$95M Terminal B Redevelopment Nearly Complete; Tenant Line-Up Revealed

By Georgiana Mihaila, Associate Editor

George Bush Airport – Terminal B

United Airlines recently unveiled the dining and retail line-up soon to be featured at the new Terminal B south concourse at Houston’s George Bush Intercontinental Airport.

The $95 million south concourse redevelopment—expected to open in mid-April—is a new 225,000-square-foot facility designed to accommodate United Express regional flights. The new space, nearly four times the size of the former south concourse, will feature modern and expanded gate-lounge areas; 17 food, beverage and retail concessions; and a spacious central passenger lounge with expansive tarmac views.

The tenant list is led by two new celebrity-chef venues. First-time airport concession 3^rd Bar Oyster & Eating House is the creation of Houston native and celebrated chef Bryan Caswell and noted food and beverage director Bill Floyd—whose Midtown restaurant Reef was named the No. 1 seafood restaurant in the United States by Bon Appetit magazine in 2008. Another airport first is The Fruteria, developed by San Antonio chef Johnny Hernandez, whose passion for Mexican street food has already caught the attention of Travel & Leisure, Southern Living and Bravo’s Top Chef.

Other new airport concessions include Texas icon Whataburger; Bullrito’s, also a Texas native, which will feature fresh Tex-Mex; and Barcuterie, which will offer cured meats and classic cheeses in an energetic bar setting.

The retail component does not fall far behind, as it also includes a variety of shopping options, among them the iStore Boutique, the first airport retail concept authorized to sell Apple devices, as well as a Relay store and beauty brand The Body Shop. Brookstone will also be present on-site with a highly interactive store that will offer the latest business and technology gear, tablet accessories, checkpoint-friendly luggage, travel pillows and blankets, as well as gifts. Other well-known retail stores include Ice Currency Exchange, Johnston & Murphy, Natalie’s Candy Jar and Nuance Duty Free.

With 15,000 square feet of concessions, the new space is 500 percent larger than the concession space in the previous south concourse facility.

Responsible for leasing and managing the concessions, as well as the food and beverage operations in the Terminal B south concourse, is Westfield, the company that also manages the concessions for Terminal E at Bush Intercontinental Airport.

CNC Manufacturing Buys Lakeview Business Park Land for New Facility

By Georgiana Mihaila, Associate Editor

Following the recent purchase of a 7.6-acre development site within the Lakeview Business Park in Missouri City, Texas, CNC Manufacturing has hired Trammell Crow Co. to oversee the development of a new facility.

A 75,000-square-foot warehouse and industrial facility will rise on the newly purchased site at 911 Buffalo Run. As the CNC Manufacturing facility will be part of Lakeview Business Park—a 157-acre master-planned development owned by Trammell Crow and a private real estate fund advised by Crow Holdings Capital Partners L.L.C.—electing Trammell Crow to manage the development of the new facility was a natural choice.

“We are pleased CNC Manufacturing has chosen to relocate to Lakeview Business Park. They will build an attractive, high-quality building designed by Powers Brown Architecture that will be a great addition to the park,” said Jeremy Garner, senior vice president of Trammell Crow’s Houston business unit.

CNC Manufacturing, seeking to relocate from its current 40,000-square-foot Jessamine Street location in Houston due to expansion needs, currently employs 62 people. The company also plans to develop an additional 35,000 square feet within the first three years of occupancy, opening up the opportunity to hire another 45 employees.

CNC Manufacturing was represented in the land transaction by Studley’s Drew Morris and Holden Rushing, while Alexander Reilly and Bo Pettit with Boyd Commercial/CORFAC represented seller Lakeview BP Land LP.

Located near the Sam Houston Parkway, U.S. Highway 90-A and the Fort Bend Parkway, Lakeview Business Park offers a master-planned business park environment with opportunities for build-to-suit facilities and land parcels for sale. This transaction marks the eighth property sale within the park.

Image courtesy of http://www.lakeviewbp.com/

Massive 2,100-Acre Houston Development Site Hits the Market

By Georgiana Mihaila, Associate Editor

The Sam Houston Area Council of the Boy Scouts of America is looking to sell its more than 2,100-acre Camp Strake property, considered to be one of the largest available contiguous land parcels currently available in the Houston metropolitan area.

Jones Lang LaSalle Inc. has already been hired to market the property, and the proceeds from the sale will be used to buy, develop and endow in perpetuity a new Camp Strake north of the city. JLL capital markets experts including Managing Director Tom Kirschbraun, Senior Vice President Scott Cullen and Vice President Mark Lindenbaum are leading the national and global efforts on the offering, with Houston Market Director Dan Bellow and Senior Vice President John Talhelm leading local outreach.

