bond, Cushman & Wakefield executive managing director, told CPE that interest in large-scale power availability, plentiful land and less strict latency requirements for AI had driven hyperscalers and operators to expand in a host of historically emerging markets.

“Demand for artificial intelligence and cloud data centers surged in the first half of 2024 in both established and peripheral markets, and absorption is poised to surpass last year’s record levels,” Bond said.

This trend will continue to be driven by providers and investors prioritizing power transmission and hyperscaler deployment, he added. “Despite an expanding pipeline of data center development, demand continues to outpace supply, resulting in consistently declining vacancy rates across the board.”

In July, Microsoft announced it would more than double the size of a data center campus in Medina County, Texas, in the San Antonio metro, the San Antonio Business Journal reported based on a filing with the Texas Department of Licensing and Regulation.

The planned single-story, 244,000-square-foot building reportedly will offer space for up to five tenants. According to SABJ, construction is scheduled to begin in April 2026 and has a tentative dollar value of $483 million.

Robert Martinek, director at EisnerAmper, said that although the overall commercial real estate market has struggled since the pandemic, data centers have grown robustly, doubling their market size in the past four years.

“This has been driven by strong demand for IT and increasingly high-density IT systems advances in cloud-based solutions, artificial intelligence and other new applications and technologies,” Martinek said.

He added that despite the North American data center inventory growing by 20 percent over the past year, active markets including Northern Virginia, Chicago, Dallas-Fort Worth and Silicon Valley have all seen significant net absorption increases and vacancy rates falling below 3 percent. According to Martinek, supply shortages and a high demand during this period have caused average asking rates in these markets to surge by 20 percent year-over-year.

“High-performance computing will require rapid innovation in data center design and technology to manage rising power density needs. Rapidly evolving technologies will further drive and sustain this trend in 2025 and beyond,” Martinek said.

Data center hiring is a challenge

Finding the right talent remains a challenge for data center operators, a vital issue amid rapid growth in this sector, according to a new report from JLL.

The firm’s data center report findings indicated that the booming demand showed no sign of slowing down at midyear, as vacancy set a record low of 3 percent, and occupancy has increased at a 30 percent compound annual growth rate since 2020.

The post Serverfarm Acquires Houston Data Centers appeared first on Commercial Property Executive.

Lunada Rose Partners has acquired Vault Distribution Center, a 185,413-square-foot industrial property in Houston. Vault Partners was the previous owner and developer of the facility, according to CommercialEdge information.

The initial asking price for the property was $21.9 million, but the final purchase price was not disclosed. The facility traded in an all-cash transaction.

The developer acquired the land in November 2022 and started construction on the 16-acre property in March last year. The distribution center came online earlier in 2024 and is already fully leased to Empire Auto Parts, as part of the company’s expansion into the Texas market. The agreement was signed last November, the same source shows.

READ ALSO: Are Co-Warehousing Solutions a Game-Changer for Industrial?

The Class A facility features 34 dock-high loading doors and two drive-in doors, 137 car parking spaces and 23 trailer stalls. Additionally, the building has 32-foot clear heights and ESFR sprinklers.

The distribution center is at 13612 Furman Road, providing easy access to Highway 288. Downtown Houston is within 12 miles, while the George Bush Intercontinental Airport is some 31 miles away.

Houston industrial facilities continue to trade

Houston’s industrial sector registered more than $1.2 billion in transaction volume year-to-date through July, according to the latest CommercialEdge industrial report. Assets in the metro traded for an average of $107 per square foot, slightly below the $135 national average.

In July, KKR acquired Park 8Ninety, a 12-building logistics park in Houston from Artis Real Estate Investment Trust. The approximately 1.8 million-square-foot asset changed hands for $234 million and was delivered in multiple phases between 2017 and 2022.

Earlier this year, KBS sold Clay Crossing Business Center, a 222,750-square-foot light industrial complex in Houston. Completed between 2000 and 2002, the four-building asset was acquired by HPI Holdings II LLC.

The post Vault Partners Sells Fully Leased Houston Industrial Facility appeared first on Commercial Property Executive.

Frost Brown Todd has signed a 23,537-square-foot lease at 1100 Louisiana St. in Houston and will utilize the entire 43rd floor. Cushman & Wakefield and CBRE represented the landlord and the tenant, respectively, in the lease negotiations.

The law firm currently occupies 9,632 square feet at 4400 Post Oak Parkway, a high-rise owned by CP Group, and will relocate to the new premises this month, the Houston Business Journal reported.

Enterprise Products Partners owns the 1.3 million-square-foot, Class A office tower, according to CommercialEdge. The company purchased the tower from Hines in 2005.

The owner uses more than 500,000 square feet, between the fourth and 25th floors, with the tenant roster including Ryder Scott, Gibbs & Bruns and King & Spalding, among others.

READ ALSO: Greater Houston’s Office Market Slowly Recovers

Built in 1980, the tower at 1100 Louisiana St.—also known as Enterprise Plaza—underwent renovations in 2019. The facelift of its lobby included new stone wall finishes, furnishings and upgraded LED lighting. Hines, Gensler and NanoLumens worked on the overhaul. Plans called for the installation of a 576-square-foot LED wall for the lobby, which at the time was the largest commercial office indoor digital installation in downtown Houston.

The tower features 23,509-square-foot floorplates across its 55 floors, 44,046 square feet of retail space, as well as a 13-story parking garage with a 2,234-car capacity. Amenities include a gym, on-site restaurant and conference facility. The building holds LEED Gold and Energy Star certifications.

Located in Houston’s Central Business District, the skyscraper is within walking distance of the Houston City Hall and Sam Houston Park. Multiple quick-service restaurants and transit stops are nearby.

Cushman & Wakefield Executive Managing Director Winfield Haggard Jr., together with Managing Director Diana Bridger, represented Enterprise Products Partners. CBRE Executive Vice President Jon Lee alongside Director Claire Douthit and Senior Vice President Paul Tingley led the negotiations on behalf of Frost Brown Todd.

Houston office relocations on the rise

Office leasing in Houston totaled 5.2 million square feet during the first six months of 2024, a report by Avison Young shows. Law firms accounted for just 3.9 percent of all activity during that interval.

Although the share of new office leases and relocations remained somewhat consistent—55.6 percent of all Houston leases from 2018 to March 2020 and 52.5 percent from April 2020 to June 2024—the first six months of this year saw a surge in fresh leasing activity and relocations, with the figure landing at 67 percent.

The post Law Firm Expands Houston Office Presence   appeared first on Commercial Property Executive.

In a series of successive transactions, Basis Industrial has purchased office and industrial assets totaling 1.1 million square feet throughout Texas and Florida. Beach Point Capital Management provided acquisition financing, while Newmark facilitated the debt sourcing.

The industrial assets—Houston I, DFW II and DFW III—are in the Lone Star State. Basis acquired them from Birtcher Anderson & Davis and COFE Properties. Taurus Investment Holdings sold the office property, a 206,275-square-foot campus in St. Petersburg, Fla.

READ ALSO: Dallas Industrial Investment Sees Surge

The 14 industrial buildings total some 901,200 square feet. Plans call for capital improvements focused on roof and HVAC replacements, as well as drainage and landscape renovations, among others. Tenants include California Fruit Exchange, Francisco & Sons Auto, 1 Dust Group, as well as Ministerios Linaje Escogido and Liturgical Publications, to name a few.

A total of 12 facilities are in the Metroplex, scattered throughout Dallas, Haltom City, Texas, Irving, Addison, Farmers Branch, Carrollton and Fort Worth. The assets are, on average, some 15 miles from the Dallas Fort Worth International Airport, some of them being close to interstates 20, 35W, 35E and 635.

The other two industrial buildings, located in Houston, are roughly 18 miles on average from the Port of Houston and the William P. Hobby Airport. Interstates 69 and 610 are about 4 and 6 miles away, respectively, while Downtown Houston is some 13 miles northeast of the property pair.

Newmark Vice Chairman Stephen Bailey represented the seller of DFW III and Houston I—COFE Properties—and the seller of DFW II, Birtcher Anderson & Davis. Basis Industrial was self-represented by COO & Managing Partner Anthony Scavo.

Basis Industrial doesn’t wait and see

As of September, Basis owned more than 5 million square feet of industrial and self storage space and is expected to close on another 1 million square feet this year. The acquisition of DFW II and III brought the company’s Metroplex portfolio to more than 1 million square feet of shallow-bay, multi-tenant industrial space.

Scavo said, in prepared remarks, that Basis’ goal of growth and expansion is working while other companies are on the sidelines. Last year, the firm acquired and refinanced a six-asset, 1.3 million-square-foot portfolio for a combined total of $220 million. The deal included the purchase of four industrial properties in Florida and Texas.

Dallas-Fort Worth industrial sales soar

Year-to-date through July, investors purchased more than $2.4 billion in industrial assets throughout the Metroplex at a price per square foot of $146, above the national average of $135 per square foot, according to a report by CommercialEdge. The Bay Area was the only market to outshine Dallas-Fort Worth, with a total investment volume of $2.5 billion.

The average asking rents in the metro jumped 7.6 percentage points year-over-year, landing at $6.06 per square foot in July—below the national average of $8.15 per square foot—the same source shows. Dallas-Fort Worth’s vacancy rate stood at 7.1 percent during the same period, slightly above the national average of 6.4 percent.

Meanwhile, the Metroplex’s supply pipeline held more than 16.3 million square feet of under-construction industrial space in July, accounting for 1.7 percent of total stock, the report reveals. Only Phoenix’s pipeline surpassed Dallas-Fort Worth’s, with more than 36.9 million square feet underway.

The post Basis Industrial Closes 1.1 MSF Buying Spree appeared first on Commercial Property Executive.

Safespill has inked a full building, 192,400-square-foot lease to occupy Ares Management’s Brittmoore Industrial Development, a Class A infill distribution facility in Houston. Transwestern Real Estate Services and Colliers represented the tenant and the owner in the leasing negotiations, respectively.

Ares purchased the asset from PinPoint Commercial last year, CommercialEdge information shows.

The fire-protection, flooring-system manufacturer will relocate from Evtex Cos.’ 54,352-square-foot industrial facility, which Safespill has leased fully since 2020.

Safespill is installing an extrusion line at its new headquarters. The addition will allow Safespill to extrude in-house, cutting costs and accelerating manufacturing for its military and commercial clients. The building will be fully operational in 2024’s fourth quarter.

READ ALSO: Q&A: How Will the Manufacturing Investment Boom Impact Industrial CRE?

The Brittmoore facility features a front-load configuration, 32-foot clear heights, a build-to-suit office space of 2,959 square feet, a 60-foot speed bay and a 52- by 55-foot column spacing, as well as a 135-foot truck court and 128 parking spaces.

Located at 4510 Brittmoore Road, the property is some 4 miles south of U.S. Route 290, while downtown Houston is roughly 18 miles southeast. The Port of Houston and the George Bush Intercontinental Airport are within 27 miles. Safespill’s previous location is 22 miles southeast.

Transwestern Real Estate Services Executive Managing Director Brian Gammill alongside Managing Director Carter Thurmond led the leasing efforts on behalf of Safespill. Colliers Vice Chair & Director John Nicholson and Principal & Director Ryan Byrd together with Associate Trey Horne represented Ares Management.

Houston’s industrial demand retains momentum

Throughout 2024’s second quarter, metro Houston’s leasing activity amounted to 8.1 million square feet, according to a report by Cushman & Wakefield. Although the figure was in line with last year’s quarterly average—8.3 million square feet—it came up short compared to the 8.7 million square feet recorded in 2024’s first quarter.

Despite increasing for five consecutive quarters, Houston’s vacancy rate reached 6.7 percent in June, just below the five-year historical average of 6.9 percent, the same source shows.

The growth represented a 100-basis points increase year-over-year through June, which can be explained by the second quarter’s industrial deliveries that clocked in at 4.2 million square feet, the report shows. Of the completed space, 2.9 million square feet, or 68.6 percent, was vacant as of June.

Another industrial lease deal closed earlier this year at Jackson-Shaw’s 536,992-square-foot industrial project in Houston. Festival Trading Co. signed an agreement to occupy 168,893 square feet at the development.

The post Ares Lands Full-Building Industrial Tenant in Houston appeared first on Commercial Property Executive.

The metro also saw a rise in construction starts during the same period when compared to 2023. Six developments totaling about 275,417 square feet broke ground year-to-date as of July.

These positive trends can also be attributed to an increased focus on the medical office building sector, driven by a growing ageing population.

However, Houston continues to face some challenges. The market’s vacancy rate remained considerably above the national average, standing at 23.8 percent. Meanwhile, assets traded for $103 per square foot on average, well below other top-performing Southwest cities.

As office properties are losing value due to ongoing challenges, CommercialEdge has developed a tool to highlight the likelihood of how assets in some markets can be repurposed into housing space. The data provider’s Conversion Feasibility Index shows that, while Texas markets don’t rank among the top markets for potential conversion, there is a lot of nationwide potential for the process.

Under-construction pipeline lags national figures

As of July, Greater Houston’s office sector had more than 1.8 million square feet underway, representing 0.7 percent of total stock—below the 1.1 percent U.S. average. The market trailed most of its peers, including Austin (4.6 percent), Dallas (1.8 percent) and Atlanta (0.9 percent), but fared better than Phoenix (0.4 percent).

However, six projects started construction in the first seven months of the year, which are expected to total 275,417 square feet upon completion. This figure is more than six times larger year-over-year.

Houston’s office sector is also seeing a rise in medical office developments, possibly caused by the ageing population—by 2034, the metro will see the nation’s third-largest increase in cohorts aged 65 and older.

Earlier this year, North Cypress Land Ventures LLC started construction on the first phase of Grand Cypress Medical Pavilions in Cypress, Texas. The 30-acre, $600 million project will come online over the course of five years.

Office completions rose in the first half of 2024

Houston’s office sector saw a 4.1 percent growth in deliveries year-over-year, with 13 properties coming online in the first seven months of this year. The developments, totaling more than 1.4 million square feet, represent 0.5 percent of total inventory.

The metro fared better than most peer markets, surpassing Atlanta (1.1 million square feet), Austin (945,519 square feet) and Dallas (850,500 square feet). The Bay Area (958,030 square feet) and Raleigh – Durham (937,470 square feet) also fared worse.

By the end of the year, Texas A&M University and Medistar Corp. are set to complete Horizon Tower, a 485,000-square-foot building within the $550 million Texas A&M Innovation Plaza. The life science and medical office high-rise will further boost the metro’s MOB inventory.

Sale prices still below other Sun Belt markets

Greater Houston’s office sector registered $482 million in investment volume year-to-date as of July. Assets changed hands for $103 per square foot on average, well below the $173 national average and peer markets. Dallas ($116 per square foot), Atlanta ($146 per square foot) and Phoenix ($171 per square foot) are some of the metros that performed better.

Office deals are getting tougher to complete because of a mix of factors, including shifting market conditions, changing tenant needs and more scrutiny during negotiations. This trend is also seen in Houston’s performance, where the total sales volume for the second quarter saw a year-over-year decline of 32.3 percent, clocking in at only $109.1 million.

However, pricier deals are still closing. In June, Howard Hughes Holdings purchased Waterway Plaza II, a 142,400-square-foot office building in Greater Houston, for $19.2 million. The price per square foot was almost $135.

Houston’s office vacancy rate stays put

Houston’s office vacancy rate at the end of July remained relatively stable over the year, increasing only by 20 basis points to 23.8 percent. Although the rise was modest, the rate remains significantly higher than the 18.1 percent national average.

Peer markets such as Atlanta (18.4 percent), Dallas (21.8 percent) and Austin (22.9 percent) also performed better than Greater Houston. The metro’s average listing rate that month averaged $29.82, below the $31.67 national figure.

Notable leasing activities in the area included Camden Property Trust’s decision to relocate its headquarters to 104,013 square feet at Invesco Real Estate’s Williams Tower in Houston. The 1.4 million-square-foot office property is the tallest building outside of the metro’s central business district.

Additionally, Skanska’s 1550 on the Green building, that opened in February, saw a rise in occupancy. In June, Boston Consulting Group inked a 12-year lease for about 53,000 square feet and the company is set to move in by the end of next year.

Coworking footprint below national average

Greater Houston’s office sector had more than 4.3 million square feet of shared space as of July. Accounting for 1.7 percent of its total inventory, the metro’s coworking space slightly lagged the 1.8 percent national average.

Raleigh – Duram (2.5 percent), Denver (2.2 percent) and Atlanta (2.1 percent) surpassed the market, while Philadelphia (1.4 percent), Austin (1.5 percent) and Charlotte (1.6 percent) were at the opposite pole.

The coworking operator that had the largest footprint in the metro was Regus, with 540,335 square feet across 32 properties. The firm was followed by The Cannon, with 444,341 square feet, and Workstyle Flexible Spaces, with 429,159 square feet.

The post Greater Houston’s Office Market Slowly Recovers appeared first on Commercial Property Executive.

Trammell Crow Co. has broken ground on Blue Ridge Commerce Center, a five-building, 1.4 million-square-foot industrial project in Houston. Completion is expected next summer.

Seeberger Architecture provided design services while BGE served as civil engineer. E.E. Reed Construction is the project’s general contractor and Linco Construction Co. handles the public infrastructure works. Sumitomo Mitsui Banking Corp. is funding the development.

Buildings 1, 4 and 5 will take shape as cross-dock facilities with 36-foot clear heights, ranging from 257,001 to 431,017 square feet. The 157,626-square-foot Building 2 will be a front-load structure with 32-foot clear heights while Building 3 will be a 153,928-square-foot facility with 28-foot clear heights.

READ ALSO: What’s Driving Optimism in CRE? Baker Tilly’s Brent Maier Weighs In

TCC is pursuing LEED certifications for all five buildings. Plans also call for new underground utilities, a new regional stormwater detention pond and roof-mounted solar panels to reduce operating costs.

CBRE handles property leasing. The brokerage team includes CBRE Senior Vice Presidents Cape Bell and Jason Dillee alongside Transaction Manager Kayla Ripple.  

Carrying the address 4141 McHard Road, the site is some 5 miles from U.S. Route 90, while Port of Huston is 21 miles northeast. William P. Hobby and George Bush Intercontinental airports are roughly 19 and 37 miles away, respectively.

Houston’s industrial pipeline shrinks

Metro Houston’s industrial pipeline totaled 10.9 million square feet of under-construction space as of June, according to a recent Cushman & Wakefield report. A considerable shrink compared to last year’s 27.1 million square feet underway during the same period.

As developers brought the new supply online—year-to-date through June, industrial deliveries encompassed 10.9 million square feet, same as Houston’s pipeline—the metro’s vacancy rate inched upward to 6.7 percent, up 100 basis points year-over-year, the report goes on to show.  

During the second quarter, construction began on 3.6 million square feet of industrial space. The figure surpassed 2023’s 2 million square feet that broke ground during the same interval but fell short of last year’s first-quarter total of 6.8 million square feet.

One of the projects that started construction in Q2 2024 was WestPoint 45. The 728,000-square-foot speculative development is slated for completion early next year.

The post Trammell Crow Breaks Ground on 1.4 MSF Houston Industrial Park appeared first on Commercial Property Executive.

Commercial real estate services firm Lee & Associates – Houston has acquired Commercial Resource Capital. The mortgage banking and real estate investment services company is also Houston-based.

The merger will allow Lee & Associates – Houston to provide a wider variety of services, such as debt and equity placement, investment sales and structured finance. The acquisition will also expand thecompany’s footprint and its market presence by serving a wider range of clients. With the merger, CRC Founder Jason Dannatt joins Lee & Associates as head of capital markets.

CRC has been active in the industry for more than 50 years and worked with insurance company investors throughout North America. The company provides capital solutions for various transactions which included construction loans, fixed and adjustable-rate financing, mezzanine and secondary financing structure and equity investments, among other services.

Founded in 2015, Lee & Associates – Houston is part of a network of brokers located in more than 75 offices throughout North America. In Commercial Property Executive’s recent ranking of the top real estate brokerage companies, the Lee & Associates network occupied the eighth position with $7.6 billion total sales investment volume as of 2023.

Solid outlook for M&A deals

Last year, several high-profile M&A deals emerged and the trend appears to continue this year as well. In May, Northmarq announced its merger with Morrison Street Capital, allowing the firm to expand its services into the investment management and advisory sectors. In that same deal, Northmarq also acquired NBS Real Estate Consulting, an affiliate of Morrison Street Capital.

According to Tim Bodner, global real estate deals leader at PwC, there is a trend in the brokerage space toward consolidation of a very fragmented ecosystem. The most important factors driving this trend are the scale of the firm and its product offerings, diversity of product mix and scope, along with filling geographic gaps, Bodner told CPE.

The post Lee & Associates Office Merges With CRC appeared first on Commercial Property Executive.

Interra Capital Group has purchased The Esperson Buildings, two historic office properties in downtown Houston totaling 600,000 square feet. The company bought the assets following foreclosure, with Metropolitan Life Insurance Co. having held the mortgage.

Interra paid $12 million as the highest bidder of the foreclosure sale, Harris County public records show. The seller was Contrarian Capital Management, which owned the iconic pair of buildings since 2012, according to CommercialEdge. The original note, totaling $52.8 million, was issued in 2018, then amended in 2022 and reduced to a $41 million loan.

The process was led by Cameron Management, which will continue to act as property manager for a designated period.

A Houston landmark

The office complex includes two buildings completed in 1925 and 1941, respectively, both designed in the Italian Renaissance and Art-Deco architectural styles. Their façades feature terracotta details, cornices and columns.

The Niels Esperson Building rises 32 stories and The Mellie Esperson Building was constructed as a 19-story annex. Notable interior features include move-in ready coworking spaces, 14 passenger elevators, 31,500-square-foot floorplates, 586 vehicle parking spots and 12,609 square feet of first-floor retail.

Amenities include a conference center, on-site property management, a food court with multiple restaurant options, health-care, beauty and spa venues, 24-hour security and visitor valet parking services. Amegy Bank, Cameron Management, Impact Hub Houston, The Cannon, MV2 Insurance Solutions, Kerrco Inc. and Sarita Energy Resources are among the tenants, according to CommercialEdge.

The Esperson Buildings are close to downtown Houston, with multiple bus and light rail stops nearby. The location is 11 miles from William P. Hobby Airport and within 20 miles of George Bush International Airport.

Office investment activity in Houston

Office loan defaults and delinquencies are on the rise in 2024, with $1.87 billion in recently delinquent notes as of June, a recent CommercialeEdge report shows. The sector’s delinquency rate reached 7.5 percent, marking a 4.5 percent increase year-over-year.

Even with discount purchases on the rise, Houston’s office investment volume remained steady, with assets changing hands for a total of $451 million year-to-date through June. The amount pushed the metro among the nation’s top 10 leaders in office investment, while ranking third among Southern markets, after Dallas-Fort Worth ($510 million in sales) and Washington, D.C. ($1.3 billion).

The post Interra Buys 600 KSF Houston Landmark Through Foreclosure appeared first on Commercial Property Executive.

Joining the major corporations that have left California in recent years, Chevron announced on Friday that it will relocate its headquarters to Houston.

The energy giant will move its base of operations from Bishop Ranch, a mixed-use campus in San Ramon, Calif., to two Houston office towers that the company owns and occupies in full.

According to Chevron, the relocation to Houston will take place over five years. Mike Wirth, the firm’s chairman & CEO, as well as Vice Chairman Mark Nelson, will move to Houston later this year, joining other senior members of the leadership team already based in the city. About 7,000 Chevron employees are currently located in the Texas city, compared to 2,000 in San Ramon. Chevron will become the second-largest public company located in Houston, second only to Exxon Mobil Corp.

Making the move

The origins of Chevron’s San Ramon downsizing and Houston expansion go back several years. In 2022, the firm reduced its presence nearly threefold when it sold Chevron Park, a 1.3 million-square-foot campus within Bishop Ranch that had been its base of operations since 1982. Chevron sold the campus back to its previous owner, Sunset Development Co. With that sale, the company leased 400,000 square feet at Bishop Ranch – 2600, a 1.8 million-square-foot property that is also owned by Sunset.

According to previous coverage in CPE, the sale was motivated by the firm intending to focus more of its operations in Houston.

The company has had a presence near the Houston Energy Corridor for more than a century. Chevron acquired the towers on Louisiana and Smith streets in downtown Houston in 2004 and 2011, respectively, according to information from CommercialEdge.

1500 Louisiana St. is a 40-story, 1.1 million-square-foot Class A+ tower completed in 2000. The 1.2 million-square-foot 1400 Smith St., which opened in 1983, rises 50 stories. During its ownership, Chevron has renovated the buildings’ interiors and mechanical equipment.

In 2017, Chevron spent $10 million to renovate 1500 Louisiana St., according to Texas A&M University’s Texas Real Estate Research Center. Both buildings are LEED-certified.

READ ALSO: As Office Pipeline Shrinks, Existing Class A Buildings Should Benefit

Along with the towers, Chevron owns 3901 Briarpark Drive, a 222,544-square-foot office property in the city’s Westchase suburb. The company also hosts The Launchpad at Rice University’s Ion District Development, where it conducts research into integrating external technologies into its operations around lowering its carbon footprint, as well as data analytics and information technology.

Another potential project that has been a source of speculation is 1600 Louisiana St., a 58-story tower that would span 1.5 million square feet.

A long time coming

Chevron’s presence in San Ramon dates back to 1879, when a series of smaller, California-based companies merged with Standard Oil.

According to Bloomberg, reasons for Chevron’s departure from California include the state’s emissions regulations and its weaning off oil and gasoline consumption. The Golden State accounts for more than a third of the nation’s electric vehicle sales. It also has the nation’s most aggressive decarbonization initiative and has set a 2045 deadline for net-zero emissions.

Chevron also cited Texas’ lower taxes and cost of living as motivations, according to the Bloomberg report.

Heading southeast

Over the past several years, a number of corporations have moved from California to Texas, notably technology companies. Last month, Elon Musk announced that he would be moving the headquarters of both X, formerly known as Twitter, and SpaceX to the latter company’s Starbase campus. Tesla, formerly based in Palo Alto, relocated to Austin in 2021.

Oracle, formerly based in Redwood City, moved to Austin in 2020, but is now set to relocate its headquarters to Nashville.

A recent CBRE report on corporate relocations found that Sun Belt states–including Texas, Florida and Georgia–have received the most net gains in space from Fortune 500 firms over the past six years. California, Illinois, New York and New Jersey have had the sharpest decreases.

Still, the series of moves has not done much to affect fundamentals in the Los Angeles and Bay Area markets, which have retained some of the nation’s largest pipelines, asking rents and transaction volumes, data from CommercialEdge’s latest National Office Report shows.

The post Goodbye, Golden State: What’s Driving Chevron’s HQ Move appeared first on Commercial Property Executive.

Investment & Development Ventures, along with equity partner Standard Real Estate Investments, is planning to develop Veterans Memorial Business Park, a 463,000-square-foot industrial campus in Northwest Houston. The site, which counts as infill, is at 10326-10330 Veterans Memorial Drive, with construction slated to begin by the end of the year.

Veterans Memorial Business Park will consist of three spec buildings of 219,000 square feet, 151,000 square feet and 93,000 square feet. All of them will have 32-foot clear heights and were designed to accommodate tenants as small as 46,000 square feet.

READ ALSO: Getting in the Heads of Industrial Tenants

“Houston is one of the few major industrial markets with an enviable list of diverse industrial demand drivers,” Shubhra Jha, principal at Standard, told Commercial Property Executive.

Those drivers include the busiest U.S. port relative to overall tonnage, U.S.-leading population growth, access to other major Texas and southeastern U.S. cities. Houston also has a massive manufacturing sector that includes the world’s largest petrochemical complex, Jha said.

“That deep bench of demand generators, along with a business-friendly and low-cost environment, makes Houston’s industrial market attractive to a diverse slate of owners and users.”

Standard has been active in other markets as well. The firm recently invested in such industrial projects as a 180,000-square-foot facility in Reno, Nev., with Mohr Capital, and partnered with Trammell Crow on the development of the Apopka Business Center in Orlando, Fla.

The company targets shovel-ready warehouse/logistics projects between 150,000 square feet and 500,000 square feet in major logistics markets nationwide.

As for IDV, the firm has developed more than 9 million square feet of projects since its formation and delivered 4.1 million square feet of warehouse space since the start of 2023. Three-quarters of the completed space has been either leased or sold to a user or institutional equity buyer.

Houston’s industrial market, still healthy

The Houston industrial market had 3.2 million square feet of absorption in the first quarter of this year, down from its postpandemic peak, but slightly above its prepandemic (2016-2019) average, according to an Avison Young report. The market’s tenant base is fairly diverse, including logistics, but also wholesalers and industrial equipment and machinery businesses.

Construction activity in the market, by contrast, is currently at its lowest point since 2016, the same report shows, with just 985,000 square feet breaking ground in the first quarter of 2024. Before the pandemic, development averaged 4.2 million square feet per quarter. The trend in Houston mirrors the wider U.S. slowdown of industrial development.

The postpandemic surge in industrial development in Houston may have ebbed, but the sizable influx of space in recent quarters (including a record total in 2023) has pushed the market’s vacancy rate up 190 basis points year-over-year in the first quarter, coming in at 7.6 percent. But since demand is still robust, vacancies will probably head downward again as the new space is absorbed.

The post Standard, IDV Team Up to Develop Houston Industrial Campus appeared first on Commercial Property Executive.

The approximately 1.8 million-square-foot, master-planned campus was completed in phases between 2017 and 2022.

The 127-acre property has a diverse mix of Class A single-tenant and multi-tenant logistics buildings, with clear heights ranging from 24 feet to 36 feet, able to serve a variety of industrial uses.

The park has direct access to Beltway 8 and other major interstate transportation routes.

Houston continues to benefit from strong demand fundamentals and comparatively lower supply than many other U.S. markets, KKR said in a statement.

Alex Olshansky, head of investments at Zenith IOS, told Commercial Property Executive that Houston’s industrial market benefits from multiple durable demand drivers: a large and growing population base, one of the most active ports in the country, and a position as the de facto American energy capital.

“Houston is also well-positioned to benefit from ongoing re-industrialization and nearshoring trends, which should provide meaningful growth tailwinds in the region,” he said.

Reggie Beavan, vice chairman in Newmark’s Houston office, told CPE that Houston’s industrial market is defined by substantial demand drivers of energy, manufacturing, population growth/consumptive demand and a strong logistics network.

READ ALSO: Houston a Bright Spot Amid Slowing Medical Office Sector

The Port of Houston remains one of the most active ports across the U.S. and is the largest Gulf Coast container port, handling 73 percent of U.S. Gulf Coast container traffic.

The Port has seen a tremendous increase in container traffic and is expected to handle nearly 3.4 million containers in 2024, the greatest volume on record, according to Beavan.

Houston’s central location

Houston is also served by all three Class I Railroads, which further bolsters the region’s ability to logistically serve the U.S. in a central location.

“As the fourth-largest city in the U.S., Houston has a very business-friendly environment, which is not dominated by heavy regulation or labor union strife,” Beavan said. “These factors—combined with Texas’ low tax environment—have continued attracting investment in Houston, further contributing to the region’s desirability as a preferred logistics hub.”

Houston’s industrial market totals approximately 768 million square feet. This vast network of warehouse and manufacturing facilities serves as a local, regional, and super-regional distribution network.

Major logistics companies such as Walmart, Amazon, Home Depot, Daikin, DHL and numerous other third-party logistics companies rely on Houston’s strategic location to serve their customer base.

Additionally, Houston’s port market is home to the second-largest petrochemical complex in the world; given the global demand for energy and petrochemicals, this helps define Houston as one of the nation’s premier logistics markets.

KKR is acquiring the park through the KKR Real Estate Partners Americas III fund and capital accounts advised by KKR. Across its strategies, KKR has committed or acquired approximately $7.5 billion of logistics assets in the industrial sector since 2018 and currently owns over 48 million square feet of industrial real estate in major U.S. metros.`

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Capital Development Partners has completed Cedar Port Logistics Center Building II, an 800,405-square-foot facility in Baytown, Texas, a Houston submarket.

Designed by BRR Architecture, the facility is part of a 90-acre campus that broke ground in 2021. The $150 million project also features an 800,500-square-foot warehouse that came online in 2022 and was sold to Stockbridge Capital Group the same year, according to CommercialEdge data.

The logistics campus is part of the 15,000-acre TGS Cedar Port Industrial Park, the largest master-planned rail- and barge-served industrial park in the U.S.

READ ALSO: Why the Outlook Is Positive for Those in CRE

The new front-load distribution center has dual rail service to Union Pacific and Burlington Northern Santa Fe and is divisible down to 300,000 square feet. The facility has 36-foot clear heights, 56- by 60-foot bay spacing, 110 dock-high loading doors and two drive-in doors, as well as 10 rail doors.

The property also features 185-foot truck courts and 166 trailer stalls, 209 car parking spaces, 7,500 square feet of office space and levelers on each door. Colliers Executive Vice President Ryan Byrd and Vice Chair John Nicholson are in charge of leasing the facility.

Building II is at 6500 Nita Way, some 8 miles from downtown Baytown and 28 miles from the Port of Houston. Downtown Houston is roughly 34 miles away, while George Bush Intercontinental Airport is 46 miles northwest.

Houston’s industrial sector holds steady

Metro Houston’s industrial under-construction pipeline as of May stood at 6.8 million square feet, according to the latest CommercialEdge industrial report. Additionally, the vacancy rate during the same month clocked in at 8.0 percent, well above the 5.6 percent national average.

One of the current developments is WestPoint 45, a 728,000-square-foot industrial building in Houston’s Greenpoint submarket. The facility is scheduled to come online next year.

Other notable activities in the market include Lovett Industrial and PCCP LLC’s groundbreaking of Stafford Logistics Park, a 785,000-square-foot campus in Stafford, Texas. The development is set to include a cross-dock warehouse and a front-load facility.

The post Capital Development Completes 800 KSF Houston Facility appeared first on Commercial Property Executive.

Camden Property Trust has signed a 104,013-square-foot, long-term lease at Williams Tower, Invesco Real Estate’s 1.4 million-square-foot office building in Houston. The company will relocate its headquarters to floors 25 through 29 of the high-rise in the third quarter of next year.

Avison Young worked on behalf of the tenant, while CBRE represented Invesco.

Camden is currently headquartered at 11 Greenway Plaza, another Houston high-rise. The firm renewed its 86,733-square-foot lease at the building in 2013, according to CommercialEdge data. The contract is set to expire at the end of the year.

Tallest building outside the CBD

Invesco acquired the 64-story tower in March 2013 for $412 million—or $277.93 per square foot—from Hines, the same source reports. The company financed the purchase with a $185.4 million loan from Prudential Financial.

Williams Tower came online in 1983 and is Houston’s tallest building outside of the central business district. The high-rise features floorplates averaging 23,500 square feet, as well as almost 9,000 square feet of retail space. The LEED Platinum-certified tower also has 3,100 parking spaces, 39 passenger elevators and a conference center.

READ ALSO: Office Visits Continue to Improve

Tenants include Ecopetrol USA, CBRE, Industrial and Commercial Bank of China and Morgan Stanley, CommercialEdge data shows.

The tower is at 2800 Post Oak Blvd., in the Galleria submarket, and less than 9 miles from downtown Houston. George Bush Intercontinental Airport is within 28 miles.

Avison Young Principals Anthony Squillante and Dustin Devine worked on behalf of Camden. CBRE Senior Vice President Warren Savery and Senior Associate Nina Seyyedin represented the landlord.

Houston’s office sector still faces headwinds

Houston’s office vacancy rate clocked in at 22.5 percent as of May, considerably above the 17.8 percent national average and the second-highest value registered in the South, according to a CommercialEdge office report. The metro’s rents averaged $29.56 that month.

In one of the metro’s larger leasing deals signed in the first five months of the year, Blue Cross Blue Shield of Texas committed to 132,000 square feet at the Westbelt Office Center, a 134,707-square-foot building in Houston. The company will occupy the space for at least 11.5 years.

The post Camden Relocates HQ to 104 KSF at Houston Tower appeared first on Commercial Property Executive.

The property is currently 55 percent occupied, which Howard Hughes characterizes as providing needed inventory to its office portfolio in The Woodlands Town Center, which is currently 96 percent leased. According to the company, Waterway Plaza II is expected to achieve stabilized net operating income of $3 million in the coming years.

Waterway Plaza II is a LEED Silver and Energy Star certified building near The Woodlands Waterway and the retail, dining and entertainment venues in its vicinity. The Waterway runs from The Woodlands Mall to Lake Woodlands and connects much of The Woodlands. Waterway Plaza II is also near 10 Waterway, an undeveloped office site adjacent to the Waterway Square retail building.

READ ALSO: Office Debt – The Underwater Mountain

The Woodlands is a 28,500-acre master-planned community developed by Howard Hughes about 27 miles north of downtown Houston, with a current population of 123,000 residents, and nearly 72,000 people who work in the community. Howard Hughes, which is headquartered in The Woodlands, focuses largely on master-planned communities, holding those and other properties in Texas, New York, Maryland, Nevada, Arizona and Hawaii.

Howard Hughes recently secured $130 million for the refinancing of 9950 Woodloch Forest Drive, a 601,000-square-foot office building in The Woodlands. The company acquired the asset from Occidental Petroleum Corp. in 2019 and relocated its corporate HQ to the building from Dallas.

The Woodlands is a relatively strong office submarket

Office vacancy in The Woodlands submarket came in at 18.5 percent in the first quarter of 2024, according to Colliers, which is higher than previous quarters, but compares favorably to 26.7 percent for the overall Houston area in the first quarter, and some of the other large submarkets in the metro.

The Houston CBD turned in a vacancy rate of 30.8 percent, while the West Loop/Galleria is experiencing 29.7 percent vacancy. At 40 million square feet and 23 million square total office inventory, respectively, those two markets are larger than The Woodlands, which is by no means small at 12.1 million square feet.

Overall in the Houston-area office market, demand continues to lag behind supply, with net absorption dropping to about negative 616,400 square feet during the first quarter of 2024, following the previous quarter’s positive absorption. Firms are reducing their footprints, Colliers reports. One of the larger examples in the first quarter happened to be in The Woodlands, where U.S. Oncology moved out of 200,000 square feet at 10101 Woodloch Forest into about 26,500 square feet in The Woodlands Towers at The Waterway.

The post Howard Hughes Snaps Up Metro Houston Office Asset appeared first on Commercial Property Executive.

As part of a nationwide wave of growth among experiential retail, Simon Property Group is expanding its offerings, inking a deal with Camp to open two new locations at Simon shopping centers—including King of Prussia Mall. Separately, the company previously struck a deal with Netflix to open one of the steaming service’s new experiential concepts at the same King of Prussia, a Greater Philadelphia Simon property.

Beside the King of Prussia location, which will open this year, Camp and Simon also plan a new experience at the Galleria Mall in Houston, for 2025. Both spaces will exceed 10,000 square feet.

Earlier this year, Simon also inked a deal with Netflix to include a Netflix House concept in 2025 at the King of Prussia Mall. The concept was created by the streaming giant as a retail, dining and live entertainment venue. Another Netflix House location will open soon at Galleria Dallas, which is currently owned by Metropolitan Life Insurance.

READ ALSO: Property Management Success: Reimagining Retail

Camp currently operates in Atlanta, Boston, Chicago, Dallas, Los Angeles, New York and Washington, D.C. Simon’s Burlington Mall Camp location, in the Boston market, opened in 2022. That one recently announced that Bluey x Camp, a collaboration with BBC Studios, will open later this summer.

Camp has been providing entertainment for young families since 2018, offering immersive retail experiences tied in with popular staples including The Little Mermaid, Trolls, Encanto and Bluey.

Experiential retail growing

In its Brown Book of Retailer and Restaurant Expansion 2024, Garrick Brown anticipates strong growth this year among experiential retail operations, including those set up for family amusement, such as Camp. There will be a net of more than 150 openings of family-oriented amusement at malls in 2024, the company forecasts.

READ ALSO: Retail Investors Are Adapting to Disruption. Here’s How.

Other experiential retail growth this year is set to involve art and culture exhibits as part of museum concepts, with nearly 30 net openings in 2024, and escape rooms, which is still largely a travel-destination concept that will see nearly 20 openings this year.

The largest growth trend among experiential retail will involve “competitive socializing,” the Brown Book found, including pickleball, bocce, bowling and other activities. There will be 378 openings of this kind of experiential retail this year, according to Garrick Brown.

The post Simon Doubles Down on Experiential Retail appeared first on Commercial Property Executive.

Boston Consulting Group has inked a 12-year lease for about 53,000 square feet plus parking at the 1550 on the Green office building in Houston.

Now the property is nearly half—48 percent—leased, with BCG expected to take occupancy toward the end of next year. Previously, international law firm Norton Rose Fulbright committed to a 15-year lease for 32 percent of the office space and began relocating this month.