The development site, located on the southwest corner of Interstate 45 North and Loop 336, south of Conroe, is expected to draw a great deal of both national and international interest, featuring more than two miles of commercial frontage, secluded residential areas and natural amenities suitable for recreation, parks, hiking trials, bike trails and environmental mitigation.

Bellow believes that “Camp Strake is truly one of Houston’s treasures, but the time is right to create a new gem for this city. Between the Exxon Mobil Corporate Campus opening next year with more than 14,000 employees and the Town Center in The Woodlands with approximately 50,000 jobs currently in place and the potential for another 25,000, the north Conroe area is one of the top growth areas in the entire state of Texas.  Amazing things are happening here.”

The massive site presents no specific zoning requirements and will be annexed by the city of Conroe, whose mayor, Webb Melder, has declared himself in favor of future on-site development, offering potential new owners/developers full support.

The Camp Strake property served as the flagship camp for the nation’s largest Boy Scout Council for more than 70 years. It was named in honor of Susan and George Strake Sr., who provided the funds to purchase the camp property in 1943.

Photo: Grand Lake, the camping and activity area of Camp Strake, courtesy of Sam Houston Area Council.

West Ave to Debut Two New Luxury Tenants

By Georgiana Mihaila, Associate Editor

Two new luxury concepts are set to debut this spring at the chic West Ave mixed-use development, set at the crossroads of Upper Kirby and River Oaks. The two new tenants—Del Frisco’s Grille and Jonathan Adler—will join an already impressive list of high-profile retailers and restaurants.

The pedestrian-friendly West Ave boasts 190,000 square feet of high-end retail space on its first two floors, with more than 30 individual storefronts. West Ave has drawn some of Houston’s most talented brands along with highly regarded regional and national brands to create the ultimate one stop shop for fashion, dining, mingling and pampering.

We are excited to announce the addition of two new luxury brands that will join our retail lineup,” said Michelle Yeglic, director of marketing for developer Gables Urban. “We are committed to providing our guests with a unique and indulgent experience that includes the latest fashions, cuisine and urban nightlife that the city has to offer.”

The Jonathan Adler store, scheduled for an April opening, will showcase Jonathan Adler’s complete range of home décor, furniture, rugs, tabletop collections, bedding, gifts, candles and more, all within 3,500 square feet of space. The new Houston store will debut a brand-new merchandising concept that will be introduced across various Jonathan Adler stores. A “gift bar” will be created to inspire clients with the perfect gifts and clearly defined room vignettes will help clients envision how pieces will work in their own homes.

The 7,100-square-foot Del Frisco’s Grille opened on March 16. Targeted to a slightly younger, less business-based demographic than the brand’s legendary steakhouse—Del Frisco’s Double Eagle Steak House—it takes a modern approach to designing the spacious interior, with oversize lamps, large leather banquettes and lightning-rod ceiling fixtures throughout. The restaurant also features two outdoor patios and an indoor bar, complete with flat screen TVs.

The two brands join a tenant roster that includes such retailers and restaurants as Eddie V’s, Katsuya, Pondicheri, Cru Wine Bar, Ligne Roset and Ivory Bridal. They also join anchoring retailer TOOTSIES, , which opened in January 2011 in 34,000 square feet of premium ground-floor space.

Image: West Ave via Gables Urban

Hines Sells Iconic Williams Tower to Invesco for $412M

By Georgiana Mihaila, Associate Editor

The previously reported sale of Hines’ 1.4 million-square-foot Williams Tower to Invesco Real Estate came through this week, with the new owner paying $412 million for the trophy tower, according to Reuters.

Developed by Hines in 1983, Williams Tower returned to its original owner in 2008, when current seller Hines Real Estate Investment Trust Inc. bought the building from Fosterlane Holdings of Atlanta for $271.5 million. Hines put the tower back on the market in August 2012, when the company hired Jones Lang LaSalle Inc.’s Houston office to find a buyer.

“Williams Tower is a world-class building that has been one of Hines REIT’s most significant investments. It is also a very important property to Hines as a firm and to the city of Houston. This has been a great investment that delivered strong cash flows and a positive return to Hines REIT,” said Charles Hazen, president & CEO of Hines REIT.

When completed in 1983, the iconic 909-foot Williams Tower held the title of “the tallest skyscraper in the world outside of a Central Business District”; although the title was lost, the 64-story tower is still one the tallest buildings in the world outside of a CBD. Designed by renowned architects Philip Johnson and John Burgee, it was created in the art deco style. Clad in silver gray reflective glass and anodized aluminum, the sleek tower is accented by columns of bay windows made of non-reflective glass and podium setbacks on two lower floors and four higher levels. A 7,000-watt, revolving beacon on its roof can be seen for miles around, creating a virtual urban lighthouse. The tower is connected by skywalk to the world-famous Galleria, Houston’s popular shopping and tourist destination.

Williams Tower is currently more than 95 percent leased to tenants including Williams, Hines, Rowan Cos., Quanta Services and Cadence Bancorp. It also serves as Hines’ corporate headquarters. Hines has managed the property for three decades and will continue to do so under the new ownership.

Image: Williams Tower via Wikimedia Commons

Camden Property Trust Expands Presence at Greenway Plaza—but Switches Buildings

By Georgiana Mihaila, Associate Editor

Camden Property Trust—one of the largest publicly traded national multifamily developers—will soon be trading its office at 3 Greenway Plaza for the neighboring 11 Greenway Plaza. The company signed a lease for 86,733 square feet on floors 23 through 26 of the 31-story Class A office building.

Bob Boykin, Warren Savery and Bubba Harkins represented owner Crescent Crown Greenway Plaza SPV L.L.C., while Anthony Squillante, Chris Johnson, Jeremy Hunt and Mike Anzilotti represented Camden Property Trust.

“Camden’s growth over the years required that we relocate our headquarters from 3 Greenway Plaza,” said Keith Oden, Camden’s president. “After a lengthy review of available options, we decided that the best choice for the company and our team members was to relocate within Greenway Plaza. The convenient location, ease of ingress/egress and access to amenities made our decision to move to 11 Greenway very straightforward.”

The planning and design of Camden’s new space in Greenway Plaza is being conducted by Gensler, and the construction will be performed by E.E. Reed Construction L.P. Located in Houston’s Greenway Plaza submarket, 11 Greenway Plaza totals 745,956 square feet.

Greenway Plaza, Houston’s premier master-planned business development, is a 10-building complex featuring 4.3 million square feet of Class A office space. The campus is also home to The Shops at Greenway, which includes a unique selection of retail options and a full-service food court. Located just five miles southwest of downtown Houston, the 55-acre business park and mixed-use community includes residential condominiums, a luxury hotel and a comprehensive athletic/social club; it provides easy access to major thoroughfares and convenient transportation alternatives.

Image via http://www.greenwayplaza.com/

GID Development Reveals Phase Two of Regent Square Mixed-Use Project

By Georgiana Mihaila, Associate Editor

Following the August 2012 groundbreaking on its Regent Square mixed-use project, GID Development Group is now lining up plans for a second phase.  Phase Two will add an Alamo Drafthouse Cinema, another residential building and 15,000 square feet of restaurant space to the project, which is set in the heart of the Inner Loop.

Designed as a walkable mixed-use district featuring apartments, condominiums, retail shops, restaurants, entertainment venues, office space, parks and courtyards, Regent Square aims at becoming an icon of sophisticated urban planning.

GID Development kick-started the 4.2 million-square-foot mixed-use Regent Square development in August 2012, when construction began on the 290-unit luxury apartment tower The Sovereign. The 21-story residential tower, designed by Zeigler Cooper Architects, promises to deliver the most sophisticated set of amenities in the market. With initial occupancy slated for March 2014, The Sovereign has been designed to comply with LEED Silver standards.

Work on Phase Two will start in late 2013, with Alamo Drafthouse Cinema having already officially announced its presence at the location. Another sophisticated residential project featuring 160 apartments and a wide variety of amenities has also been included, as well as 15,000 square feet of restaurant space.

“Phase Two represents a vibrant component of Regent Square, featuring an exciting multi-family project and high-caliber tenants such as Alamo Drafthouse Cinema,” said James Linsley , president of GID Development Group. “The addition of this type of entertainment destination to Regent Square supports our vision to provide the best shopping, dining, entertainment, public space and walking neighborhood in Houston.”

Neal Berkowitz with Newmark Grubb Knight Frank mediated the Alamo Drafthouse Cinema lease.

Image courtesy of GID Development Group

Hines Tapped to Manage Three-Building Energy Corridor Portfolio

By Georgiana Mihaila, Associate Editor

Energy Tower I

Franklin Street Properties Corp. has retained international real estate firm Hines to manage its three-building office portfolio in the West Houston Energy Corridor.

The multi-tenant office portfolio comprises Energy Tower I—a 326,000-square-foot, 14-story building located at 11700 Katy Freeway; Phase I of The Offices at Park 10, a six-story building at 16285 Park Ten Place, with 157,000 square feet of space; and neighboring Phase II of The Offices at Park 10, located at 16290 Katy Freeway and totaling 157,000 square feet.