Skanska broke ground on the 387,500-square-foot development in June 2021 and opened the tower this February. Common-area amenities include a fitness center, rooftop conference facilities, parking and 7,000 square feet of retail, including a restaurant and coffee shop.

READ ALSO: Office Debt – The Underwater Mountain

Located at 1550 Lamar St. near Discovery Green, the building has direct access to the Lamar Bike Trail, which runs through downtown Houston, and has attained a variety of sustainability standards, including LEED Platinum, WELL Platinum, WiredScore Platinum and Fitwel certifications.

The 1550 on the Green building isn’t Skanska’s only recent project in Houston. The company and its joint venture partner, B. Bell Builders, will soon start work on a new development adjacent to McNair Hall at Rice University. The 112,000-square-foot structure for the Jones Graduate School of Business will consist of new classrooms, Ph.D. student office space, and various breakout and meeting spaces.

Houston leasing sags

In its first quarter 2024 earnings report, Skanska noted that the U.S. leasing market is lagging overall, but some segments and locations are nevertheless seeing improved activity. Tenants are focusing on high-quality, sustainable office space in locations good enough to help attract and retain employees, the company posited.

Meanwhile, Houston’s office market posted negative net absorption of about 616,400 square feet during the first quarter of 2024, a reversal from positive absorption of 563 million square feet in the last quarter of 2023 and 287,500 square during the first quarter of 2023, according to Colliers. The marketwide vacancy rate increased to 26.7 percent in Q1 2024, and will likely continue to rise in the immediate future as tenants occupy their new, downsized offices and leave larger spaces vacant, Colliers forecasts.

Developers are responding to the sluggish market by dialing back construction. As of the first quarter, some 214,400 square feet of office was underway in Houston, a steep decline from the 969,200 square feet a year earlier, the same brokerage shows.

The post Boston Consulting Takes 53 KSF at Skanska Tower in Houston appeared first on Commercial Property Executive.

Howard Hughes Holdings Inc. has secured $130 million for the refinancing of 9950 Woodloch Forest Drive, a 601,000-square-foot Class A office building in The Woodlands, Texas.

The non-recourse note carries a five-year term and amortizes on a 30-year schedule, bearing a fixed-rate interest of 7.07 percent. Wells Fargo and Argentic Real Estate Finance originated the loan, public records show.

This refinancing amounts to 24 percent of the company’s 2025 maturities while simultaneously addressing Howard Hughes’ largest debt maturity in the next two years. Bank of America had issued the previous $137 million loan in 2020.

The company acquired the asset from Occidental Petroleum Corp. in 2019, as part of a $565 million portfolio deal. Following the purchase, Howard Hughes relocated its corporate headquarters to 9950 Woodloch Forest Drive from Dallas.

READ ALSO: Office Debt – The Underwater Mountain

Howard Hughes CFO Carlos Olea said, in prepared remarks, that the office building was empty upon its acquisition but is currently 98 percent leased. Other tenants at the property include McKesson Specialty Health and Lancium Technologies Corp., among others.

An office high-rise near Houston

The high-rise at 9950 Woodloch Forest Drive rises 31 stories as part of The Woodlands Towers at the Waterway office campus. The 2014-built tower has floorplates of roughly 28,400 rentable square feet, floor-to-ceiling glass windows and column-free interiors.

Amenities feature an indoor sports court, a lobby café and custom art pieces, as well as a 33,000-square-foot rooftop terrace, to name a few. The property received LEED Silver, Energy Star and BOMA 360 certifications.

Interstate 95 is less than 1 mile from 9950 Woodlock Forest Drive, while downtown Houston is roughly 30 miles away. The Woodlands Mall, a 160-store shopping center, is within walking distance.

Houston’s high office vacancy rate

As of April, Greater Houston’s office vacancy rate stood at 23.6 percent, up 30 basis points year-over-year but down 70 basis points year-to-date, according to a recent CommercialEdge report. During the same interval, the national office vacancy rate climbed 160 basis points to 18.3 percent.

The metro had the highest vacancy rate in the Southwest as of April, followed by Austin (22.4 percent) and Dallas (21.1 percent), the same report shows.

The post Howard Hughes Lands $130M Refi for Houston-Area Office Tower appeared first on Commercial Property Executive.

Blue Cross Blue Shield of Texas has leased 132,000 square feet at the Westbelt Office Center, a 134,707-square-foot office building in Southwest Houston. The company signed an 11.5-year lease with the owner, identified by CommercialEdge as an entity affiliated with Sagard Real Estate.

Harvey | Harvey-Cleary is tasked with the buildout, expected to be completed in early 2025. New amenities will include an onsite café, employee training center and multi-purpose room.

The property debuted in 1999, with its first tenant being HCA Houston Healthcare, which signed a 100,552-square-foot lease in 2000. A year later, Sourcepoint leased the remaining 34,852 square feet.

READ ALSO: Designing an Office Experience That Feels Like Home

Located at 8101 W. Sam Houston Parkway S., between the Westwood and Sharpstown neighborhoods, Westbelt Office Center is roughly 2 miles north of Interstate 69 and 7 miles south of Interstate 10. Downtown Houston is some 17 miles northeast.

Blue Cross Blue Shield’s office endeavors

With this lease, BCBSTX expands to 17 facilities throughout Texas, employing more than 168,000 physicians and health-care practitioners. The firm’s footprint includes offices in Dallas-Fort Worth, Austin and San Antonio, among others.

Health Care Service Corp. also operates Blue Cross Blue Shield in Illinois, Montana, Oklahoma and New Mexico. Last year, Blue Cross Blue Shield of Illinois leased a 103,000-square-foot facility in Chicago, destined to house nearly 300 customer service and information technology personnel. In 2020, BCBSIL brought online a 130,000-square-foot multipurpose facility in Chicago, creating roughly 330 jobs to date. There, the firm redeveloped an abandoned retail store.

Blue Cross Blue Shield of New Mexico broke ground on a neighborhood center in Albuquerque this February. Completion is expected in the summer.

The post Blue Cross Takes 132 KSF in Houston appeared first on Commercial Property Executive.

McCarthy Building Cos. has signed a 38,230-square-foot lease at 2200 Post Oak, a 22-story Class A office building in Houston’s Galleria submarket. The tenant will relocate from Greenway Plaza and will move into the new space next year.

Stream Realty Partners represented the landlord, Masaveu Real Estate, while JLL negotiated on behalf of the tenant.

Masaveu purchased the mid-rise office building in 2015, from the joint venture of TRC Capital Partners, L&B Realty Advisors and Stream Realty Partners. PNC Bank provided a $92 million loan for the acquisition, with a maturity date set for late 2025, CommercialEdge data shows.

Also known as BBVA Compass Plaza, 2200 Post Oak is a 326,200-square-foot office building that features 25,476-square-foot floorplates, nine passenger elevators, 943 parking spots spread across six levels of parking and 12,000 square feet of first-floor retail space, according to CommercialEdge. Amenities include on-site access to two restaurants, dining and retail options, dry cleaning services and an upcoming fitness center, scheduled for delivery in 2025.

The 2013-built building has received both LEED Gold and Energy Star certifications. Notable tenants at 2200 Post Oak include Firmspace, Insight Global, Nan and Co. Properties and The WindAcre Partnership.

The approximately 3-acre property at 2200 Post Oak Blvd. is close to Loop 610 and Interstate 10, in an area with multiple bus stops. The property is some 8 miles from downtown Houston, 16 miles from William P. Hobby Airport and 27 miles from George Bush Intercontinental Airport.

Stream Realty Partners Senior Vice President Brad Fricks and Vice President Adam Ross worked on behalf of the landlord, while McCarthy Building Cos. was represented by JLL Executive Vice Presidents Scott Wetzel and Beau Bellow.

Houston’s vacancy rates on the rise

Houston’s office vacancy clocked in at 23.5 percent in March, up 10 basis points year-over-year, a recent CommercialEdge report shows. The metro came in third in the U.S. after San Francisco (24.2 percent) and Detroit (32.1 percent).

Some recently inked office deals in the market include Lionstone Investments’ 41,114-square-foot lease with SouthWest Water Co., in Sugar Land, Texas. The tenant made a 15-year commitment in December at The Minute Maid Building.

During the same period, Agellan Commercial REIT secured two leases totaling 66,000 square feet at Beltway 8 Corporate Center, a 363,452-square-foot office complex. Its buildings came online between 2003 and 2006.

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North Cypress Land Ventures LLC, a physician investor group, has broken ground on the first phase of Grand Cypress Medical Pavilions in Cypress, Texas. The 30-acre, multi-medical building park is estimated to cost up to $600 million.

The 60,000-square-foot Grand Cypress Doctors Pavilion One is slated for completion in June 2025. The development team includes Tennessee-based companies such as CONAR Building Group, the general contractor, alongside Davis Stokes Collaborative Architects.

The developer first received an $8 million loan in 2019 from Guaranty Bank & Trust, with a maturity date extended to July 2025, according to Harris County records. A year later, the same lender originated another $19.1 million for the project initially dubbed Cypress Health and Wellness Campus.

READ ALSO: Medical Office Real Estate Trends to Watch in 2024

At full build-out, Grand Cypress Medical Pavilions will provide a wide array of services such as health education, patient care, wellness and cancer prevention. The project was designed to include four or five buildings and will come online over the course of five years. Phase Two would feature a wellness center, while a women’s or cancer center could be part of Phase Three.

An aging population and the demand for new supply are among the main factors that make the medical outpatient sector still attractive for investors, as well as high occupancy and long-term tenancy.

A preleased first phase

The first phase of the development is a multi-disciplinary facility that will also feature an endoscopy surgery center set to encompass 12,000 square feet. The three-story building has been preleased almost entirely, anchor tenants including Keller Surgical Specialists, GastroDoxs and USPI/Memorial Hermann Hospital Systems.

The project is taking shape at the northeast corner of Grand Parkway and Highway 290, some 34 miles northwest of downtown Houston. Other medical providers in the surrounding area include North Cypress Physicians Center, Memorial Hermann Cypress Hospital and Centrum Health, among others.

The post $600M Medical Campus Breaks Ground Near Houston appeared first on Commercial Property Executive.

Jackson-Shaw has secured a full-building lease at its Post Oak Logistics Park, a two-building industrial project totaling 536,992 square feet in Houston. Festival Trading Co. is the tenant and will occupy the 168,893-square-foot Building A, committing to the space for 10 years, according to Harris County public records.

Other partners at the project include an affiliate of Greystar Real Estate Partners as equity partner, Rosenberg Construction as general contractor, WGA as civil engineer and Powers Brown as architect of record. In late 2021, the landlord secured $34.5 million in financing originated by BancFirst, according to the same source.

Building A will be a front-load facility at 12631 Main St. The property is slated to include 32-foot clear heights, ESFR sprinkler systems, two drive-in doors, 30 dock doors, 33 trailer parking spots and 71 vehicle parking spots with the option to add up to another 141.

Plans for the 368,099-square-foot Building B call for a cross-dock industrial facility that will feature 36-foot clear heights, four drive-in doors, 102 dock doors, ESFR sprinkler systems, 58 trailer parking spots and 246 vehicle parking spots with the possibility for an additional 124.

Post Oak Logistics Park will be located on 43 acres, close to U.S. Highway 90, allowing quick access to Beltway 8 and Interstate 610. The two-building industrial campus will be 15 miles from William P. Hobby Airport, 32 miles from George Bush Intercontinental Airport, 35 miles from the Port of Houston and within 50 miles of the Texas City Port.

Following this deal, Post Oak Logistics Park is 31 percent preleased. Cushman & Wakefield’s team of Executive Managing Director Beau Kaleel and Executive Director Michael Foreman negotiated on behalf of the landlord and is marketing the second building for lease.

Recent Jackson-Shaw projects in Texas

Jackson-Shaw has other significant industrial developments in Texas under various stages of development. In January, the company partnered with Compatriot Capital for the development of Lakeview Business Center, a 1.8 million-square-foot industrial campus within Dallas Fort Worth’s submarket of Rowlett, Texas. The project is financed with a $69 million construction loan.

Another project currently underway is ATX 130, a business park that is slated to bring 602,400 square feet of warehouse, distribution and office space in Austin, Texas. The four-building development is expected to come online this year.

The post Jackson-Shaw Secures Full-Building Lease in Houston appeared first on Commercial Property Executive.

The joint venture between Vigavi and Principal Asset Management has broken ground on WestPoint 45, a 728,000-square-foot speculative industrial project located in Houston’s Greenspoint submarket. Completion is expected by early 2025.

WestPoint 45’s development team includes Angler Construction and Seeberger Architecture, locally based contracting and architecture firms. Langan will provide civil engineering services, while JLL will head up marketing and leasing.

Vigavi’s 31st industrial project near Houston

The partners have purchased the then 42-acre vacant parcel from Audacy Inc., a Philadelphia-based broadcast company. The site hosted transmitters for several local radio stations, which have since relocated. When complete, this will be Vigavi’s 31st industrial building in the Houston area.

The developers are pursuing LEED certification for WestPoint 45. Plans call for a facility with 40-foot clear heights, 180 trailer stalls and additional speculative office space. JLL Executive Vice Presidents Richard Quarles and Mark Nicholas, alongside Senior Vice President Joseph Berwick, will spearhead leasing at the property.

The development site at 410 West Road is roughly a mile and a half from the Pinto Business Park, a 971-acre campus that will total approximately 7 million square feet of industrial space at full build-out. An onramp to both Interstate 45 and Beltway 8 is a mile and a half to the northeast, giving the facility potential shipping access to much of the metro area. Downtown Houston is roughly 12 miles southward, while the city’s port is roughly 30 miles southeast.

Space City, the industrial superstar

Data from CommercialEdge’s latest national industrial report shows that Houston boasted the second-largest pipeline in the South at the end of February, totaling more than 8.2 million square feet. H-Town also took home the region’s silver medal for sales, with $220 million worth of transactions closing in the first two months of the year. The metro was second only to Dallas, which had a pipeline nearly three times as large, with an even smaller vacancy rate.

One of the industrial projects that entered Houston’s development pipeline in February is Stafford Logistics Park, a 785,000-square-foot campus taking shape in Stafford, Texas. Lovett Industrial is developing the complex in partnership with PCCP LLC.

As for upcoming projects, last month NASA completed a leasing and development agreement with the American Center for Manufacturing & Innovation at Exploration Park, a planned 240-acre manufacturing and research complex adjacent to the Johnson Space Center in Houston. The tenant intends to develop a campus that will include commercial and aerospace-oriented industrial and manufacturing space as well as an applied research facility.

The post Vigavi JV Starts Construction on North Houston Industrial Project appeared first on Commercial Property Executive.

Hines and its partners 2ML Real Estate Interests and Harrison Street have signed a 7,400-square-foot lease at Levit Green, a mixed-use life science district in Houston. The tenant is PranaX, a biotechnology company scheduled to move into a turn-key lab space within the development’s Phase I building this week.

PranaX focuses on harnessing exosomes to rejuvenate inflamed, aging and damaged tissues and organs, with the goal of unlocking their regenerative properties to promote health and enhance quality of life. The company will work together with The University of Texas MD Anderson Cancer Center to create healthy aging products. PranaX will use the new space as the headquarters of its manufacturing, research and development operations.

Levit Green’s centerpiece

Levit Green’s Phase I is a 290,000-square-foot five-story building at 3131 Holcombe Blvd. that features 56,000-square-foot floorplates, a 25,000-square-foot laboratory space, ample bay spacing, grade level doors and dock high shipping and receiving bays. Additionally, the lab and biomanufacturing facility includes a 9,500-square-foot vivarium, a 5,800-square-foot fitness center with an outdoor garden, a conference center and about 3,500 square feet of waterfront coffee bar and restaurant space.

PranaX, in collaboration with Hines, is planning to convert one of the laboratory’s support rooms into an ISO-7 clean room that meets FDA standards. The firm will use this space to manufacture approved therapies, further advancing its research and development capabilities.

Developed in 2023, the building serves as the centerpiece of the bigger Levit Green project. The facility was designed by architectural firm HOK, while J.P. Morgan Chase Bank provided construction financing for the project, according to CommercialEdge.

The 4-acre life science building is close to Interstate 610 and within the city’s Medical Center Area, 5 miles from Houston’s central business district, 5 miles from downtown Houston, 12 miles from William P. Hobby Airport and within 23 miles of George Bush Intercontinental Airport.

Levit Green is a 53-acre life science hub adjacent to the Texas Medical Center that will encompass 4 million square feet of mixed-use space across nine buildings. Plans call for a mix of research and production facilities, as well as outdoor amenities, office, retail and residential spaces.

A team of JLL life science experts has been tapped as exclusive leasing agent for Levit Green in 2021. It is currently led by Vice Presidents Sarah Savage and Mallory Kelly, together with Managing Director Chris Wadley.

Houston’s life science megaprojects

In late 2023, Texas Medical Center opened another life science campus nearby: TMC3 Collaborative Building, which encompasses 250,000 square feet of research and life science space within the Helix Park megaproject. The building is part of the development’s first phase, which will also include a 700,000-square-foot research facility.

In August of last year, McCord Development unveiled plans for BioHub Two, a speculative 500,000-square-foot biomanufacturing campus in northeast Houston. The project will rise within Generation Park, a 4,300-acre master-planned development that will include multifamily, office, industrial, retail and medical office spaces.

The post Hines JV Welcomes Biotech Firm at Houston Campus appeared first on Commercial Property Executive.

Sovereign Partners has tapped Partners Real Estate as exclusive leasing agent for San Felipe Plaza, a 980,472-square-foot Class A office tower in Houston’s Galleria submarket. Senior Vice Presidents Vince Strake, Lesley Rice and Andy Parrish will handle all leases at the property.

Sovereign Partners picked up the 46-story building in early 2023 from Parkway Properties Investments for $82.8 million, according to CommercialEdge information. Onex Corp. provided a $62.3 million acquisition loan.

Originally completed in 1984, San Felipe Plaza is a LEED Gold-certified office high-rise and includes floorplates between 19,985 and 23,400 square feet, 22 passenger elevators, a fitness center and 2,940 vehicle parking spots, CommercialEdge data shows. Notable tenants include Toyota Tsusho America Inc., Lincoln Property Co. and Chase Bank.

READ ALSO: Houston’s Office Market Struggles to Find its Footing

San Felipe Plaza is currently undergoing a renovation program that is focused on upgrading the common areas while also improving the work environment. The revamp will result in an upgraded fitness center, new conference rooms, exterior recreational facilities, an indoor golf simulator, a movie theater and pickleball courts.

The 5-acre property at 5847 San Felipe St. is close to interstates 610 and 10, as well as to multiple bus stations. The location is 10 miles from downtown Houston, 19 miles from William P. Hobby Airport and 26 miles from George Bush Intercontinental Airport.

Houston’s vacancy rate, second-highest in the U.S.

Houston’s office vacancy rate clocked in at 24.4 percent in February, down 30 basis points year-over-year, a recent CommercialEdge report shows. The value was the second highest in the U.S., after Detroit’s 31.3 percent.

One of the metro’s largest leasing deals in recent months was Lionstone Investments’ 41,114-square-foot lease at The Minute Maid Building in Sugar Land, Texas. SouthWest Water Co. signed a 15-year commitment at the 185,000-square-foot building in December.

The same month, Agellan Commercial REIT inked two leases totaling 66,000 square feet at Beltway 8 Corporate Centre, a 362,452-square-foot three-building office campus in Houston. US Med-Equip and Moody Rambin are the latest tenants at the Class A office complex.

The post Partners to Lease 980 KSF Houston Office Tower appeared first on Commercial Property Executive.

Sales activity was diminished, registering a nearly 75 percent drop from the same period last year. Consequently, prices per square foot also lagged other secondary markets.

Houston’s vacancy rate slightly decreased over 12 months, but remained one of the highest in the U.S., although a few significant leasing agreements occurred in the market. Meanwhile, the metro’s coworking sector continued to perform well, in line with national trends.

Construction pipeline below U.S. rates

As of the end of February, there was nearly 2.6 million square feet of office space under construction in Huston across 19 projects and accounting for 0.9 percent of existing stock. The construction rate was below the 1.6 percent national figure and lagged most of its peer markets such as Atlanta (1.8 percent), Dallas (2 percent) and Austin (3.9 percent), but surpassed Phoenix (0.6 percent).

In terms of construction starts, only one property broke ground in 2024’s first two months. Local developer Midway commenced construction on the 320,000-square-foot CITYCENTER Six in west Houston. The project is part of a larger 2 million-square-foot development which features another five already existing office buildings, along with large residential and hospitality components.