“Hines has enjoyed its relationship with Franklin Street Properties, managing buildings for FSP in Atlanta, Chicago, Dallas and Kansas City. Following our firm’s recent success with FSP at Phoenix Tower in Houston, we look forward to achieving our owner’s asset objectives through Hines’ property management expertise,” said General Property Manager Don Emerson, who will oversee Hines’ on-site management staff at each property.

The three-building portfolio is 100 percent leased, with Technip USA Holdings Inc. and Murphy Exploration and Production Co. occupying substantial portions of Energy Tower I and the Offices at Park 10, respectively.

According to Marcus & Millichap, Houston continues to rank among the tightest office markets in the nation. With above-average job creation, limited new supply and a highly active energy industry, investor demand for Houston properties will most likely rise over the next year alongside occupancy and rents. In high-demand areas such as the Energy Corridor and CBD, availability of large blocks of space has dwindled, and soon-to-be-vacated space should be met with healthy demand.

Image: Energy Tower I courtesy of Hines

Forum Energy Tech to Occupy 68% of New Duke Realty Building

By Georgiana Mihaila, Associate Editor

Duke Realty Corp.’s Houston office found a tenant for Sam Houston Crossing Two, the firm’s new, speculative suburban office building fronting the Sam Houston Tollway.

Forum Energy Technologies Inc.—a provider of manufactured technologies and applied products for the energy industry—signed a 108,639-square-foot lease and will be occupying the second and third floors of the building. The 108,639-square-foot lease amounts to 68 percent of the building.

Located between Highway 290 and Highway 249 on the Sam Houston Tollway, midway between the I-10 Energy Corridor and the new Exxon Mobil campus, Sam Houston Crossing Two has been targeting energy services firms that want to be close to industry clients, with Duke Realty’s efforts in this respect being deemed successful.

“This building will consolidate Drilling and Subsea personnel from four buildings, giving them an opportunity to work more closely together as a team, and supports our continued growth,” said Tom Simms, treasurer with Forum. “The Duke building appealed to us due to its location, easy access on the Sam Houston Tollway, visibility and attractive design.”

The 159,056-square-foot tilt-wall concrete-and-glass facility features large floor plates for flexibility in space planning and includes Class A finishes and fixtures. Forum will be moving in starting in July 2013.

Steve Hesse and Jeff Cairns with CBRE represented Forum in the transaction, while Cory Driskill, senior leasing representative, represented Duke Realty.

Another speculative development will soon claim ground at the southwest corner of the Sam Houston Beltway 8 Tollway and Highway 225. California-based The Carson Cos. recently broke ground on Carson Commerce Center, a three-building, 365,000-square-foot industrial project. With completion set for the end of the year, The Carson Co. chose Cadence McShane to be the general contractor for the project, while Powers Brown Architecture was named architect.

Image via Duke Realty’s Official Web site

Energy XXI Expands Footprint at One City Centre; Law Firm Moves In at BG Group Place

By Georgiana Mihaila, Associate Editor

Oil-and-gas exploration and production company Energy XXI Services L.L.C. has decided to expand its presence on the Main Street Corridor. The company has signed a lease expansion for 28,168 square feet at One City Centre, bringing its total footprint to 128,133 square feet.

Transwestern’s David Baker, executive vice president, represented landlord Beacon Investment Properties, which purchased the property on Sept. 20 from Behringer Harvard; Jason Wasaff with Wilson Wasaff Group L.L.C. represented the tenant.

One City Centre is a 29-floor, Class A office building totaling 609,000 square feet and located within walking distance of hotels, sporting events, convention facilities and Discovery Green Park. The strategic location on the Main Street Corridor is convenient to the Metro’s light-rail and bus routes.

Meanwhile, Downtown Houston’s newest office tower, BG Group Place, has achieved some recent leasing activity: Law firm BakerHostetler signed a 75,737-square-foot lease for floors 11 through 13 of the 46-story LEED Platinum building. The lease also includes a unique 10,000-square-foot, green rooftop deck for client events and firm functions.

The law firm will relocate from another downtown building when the lease commences in the third quarter of this year. With the signing of this lease, BG Group Place is 92 percent occupied. BakerHostetler was represented in lease negotiations by Mark O’Donnell, Derrell Curry and David Endelman of Studley. Chrissy Wilson, Allison Knight and Tyler Garrett represented Hines, the building’s developer, owner and manager.

Hines senior managing director John Mooz said, “We could not be more pleased with BakerHostetler choosing BG Group Place for their new home. They are an outstanding addition to an already world-class tenant roster.”

Image: BG Group Place, Courtesy of Hines

Skanska’s LEED Platinum Office Building Lands First Tenant

By Georgiana Mihaila, Associate Editor

Skanska USA’s commercial development business unit in Houston has officially announced the first tenant lined up for its state-of-the-art 3009 Post Oak Blvd. building, currently under construction in the Uptown/Galleria submarket.

Datacert Inc.—a 15-year-old global company based in Houston that provides enterprise legal management solutions—plans on relocating its corporate headquarters to the building. The company has signed a long-term lease for 49,824 square feet on the 10th and 11th floors of the new building.

“Our decision to move was driven by the need for more space to accommodate our growth, as well as a desire to have a state-of-the-art workspace that will help us attract and retain top talent and present well to our world-class client base,” said Datacert CFO Alan Harding. “The innovative, green design of 3009 Post Oak Blvd.  will provide our employees with an attractive work environment with lots of natural light that’s in a premier location near Houston’s top amenities.”

3009 Post Oak Blvd. will total 20 stories and 302,000 square feet, including 12 stories of office space sitting atop an eight-story parking garage. The building will feature an all-glass curtain wall façade, an expansive double-height ground-floor lobby and 25,000-square-foot floor plates that maximize space-planning efficiencies. The building skin and high-efficiency mechanical and electrical systems are designed to reduce energy consumption by 25 percent for operational savings. In addition, the building will have a sophisticated lighting control system for the office and garage areas, as well as a water-saving rainwater collection system used for landscape irrigation.

The project is on track to deliver in summer 2013 and is pre-certified LEED Platinum, making it the only speculative office building of this level outside the Central Business District in Houston. Skanska USA Commercial Development acquired the site in October 2009 and is self-financing 100 percent of the development costs.

Image: 3009 Post Oak Blvd. brochure, courtesy of Skanska

Trammell Crow, Principal Start Work on Class AA Energy Center Three

By Georgiana Mihaila, Associate Editor

A joint venture between Trammell Crow Co. and Principal Real Estate Investors have embarked on a quest to deliver the highest-quality office building in the Energy Corridor, Energy Center Three. The developers just broke ground on the Class AA, 546,372-square-foot office building on the southwest corner of I-10 and North Eldridge Parkway, on an 18.9-acre site acquired by the joint venture in March 2012.

The Kirksey Architects-designed building will feature a post-tension concrete structure with a high-performance skin including a glass curtain wall and metal panels. Plans also call for a large green area and water amenity adjacent to the building.

The 20-story Energy Center Three has already been pre-certified LEED Gold by the U.S. Green Building Council. The office building—along with its featured nine-level, freestanding parking garage—will be merely the first phase of a planned multi-phase office development.

The project marks the fifth Class A office project Trammell Crow and Principal will develop together in Houston. The venture also developed Hess Tower downtown (the 2012 winner of Commercial Property Executive‘s Distinguished Achievement Award for Best Development/Redevelopment), Energy Center I and II in the Energy Corridor and most recently Noble Energy Center One in the northwest quadrant.

“Energy Center Three demonstrates TCC and Principal Real Estate Investors’ commitment to high-quality office development in top-tier national markets. This new speculative project is reflective of our longer-term outlook for growth and expansion within Houston and specifically the Energy Corridor,” said Aaron Thielhorn, managing director with Trammell Crow’s Houston business unit.

With Balfour Beatty Construction serving as the project’s general contractor and Trammell Crow’s Aaron Thielhorn, Kevin Schmok and Brandon Houston  alongside Principal’s Joe Wanninger leading the development team, completion is expected in the fourth quarter of 2014.

A syndication of Wells Fargo Bank and U.S. Bank provided construction financing, while the leasing assignments have been awarded to Cody Armbrister and Steve Rocher with CBRE Group Inc.’s Houston office.

Shorenstein Buys Exxon Mobil Building; Hilton Westchase Also Gets New Owners

By Georgiana Mihaila, Associate Editor

The downtown Exxon Mobil building recently traded hands, with San Francisco-based Shorenstein Properties becoming its new owner.  Shorenstein purchased the property for Shorenstein Realty Investors Ten L.P., a fund formed in 2010 with $1.2 billion in committed capital.

Along with the sale, former owner Exxon Mobil Corp. also leased back the entire building into 2015, when it plans to relocate to its new 385-acre corporate campus, currently under construction north of Houston.

The 45-story 800 Bell St. building, known as the Exxon Mobil Tower, was built in 1962 as the headquarters of Humble Oil & Refining Co., a predecessor to ExxonMobil; at that time, the 1.2 million-square-foot office tower was the tallest building west of the Mississippi River at 606 feet.