Some 825,000 square feet of office space came online in Houston across six properties, accounting for 0.3 percent of existing stock. This represents a 42.4 percent year-over-year increase. Regarding sheer volume brought to market, Houston greatly outpaced all of its peers such as Austin (635,250 square feet), Dallas (100,000 square feet), Phoenix (35,587 square feet) and Nashville (32,000 square feet).

The largest property to come online in Houston during this period is 1550 on the Green, which Skanska completed in February. The Bjarke Ingels Group-designed building rises 28 stories and spans 375,000 square feet. International law firm Norton Rose Fulbright already signed a lease for six floors, and will occupy 32 percent of the space, becoming the property’s anchor tenant.

Houston’s office sales slow down

Year-to-date through February, five assets totaling 511,827 square feet changed hands in the Houston office market. These figures represent a drop from the same period in 2023, when nearly 4 million square feet had traded.

After the year’s first two months the price per square foot averaged $93.8. It was slightly above figures recorded in Dallas ($92.7), but considerably behind all other peer markets such as Atlanta ($140.2), Phoenix ($166.5), Nashville (200.9) and Austin ($542.8)

One of the largest transactions recorded in the metro during this period was HTZ Investments’ sale of The Westchester, a 117,261-square-foot office property. Madison Cos. purchased the asset with the help of a $22.9 million CMBS acquisition loan originated by Morgan Stanley. The building was 74 percent leased at the time of the transaction.

The vacancy rate in Houston’s office market clocked in at 24.4 percent as of February, down 30 basis points year-over-year, but remaining one of the largest in the U.S., second only to Detroit’s 31.3 percent. It was also well above the 17.9 percent national rate, as the metro fared worse than all of its peers including Austin (22.1 percent), Dallas (21.1 percent) and Nashville (16.5 percent).

Second-highest U.S. vacancy rate

At the end of 2023, Agellan Commercial REIT also secured two leases totaling 66,000 square feet at the three-building Beltway 8 Corporate Center.

Tenants US Med-Equip and Keystone Advisors, committed to 34,000 and 32,000 square feet, respectively. Angellan acquired the 362,452-square-foot property in 2013.

One of the largest recent leasing agreements in the Houston market was SouthWest Water Co. committing to 41,114 square feet for 15 years at The Minute Maid Building. Lionstone Investments owns the 185,000-square-foot property, which is part of the 32-acre mixed-use Sugar Land Town Square development.

Coworking on par with national figures

As of February, there were more than 4.1 million square feet of shared space in the Houston office market, accounting for 1.7 percent of total stock. This share of coworking space was on par with the national rate, as well as with other Texas markets such as Dallas–Fort Worth and Austin, but lower than secondary markets such as Atlanta (2 percent) and Nashville (2.7 percent).

The largest flexible space operator in Houston was Cubework with more than 1 million square feet in five locations. Other key players in the sector included Regus operating some 540,000 square feet across 32 properties, as well as Workstyle Flexible Space with a 450,510-square-foot footprint in 30 locations.

The post Houston’s Office Market Struggles to Find its Footing appeared first on Commercial Property Executive.

JLL brokered the transaction, with Senior Managing Director Trent Agnew, Senior Director Charles Strauss, Director Lance Young and Analyst Brooke Petzold working on behalf of the seller.

KBS purchased Clay Crossing Business Center from Invesco Real Estate back in 2006 for $23.9 million, according the CommercialEdge data.

Clay Crossing Business Center comprises 16-foot to 20-foot accessible industrial buildings and office suites with a diverse range of suite configurations. Its four rear-load buildings have suite sizes ranging from 3,105 square feet to 44,883 square feet. Built between 2000 and 2002, the one-story buildings include sky lights, insulated ceilings, fire sprinklers, climate control, approximately 620 parking spaces and 7,500 square feet of retail space.

Located at 4321 W. Sam Houston Parkway North, the property is within the Northwest submarket. Clay Crossing Business Center is near Interstate 10 and Route 290, which allow easy access across the Houston metropolitan area.

Houston leasing stays strong

Throughout 2023, Houston’s industrial market remained resilient, with demand accelerating in the fourth quarter, according to a recent JLL report. Leasing activity amounted to 10.2 million square feet, marking the highest quarterly total of last year.

Deliveries reached an all-time high of 35.6 million square feet in 2023, while leasing activity and net absorption both hit their third-highest annual totals on record, the same report shows.

The post KBS Sells Houston Light Industrial Facility appeared first on Commercial Property Executive.

Silver Star Properties REIT has borrowed $135 million to pay off creditors and liquidate a 4.2 million-square-foot legacy portfolio with office, retail and industrial assets as it repositions solely into the self storage sector.

Hartman SPE LLC, an indirect subsidiary which owns the legacy office, retail and industrial properties, and lenders Benefit Street Partners and RMWC closed on the exit facility on March 27th. The closing allows Hartman SPE to fund its Chapter 11 Plan of Reorganization, which was approved by the U.S. Bankruptcy Court for the District of Delaware on Feb. 26. The Chapter 11 plan provides for payment in full to all unsecured creditors and tenants and the full reinstatement of all interests without impairment. Hartman SPE filed for Chapter 11 bankruptcy in September.

BSP, a New York-based credit-focused alternative asset manager, provided a $120 million two-year floating-rate senior loan with no extension options. RMWC, a New York-based boutique private lender, provided a $15 million co-terminus second mortgage loan.

READ ALSO: Getting Into the Heads of Tenants

The portfolio totals 27 properties across multiple asset classes through the Dallas, Houston and San Antonio MSAs. There are 24 office assets in the portfolio as well as two retail properties and one industrial property. When all the sales are completed, Silver Star expects to have approximately $370 million in available funds.

A giant step forward

For Silver Star, which announced its plan to shift its investment focus to self storage last April, finalizing the loans was a major move.

Silver Star began that pivot with the April 2023 acquisition of Southern Star Self-Storage Investment Co., according to Multi-Housing News, the sister publication of Commercial Property Executive. Southern Star Self Storage owned a portfolio of nine self-storage properties totaling 2,526 units and 321,291 rentable square feet. At the time of acquisition, the company had two assets under contract, adding 208,220 rentable square feet to its portfolio. In December, MHN reported Silver Star had acquired two self-storage facilities in Houston totaling 115,126 rentable square feet from Harrison Street Real Estate Capital.

At the beginning of 2023, Houston-based Silver Star owned more than 40 office, retail and industrial properties with about 7 million square feet of space. By Dec. 31, the company owned 33 commercial properties comprising about 4.6 million square feet.

The company has been selling properties since last year, including Cooper Street Plaza, a four-building, 127,696-square-foor retail center in Arlington, Texas, in July through a 1031 tax-free exchange. It also sold several office properties including the 170,000-square-foot Westway One in Irving, Texas; the 139,600-square-foot Bent Tree Green, the 10-story North Central Plaza I and the 15-story Gateway Tower, all in North Dallas, according to The Real Deal.

The post Silver Star Secures $135M Loan Package in Shift to Self Storage appeared first on Commercial Property Executive.

A joint venture of CenterSquare Investment Management and Pagewood Real Estate has acquired a 621,000-square-foot industrial portfolio in Houston. Northmarq arranged a $40 million acquisition loan, while Moody Rambin brokered the sale.

HRES Group sold the portfolio, CommercialEdge data shows. Symetra Financial originated the fixed-rate bridge loan, which carries extension and prepay options, as well as asset release flexibility.

The portfolio consists of nine, small-bay properties encompassing a total of 46 buildings. The assets are located in Northwest Houston, between the Southern Brittmoore and Lower 290 corridors.

Shared features include 14- to 15-foot clear heights, an average office buildout of 19 percent and suites ranging between 1,000 and 30,000 square feet. The properties are close to Interstate 10 and Beltway 8.

READ ALSO: Top 5 Emerging Industrial Markets in 2024

The new owner plans to implement capital improvements throughout the portfolio. Renovations include LED lighting, replacing HVAC systems, concrete repairs and metal framing upgrades, which are expected to increase rents to match the current market rates.

Moody Rambin Vice President Stephen Ghedi and Executive Vice President Jim Autenreith secured the transaction. Northmarq’s Houston Debt and Equity team included Managing Director Warren Hitchcock, Vice President Blane Eikenhorst and Investment Analyst Chris Compton.

Last year, Hitchcock was part of the team that arranged the joint venture between Fidelis Industrial and Transwestern Investment for the acquisition of a 56-acre site in Georgetown, Texas.

Houston kicks off new year with a few large transactions

In February, Sealy & Co. acquired Great 290 Distribution Center, a 500,840-square-foot industrial facility with funding from a $50 million line of credit. Pagewood sold the fully leased asset.

Triten Real Estate Partners also expanded its Houston presence with the acquisition of a three-building industrial portfolio. The 534,541-square-foot properties are in the West Houston and Port of Houston submarkets.

Houston’s vacancy rate clocked in at 5.9 percent as of January, 110 basis points higher than the national average, but slightly below peer markets Tampa, Fla., and Baltimore, according to a recent CommercialEdge industrial report. Charlotte, N.C., (3.3 percent) and Nashville, Tenn., (3.4 percent) registered some of the lowest vacancies nationwide.

During the same month, transaction activity in the metro amounted to $64 million. Properties traded for an average of $128 per square foot, trailing the $145 national average.

The post CenterSquare JV Buys 621 KSF Portfolio, Lands $40M Loan appeared first on Commercial Property Executive.

Greenspoint Property Management has sold Intercontinental Park III, an 89,820-square-foot office building in Houston. Fracht Group acquired the asset, according to CommercialEdge data.

Colliers Principal David Carter represented the seller, while Caldwell Cos. Senior Vice President Bill Ginder worked on behalf of the buyer.

The property previously traded in March 2021 in a portfolio transaction, when Greenspoint purchased it from Lincoln Property Co., the same source shows.

Dating back to 1983, the three-story building features 30,000-square-foot average floorplates, two passenger elevators and more than 260 parking spaces. Amenities at the almost 4-acre property include a three-story atrium lobby with a centered skylight. The facility is also part of a three-building campus dubbed Intercontinental Park measuring about 357,000 square feet.

Located at 16701 Greenspoint Park Drive, the building is 9 miles from George Bush Intercontinental Airport and within 15 miles of downtown Houston. The property is also within walking distance of 16666 Northchase Drive, a 147,135-square-foot office building that traded last year.

Houston’s office sector still struggles

Houston’s January office vacancy rate clocked in at 24.3 percent, 170 basis points lower year-over-year, but still considerably higher than the 18 percent national average, the latest CommercialEdge office report shows. Assets in the metro during the same month changed hands for an average of $137 per square foot, compared to the national average of $195.

In January, HTZ Investments sold The Westchester, a 117,261-square-foot office building. Mission Cos. acquired the asset with the help of a $22.9 million CMBS loan originated by Morgan Stanley.

Novel Office purchased 3555 Timmons, a 225,895-square-foot office property around the same time. The new owners plans to implement several upgrades, including lobby renovations and new speculative suites.

The post Fracht Group Acquires Houston Office Asset appeared first on Commercial Property Executive.

JLL Capital Markets secured the retail financing through Prime Finance. The loan is refinancing the original construction loan the brokerage company secured for the development back in 2020.

Senior Managing Director Colby Mueck, Managing Director Michael Johnson and Director Jack Britton from the Debt Advisory team worked on behalf of the borrower. In another recent deal, JLL Capital Markets has arranged $55 million in financing for a 456,208-square-foot open-air shopping center in Philadelphia.

Montrose Collective came online in 2022, featuring sustainable finishes, open-air courtyards, an outdoor garden room, open patios and approximately 230 parking spaces. The six-story building also includes office space on the upper floors.

The tenant roster at Montrose Collective includes a diverse mix of retailers such as Marmo, Amano, GANNI, Gorjana, Oheya, The Chelsea, Sisu Clinic and RMA Houston, among others. At the time of the deal, the center was 98 percent leased.

Located at 888 Westheimer Road, the shopping center is within Houston’s Montrose neighborhood. Situated at the corner of Westheimer Road and Montrose Blvd., the property is positioned centrally between downtown, the Texas Medical Center, Rice University and River Oaks.

Houston’s demand for retail real estate continues to outpace supply, despite an increase in annual construction deliveries. The metro added 3.1 million square feet of retail space last year, with 1.2 million square feet delivered just in the final quarter, according to a recent CBRE report.

The post Radom Capital Lines Up $76M Refi for Houston Shopping Center appeared first on Commercial Property Executive.

DML Capital has acquired The Offices at Kensington, a two-building campus in Sugar Land, Texas. Buchanan Street Partners sold the Class A office complex, which totals 171,055 square feet.

Situated at 1600 and 1650 Highway 6, the four-story buildings are 84.1 percent leased. The assets are composed of mainly smaller suites under 5,000 square feet.

Completed in 1998, The Offices at Kensington property covers a 9.6-acre lot, CommercialEdge data shows. The campus includes 681 parking spaces.

Tenants include Freed, Mangan, Edelman Financial Engines, First Genesis, Houston Automobile Dealers Association, Allstate, State Farm, Keller Williams, Celebrity Title and  Roberts Wealth Management, the same data source shows.

READ ALSO: Surging Law Firm Leasing Provides Office Sector Bright Spot

Located at the intersection of Highway 6 and Interstate 69, The Offices at Kensington are nearby several Houston thoroughfares. Retail, dining and entertainment options are available throughout Sugar Land. Downtown Houston is approximately 22 miles northeast of the property.

JLL Capital Markets secured a fixed-rate acquisition loan on behalf of DML Capital for the transaction. Senior Director Rick Goings and Managing Director Marty Hogan with JLL’s Investment Sales & Advisory team represented the seller. Managing Director Michael Johnson and Director Michael King with JLL’s Debt Advisory team represented the borrower.

Late last year, Lionstone Investments signed a 41,114-square-foot lease at another office property in Sugar Land, The Minute Maid Building. A water company will occupy space in the mixed-use development for 15 years. Completed in 2009, the building is less than a mile from The Offices at Kensington.

The post DML Capital Buys Suburban Houston Office Campus appeared first on Commercial Property Executive.

The National Aeronautics and Space Administration has completed a leasing and development agreement with American Center for Manufacturing & Innovation at Exploration Park, a planned 240-acre manufacturing, research and development campus located adjacent to the Johnson Space Center in Houston.

ACMI and its industrial development subsidiary, ACMI Properties, are set to develop the Space Systems Campus, which will include commercial and aerospace-oriented industrial and manufacturing space as well as an applied research facility devoted to space, defense and civilian-focused robotics, automation and materials science.

ACMI is set to build the campus on a 207-acre parcel of underdeveloped land located around Saturn Lane, which lies roughly half a mile northwest of the Johnson Space Center’s controlled access area. ACMI will lease the land for a minimum of 20 years, and will be able to extend its stay by two 20-year terms.

ACMI’s new assignment marks the second lease at the campus, following last month’s agreement with Texas A&M University to build a $200 million, 30-acre spaceflight R&D facility designed to simulate the exploration of the surfaces of Earth’s Moon and Mars. That agreement takes place amid NASA’s ongoing Artemis program, where crewed flybys and landings on the moon are set to take place in 2025 and 2026, respectively. Artemis’ long-term goals include research about a possible mission to Mars in the 2030s.

The firm’s other projects include facilities devoted to munitions production and battery research and development.

READ ALSO: How Reshoring Is Driving Industrial Real Estate Demand

A&M’s lease agreement is nearly identical to that of ACMI. According to an article from the Community Impact, NASA intends for the park to serve as a nexus for government, academic and private sector institutions related to aerospace research and development, to further advance the industry around the Houston Spaceport.

Houston, we have a solution

In operating the Space Systems Campus, ACMI plans to partner with universities including Rice and Johns Hopkins, private corporations and the U.S. Department of Defense. ACMI’s broader goals at the campus include assisting with the manufacturing and repair of aerospace hardware, alongside collaboration with the above universities’ robotics, artificial intelligence and space-oriented materials science and professional training programs. Within the rentable space that it builds, the company also anticipates leasing to commercial space companies.

Located adjacent to the Johnson Space Center, the park will sit within half a mile of the Space Center Houston science museum, and within 5 miles of the Houston Spaceport. An onramp to the Interstate 45 sits 2.5 miles to the southwest, feeding directly into downtown.

An industrial rocket

Despite a slight development and absorption slowdown, the world’s energy capital boasts strong supply, demand and investment volumes. A February CommerciaEdge report found that Houston’s pipeline of 9.55 million square feet is the eighth-largest in the nation, while the market saw $64 million in sales in January. According to Cushman & Wakefield, much of the new development is devoted to the manufacturing, utilities and manufacturing sectors.

Recent industrial headlines from H-town are on the logistics front. Last week, 84 Lumber signed a full-building lease at the Cypress Distribution Center, a 142,100-square-foot facility located in West Houston. One day prior, a joint venture between Lovett Industrial and PCCP broke ground on the Stafford Logistics Park, a two-building campus totaling 785,000 square feet.

The post NASA Lifts Off With New Tenant for Houston R&D Campus appeared first on Commercial Property Executive.

Fertitta Entertainment Inc., the holding company owned by billionaire Tilman Fertitta, has acquired River Oaks District, a 13.9-acre, 663,408-square-foot luxury retail and mixed-use property in Houston’s Uptown/River Oaks corridor.

The seller and the acquisition’s dollar value were not disclosed, but Bloomberg reported the seller as JPMorgan Chase & Co. and the price as $450 million, citing “a person familiar with the matter.”

River Oaks District includes 302,668 square feet of luxury retail, 279 luxury apartments and 67,060 square feet of “jewel-box” office space, according to JLL, which represented the seller.

The high-end luxury retailers that occupy River Oaks District include Hermes, Cartier, Rolex, Dior, Van Cleef & Arpels, Patek Phillipe, Brunello Cucinelli, Balmain, Zimmerman and Harry Winston. The surrounding area boasts an average household income of $158,600.

READ ALSO: Property Management Success: Reimagining Retail

The property’s multifamily component is the five-story Grey House Apartments, whose units feature wood flooring, stainless steel appliances, quartz countertops, custom European cabinetry, 9-foot ceilings and floor-to-ceiling windows. Amenities include resort-style pools and spas, clubhouses with modern décor, a full-service onsite concierge, a screening room, conference rooms and a fitness facility.

The JLL Capital Markets team that arranged the acquisition was led by Retail Group Co-Leader and Senior Managing Director Barry Brown. Brown, along with Director Erin Lazarus; Senior Managing Directors Colby Mueck, Ryan West and Jeff Hollinden; and Managing Director Dustin Selzer, advised on the transaction. 

One extreme to another

Tilman Fertitta is perhaps best known as the owner of the NBA’s Houston Rockets and of Fertitta Entertainment, which in turns owns (through Landry’s Inc.) restaurant chains Bubba Gump Shrimp Co., Rainforest Cafe, McCormick & Schmick’s and Morton’s The Steakhouse, as well as Golden Nugget Hotel & Casinos properties in several states.

In Houston, Fertitta owns The Post Oak Hotel at Uptown and its adjacent upscale restaurants, as well as Post Oak Motor Cars, a Bentley/Rolls-Royce/Bugatti dealership.

Last May, at the other end of the retail spectrum from Cartier and Rolex, Highland Capital acquired Steeplechase Center, a workaday 195,575-square-foot retail property in Houston, for $18 million. The center’s tenants include Goodwill, Melrose, Citi Trends, Uptown Beauty, Dollar Tree, dd’s Discounts and 99 Cents Only.

Ample deliveries of new space notwithstanding, Houston’s retail real estate market currently enjoys an average occupancy hovering near 95 percent, a record high level, according to a fourth-quarter report from CBRE. Retailers that are expanding in metro Houston include grocer H-E-B, Costco, Floor & Decor, Living Spaces, Dick’s House of Sport and Target.

The post Fertitta Pays $450M for Houston Mixed-Use Complex appeared first on Commercial Property Executive.

Molto Properties has signed a 142,100-square-foot long-term lease at Barker Cypress Distribution Center, in Cypress, Texas, within the West Houston submarket. Building materials supplier 84 Lumber will fully occupy the Class A facility.

Colliers’ Executive Vice President & Principal Wes Williams and Boyd Commercial’s Managing Principal Conrad Bernard negotiated on behalf of the landlord. The same team also helped the owner when it acquired the land site.

Molto Properties financed the asset’s development with a $7.3 million construction loan from Associated Bank, due 2025, CommercialEdge data shows.

Built in 2022, Barker Cypress Distribution Center is at 12020 Barker Cypress Road and features 32-foot clear heights, a 3,574-square-foot office component, two drive-in doors, 11 dock levelers, 124 vehicle parking spots and 25 trailer parking spots. The front load industrial facility also includes ample column spacing, 32 dock-high doors and 60-foot speed bays.

The 12-acre property provides easy access to Interstate 10 and U.S. Highway 249, while being 27 miles from George Bush Intercontinental Airport, 30 miles downtown Houston and within 33 miles of Port of Houston.

Houston’s vacancy rate in early 2024

As of January, Houston’s average in-place rents were at $6.58 per square foot, up 4.4 percent year-over-year. This was more expensive than Dallas ($5.83 per square foot) and Atlanta ($5.60 per square foot), according to a recent CommercialEdge report. The vacancy rate in Houston settled at 5.9 percent, 110 basis points higher than the national figure.

In early December 2023, Stream Realty Partners has been appointed as exclusive leasing agent for North Park 34, an 865,000-square-foot industrial campus in Houston. Arden Group subsidiary Arden Logistics Parks owns the asset and upgraded it after its purchase in late 2021.

The post Molto Properties Inks Full-Building Lease in West Houston appeared first on Commercial Property Executive.

MORE Architecture serves as main architect for the project, while Burton Construction is the general contractor and ALJ Lindsay the civil engineer. The development cost of the two buildings is estimated at $30 million, as reported by The Real Deal. Simmons Bank provided construction financing.

JLL’s Executive Vice President Jarret Venghaus and Senior Vice President Jordan Raney will handle the marketing and leasing efforts for the speculative warehouses. The future tenants of Stafford Logistics Park will benefit from triple freeport tax exemptions and no property taxes under the City of Stafford, according to JLL.

READ ALSO: Industrial Sector Set for 2024 Transformation

Stafford Logistics Park will comprise two Class A industrial buildings—a 520,000-square-foot cross-dock warehouse and a 265,000-square-foot front-load facility. The buildings are set to feature 36- and 32-foot clear heights, 90 trailer stalls, 190 trailer parking spaces and 380 auto parking spaces.

The property will take shape on some 38 acres in the Greater Southwest Houston submarket, at 13650 Pike Road. The development’s location near Route 90 and Interstate 69 provides easy access across the Houston metropolitan area.

Southwestern industrial markets take the lead

Stafford Logistics Park marks the company’s ninth industrial development in Greater Houston. Benefiting from its strategic Gulf Coast location, Houston ranked second for industrial deliveries in the first half of 2023, according to CommercialEdge research.

The metro added 11.3 million square feet of industrial space in the first six months of last year, which accounted for 4.3 percent of total stock. As of January this year, Houston had 9.5 million square feet underway, the same source shows.

Lovett developed the largest industrial property that came online in Greater Houston in 2023—a 908,853-square-foot asset within the Interchange 249 industrial park in Tomball, Texas.

Dallas-Fort Worth ranked first on the same list. The metro had 69 properties come online in 2023’s first half, adding 29.3 million square feet to its inventory. At the end of last year, Lovett and Rosewood Property Co. acquired a 12.2-acre site for the development of a two-building industrial facility in Addison, Texas, a Dallas suburb. 

The post Lovett, PCCP Break Ground on Houston-Area Industrial Park appeared first on Commercial Property Executive.

Houston-based Midway has broken ground on CITYCENTRE Six, a 320,000-square-foot office development in Houston. Partners include architect of record Kirksey and design firm Munoz + Albin Architecture and Planning, along with OJB Landscape Architecture. The building is scheduled to come online in 2026.

The project is part of CITYCENTRE, a 2 million-square-foot, mixed-use development in West Houston, featuring five already-completed office buildings, 1,120 luxury residences and a 255-key hotel. Plans also call for CITYCENTRE Seven, an adjacent, office development that will encompass 119,000 square feet.

READ ALSO: What Workers Want Now in Office Design

When complete, CITYCENTRE Six will include 308,000 square feet of office space and 12,000 square feet of ground-floor retail and dining options. Dow, a global materials science company, will be the anchor tenant at the 19-story building and will occupy 208,000 square feet for its Houston Dow Center.

The property will feature a nine-level podium parking structure, multiple private terraces and a new half-acre urban plaza at the tower’s entrance. The plaza will be shared with Marathon Oil’s new headquarters, a 525,000-square-foot building developed by Hines and owned by Sumitomo Mitsui Banking Corp.

The tower is rising at 800 Town and Country Blvd., close to a host of dining and retail options and 14 miles from downtown Houston. George Bush Intercontinental Airport is 27 miles from the site, while 12012 Wickchester, a 109,473-square-foot office building that recently changed hands, is within 3 miles.

Midway’s new venture

Last May, Midway Holdings LP and Parkway Property Investments LLC entered into a definitive agreement to form a new real estate investment, operations and management firm. The new company now has a total of 45 million square feet of assets under management, including the under-development projects.

In October, the firm acquired two Houston office campuses, dubbed Post Oak Central and CityWestPlace. The pair of properties measure more than 3 million square feet and are 10 miles apart.

Houston’s struggling office sector

According to a recent CommercialEdge office report, Houston had almost 2 million square feet of office space under construction as of last month. The market registered the second-largest vacancy rate among the top metros, clocking in at 24.3 percent, well above the 18 percent national average. Houston was surpassed only by Detroit (25.4 percent).

Last April, Hicks Ventures revealed plans for Framework @ Block 10, Houston’s first office project utilizing mass timber and the first building in the state to aim for net zero energy operational carbon. The 200,000-square-foot office development is scheduled for completion by the end of the year.

The post Midway Kicks Off Houston Office Project appeared first on Commercial Property Executive.

Skanska has celebrated the grand opening of 1550 on the Green, its latest office tower in downtown Houston, after more than three years of development. The firm first acquired the land parcel for the project in October 2019 and broke ground on it in January 2021. The 28-story building topped out in February 2023.

The Bjarke Ingels Group-designed office building totals 375,000 square feet and includes sustainable features together with tenant-focused tech and amenities, such as a 7,000-square-foot fitness center, a 9,400-square-foot rooftop event space, bike storage and pedestrian zones with tree canopies. The property also encompasses 7,000 square feet of retail and direct access to the Lamar Bike Trail for its tenants. Michael Hsu designed the building’s interiors.

READ ALSO: Getting Into the Heads of Office Tenants

Norton Rose Fulbright has already signed a lease to relocate to 1550 on the Green later this year and will be the building’s anchor tenant. The international law firm will occupy 32 percent of the tower’s office space across six floors.

The Class A office tower has already achieved LEED Platinum, WELL Platinum and WiredScore Platinum certifications, but the developer is targeting a Fitwel certification as well. Rising at 1550 Lamar St., the building is across the street from the Discovery Green park, near downtown Houston’s many retail and restaurant options, as well as major attractions like the Toyota Center, Minute Maid Park and the George R. Brown Convention Center.

Now complete, 1550 on the Green is the first component of Skanska’s three-block mixed-use project dubbed Discovery West. The developer, along with BIG, put together the 3.5-acre master plan in early 2020; the development is set to include three neighboring properties along with restaurants, retail and green space.

A long history of Houston projects

Prior to 1550 on the Green, Skanska had extensive experience in the Houston market with both restoring local landmarks and pursuing new developments. The firm’s portfolio in the metro totals 1.8 million square feet of Class A office space, including 3009 Post Oak Blvd., a 20-story Class A building that came online in 2013.

In 2022, Skanska sold West Memorial Place, a two-building, 715,000-square-foot office campus also in Houston, to a joint venture led by Fuller Realty. The developer had completed the two phases of the project in 2015 and 2016.

Skanska was also the developer of Houston’s Bank of America Tower, the first LEED v4 Platinum Core & Shell project in the U.S. The 35-story, 775,000-square-foot office building changed hands in 2019.

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GLP Capital Partners has sold two Texas warehouses: The 430,852-square-foot CentrePort 2 in Fort Worth and the 411,460-square-foot Northwest Logistics Center in Houston. The buyer, Sterling Investors, took out a $49.2 million acquisition loan from Principal Life Insurance Co., public records show. JLL Capital Markets brokered the transaction.

Completed in 2017, the cross-dock CentrePort2 features 97 dock-high loading doors, 32-foot clear heights and 60-foot bay spacing, along with more than 245 parking spaces. The warehouse is part of a campus developed by Hillwood, also incorporating the 270,762-square-foot CentrePort 1; GLP had acquired both properties in 2018, CommercialEdge information shows.

READ ALSO: Why Industrial Is Falling Back to Earth But Not Off a Cliff

The 24-acre property is at 14200 FAA Blvd. in the Upper Great Southwest submarket, providing easy access to highways 360 and 183. Dallas Fort Worth International Airport is some 6 miles away, while downtown Dallas is within 21 miles.

Northwest Logistics Center came online in 2018 and previously traded the same year in a portfolio transaction, the same source shows. The Class A facility has 138 dock loading doors and 32-foot clear heights, along with 119- and 136-foot truck courts, four drive-in doors and some 260 parking spaces.

The property occupies 26 acres at 6751 N. Eldridge Parkway in the Northwest submarket, some 20 miles from downtown Houston and 25 miles from George Bush Intercontinental Airport. The distribution center is also less than a mile from a to-be-built 537,375-square-foot speculative warehouse.

The JLL Capital Markets team comprised Co-Head & Senior Managing Director Trent Agnew, Senior Directors Charlie Strauss and Parker McCormack, Directors Tom Weber, Lance Young and Pauli Kerr, along with Associate Matthew Barge and Analyst Brooke Petzold. Earlier this month, Agnew and Strauss represented Pagewood in the sale of a 500,840-square-foot facility in Houston.

GCP’s recent industrial deals

GCP currently owns 59 industrial facilities across the country, totaling more than 18.3 million square feet, CommercialEdge data shows. In December, the company sold a 1 million-square-foot warehouse in Manchester, Pa., for $110.3 million.

A few months earlier, the firm acquired 34 Engelhard Drive, a 203,000-square-foot distribution center in Monroe Township, N.J. Clarion Partners sold the asset for $53.8 million.

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Triten Real Estate Partners has acquired a three-building industrial portfolio totaling 534,541 square feet in Houston’s submarkets of West Houston and Port of Houston.

Nationwide Mutual Insurance Co. provided the acquisition financing, with the undisclosed loan maturing in 2028, according to Harris County public records.

Lee & Associates worked on behalf of the seller of the West Houston property, while JLL brokered the deal for the other two industrial buildings.

Kingsland 4 is the largest asset in the portfolio, located at 31067 Kingsland Blvd. in Brookshire, Texas. It is a 200,680-square-foot rear-load distribution facility that is fully occupied by third-party logistics company Pods and Armstrong SCS. A private seller sold the Class A property, which covers approximately 35 acres, according to CommercialEdge data.

READ ALSO: How CRE Deals Are Changing: DLA Piper

The other two properties are in La Porte, Texas, and were sold by Ares Management, the same source shows. These include:

• Port 146, a Class A industrial warehouse at 2020 N. Highway 146, totaling 140,272 square feet. The 8-acre asset was constructed in 2020 and its sole tenant is Barsan Global Logistics.
• LaPorte Distribution Center, which totals 193,586 square feet at 1401 S. 16th St. Hawthorne Global Logistics occupies the building.

The La Porte properties are within 4 miles of each other, close to Fred Hartman Bridge, 29 miles from downtown Houston and within 31 miles from George Bush Intercontinental Airport. Kingsland 4 is 19 miles from Rosenberg, Texas, and 36 miles from downtown Houston.

Lee & Associates’ Principals Taylor Schmidt and Robert McGee negotiated on behalf of the private seller. JLL’s team of Senior Managing Director Trent Agnew, Senior Director Charlie Strauss and Director Lance Young worked on behalf of Ares Management.

Houston still a hotspot for investment activity

Houston recorded nearly $2.3 billion in industrial sales volume in 2023, a recent CommercialEdge report shows. The metro was outperformed only by Dallas-Fort Worth across Southern markets, while nationally its deals volume secured the seventh place, with assets changing hands at an average sale price of $122 per square foot, below the national figure of $129.

Recent transactions of large assets included Sealy & Co.’s purchase of a 500,840-square-foot industrial facility. Pagewood sold the property—Great 290 Distribution Center, a Class A warehouse that came online in 2023 and is fully occupied by a single tenant.

One of the biggest deals in Houston last year was Dalfen Industrial’s acquisition of Fairbanks Logistics Park. The company picked up the 1 million-square-foot industrial campus from seller Investment & Development Ventures, with Affinius Capital providing a $90.6 million acquisition loan.

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Sealy & Co. has purchased Great 290 Distribution Center, a 500,840-square-foot industrial facility in Houston, making use of a $50 million line of credit from KeyBank, public records show. Pagewood sold the property, according to CommercialEdge data. The buyer had in-house representation, while JLL negotiated on behalf of the seller.

Daikin Comfort Technologies is the sole tenant at the property—occupying it entirely—with 3.6 years remaining on the lease term. The indoor HVAC manufacturer also has a 4 million-square-foot plant just 3 miles away.

Great 290 Distribution Center came online in 2023, with the developer benefitting from a $36.1 million construction loan from Prosperity Bank, CommercialEdge also shows.

Features at the Class A warehouse include 106 dock-high loading doors and four drive-in doors, 36-foot clear heights, 280 parking spaces, as well as 185-foot truck courts. The cross-dock building has 130 trailer stalls and pit levelers. Additionally, the property includes 10 acres of developable land.

The facility is at 2120 Field Store Road, 43 miles from downtown Houston. The Port of Houston is some 70 miles southeast, while George Bush Intercontinental Airport is within 49 miles.

Sealy & Co. represented itself in the deal through Director of Investment Services Jason Gandy. JLL’s team included Senior Managing Director Trent Agnew and Senior Director Charles Strauss. Last year, the duo was part of the group that arranged the joint venture equity and construction financing for Hero Way West, a 227,200-square-foot industrial project in Leander, Texas.

Houston investment activity remains solid

According to the latest CommercialEdge industrial report, Houston metro saw some $2.3 billion in assets change hands last year, ranking seventh among the largest markets. These assets traded for an average of $122 per square foot, slightly below the $129 national average.

In July, Dalfen Industrial purchased Fairbanks Logistics Park, a 1 million-square-foot industrial park, from Investment & Development Ventures. Affinius Capital provided a $90.6 million acquisition loan.

A few months earlier, Partners Capital acquired Mitchelldale Business Park, a 377,752-square-foot industrial campus, through its Partners Investment Fund IV. Hartman sold the 12-building complex.

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Grainger Industrial Supply is expanding its Texas footprint with a 1.2 million-square-foot industrial property in Hockley. The company plans to break ground on its Houston Texas Distribution Center this spring and delivery is expected in 2026. Hines will develop the project.

Set to be one of Grainger’s largest facilities upon its completion, the warehouse will feature a 36-foot clear height, 52- by 50-foot column spacing and a total of 740 car parking spaces.

The distribution center will house industrial supply items such as hand and power tools, heating, ventilation and air conditioning equipment, lighting, power transmission equipment, fluid power solutions and motors.

READ ALSO: What’s Next for Industrial Real Estate?

The property will take shape on a vacant 108-acre parcel of land, near the intersection of Hempstead Highway and Roberts Road, 35 miles northwest of downtown Houston. Daikin Texas Technology Park and Broad-Ocean Motor/Manufacturing Texas are within a 4-mile radius of the development site.

Grainger currently has other industrial projects underway as well. The company plans to open a 525,000-square-foot bulk warehouse in Pineville, N.C., later this year, while another 535,000-square-foot distribution center in Gresham, Ore. is set for delivery in 2025.

Grainger already operates more than 45 locations in Texas, six of them being in Houston. The firm also has two logistics facilities outside of Dallas.

The Texas industrial market prospers

Texas had the highest concentration of construction starts in 2023, with three markets ranking in the top five nationwide: Dallas (28.4 million square feet), Houston (14.1 million square feet) and Austin (10 million square feet), a recent CommercialEdge report shows. At the end of last year, Houston had 12.5 million square feet under construction, representing 2.1 percent of stock.

And more development is expected this quarter. In January, Constellation Real Estate Partners announced plans for the construction of Constellation Eldridge, a 537,375-square-foot speculative warehouse in Houston. The 26-acre property is set for completion by the end of the year.

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Mission Cos. has purchased The Westchester, a 117,261-square-foot office building in Houston. The buyer landed a $22.9 million CMBS acquisition loan originated by Morgan Stanley, CommercialEdge data shows. HTZ Investments sold the property according to the same source. JLL Capital Markets worked on behalf of the seller and arranged the financing.

The six-story building was 74 percent leased at the time of sale. Tenants include GHD Inc., Sterling Resources, Expert Pain and Prestige Family Dentistry, CommercialEdge reports.

Dating back to 1999, the property features 20,800-square-foot average floorplates, three passenger elevators and some 470 parking spaces. Additionally, there are 2,000 square feet of retail space, a deli, a conference center and a private courtyard.

The 2-acre property is at 11451 Katy Freeway, close to a host of dining and retail options, including the Nottingham shopping mall. Downtown Houston is less than 16 miles away, while George Bush Intercontinental Airport is 28 miles northwest.

The JLL Capital Markets Investment Advisory team included Managing Director Marty Hogan and Senior Director Rick Goings, while Senior Director John Ream lead the debt advisory team. Last year, Hogan and Goings were part of the team that represented CWCapital Asset Management in the sale of a 143,410-square-foot office property in suburban Houston.

Houston’s office sector shows mixed signals

According to the latest CommercialEdge office report, office deals amounted to $1.3 billion year-to-date through November in Houston, ranking among the top-performing markets in the country. The average price per square foot within the same timeframe settled at $127, considerably lower than the $193 national average.

In October, Parkway purchased a 3 million-square-foot office portfolio consisting of two campuses totaling more than 3 million square feet. That same month, Interra acquired Memorial Pointe, a 226,586-square-foot building from Gemini Rosemont.

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Constellation Real Estate Partners has acquired a 26-acre property in Houston, where it will develop Constellation Eldridge, a 537,375-square-foot speculative warehouse. CBRE’s Houston office will oversee leasing efforts.

Construction will start later this quarter, while completion is anticipated in the fourth quarter. Plans call for the demolition of a 102,034-square-foot office building, previously owned by Dril-Quip, an offshore drilling and production equipment company.

Seeberger Architecture designed the project. The Class A facility will feature 40-foot clear heights, 127 trailer stalls, truck circulation drives and 56-foot column spacing.

Constellation Eldridge will rise at 6401 N. Eldridge Parkway in Houston’s Northwest submarket, close to U.S. 290 and Beltway 8. Downtown Houston is 21 miles from the site, while George Bush Intercontinental Airport is 26 miles away.

CBRE’s leasing team comprises Senior Vice Presidents Faron Wiley and Joseph Smith. In August, the duo represented Trammell Crow Co. and Clarion Partners in two leasing agreements at their Rankin 45 Distribution Center, a 355,686-square-foot facility in Houston.

In November, Constellation partnered with Northwestern Mutual for the development of Constellation Mustang Crossing, a four-building industrial campus in Southlake, Texas. Construction is expected to start later this quarter, while completion is anticipated in early 2025.

Houston’s industrial pipeline

According to a recent CommercialEdge industrial report, Houston had one of the strongest under-construction pipeline in the nation—with 17.1 million square feet as of November. It was surpassed by the Inland Empire (24.8 million square feet), Dallas (41.4 million square feet) and Phoenix (47.7 million).

Last year, Brennan Investment Group has acquired an approximately 11-acre land in Houston to develop a 157,300-square-foot facility. Dubbed Northbelt, the building is expected to come online in the third quarter of this year.

The post Constellation to Develop 537 KSF Houston Warehouse appeared first on Commercial Property Executive.

Financing for the acquisition included a $5.5 million junior loan from Woodbranch and a $9.7 million senior loan from Business Loan Capital, public records show. Unilev purchased the property in 2012 from Great Point Investors, CommercialEdge shows.

Dating back to 1982, the 15-story asset features floorplates averaging 15,060 square feet, five passenger elevators and some 670 parking spaces. Amenities at the 1.8-acre asset include 24/7 security, a conference center, tenant lounge, training room and food service. Novel’s plans call for upgrades, including a lobby renovation, new speculative suites and complete turnkey buildouts.

READ ALSO: 3 Ways Government Will Impact CRE in 2024

Located at 355 Timmons Lane, the asset is close to Greenway Commons and Plaza in the Park shopping malls, which offer a host of dining and retail opportunities. The Galleria retail center is within 3 miles, while downtown Houston 6.4 miles away. George Bush Intercontinental Airport is some 25 miles northeast.