Also included in the sale was a seven-story parking garage. No financial details of the transaction have been disclosed, but Shorenstein Properties chairman & CEO Douglas Shorenstein declared, “We purchased this property markedly below current replacement cost, which gives us the opportunity, once the current user vacates, to employ all our company’s core skills – in capital transaction execution, redevelopment, leasing and operations – to increase the property’s value by establishing its long-term position and further enhancing its reputation in the market.”

According to an official release, Shorenstein plans to undertake significant improvements to the property after ExxonMobil’s departure.

The Hilton Houston Westchase also experienced a recent change of owners, as Interstate Hotels & Resorts sold the 297-room hotel to Wheelock Street Capital. This is the company’s second Houston purchase and its sixth full-service hotel acquired within the past 12 months. Wheelock Street plans to renovate the 12-story, 220,254-square-foot hospitality property at 9999 Westheimer Road.

No details have been provided as to the amount for which the Hilton Houston Westchase traded, but CoStar Group Inc. reports that investment entity Capstar Westchase Partners L.P. sold the asset to Interstate Hotels in February 2007 for $50.5 million, or $170,034 per key.

Image courtesy of Obskura via Flickr

One Hughes Landing Gets First Major Tenant, Construction Financing

By Georgiana Mihaila, Associate Editor

One Hughes Landing, the first office building to be constructed at the Hughes Landing community that The Howard Hughes Corp. is planning for The Woodlands, now has a major new tenant, as well as construction financing.

Layne Christensen Co. has signed a 51,152-square-foot lease for the top two floors of the still-to-be-completed One Hughes Landing. The global solutions provider will move 210 employees from its current Mission City, Kan., location in September 2013.

“We are delighted by the opportunity to join The Woodlands community and the amenities it provides,” said Rene Robichaud, president & CEO of Layne Christensen. “The Woodlands is a wonderful location to live and to conduct business. We sincerely appreciate the efforts of The Woodlands Development Co. to collaborate on our new building. We look forward to a successful partnership in the years to come.”

The developer was represented in the deal by Robert Parsley and Norman Munoz of Colliers International. Tenant Layne Christensen was represented by Colliers International brokers Sven Sykes (of Chicago), Brian Johnson (Kansas City) and Jay Kyle (Houston).

The Howard Hughes Corp. secured $38 million in non-recourse financing from Texas Capital Bank and Woodforest National Bank for the construction of the building.

Designed by Gensler of Houston to be LEED Silver certified, the 197,000-square-foot, Class A, eight-story building is now underway and is expected to be completed by September 2013. It will be the first of as many as eight office buildings at the 66-acre Hughes Landing on Lake Woodlands, a dynamic destination within The Woodlands that is set to include a boutique hotel and several retail and entertainment venues with high-end specialty stores, as well as upscale multifamily housing.

Image courtesy of The Howard Hughes Corp.

Houston Office Market Heats Up as 3 Buildings Change Hands; Invesco Emerges as Williams Tower Buyer

By Georgiana Mihaila, Associate Editor

With Houston having already set an annual record in office sales, December closings will certainly stand as confirmation, as investors seem to be herding local properties at an unusual pace.

3555 Timmons, a 225,895-square-foot, Class A office building in Houston’s Greenway Plaza submarket, recently traded hands for an undisclosed amount. Buyer Unilev Capital Corp. acquired the 14-story building from Great Point Investors L.L.C., with Holliday Fenoglio Fowler L.P. arranging the deal.

The 272,361-square-foot Westchase Park also experienced a change in ownership, with Clarion Partners recently acquiring the Class A office building along with seven acres of adjacent land. Westchase Park, completed in 2009, is one of the newest office properties in the Westchase submarket and has been awarded a LEED Gold designation for core and shell and a LEED Platinum designation for certain tenant improvements. The property is currently 98.3 percent occupied.

KBS Strategic Opportunity REIT also added a Houston office property to its portfolio; in its sixth investment of the year, KBS acquired 1800 West Loop South, a 400,101-square-foot, 21-story office tower located in the West Loop/Galleria submarket for the reported amount of $68.5 million. Although the 1982-built property underwent a renovation process in 2005, the new owner plans additional building improvements and modernizations, including an upgrade of the lobby and elevators.

The biggest local office deal is yet to come, Invesco Real Estate has reportedly agreed to pay Hines approximately $420 million for the 1.5 million-square-foot Williams Tower. If the deal closes, it would be Hines’ second major deal of the year, following the company’s August sale of the 1.8 million-square-foot One and Two Shell Plaza for $550 million. The 64-story Williams Tower, located at 2800 Post Oak Blvd. in the Galleria/West Loop submarket, is currently 96.5 percent leased, according to CoStar Group Inc. The tenant roster includes Hines itself, Transco Energy, Rowan Cos., Quanta Services and Citigroup.