The CBRE Capital Markets team that arranged the transaction included Vice Chairman Russel Ingrum and Senior Vice President Jared Chua. The Transwestern team that provides the leasing services is led by Executive Managing Director Eric Anderson, Senior Vice President Katy Gragg and Vice President John Heard.

Recent office deals in Houston

Some of the latest sales in the metro included Parkway’s acquisition of two office campuses totaling more than 3 million square feet. Post Oak Central and CityWestPlace are 3.6 and 10 miles away from 3555 Timmons, respectively. Last October, Formation Capital acquired a 147,135-square-foot asset in north Houston, from Geosam Capital.

As of November, year-to-date transactions in the Houston metro amounted to $1.3 billion, being surpassed by markets such as Boston, Dallas and Manhattan, the latest CommercialEdge office report shows. The sale price per square foot during the same period was $127, much lower than the national average of $193.

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A Hines subsidiary bought 200 Park Place in Houston last year, for $145 million. Image courtesy of Hines

Hines Securities Inc. has completed a $152 million offering of interests in HGIT 200 Park Place DST, a Delaware Statutory Trust designed to offer qualified investors tax-advantaged investment opportunities. The DST owns 200 Park Place, a 15-story, 206,943-square-foot office building in Houston’s River Oaks district.

Completed in 2020, the property at 4200 Westheimer Road is fully leased to a diverse tenant roster and anchored by JLL and Buckeye Partners. The asset was sourced by Hines Global Income Trust Inc., a division of Hines which acquired the Class A office building in July 2022 from Stonelake Capital Partners for $145 million.

The WELL-certified and LEED-certified building is located on a 1.3-acre lot and has seven parking levels encompassing nearly 700 spots. On-site amenities include a rooftop terrace, conference center and lounge. The property is within walking distance of numerous dining and retail options and less than 1 mile from the Uptown District and Interstate 610.

Hines launches HREX

In September 2022, Hines launched Hines Real Estate Exchange, a platform that makes 1031 exchange opportunities available to investors in the form of interests in DSTs holding assets sourced from HGIT. The 200 Park Place property was the first HGIT asset to offer DST shares. The global real estate investment, development and property management firm filed a registration statement for the DST offering with the U.S. Securities and Exchange Commission on Sept. 19, 2022. HGIT has the option to acquire the properties held by the DSTs.

When Hines announced the HREX platform last year, Alfonso Munk, CIO of the Americas, said in prepared remarks that it was a natural progression for the firm and a way to meet strong market demand for 1031 exchange products. Citing the current market uncertainty, Munk said in a more recent prepared statement that the enthusiasm around the HGIT 200 Park Place DST showed investors shared Hines’ conviction in the offering as well as the asset.

Growing investment option

In May, JLL Income Property Trust announced it had fully subscribed its JLLX Diversified II DST, a five-property, $200 million diversified portfolio structured as a DST. It marked the firm’s largest 1031 exchange offering at that time and experienced significant demand from wealth management firms and their clients.

The DST featured five institutional-quality properties diversified by property type, geography and tenant profile. The properties were a 78,000-square-foot grocery-anchored shopping center; a 559,000-square-foot bulk industrial distribution facility leased to Mitsubishi; and three medical office buildings leased to creditworthy medical tenants.

In early 2022, Greystone made a minority investment in Passco Cos., as the two firms formed a strategic alliance to provide clients increased benefits from the DST investment sector and other real estate investment opportunities. The alliance helped Greystone, a national commercial real estate finance company, strengthen its platform in a market where Passco has been an industry leader for more than two decades.

The post Hines Closes $152M DST Offering for Houston Tower appeared first on Commercial Property Executive.

Minute Maid, a division of Coca-Cola Co., closed its Sugar Land headquarters in 2021. Image courtesy of CommercialEdge

Lionstone Investments has signed a 41,114-square-foot lease at The Minute Maid Building, a 185,000-square-foot office property in Sugar Land, Texas. SouthWest Water Co. will occupy the space for 15 years. Planned Community Developers is handling office leasing at the 32-acre mixed-use Sugar Land Town Square development that the building is part of.

To facilitate the deal, Sugar Land Development Corp. provided the tenant a $1 million incentive, to be paid over two fiscal years. After relocation, the wastewater company will add some 20 jobs.

The eight-story property consists of 174,244 square feet of office space and 10,756 square feet of first-floor retail. Dating back to 2009, the asset was remodeled in 2019 and features 25,000-square-foot floorplates, four passenger elevators and approximately 660 parking spaces. Other tenants include Lotus Midstream, GR Energy Services and Electronica Laboratories, CommercialEdge shows.

Located at 2150 Town Square Place, the office building is close to numerous dining and retail opportunities, including Sugar Land Town Square shopping mall, First Colony Mall and Town Center Shopping Center. Downtown Houston is some 21 miles northeast, while William P. Hobby Airport is 28 miles away.

Recent notable transactions in Sugar Land include InLight Capital’s purchase of 77 Sugar Creek, a 143,410-square-foot office property. Completed in 1998, the Class A property is 2.7 miles from The Minute Maid Building.

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Other tenants at Beltway 8 Corporate Centre IV include Allstate and Walgreens. Image courtesy of JLL

Agellan Commercial REIT has signed two leases amounting to 66,000 square feet at Beltway 8 Corporate Centre in Houston. NAI Global Corporate Services and Transwestern represented US Med-Equip, while the other tenant, Keystone Advisors, was represented by Moody Rambin. A JLL team worked on behalf of the landlord in both deals.

The owner purchased the three-building office complex in 2013, CommercialEdge data shows. Completed between 2003 and 2006, the properties encompass a total of 362,452 square feet.

US Med-Equip, a medical and hospital equipment provider, signed a 34,000-square-foot commitment at Beltway 8 Corporate Centre IV. The two-story, 131,908-square-foot building was completed in 2006 and comprises 66,000-square-foot floorplates. The LEED Silver-certified building includes two passenger elevators and some 720 parking spaces. Plans call for an upgrade of the property that is set to include lobby improvements, a new conference center and a grab-and-go food option. The renovation is expected to finish in the second quarter of 2024.

Renovations at Beltway 8 Corporate Centre IV involve lobby upgrades and a new conference center. Image courtesy of JLL

Keystone Advisors, an insurance brokerage firm, will occupy 32,000 square feet at the 129,505-square-foot Beltway 8 Corporate Centre III. Dating back to 2005, the two-story office property comprises 64,752-square-foot floorplates, approximately 780 parking spaces and two passenger elevators. The building is also LEED Silver certified.

Located at 10900 Corporate Centre Drive and 4920 Westway Park Blvd., the buildings are 8 miles from Memorial City Mall and Village Plaza at Bunker Hill, which offer several dining and retail options. West Houston Airport is 9.5 miles away, while downtown Houston is 20 miles southeast.

The JLL leasing team consisted of Senior Vice President Scott Fikes, Vice President Matt Pruitt and Senior Associate Christian Canion. The team that represented US Med-Equip included NAI Global Director Cory Sleeth and Transwestern Executive Managing Director John Ferruzzo. Moody Rambin Executive Vice President Josh Marcell and Associate Anthony Porraz represented Keystone Advisors.

Houston’s office market sees high vacancy rate

According to a CommercialEdge report, Houston had a vacancy rate of 25 percent as of October, 720 basis points above the national average. However, office transactions in the market amounted to $1.17 billion, ranking seventh on national level and surpassed by metros such as Los Angeles, Dallas and Washington, DC.

In terms of pipeline, Houston had some 2.7 million square feet of office space under construction in October, the same source shows, amounting to 1.1 percent of total stock. Current projects in the area include Framework @ Block 10, a 200,000-square-foot office building developed by Hicks Ventures. That project is expected to be delivered by the end of 2024.

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North Park 34 is roughly 14 miles from downtown Houston. Image courtesy of Stream Realty Partners

Arden Group subsidiary Arden Logistics Parks has hired Stream Realty Partners as exclusive leasing agent for North Park 34, an 865,000-square-foot industrial park in Houston. Arden bought the 34-building portfolio in November 2021 from HPI, for just under $80 million, according to CommercialEdge data.

Stream Realty Partners Senior Vice President Boone Smith, Senior Associate Abraham Richardson and Associate Meg Zschappel are the leasing agents in charge, while Analyst Jax Rawlinson will also provide leasing support.

Since acquiring it, the owner implemented a capital improvement program, which led to 436,000 square feet being leased. Upgrades included new exterior paint on all buildings, new energy-efficient lighting, interior renovations for 21 suites and the installation of a drought-tolerant system to reduce water consumption.

The repositioned North Park 34 is at the northwest corner of Beltway 8 and Hardy Toll Road. It includes suites that range from 1,500 to 40,000 square feet. Buildings have clear heights between 13 and 17 feet, semi-dock and dock-high loading configurations and on-site property management.

The Class B, multi-tenant industrial park provides easy access to interstates 45 and 69. The property is 6 miles from George Bush Intercontinental Airport and 14 miles from downtown Houston.

Houston maintains steady industrial supply

In September, Stream Realty Partners, together with Principal Asset Management, completed Portside Logistics Center, a two-building, 1 million-square-foot logistics center in southeast Houston’s Port Industrial submarket. Stream will also market the property for lease.

Triten Real Estate Partners also recently completed a 357,570-square-foot, two-building industrial project in Houston. Fairbanks Northwest Distribution Center is 19 miles from downtown Houston and available for lease, with Cushman & Wakefield as exclusive leasing agent.

Due to its coastal location and access to key industries and Southern distribution routes, Houston maintains its popular position for new industrial development. According to a recent CommercialEdge report, Houston had 17.2 million square feet of industrial space under construction as of October, representing a 5.0 percent expansion of stock. In-place rents were up 4.1 percent year-over-year, which was below the nation’s 7.6 percent—a potential result of new inventory being brought online.

The post Stream Realty to Lease 865 KSF Houston Industrial Park appeared first on Commercial Property Executive.

Texas Tower is LEED Platinum certified. Image courtesy of CommercialEdge

A joint venture between Hines and Ivanhoé Cambridge secured a lease with Morgan Stanley spanning 37,600 square feet at Texas Tower in Houston. The ownership was represented by Cushman and Wakefield in the transaction, while JLL worked on behalf of the tenant.

Completed in 2019 by the current owners, the building rises 47 stories and spans 1,131,856 square feet, featuring 31,255-square-foot floor plates and including 15,000 square feet of retail space. It encompasses amenities such as an 8,000-square-foot fitness center, rooftop gardens and a high-tech conference center. In 2018, it became subject to a $317.6 million loan from New York Life Insurance Co, according to CommercialEdge data. The building also recently achieved LEED and WELL Platinum certifications.

Following the deal, Texas Tower achieved 80 percent occupancy, housing tenants such as Vinson, Chicago Title and Charter Title Co. Recently, global law firm Clifford Chance also inked a 60,400-square-foot lease at the property, for two full floors. The tenant previously operated from The Square at Texas Tower, Hines’ coworking platform.

Located at 845 Texas Ave., the property is within downtown Houston, in proximity of access points for interstates 10 and 45. It is also within walking distance of Houston City Hall, as well as near multiple light rail stations.

Houston registers high vacancy rates

JLL Executive Vice President John Burke represented Morgan Stanley in the transaction. Ownership was represented by Cushman & Wakefield Executive Managing Director Michael Anderson.

As of September, Houston registered the highest vacancy rate in the U.S. at 24.9 percent, marking a 30-basis-point increase year-over-year, placing it significantly above the national average of 17.8 percent, according to a recent CommercialEdge report. Average asking rates in the metro clocked in at $30.66, representing a 2.7 percent increase over 12 months and exceeding the 0.3 percent national average growth rate, the same source shows.

The post Morgan Stanley Inks 38 KSF Lease in Houston appeared first on Commercial Property Executive.

263 N. Sam Houston Parkway E. is roughly 14 miles from downtown Houston. Image courtesy of Colliers

Geosam Capital has sold 263 N. Sam Houston Parkway E., an office building in Houston spanning 87,282 square feet, to a private buyer. Colliers brokered the deal for the seller.

The asset previously traded in 2019 and in 2020 became subject to a $5 million loan from HSBC Bank Canada, as part of a larger $29 million portfolio financing, according to CommercialEdge data.

Completed in 1978 and renovated in 2015, the building rises three stories and features 29,204-square-foot floorplates. The leasing broker for the property is Lee & Associates, the same source shows.

Located near the intersection of Highway 8 and Interstate 45, in an Opportunity Zone, the 4.4-acre property is roughly 14 miles north of downtown Houston. It is also some 8 miles from the George Bush International Airport. Greenspoint Mall is within walking distance of the building.

Colliers Principal & Director David Carter represented the seller in the transaction. Carter recently worked with Geosam in the sale of another office building spanning 147,135 square feet, adjacent to 263 N. Sam Houston Parkway E.

As of September, Houston recorded the highest vacancy rate in the U.S. at 24.9 percent, representing a 30-basis-point increase year-over-year and well above the 17.8 percent national average, according to a recent CommercialEdge report. The listing rate in the metro clocked in at $30.66, rising 2.7 percent since the same month of last year.

The post Geosam Sells North Houston Office Asset appeared first on Commercial Property Executive.

Aerial view of Greenway Plaza. Image courtesy of Lincoln Property Co.

Lincoln Property Co. has been selected by a court-appointed receiver to provide property management services at Houston’s iconic 11-building, 4.5 million-square-foot Greenway Plaza office and mixed-use complex that is home to many of the city’s top companies.

Located on 52 acres between Houston’s central business district and Galleria submarket, the area is surrounded by high-end residential and retail areas. Built by the late Kenneth Schnitzer of Century Development starting in the late 1960s, Greenway Plaza is considered to be Houston’s first mixed-use development and an early example of the live-work-play concept.

READ ALSO: Creating a Winning Back-to-the-Office Formula

The Class A campus has been a landmark in the city and many of Houston’s top companies have offices there, including Occidental Oil & Gas, Invesco, Camden Property Trust, Boardwalk Pipeline, Magnolia Oil & Gas and Stephens. In September 2022, Invesco renewed its lease at Eleven Greenway Plaza, where it had been located for more than four decades. The global investment management firm signed a long-term lease extension for more than 180,200 square feet at the 31-story, 746,437-square-foot office tower.

$465 million CMBS loan default

The complex has had several owners over the years and undergone numerous upgrades. The most recent joint venture that owned Greenway Plaza, the Canada Pension Plan Investment Board, Nuveen Real Estate and Silverpeak Real Estate Partners, defaulted on a $465 million CMBS loan, according to reporting by Trepp and Bisnow.

When the loan matured in May 2022, refinancing efforts were unsuccessful, and the loan was transferred to special servicing two months later. But forbearance was granted, and the loan was paid through June 2023. Citing Trepp, Bisnow stated the borrower indicated over the summer it was no longer able to perform under the forbearance agreement and the loan went into default. A receiver has since been appointed, leading to the new property management assignment for Lincoln.

Greenway Plaza had previously been managed by Parkway Property Investments LLC. Parkway had earlier been the full owner of the campus but in April 2017 sold a 24.5 percent stake to a partnership between TH Real Estate (now Nuveen) and Silverpeak. CPP Investments also acquired a 24.5 percent stake and later became 75 percent owner of the complex after acquiring Parkway Inc. in a $1.2 billion merger in October 2017. Following the merger, Parkway Property Investments emerged as a spinoff.

Charlie Giammalva, executive vice president, Lincoln Property Co., said in prepared remarks Greenway Plaza is a cornerstone of the Houston office market and its significance cannot be overstated. Giammalva said Lincoln will bring a highly experienced team of professionals that have worked on large, complex assignments to the property and deliver efficiency, elevated maintenance and unmatched tenant experience.

Greenway Plaza amenities

The LEED Gold-certified complex has numerous amenities for tenants and visitors. Amenities include bike rooms; a food hall known as The Hub; casual fine dining; Lifetime Fitness, with outdoor pools and sundeck; a Primrose School for childcare; banking; sundry shop; coworking concepts; drycleaner; florist; hair salon; commercial printing and graphics. There is also an event space, a conference center and greenspace. A 388-key Doubletree by Hilton hotel is part of the complex and also has meeting and banquet facilities.

Buildings outlined

In addition to Eleven Greenway Plaza, the buildings to be managed by Lincoln include:

• One Greenway Plaza, an 11-story, 210,038-square-foot office building;
• Two Greenway Plaza, an 11-story, 209,914-square-foot office building
• Three Greenway Plaza, a 21-story, 518,578-square-foot Class A office tower;
• Four Greenway Plaza, an 11-story, 241,294-square-foot Class A office tower;
• Five Greenway Plaza, a 31-story, 912,011-square-foot Class A office tower;
• Eight Greenway Plaza, a 15-story, 255,305-square-foot Class A office tower;
• Nine Greenway Plaza, a 31-story, 747,819-square-foot Class A office tower;
• Twelve Greenway Plaza, a 15-story, 254,920-square-foot Class A building;
• 3800 Buffalo Speedway, a five-story, 155,761-square-foot office building;
• The Shops at Greenway/The Hub, a single-story, 97,411-square-foot food court and dining hall.

The post Lincoln Property to Manage Houston Landmark appeared first on Commercial Property Executive.

9 Greenway Plaza underwent cosmetic renovations in 2018. Image courtesy of CommercialEdge

Parkway Properties has signed a renewal and expansion lease totaling 35,454 square feet at 9 Greenway Plaza, a 746,824-square-foot Class A office tower in Houston. Privately owned insurance brokerage company Stephens Insurance expanded their commitment and will occupy 1.5 floors. JLL negotiated on behalf of the tenant, while the landlord was represented in-house.

The company, together with its affiliates Stephens Inc. and Stephens Investment Management Group, will maintain its Houston headquarters at the property, where 50 employees are currently located, said Stephens Insurance’s President & Chief Executive Officer Miles Stephens, in prepared remarks. Other tenants at 9 Greenway Plaza include Revenew International, The Sterling Group, The ITEX Group and Flagstar Bank, among others, according to CommercialEdge.

The current owner picked up the property in 2013, in a $1.1 billion portfolio transaction incorporating 5.2 million square feet of space from seller Crescent Real Estate, the same source shows.

Built in 1978, the 31-story office building includes 15 passenger elevators, 24,195-square-foot floor plates, 3,000 square feet of retail space and 3,000 vehicle parking spots and underwent cosmetic renovations in 2018. Additionally, the tower also features a fitness center, a food court, on-site property management services, a restaurant and a bar on the first floor.

JLL’s team of Senior Presidents Don King and Anya Marmuscak represented Stephens Insurance. Parkway Properties’ Senior Directors of Leasing JP Hutcheson and Amanda Nebel represented the landlord.

Recent deals in Houston

9 Greenway Plaza is part of a 60-acre master-planned development comprising 11 office buildings, close to interstates 69 and 610 and to multiple bus stations. The property is 6 miles from downtown Houston, 14 miles from William P. Hobby Airport and within 28 miles of George Bush Intercontinental Airport.

As of September, Houston’s office vacancy rate reached 24.9 percent, one of the highest among all U.S. markets, a recent CommercialEdge report shows. Recent office leases in the metro included Audubon Engineering Co.’s 71,879-square-foot commitment at Azrieli Group’s 227,045-square-foot 8 West Centre office building. Additionally, NRG Energy signed a 245,000-square-foot lease at Brookfield Properties’ 3 Houston Center, a 51-story skyscraper totaling 1.2 million square feet.

The post Parkway Properties Inks Lease at Houston Office Tower appeared first on Commercial Property Executive.

The TMC3 Collaborative Building encompasses 250,000 square feet. Image courtesy of Texas Medical Center

Texas Medical Center has opened TMC3 Collaborative Building, a 250,000-square-foot life sciences and research facility in the heart of the Helix Park megaproject in Houston. The project has come to life in partnership with The University of Texas MD Anderson Cancer Center, Texas A&M University Health Science Center and The University of Texas Health Science Center at Houston.

Boston-based Elkus Manfredi Architects designed the four-story, TMC3 Collaborative Building, which will be dedicated to research initiatives for the four founding institutions. The building includes a 43,000-square-foot joint research lab, office and coworking space, as well as shared IT infrastructure. The hub also features a 14,000-square-foot MD Anderson lab and a 7,000-square-foot atrium. Portal Innovations and TMC Venture Fund will be among the first life sciences tenants of the facility.

More to follow

The TMC3 Collaborative Building is part of the first phase at Helix Park campus, which will also include a 700,000-square-foot research facility dubbed Dynamic One. Back in September 2021, when construction began, the first phase was valued at $1.8 billion, with financing coming from leading life science investment and property development teams. The two-tower Dynamic One project is set for completion this year, as well. In early 2023, Baylor College of Medicine signed as an anchor tenant in a 114,000-square-foot deal.

READ ALSO: Life Science Market to Bounce Back: JLL

Beacon Capital Partners and Braidwell developed the TMC3 research facility, with other parties involved in the project including Majestic Realty and Transwestern Development.

At full build-out, the 37-acre life science campus will encompass a total of 6 million square feet, and will include an additional six industry and institutional research buildings, a residential tower, a hotel, a mixed-use building with a retail component and an 18.7-acre green space made of six interconnected parks that are already open to the public. The Helix Park green space was designed by landscape architect Mikyoung Kim and it encompasses a total of 300,000 square feet of public areas, retail options, cafes and spaces for events.

Houston, a major life science hub in the making

Earlier this year, The Howard Hughes Corp., in partnership with Vitrian, announced plans to develop cGMP/biomanufacturing facility within The Woodlands, a master-planned community in the Greater Houston area. McCord Development also unveiled plans for a major project. BioHub Two is a speculative 45-acre, 500,000-square-foot biomanufacturing campus that is set to be part of the 4,300-acre mixed-use Generation Park.

This month, Alexandria Real Estate Equities announced the launch of a 325,000-square-foot development, its first in the Houston market. The campus is set to include a purpose-built laboratory structure in The Woodlands and is valued at $201.5 million.

The post Texas Medical Center Opens 1st Facility in Houston Life Science Campus appeared first on Commercial Property Executive.

16666 Northchase Drive is some 14 miles north of downtown Houston. Image courtesy of CommercialEdge

Formation Capital has acquired 16666 Northchase Drive, a 147,135-square-foot office building in north Houston. The seller, Geosam Capital, was represented by Colliers Principal & Director David Carter.

The property is subject to an $11.4 million loan from HSBC Bank Canada originated in 2020, CommercialEdge data shows. One of the tenants is RFA Innovation, according to the same source.

Rising six stories, the building features 25,000-square-foot floorplates. It was constructed in 1985 and underwent a cosmetic renovation in 2007.

The building is part of the North Belt/Greenspoint submarket, which holds a total of more than 12 million square feet of office space and an occupation rate of 59.2 percent, according to Colliers. Recently, Carter was also also involved in arranging a 116,161-square-foot headquarters lease at an office building in west Houston.

Located in the North Houston District, 16666 Northchase Drive is near the intersection of Interstate 45 and Sam Houston Parkway, and some 14 miles from downtown Houston. It is also roughly 7 miles from the George Bush Intercontinental Airport and in the proximity of Greenspoint Mall.

As of September, metro Houston registered $1.1 billion in office sales, at an average price of $128 per square foot, a recent CommercialEdge report shows. The vacancy rate in the metro was the highest nationwide at 24.9 percent, representing an increase of 30 basis points year-over-year, according to the same source. Asking rents also increased by 2.7 percent, reaching $30.66.

The post Geosam Capital Sells Houston Office Asset appeared first on Commercial Property Executive.

The deals marks the company’s fourth IOS investment. Image courtesy of Apricus Realty Capital

Apricus Realty Capital, in a programmatic joint venture with ABR Capital Partners, has purchased a two-building industrial outdoor storage property in Houston, totaling 31,750 square feet. TRECAP Cos. sold the asset, CommercialEdge data shows. Generations Community Federal Credit Union provided a $2.6 million acquisition loan, Harris County public records show.

Located at 12400 and 12402 Taylor Road, the property include a paved concrete yard for storage and distribution. The 5-acre asset is near U.S. Highway 290 and major routes in Houston, such as Beltway 8 and 6, while also being 20 miles from downtown and within 23 miles from George Bush Intercontinental Airport. Tenants include SFR Building Products and Total Waste Management Alliance.

Apricus Realty Capital Managing Principal Matt Haley, Vice President Garrett Marler and Associate Cort Martin represented the company in the transaction.

Since the beginning of the year, several joint ventures were formed for the acquisition and development of new IOS products. In April, Centerbridge Partners and Dalfen Industrial joined forces with plans to invest in key markets that provide storage space for vehicle parking, containers, trailers, machinery and construction materials.

In March, GreenPoint Partners launched a $500 million IOS platform, with GCM Grosvenor as its lead investor. The funds will be used to acquire semi-truck parking and trailer storage assets across the U.S.

The post Apricus Realty JV Buys Houston IOS Facility appeared first on Commercial Property Executive.

8 West Centre will serve as the tenant’s new headquarters. Image courtesy of CommercialEdge

Audubon Engineering Co. has signed a 71,879-square-foot office lease at 8 West Centre, a Class A, 227,045-square-foot office building in Houston. Newmark worked on behalf of the tenant, while CBRE negotiated on behalf of the landlord, Tel Aviv-based Azrieli Group.

The engineering, procurement and construction services company will relocate to and use the new space as its primary corporate office. Azrieli Group picked up the asset in 2014 for $76 million from PGIM Real Estate, according to CommercialEdge data.

READ ALSO: Remote Work Shapes Office Sector

CBRE Executive Vice Presidents Russell Hodges and Bubba Harkins worked on behalf of the landlord. Newmark’s Vice Chairman Reggie Beavan, Managing Director Joshua Brown, together with Associate Director Audrey Selber represented the tenant.

The office building is at 3505 W. Sam Houston Parkway N. and includes 1,614 square feet of retail space, 59,000-square-foot floor plates, four passenger elevators and 1027 vehicle parking spots, CommercialEdge data shows. The four-story building includes amenities such as a fitness center, floor-to-ceiling windows, an outdoor courtyard and a full-service cafe. Other tenants at the property include Helix Energy Solutions Group, Inc. and Cameron International, according to the same data provider.

Built in 2013, the 9-acre property is close to Interstate 10 and to the Houston Energy Corridor, 17 miles from downtown Houston and from Sugar Land, Texas, 24 miles from George Bush Intercontinental Airport and within 33 miles of The Woodlands, Texas.

Houston vacancy among the highest

As of September, Houston’s office vacancy rate reached 24.9 percent, a massive 710-basis-point difference from the national average of 17.8 percent, according to the latest CommercialEdge office report. The metro had one of the highest vacancies in the nation, but the average full-service equivalent listing rate rose 2.8 percent year-over-year, to $30.66, the same source shows.

Recent office leases in the metro included NRG Energy’s 245,000-square-foot commitment at Brookfield Properties’ 51-story office tower in downtown Houston. Additionally, Lime Rock Management signed a 57,000-square-foot renewal at Heritage Plaza earlier this year. AEW Capital Management is a majority owner in that building, while Brookfield Properties acts as manager and leasing agent.

The post Azrieli Group Inks 71 KSF Office Lease in Houston appeared first on Commercial Property Executive.

Four Westlake. Image courtesy of JLL

JLL’s Houston leasing and property management team has been selected as the exclusive property manager and leasing agent for Four Westlake, a 20-story, 560,888 square-foot office tower located in the city’s Energy Corridor.

The firm’s new roles follow the property’s September foreclosure and subsequent trade to Pacific Life Insurance, according to reporting from Bisnow.

Four Westlake’s previous owner, Treeview Real Estate Advisors, defaulted on a $70 million loan for the property’s purchase, leaving it in the hands of the lender, Pacific Life Insurance Co., the article states. The property went up for auction in early October following a Notice of Acceleration, but the firm failed to find a buyer, even at a 50 percent price discount.

Presently, the California-based insurance firm and institutional investor remains the owner, and has committed to renovate the distressed asset’s lobby, conference spaces and fitness facilities, according to JLL.

Leasing at the building will be overseen by Managing Director of Houston Agency Leasing Tyler Garrett and Vice President Matt Pruitt, while Managing Director Connie O’Murray will lead property management.

A profile of Westlake Park

Four Westlake was built in 1992 as the largest component of Westlake Park, a 58-acre, four-building office campus that totals more than 2.3 million square feet of space. Oil and gas giant BP was the fourth building’s former anchor tenant, leasing space adjacent to its U.S. headquarters at 501 Westlake Blvd.

READ ALSO: Property Management Success: AI’s Power and Potential

According to CommercialEdge, the Four Westlake Park is sectioned into 28,000 square-foot floorplates, and includes a covered multi-level parking structure. Located at 200 Westlake Park Blvd., the building’s immediate neighbors include offices from BP, alongside the Houston office of Korean compressor manufacturer Hanwha Power Systems. The world headquarters of ConocoPhillips and McDermott International sit within a mile to the east, while downtown Houston lies 16 miles away, accessible through the Interstate 10.

Recharging the Energy Corridor

Houston’s Energy Corridor remains one of the nation’s top performing submarkets, despite the city market’s overall lukewarm fundamentals. Office leasing activity here, which was up 40 percent as of the second quarter, is getting a boost from employers such as BP mandating a three-day in-person workweek.

According to data from JLL Research, Class A assets in Houston saw a positive absorption of approximately 125,000 square feet in the third quarter, while the whole market presented a negative absorption of more than 600,000 square feet, driven by Class B’s significant move-outs.

The beating heart of the nation’s oil and gas industry remains active on the investment and leasing front. Earlier this month, Interra Capital Group bought Memorial Pointe, a 226,586 square-foot office building along Katy Freeway. Over the summer, engineering giant Gulf Cos. signed off on a 52,148-square-foot lease at Eldridge Oaks, a 349,190-square-foot property owned by Broadshore Capital Partners.

The post JLL to Lease, Manage Houston Office Tower appeared first on Commercial Property Executive.

Alexandria Center for Advanced Technologies at The Woodlands marks the developer’s first project in Houston. Image courtesy of Alexandria Real Estate Equities

Alexandria Real Estate Equities, the largest life science developer in the country, is opening its first campus in the Houston market with the unveiling of a $201.5 million, 325,000-square-foot multi-tenant development that will be home to the first purpose-built Class A laboratory structure in The Woodlands.

Located on 12 acres at 8800 Technology Forest Place, the first building at Alexandria Center for Advanced Technologies at The Woodlands is a 123,392-square-foot redevelopment project anchored by San Francisco-based Nurix Therapeutics. Nurix, a clinical-stage biopharmaceutical company developing drugs to treat cancer and other diseases, is leasing approximately 47,000 square feet in the building.

READ ALSO: Life Science Market to Bounce Back

Nurix and Alexandria acquired the campus, which then had five buildings across 260,950 square feet, from Lexicon Pharmaceuticals in December 2020. Alexandria later assumed full ownership of the property with Nurix leasing the main, redeveloped building that is now LEED Gold Core & Shell and Fitwell-certified.

Laboratory space at the Alexandria Center for Advanced Technologies at The Woodlands. Image courtesy of Alexandria Real Estate Equities

The campus, designed by Gensler, features move-in ready laboratory space and adjacent nontechnical space, as well as laboratory support services. Amenities include a modern conference and event space, a courtyard and event lawn, wellness and fitness center and pickleball courts. Most of the new construction will be build-to-suit space for life science companies but about 30,000 square feet is expected to be speculative space.

The Houston Business Journal reported Alexandria demolished two existing buildings and gutted two others down to the studs and redeveloped them. Plans call for at least one new building and a four-story parking garage. The site can be expanded.

Houston’s growing life science market

Joel Marcus, executive chairman & founder of Alexandria Real Estate Equities and Alexandria Venture Investments, said in a prepared statement the REIT’s efforts in The Woodlands can be compared to the firm’s entrance into New York City, where commercial life science was very limited before it opened its flagship Alexandria Center for Life Science – NYC in 2020. The campus has since grown to 1.3 million square feet. Marcus said Alexandria is similarly committed to developing a commercial life science presence in The Woodlands, a suburb located about 30 miles north of downtown Houston.

According to Newmark’s newly released Midyear 2023 National Life Science Overview, nearly 1 million square feet of life science space is expected to deliver by the end of 2023 in the Houston market, which currently has about 4.9 million square feet of total inventory. The top three life science owners in the market are Beacon Capital Partners with 700,000 square feet and a 16 percent market share; Texas Medical Center, with 650,000 square feet and a 15 percent market share, and Board of Regents of the Texas A&M University with 572,000 square feet and a 13 percent market share, according to the Newmark report.

Significant life science projects

Construction is underway on TMC Helix Park, previously known as TMC3, which will be part of the Texas Medical Center district and could become the largest life science development in the world. Plans call for the addition of 5 million square feet of life science space across 37 acres, further boosting the metro’s growing position as a major life science cluster. The TMC3 Collaborative Building, the first building being developed by Beacon Capital Partners, is slated to deliver this fall. The 250,000-square-foot building will house research facilities for MD Anderson, Texas A&M University Health Science Center, the University of Texas Health Science Center at Houston and TMC.

A second building, one of two towers that will be part of the 700,000-square-foot Dynamic One property, is also expected to be completed this year. Baylor College of Medicine is leasing 114,000 square feet of lab and office space at the 355,000-square-foot building.

Houston-based Hines is building the 53-acre Levit Green project adjacent to TMC that will also have lab and research facilities.

In March, The Howard Hughes Corp. teamed up with Vitrian to develop cGMP/biomanufacturing facilities within The Woodlands, where firms Cellipont Bioservices, Millipore Sigma, VGXI and KBI Biopharma already have ongoing operations. In August, McCord Development unveiled plans for the construction of BioHub Two, a speculative 45-acre, 500,000-square-foot biomanufacturing campus in northeast Houston.

The post Alexandria Launches $202M Life Science Campus appeared first on Commercial Property Executive.

Lowe’s opened its first Houston outlet store at Champions Village. Image courtesy of First National Realty Partners

Lowe’s has opened its first Houston outlet store at First National Realty Partners’ Champions Village, a 383,346-square-foot shopping center. The retailer committed to 41,453 square feet at the property earlier this year.

Champions Village came online in 1979 on nearly 32 acres, according the CommercialEdge data. FNRP purchased the retail center last year from New Market Properties. The asset had previously changed hands in 2016 for $48.8 million, the same source shows.

Located in Houston’s Cypress West submarket, Champions Village serves around 300,000 residents within a 5-mile radius, with an average household income of $109,950, according to its marketing brochure. The center is located at the corner of 5215 FM 1960 Road W. and Champion Forest Drive, in an area where the daily traffic count reaches approximately 80,000 vehicles.

Tenants, old and new

Anchored by a 61,604-square-foot Randalls grocery store, the center also features multiple national and regional tenants including TJ Maxx, Bath & Body Works, Sport Clips, Bank of America, AT&T, Kirkland’s and Painted Tree. Randalls and Barnes & Noble have recently signed long-term lease extensions and FNRP is currently under negotiations with a national retailer to occupy the former 13,688-square-foot Tuesday Morning space.

The owner also signed Hibbett Sports and The Greasy Spoon, which are slated to open next year. This will be Hibbett’s seventh location within FNRP’s portfolio and the restaurant’s fourth location in the metro.

A national retail portfolio

FNRP currently owns some 10 million square feet of retail space across the U.S., according to CommercialEdge. In October 2022, the firm acquired three shopping centers—a 287,000-square-foot property in Manassas, Va., a 158,000-square-foot asset in O’Fallon, Mo. and a 268,000-square-foot grocery-anchored shopping center in Indianapolis.

At the end of last year, FNRP has also purchased a 586,000-square-foot grocery-anchored retail center in Las Vegas. Graystone Capital Advisors brokered the transaction which marked the buyer’s entrance in the Nevada market.

The post Lowe’s Opens 1st Houston Outlet Store appeared first on Commercial Property Executive.

The site of The Grand at 249 development was one of the first land acquisitions made by NewQuest. Image courtesy of NewQuest Properties

NewQuest Properties has preleased 96 percent of The Grand at 249, a 404,256-square-foot retail development in Tomball, Texas. Andrew Alvis, senior vice president & development partner of the development and brokerage firm, along with Leasing Director David Meyers, are negotiating or have already signed leases totaling 388,856 square feet.

Boomer Jack’s and Gringo’s were the first to sign ground leases, followed by other tenants such as AT&T, Jersey Mike’s, Milano Nails and Two Pho Nine Asian Fusion. Other negotiations with potential anchor tenants and several well-known brands are still underway.

At full buildout, the $90 million project is set to create the largest concentration of retail in the submarket. NewQuest Properties purchased the 65-acre site in the 1990s, but only broke ground on the regional project in 2016. The Grand at 249 development marks one of the first land acquisitions made by NewQuest.

Set to encompass 16 buildings, the project will also include 12 pad sites ranging from one to two acres, all expected to be delivered by the end of this month. NewQuest also plans to develop two multi-tenant buildings totaling almost 25,000 square feet.

The booming 249 corridor

The Grand at 249 is at the northwest and southwest corners of Highway 249 and the Grand Parkway in Harris County, some 30 miles northwest of Houston. According to NewQuest, the retail center will serve approximately 27,000 households within a 3-mile radius, with an average income of $141,000 per year.

The opening of the Grand Parkway in 2016 accelerated development in the Tomball area, with multiple construction projects—including residential, retail, industrial and health care—breaking ground. Several master-planned communities and a 240-acre industrial development are currently underway.

With increased development along the northern corridor of the Grand Parkway, Tomball’s population increased by 19 percent over the past three years. Almost 22,000 new homes are anticipated to be added to the area’s stock.

The post NewQuest Lands Tenants for $90M Texas Retail Project appeared first on Commercial Property Executive.

The three medical office buildings came online between 2014 and 2017. Image courtesy of Big Sky Medical

Big Sky Medical has acquired a three-property portfolio totaling 110,636 square feet in metro Houston. Caddis Healthcare Real Estate sold the single-tenant assets, which are fully leased on the long-term to Memorial Hermann Health System. According to county records, the deal included a $28.9 million acquisition loan, provided by Siemens Financial Services.

The three medical office buildings are part of the Katy, Spring and League City submarkets. In 2016, Siemens Financial Services originated two construction loans totaling $16.8 million for the properties in Spring and League City and an $11.1 million acquisition loan for the asset in Katy, CommercialEdge data shows.

The medical facilities came online between 2014 and 2017. The low-rise, Class B buildings range between 30,000 and 44,000 square feet. The facilities offer 24-hour Level 1 trauma emergency care, primary care, breast care, sports medicine and rehabilitation, as well as imaging. The League City clinic also offers medical services such as orthopedics, cardiology and gastroenterology.

Presence in the Houston market

Located at 2555 Gulf Freeway S., the League City property is in the proximity of Interstate 45 and the UTMB Health League City Campus Hospital & Clinics, while being 27 miles southeast from downtown Houston. The Spring facility at 7474 Grand Parkway is located near U.S Route 99 and 30 miles north of downtown Houston. Lastly, the Katy clinic at 22430 Grand Corner Drive is 26 miles west of the city’s center.

Before the deal, Big Sky Medical already established a presence in the Houston market. Last year, the company acquired Greenpark One, a 134,910-square-foot medical office building, from Healthcare Realty Trust. The firm also acquired Westinghouse Building at Providence Park, a 175,752-square-foot life science facility in College Station, Texas.

The deal continues Big Sky’s strategic partnership with Bahrain-based GFH Financial Group. The duo formed a joint venture in 2022 to create a medical office portfolio worth $1 billion. At the beginning of 2023, GFH purchased a majority stake in Big Sky Medical.

The post Big Sky Medical Expands Houston Portfolio appeared first on Commercial Property Executive.

Brookfield Properties has landed a 245,000-square-foot lease at a Class A office tower in Houston. NRG Energy signed the lease and will relocate its headquarters to the east downtown building, 3 Houston Center, also known as the Fulbright Tower.

The integrated power company will occupy the top 10 floors of 3 Houston Center, situated at 1301 McKinney St. NRG Energy will customize the space over the next two years and then make its relocation move in January 2026.

Amenities in the 51-story office asset include a recently renovated two-story lobby, a second-floor outdoor patio, gym, locker room, energy-efficient lighting, conference spaces, updated elevator cabs and modern art and furniture. Originally completed in 1982, the 1.2 million-square-foot building has received Energy Star and LEED Gold certifications.

Current tenants of 3 Houston Center include Netherland Sewell & Associates, MRC Global, Baker Donelson, Wells Fargo and Galloway Johnson, CommercialEdge data shows. Industrious recently opened a new 23,489-square-foot coworking location in the building, featuring 277 desks, 60 offices and 10 phone booths. 

Cushman & Wakefield’s Vice Chairmen Chris Oliver and Trey Strake, along with Executive Managing Director David Guion represented NRG Energy in the deal. Transwestern’s Executive Managing Director Doug Little, Senior Vice President Kelli Gault and Vice Presidents Jack Scharnberg and Parker Burkett represented Brookfield Properties.