While the $420 million price tag the LEED Gold-certified building could trade for would mark the top price in total dollars ever paid for a Houston office property outside the central business district, it would still fall short of some early expectations that it could trade for as much as $475 million.

Image: Williams Tower via Wikimedia Commons

PM Realty Buys Greenway Plaza Site for New Mixed-Use Development

By Georgiana Mihaila, Associate Editor

Having recently broken ground on what could become Houston’s tallest apartment building—the 2929 Weslayan project—PM Realty Group has now purchased a 4.97-acre site with plans for a two-phase, mixed-use project.

PM Realty Group and its equity partner, the INDURE Fund, closed on the 3333 Richmond Ave. property on Nov. 16 but only recently released information about its plans. Located in the Greenway Plaza submarket, at the southeast corner of Richmond Avenue and Buffalo Speedway, the site includes an existing 97,000-square-foot office building, a two-story parking garage, surface parking and approximately three acres of excess land.

The mixed-use development will include a 400,000-square-foot, 18-story, Class A, LEED-certified office tower; a 3.5:1,000-density, seven-level structured parking garage; and an amenity package including a ground-floor restaurant and terrace atop the parking structure that will be accessible to office tenants. This phase of the development is scheduled for groundbreaking in late 2013, with a completion anticipated in late 2014 or early 2015.

According to a company release, the 400,000-square-foot Class A office building is already 20 percent pre-leased to two tenants, one of them the seller of the property, Solvay America Inc. The company—represented in the transaction by Trey Strake, Tim Relyea and Matt Trozzo of Cushman & Wakefield Inc.—will occupy approximately two floors in the new building.

The second phase of development will call for the demolition of the existing 97,000-square-foot structure in order to make room for a single high-rise tower comprising a full-service hotel on the bottom half and a 250-unit high-end apartment building on the top half. The hotel and apartments will be joined by a high-end-resort-styled amenity deck, to which both hotel guests and apartment residents will have exclusive access.

PM Realty Group has selected an architectural design team consisting of Elkus Manfredi, lead design architect; Sasaki, lead landscape design architect; OJB, landscape architect of record; and Kendall Heaton, architect of record. It has commenced the full design process.

The development team will be led by industry veteran Dan Leverett, executive vice president & managing director of development for PM Realty Group.

Image courtesy of PM Realty Group

$21M Houston Sale Marks Weingarten Realty’s Exit from Industrial Sector

By Georgiana Mihaila, Associate Editor

In a move to reinforce its position as a shopping center owner, manager and developer, Weingarten Realty Investors has closed on the sale of its interest in three industrial joint ventures to Exeter Property Group’s Fund II.

The move is consistent with Weingarten Realty’s previous announcement concerning its decision to sell the company’s industrial division. “The completion of this portfolio sale marks our exit from the industrial business and positions Weingarten as a pure-play retail REIT. We will continue our commitment (to) building shareholder value through the repositioning of the retail portfolio into core markets with high barriers to entry and strong growth potential,” stated president & CEO Drew Alexander.

The ventures include a total of nine properties, aggregating approximately 2.6 million square feet of building area, all of it in Houston. The sale price totaled $21.1 million, including $7.8 million of secured debt that Exeter assumed as part of the transaction.

Houston-based Weingarten Realty made public its intent of selling off its entire industrial portfolio back in April, when the company sold almost all of its industrial assets to DRA Advisors in a $382 million deal; 52 industrial properties spread out through Tennessee, Florida, Texas, Virginia and Georgia traded hands at the time, with the remainder to be sold in the most recent transaction.

The company also sold two non-core retail assets in October, including Burbank Station, located in a suburb of Chicago, and Johnston Road Plaza in Charlotte, N.C. Including the recent sale, Weingarten’s dispositions have totaled $631 million this year.

W.P. Carey Affiliate Buys KBR Tower for $174.6M

By Georgiana Mihaila, Associate Editor

The 1.04 million-square-foot KBR Tower in Houston’s Central Business District, along with its adjacent 1,500-space garage, have traded hands for $174.6 million; the buyer is Corporate Property Associates 17-Global, a public non-traded REIT affiliate of W. P. Carey Inc.

Allied Advisors both represented buyer CPA®:17 – Global in securing acquisition financing and advised the seller, a joint venture between Brookfield Office Properties and Kellogg Brown & Root Inc. (“KBR”)

KBR is also the main tenant of the 40-story building, occupying 87 percent of its namesake tower. In February 2010, KBR signed an industry-leading 20-year net lease renewal and expansion with Brookfield for 1.2 million square feet at KBR Tower and the adjacent 500 Jefferson St. garage, widely considered to be the largest U.S. office lease since fall 2008.