The Houston Center campus

The office building is situated in Brookfield Properties’ 4.2 million-square-foot mixed-use Houston Center campus. The property features a Central Plaza with greenspace and outdoor event spaces, 200,000 square feet of retail, 7,500 square feet of conference space and a 10,000-square-foot fitness center.

The Houston Center spans 6.5 blocks and was originally acquired by Brookfield Properties in 2017 for $875 million. Located in the CBD, tenants of the Houston Center campus are near Interstate 69 and have access to public transportation options such as the Red and Purple lines.

Dining opportunities in the Houston Center campus range from upscale to fast casual and include a Chick-Fil-A, Bullritos, Otto’s Barbeque, Starbucks and Wok N Roll. Entertainment and retail options are also featured throughout the campus and surrounding area.

The post Brookfield Lands 245 KSF Houston Office Lease appeared first on Commercial Property Executive.

Memorial Pointe was completed in 1982. Image courtesy of CommercialEdge

Interra Capital Group has acquired Memorial Pointe, an office building in Houston spanning 226,586 square feet. The asset was last owned by Gemini Rosemont, which acquired it in 2007 for $26.3 million, according to CommercialEdge data. In 2017, the property became subject to a $17 million loan from BOKF, the same source shows. JLL brokered the deal, representing the seller.

Completed in 1982, the property rises 11 stories and features 20,605-square-foot floorplates and average suite size of 2,600 square feet, along with 680 parking spaces. It underwent a cosmetic renovation in 2001. At the time of the sale, the property was 25 percent leased, with the roster including various insurance, law and financial firms, CommercialEdge data shows.

Located at 11767 Katy Freeway within the Energy Corridor, the building is just off Interstate 10 and roughly 15 miles west of downtown Houston. Along the corridor, there are some 3 million square feet of retail, dining and entertainment options.

Sales in Houston’s office market

JLL’s Senior Director Rick Goings and Senior Managing Director Tom Hall, along with Managing Director Chad Coluccio led the team that represented the seller. Interra Capital Group Principal Jack Polatsek stated in prepared remarks that the transaction perfectly aligns with the company’s strategy of acquiring distressed assets. Goings recently represented Gemini Rosemont in the sale of two other office buildings in the Houston area, totaling 153,294 square feet.

As of August, Houston’s office market registered a total sale volume of $865 million, at an average price of $123 per square foot, a recent CommercialEdge report shows. The vacancy rate in the metro rose 1.3 percent year-over-year, reaching 25.3 percent, above the national average of 17.5 percent, the same source shows. One of the largest recent transactions in the metro is Parkway’s acquisition of a 3 million-square-foot office portfolio.

The post Interra Acquires 227 KSF Houston Asset appeared first on Commercial Property Executive.

CityWestPlace comprises four buildings. Image courtesy of Parkway

Parkway, a newly created company between Parkway Property Investments and Midway, has acquired two significant Houston office campuses, Post Oak Central and CityWestPlace, that between them total more than 3 million square feet. The company purchased the assets from Parkway Property Investments’ previous unnamed partners.

Although a dollar value was not released in connection with the all-cash deal, Parkway’s assertion that the acquisition marks one of the nation’s largest real estate transactions so far this year seems plausible. According to The Real Deal, the assets have been appraised at nearly $350 million. Parkway touted the “strength of the submarkets, the institutional mix of the global tenant-base and the redevelopment potential of Post Oak Central” as crucial elements.

Parkway will continue to operate both properties, and its development partner, Midway, will oversee the redevelopment of Post Oak Central and the continued development of CityWestPlace.

READ ALSO: More Workers Return to Office After Labor Day

Parkway was created in 2023, when Parkway Property Investments, of Orlando, and Houston-based Midway partnered to form a private real estate investment, operations and management firm. Midway continues to operate as a separate development entity under its established name and also acts as Parkway’s development partner.

The three-building, mixed-use Post Oak Central is on Post Oak Boulevard in the Uptown business and entertainment district. Designed by Philip Johnson and constructed between 1975 to 1981, Post Oak Central comprises 1.2 million square feet of Class A office space and 90,000 square feet of pedestrian-oriented retail. The 17-acre campus provides ready access to the 610 Loop and U.S. 59, as well as to the new METRORapid Silver Line.

Post Oak Central comprises three buildings. Image courtesy of Parkway

In a prepared statement, Brad Freels, chairman & CEO of Midway and co-executive chairman of Parkway, said that while Post Oak Central is performing, it has been underappreciated in the market for some time.

CityWestPlace is a 39-acre campus in Houston’s Westchase District, off the Sam Houston Tollway near the Energy Corridor. The four-building Class A office complex was designed by Keating Mann Jerrigan Rottet and Daniel Mann Johnson & Mendenhall and built between the 1993 and 2001.

It totals nearly 1.5 million rentable square feet, in addition to four parking structures with ground-floor amenities. CityWestPlace’s outdoor spaces include extensive flower gardens, pine groves, sunken gathering areas and water features such as Japanese slit pools and a mist fountain. Tenant amenities include onsite conference space, multiple food and beverage options, two fitness centers, trails, a jogging track and sports fields.

Slow progress?

Whatever travails the office market might be going through nationally, Houston’s saw a 12 percent bump in leasing activity, to 3.7 million square feet, from the first to the second quarter, according to a report from Partners Real Estate.

Still, the metro’s overall vacancy rose 20 basis points, to 24.7 percent. And office construction is robust, with 2.9 million square feet underway.

In September, InLight Capital acquired a 143,410-square-foot Class A office property in Sugar Land, a Houston suburb, following an auction that resulted from a CMBS foreclosure.

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The Class A Airtex Commerce Center in Houston came online in 2015. Image courtesy of Colliers

Power Electronics USA has signed a full-building lease at Airtex Commerce Center, a 166,250-square-foot industrial building in Houston. Nuveen Real Estate is the owner of the property.

Transwestern Executive Managing Director Brian Gammill and Managing Directors Darryl Noon and Craig Bean represented the landlord. Colliers Vice Chairman & Director John Nicholson, Executive Vice President Robyn Hurrell, alongside Associate Ben Condara negotiated on behalf of the tenant.

Nuveen Real Estate acquired the asset in 2018 from Molto Properties, according to CommercialEdge data.

The Class A warehouse is on 19.6 acres and features 32-foot clear heights, 52-by 60-foot bay spacing, ESFR fire sprinklers, insulated ceilings, 130-foot truck court, loading doors and dock bumpers. The property offers 250 car parking spaces at a ratio of 1.5 spaces per 1,000 square feet.

Located at 431 E. Airtex Drive, the facility is near Interstate 45, within the North Industrial Corridor, some 17 miles North of downtown Houston. George Bush Intercontinental Airport is 10 miles away. Companies in the surrounding area include DHL eCommerce, Gulf States Toyota Vehicle Processing Center and CVS Warehouse Distribution Center.

Recent lease deals in Houston

Industrial in-place rents in the market were up 3.6 percent year-over-year, to an average of $6.3 per square foot as of July, according to a CommercialEdge report. Although vacancy was relatively high, at 9.5 percent, demand is healthy, with some large leases completed in previous months.

Ares Industrial Management landed a 227,300-square-foot lease with Proactive Supply Chain Group at its newly built 454,600-square-foot Bayport 146 Distribution Center in Seabrook, Texas.

Trammell Crow Co., in joint venture with Clarion Partners, fully leased its 355,686-square foot Rankin 45 Distribution Center in Houston to two tenants. UMOJA Supply Chain Solutions committed to 175,152 square feet, while Sungrow USA Corp. leased 179,534 square feet.

The post Nuveen Lands 166 KSF Tenant at Houston Warehouse appeared first on Commercial Property Executive.

Portside Logistics Center broke ground late last year. Image by Stream Realty Partners’ Alexa Bode, courtesy of Stream Realty Partners.

Stream Realty Partners and Principal Asset Management have completed a 1 million-square-foot logistics center in Southeast Houston’s Port industrial submarket. The facility broke ground in the third quarter of 2022.

The Portside Logistics Center is a two-building, Class AA development. The first building is an expandable 760,000 square-foot cross-dock asset, while the second structure is a flexible 260,000-square-foot front-load property.

Building I features 40-foot clear heights, while Building II features 36-foot clear heights. Both assets include secured truck courts, speculative office space and LED lighting. The Portside Logistics Center is designed to achieve LEED certification.

The center is located on a 33-acre site, CommercialEdge data shows. Some 482 parking spaces are available for the first building’s tenants, while the second building’s tenants have access to an additional 107 car parking spots. Spaces are available for multiple configuration floorplans, ranging from 122,971 square feet to 1 million square feet.

Situated at 4838 Borusan Road and 4908 Borusan Road in Baytown, the property is in proximity to corporate neighbors including Ikea, Walmart, Floor & Decor, The Home Depot and Niagara Bottling. The Grand Parkway, Interstate 10, Highway 225 and Highway 146 offer direct access to the Barbour’s Cut and Bayport container terminals, as well as access to the larger Houston and Texas areas. Downtown Houston is approximately 40 minutes west of the property.

Stream Realty’s Tyler Maner, managing director of the Houston industrial division, and Jeremy Lumbreras, senior vice president of the Houston industrial division, are set to act as leasing agents for the Portside Logistics Center. Kyle Fletcher, Stream Realty’s Houston office director, aided in development management. Justin Robinson, Stream’s executive managing director and partner, Tyler Wellborn, senior director, and Craig McKenna, director, led development oversight.

Houston industrial activity

According to a second quarter Houston industrial market report by Colliers, the area has seen a large amount of new supply hit the market recently, leading to a slight increase in vacancy rates. Despite net absorption decreasing on a year-over-year basis, a positive net figure of 3.9 million square feet for the quarter indicates that industrial demand in the area remains strong.

Triten Real Estate Partners has recently completed a 357,570 square-foot two-building industrial property in the Houston metro. Situated 19 miles from downtown Houston, the Class A property is fit to accommodate both large- and small-scale tenants.

The post Stream Realty JV Opens 1 MSF Industrial Project appeared first on Commercial Property Executive.

77 Sugar Creek went through a series of cosmetic renovations in 2018. Image courtesy of CommercialEdge

InLight Capital has purchased 77 Sugar Creek, a 143,410-square-foot, Class A office property in Houston’s Sugar Land, Texas, suburb. JLL, with the assistance of RI Marketplace, negotiated the deal on behalf of the seller, CWCapital Asset Management.

The asset was taken to auction following a CMBS foreclosure, with CWCapital Asset Management acting on behalf of Wilmington Trust, CommercialEdge data shows. In early 2023, NorthStar Commercial defaulted on a mortgage held by Wilmington Trust, the same source reveals.

Built in 1998, the six-story office property is located at 77 Sugar Creek Center Blvd. and features floor-to-ceiling windows, 23,839-square-foot floorplates, three passenger elevators, tenant common areas and 574 vehicle parking spots, according to the same source.

With cosmetic renovations completed in 2018, the property sits on 6 acres, close to U.S. Highway 59, Interstate 69 and 19 miles from Houston, 25 miles from Pearland, Texas, and within 38 miles of George Bush Intercontinental Airport. As of August, 77 Sugar Creek was 66 percent leased to a variety of tenants, including Wells Fargo Advisors, Lucid Private Offices, Summus Industries and Mc Offshore Petroleum, among others, CommercialEdge shows.

Senior Director Rick Goings and Senior Managing Directors Marty Hogan and Will Sledge of JLL’s Capital Markets Investment Sales and Advisory team worked on behalf of the seller.

The property’s auction raised interest from multiple high-quality buyers, RI Marketplace’s Managing Director, Neil McKenna, commented in prepared remarks.

Earlier in May, JLL brokered a deal involving two office buildings in Houston’s Woodlands, Texas, suburb. Totaling 153,294 square feet, the properties were acquired by Black Forest Ventures.

According to a recent CommercialEdge report, office sales across the U.S. totaled $17.5 billion in the first seven months of the year, marking a significant drop of more than 60 percent year-over-year. Houston ranked as the sixth market nationally, with $747 million in office sales volume through July. The metro was followed by Chicago ($658 million) and the Bay Area ($609 million).

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Triten Real Estate Partners has completed Fairbanks Northwest Distribution Center, a two-building industrial property totaling 357,570 square feet in Houston. Cushman & Wakefield has been tapped as exclusive leasing agent.

Encompassing two buildings of 194,780 and 162,790 square feet, respectively, Fairbanks Northwest Distribution Center was designed to accommodate both small and larger tenants. The campus features 32-foot clear heights, speculative office components, eight drive-in ramps, 180-foot truck courts, a 300-foot shared truck court and ample parking. Cushman & Wakefield Vice Chairman Jim Foreman and Managing Director Allison Bergman lead the leasing efforts at the property.

The Class A distribution center occupies 24 acres at 7810 Fairbanks N. Houston Road, close to U.S. State Highway 290 and within 7 miles of interstates 10 and 610. The location is 17 miles from George Bush Intercontinental Airport and 19 miles from downtown Houston. 

Recent industrial projects in Houston’s pipeline

Houston had 18.8 million square feet of industrial space under construction as of July, a recent CommercialEdge report shows. The metro outperformed Philadelphia (17.4 million) and Charlotte (13.8 million), ranking fifth in the U.S. for pipeline size.

Recent projects in the area include Brennan Investment Group’s 157,300-square-foot industrial building underway at 500 N. Sam Houston Parkway W. Completion is scheduled for late 2024.

In April, a joint venture between Pontikes Development and McNair Interests broke ground on two buildings totaling 630,128 square feet at Port 10 Logistics Center in Baytown, Texas. The 264-acre multi-modal industrial park is some 23 miles from downtown Houston.

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Rankin 45 Distribution Center came online in 2020. Image courtesy of Trammell Crow Co.

Trammell Crow Co., in a joint venture with Clarion Partners, has fully leased the 355,686-square-foot Rankin 45 Distribution Center in Houston. UMOJA Supply Chain Solutions committed to 176,152 square feet, while Sungrow USA Corp. leased 179,534 square feet at the property. JLL and Cushman & Wakefield represented the tenants, while CBRE worked on behalf of the landlord.

The Class A, cross-dock building features 32-foot clear heights, 52-foot column spacing, 60-foot speed bays and four drive-up ramps, along with ESFR sprinkler systems, 259 parking spaces and 23 trailer parking spaces. Designed by Powers Brown Architecture and built by A&F General Contractors, the facility came online in 2020, according to CommercialEdge.

JLL Senior Vice President Geoff Perrott, along with Executive Managing Director Jeff Venghaus, represented UMOJA Supply Chain Solutions, while Cushman & Wakefield Executive Director Michael Foreman and Executive Managing Director Beau Kaleel assisted Sungrow USA Corp. CBRE CIO Joseph Smith together with Senior Vice President Faron Wiley brokered the deal on behalf of the owners.

Houston’s industrial market, up close

Located at 13800 N. Freeway, the 18-acre property is off Interstate 45 and roughly 18 miles north of central Houston. It is also 9 miles from the George Bush Intercontinental Airport. Trammell Crow Co. Managing Director Jeremy Garner stated in prepared remarks that access to the broader Houston region played a significant role in securing the tenants.

As of July, Houston registered the highest vacancy rate for industrial assets in the U.S. at 9.5 percent, a recent CommercialEdge report shows. The metro does however exhibit a robust supply pipeline with 18.8 million square feet under construction, accounting for 3.2 percent of total stock. It also registered the highest sales volume among the southern markets, at $1.39 billion year-to-date, the same source shows.

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Private equity firm Lime Rock Management has signed a 57,000-square-foot lease renewal at Heritage Plaza, a Class A+ office tower in downtown Houston. AEW Capital Management is the majority owner of the 1.1 million-square-foot building.

AEW purchased a 90 percent interest in the asset from Brookfield Properties in 2014, according to CommercialEdge. Brookfield maintained its ownership stake and is the property manager and leasing agent of the building.

Lime Rock Management will continue its tenancy, that started in 2005, and will use the space to house three of its divisions. CBRE negotiated on behalf of the tenant, while Brookfield handled the lease renewal in-house. The current tenant roster at the property includes Kroll, Societe Generale, Blackstone, Deloitte and EOG Resources, that extended its lease to 375,000 square feet in September 2022.

A recent capital improvement plan

Built in 1986, the 52-story high-rise at 1111 Bagby St. features 27,932-square-foot floor plates, 28 passenger elevators and a multi-level parking structure with 2,655 parking spots, CommercialEdge shows.

In 2021, the property underwent a capital improvement plan, designed by Kirksey Architecture. The renovation resulted in a new conference center, a 10,000-square-foot fitness center with locker rooms, an upgraded glass exterior curtain wall and an exterior plaza with seating.

Rising on an approximately 1.5-acre lot, the office building is close to Interstate 45, while being 2.3 miles from East downtown Houston, 13 miles from Southwest Houston and within 20 miles of George Bush Intercontinental Airport.

READ ALSO: How Will Office Space Values Fare in 2030?

CBRE’s Vice Chairman Kevin Kushner and Senior Vice President William Padon represented the tenant in the lease negotiations. Vice Presidents Tyler Merritt and William Holliday of Brookfield Properties represented the landlord.

Other recent office leases in the metro included Gulf Cos.’ 52,148-square-foot commitment at Eldridge Oaks, Broadshore Capital Partners’ LEED Gold-certified building. Additionally, coworking provider Industrious expanded its Houston footprint with a new, 23,489-square-foot location also in Downtown.

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An aerial rendering of BioHub Two. Image courtesy of McCord Development

McCord Development has unveiled plans for the construction of BioHub Two, a speculative 45-acre, 500,000-square-foot biomanufacturing campus in northeast Houston. The firm has completed $30 million in infrastructure installations and land conversions for the campus’ construction, which is expected to begin as soon as at least a tenant is secured, according to the Houston Chronicle.

BioHub Two is a component of the Generation Park master plan, a 4,300-acre mixed-use commercial and multifamily development that will include a 101,000-square-foot medical office building, an 85,526-square-foot office building, an industrial park, 95,000 square feet of retail and a 251-unit luxury community, among others. In terms of size, the project is one of the largest mixed-use developments in the world.

The future life science campus

A rendering of San Jacinto College’s Generation Park campus. Image courtesy of McCord Development

BioHub Two will take shape near the San Jacinto College Biotechnology Center, a 10-building manufacturing and research training campus operated by San Jacinto College in partnership with the National Institute of Biotechnology Research and Training.

The life science campus will comprise five development sites connected through The Commons, a 5-acre central courtyard, and house cGMP-compliant biomanufacturing laboratories, as well as research and office space. Medicine giant Amgen had previously been interested in leasing the campus and partnering in its development, but instead opted for space in North Carolina’s Research Triangle, the Houston Chronicle article states.

At full build-out, BioHub Two will include:

• Site 1, a 75,000-square-foot facility, to be built on approximately 8.5 acres
• Site 2, which will house an 105,000-square-foot building on 7.1 acres
• Site 3, an 8.1-acre property with the same square footage as Site 2
• Site 4, a 25,000-square-foot facility on an estimated 1.4 acres
• Site 5, which will span three buildings on a 14.1-acre lot.

The campus, the first of its kind in the southwestern United States, will host training programs for students, manufacturing workers and researchers in the biotechnology manufacturing industry. Employees at BioHub Two will have access to the College and NIBRT’s programs at the campus.

READ ALSO: Getting Into the Heads of Life Science Clients

BioHub Two will be adjacent to two planned multifamily communities, with direct linkage to The Ray, Generation Park’s pedestrian highway. Once completed, the campus will be within 20 miles of a population of 7.3 million, and a workforce of 3.3 million.

Located at the intersection of Lockwood Road and Generation Parkway, the site has direct connectivity to Sam Houston Parkway, giving it highway access to much of metro Houston. The city’s largest hospital, Memorial Hermann-Texas Medical Center, is 23 miles to the west, while Rice University is 16 miles in the same direction.

Houston’s life science market heats up

In a recent ranking of life science markets by research talent, conducted by CBRE, Houston occupied the 13th position, standing among the top three fastest-growing markets by graduate holding degrees in related disciplines. Its figures are projected to expand, as the city is home to more than 700 life science companies and to the site of a 6 million-square-foot life science campus being developed by Texas Medical Center.

In March, the Howard Hughes Corp. joined forces with Vitrian for the development of biomanufacturing facilities in The Woodlands, HHC’s master-planned community in Houston. The partnership intends to accommodate the needs of contract development manufacturing organizations, and also cater to companies that focus on in-house manufacturing—from biopharma to industrial biology.

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