Commenting on the acquisition, W. P. Carey Executive Director Chad Edmonson noted, “We are extremely excited to work with a great tenant like KBR as well as complete yet another transaction with an affiliate of Brookfield. In addition, as an important location for KBR, it meets our criteria of acquiring critical facilities leased to established corporate tenants on a long-term basis. The property’s prime location in Houston’s CBD was also a positive factor in our overall analysis of the investment.”

KBR Tower, located at 601 Jefferson St. in downtown Houston, is currently 99.8 percent occupied, with the majority leased by KBR and the balance occupied by a mixture of office and retail tenants.

The 40-story building was completed in 1973. The Energy Star-certified building is part of the master‐planned Cullen Center complex, which is adjacent to the downtown YMCA and the Downtown Club at The Met sports and wellness club. Cullen Center is surrounded by numerous Metro stops and offers access to the freeway system.

Image courtesy of Blair McFarlain via Wikimedia Commons

2929 Weslayan Multifamily Project Adds 5 Stories, Gets Construction Loan

By Georgiana Mihaila, Associate Editor

The 2929 Weslayan development that just broke ground at the northeast corner of Weslayan and West Alabama will be taller than expected, as new plans for the tower include an extra five stories. When developer PM Realty Group first announced the project last year, 2929 Weslayan consisted of 35 stories; the new plan could make it the tallest rental tower in the city upon completion.

But this was not the sole recent achievement for the project; according to an official announcement. Holliday Fenoglio Fowler L.P. has arranged a construction-permanent loan on behalf of partners PM Realty Group and the INDURE Fund—a commingled real estate fund managed by National Real Estate Advisors—securing the loan through Pacific Life. The HFF team representing the borrower was led by senior managing director Whitaker Johnson, managing director Rob Rizzi and director Cameron Cureton.

“PM Realty Group has proven adept in developing best-in-class multi-housing properties, and this project, in one of the top-performing apartment markets in the country, will be no exception,” said Rizzi. “The property’s prime location, along with its unmatched level of finishes and amenities, is sure to raise the bar for Houston luxury apartment options.”

Due for completion in the first quarter of 2015, 2929 Weslayan will be a 254-unit, 40-story building with 12,156 square feet of ground-floor retail and a 547-space parking garage. Community amenities will include a fitness center, a pool lounge and club area, a cabana, a fire pit and room service from the on-site restaurant. The RTKL-designed tower will be located on a 1.7-acre site on the northeast corner of Weslayan Street and West Alabama Street near the Highland Village Shopping Area and the affluent residential area of River Oaks.

While Houston-based PM Realty Group is a leading national real estate company strategically present in 30 markets, 2929 Weslayan is the company’s first multifamily development in its hometown.

Image Courtesy of MHN Online

Houston Club Moves to One Shell Plaza, Plans Multimillion-Dollar Club Renovation

By Georgiana Mihaila, Associate Editor

The 118-year-old Houston Club has recently entered into an agreement with the Plaza Club to relocate to the Plaza Club’s current location on the 49^th floor of the One Shell Plaza.

In an attempt to provide their combined members a reinvented club, while also retaining the historic name “The Houston Club”, the two will invest in a dramatic $3.5 million onsite renovation project, scheduled to start this month.

“The Houston Club has served as a meeting place for Houston’s business and civic leaders since 1894,” said Matt Alford, president of the Houston Club. “I believe this change of venue, along with the combining of the clubs’ memberships and the extensive renovations, will allow the Houston Club to be an even larger part of Houston’s business and social culture. I am very proud to be a part of this exciting evolution.”

The new Houston Club will feature amenities such as a grand lobby surrounded by floor-to-ceiling-window views of downtown, a stylish “Anytime Lounge”, power boardroom with state-of-the-art technology including HD video conferencing and world-class business amenities for high level and critical meetings, and technology-equipped “Touchdown Rooms” for private calls, interviews or impromptu meetings with clients. Also accommodated will be Allen’s Landing—an all-in-one, innovative focal point for dining and networking in a variety of stylish settings with a few nods to the past, including club memorabilia and regional artifacts.

In addition, the new club space that is to be designed by global architecture, design, planning and consulting firm Gensler will offer an expanded private event space that is designed to accommodate up to 200 guests.

No exact date for the relocation of the Houston Club to the 50-story tower has been announced, but according to Club officials the Rusk Street location will remain open until the end of the year.

Image courtesy of Hines