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One Market Square: Proposed Office Tower for Block 43

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Thats it flood the tunnels and bring in gondoliers and we will have the only underground water taxi system in the world. 

We can bill it as the new world Venice.

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let's all think "supertall" simultaneously and maybe it will happen !  come on SUPERTALL...

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On 5/28/2017 at 0:18 AM, Howard Huge said:

This is going to be a parking garage, right?

 

Yeah, there are renderings of it on the green fence facing Franks. 

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Really excited for this project and bringing more people downtown.  In addition to having some revenue on the block, this is probably a move by the Developer to have some of the site work done to entice larger companies - similar to Capitol Tower.  There are 1-3 tenants in, or about to be in, the market that could lead tenant a brand new building. Good things ahead for this side of downtown.

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While it stinks to potentially have a vacant "block" of space in Downtown, the market usually absorbs it in due time. Bank of America will get filled up again, and whatever company that moves will too.

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38 minutes ago, CREguy13 said:

Really excited for this project and bringing more people downtown.  In addition to having some revenue on the block, this is probably a move by the Developer to have some of the site work done to entice larger companies - similar to Capitol Tower.  There are 1-3 tenants in, or about to be in, the market that could lead tenant a brand new building. Good things ahead for this side of downtown.

 

1-3 tenants in/about to be in the market... looking to relocate from other downtown buildings?

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Yes, Large tenants that are exploring other options.  Like V&E for example:

 

"The firm's lease expires in 2021. But in a few weeks, Vinson & Elkins will begin meeting with brokers associated with some of downtown Houston's newer buildings, including Hines' 609 Main and projects that haven't even broken ground yet, Vinson & Elkins COO Tim Armstrong said."

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I know of one energy company moving downtown later in the 4th quarter of this year. My friend that works there is so excited. They used to be downtown about 8 years ago but moved out to the BFEnergy Corridor. She's told me the feedback from the employees was universally negative about their experience (traffic, no commuting options, and lack of lunch options because everything requires a car other than food truck Wednesdays). Sadly, it's not a big firm but hoping there's some push back from workers. 

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On June 2, 2017 at 9:35 AM, adr said:

34241290563_ba24e5dfdc_b.jpg

 

For a perspective of how this building will fit into the neighborhood, the yellow crane you see is at the west end of the lot. 

On a completely off topic the wall of this garage in the foreground sure looks nice as it fills in with the greenery. It sure softens the view from the harsh concrete wall. Kudos to whoever planned it. This should be a requirement for every garage that doesn't support GFR. At least then they would be helping to create a more positive public realm. Come on city planners. Do your job and plan some good things for the people who are trying to make downtown more environmentally friendly.

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1 hour ago, KinkaidAlum said:

I know of one energy company moving downtown later in the 4th quarter of this year. My friend that works there is so excited. They used to be downtown about 8 years ago but moved out to the BFEnergy Corridor. She's told me the feedback from the employees was universally negative about their experience (traffic, no commuting options, and lack of lunch options because everything requires a car other than food truck Wednesdays). Sadly, it's not a big firm but hoping there's some push back from workers. 

 

I think that this is the shape of things to come. The people in management making these decisions in most companies are still baby boomers who prefer the suburbs, but as the younger generation moves into management, I think there will be a longterm shift to downtown.

 

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On June 2, 2017 at 9:35 AM, adr said:

34241290563_ba24e5dfdc_b.jpg

 

 

One other thing I notice in this photo. There are seven Hines buildings in this image.

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15 hours ago, hindesky said:

19tyyWP.jpg

Certainly "looks" like something hi-rise and major in the works on this site to me, but alas, probably yet another underground parking lot, or what not and so forth...

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1 hour ago, ArtNsf said:

Certainly "looks" like something hi-rise and major in the works on this site to me, but alas, probably yet another underground parking lot, or what not and so forth...

 

The tower is supposed to go up where the parking lot currently is. Until dirt moves there, this is only a parking garage (with possible future intentions). It's Skanska 2.0 so pray for tenant. 

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10 minutes ago, tigereye said:

 

The tower is supposed to go up where the parking lot currently is. Until dirt moves there, this is only a parking garage (with possible future intentions). It's Skanska 2.0 so pray for tenant. 

 

In my industry, there is alot of truth to 'if you build it they will come'. But more so like this: If you build it FIRST, you will be rewarded for your bullish strategy.

 

Skanska had a lot of press how they laid the foundation for the tower... and how they were ready for their tenant... This tower needs the same press. It doesnt look like they are making much press, yet. If this tower does go up, it will essentially validate that this is a new but proven strategy for spec towers... I hope Houston Center 6 and Allen 5 take a hint...

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4 hours ago, Avossos said:

Skanska had a lot of press how they laid the foundation for the tower... and how they were ready for their tenant... This tower needs the same press. It doesnt look like they are making much press, yet. If this tower does go up, it will essentially validate that this is a new but proven strategy for spec towers... I hope Houston Center 6 and Allen 5 take a hint...

 

I want to see this tower happen. Maybe we help create the news on the parking garage for Essex lol

 

 

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I made the mistake of walking through the barricaded/covered "sidewalk" along Prairie on the left side of the above photo the other day. The relative privacy afforded by all the screens made the area a block long bum latrine. Getting literal shit off the streets should be a priority around this area, it's got so much upside.

Edited by Nate99
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34 minutes ago, Twinsanity02 said:

Is the document in Chinese? Can anyone read it?  My next door neighbor is Chinese. I may ask him if it is Chinese. 

Don't bother.  I asked my (second generation) Asian-American friend.  Answer:  "yes.  Those are Chinese characters."

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Costar's mid-year report is out... downtown Houston has had almost 600,000 SF of Class A negative absorption this year, with a vacancy rate at 17%. Houston as a whole has its highest office vacancy since 1999. Would be a miracle if this building happened. That being said, for some reason Chicago has been able to build a steady stream of Class A+ office towers over the past 15 years despite vacancy hovering around 14% the whole time. I'd guess that is the result of the Class A+ market being a bit unique and hard to measure, as well as Chicago being a destination for foreign investment. Not sure if Houston could pull off something like that.

 

I wonder if at some point this block could be considered for hotel/residential, with maybe a small office component, and of course retail. As the neighborhood takes off with the influx of new residents, this could start to look attractive.

 

Edited by H-Town Man
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1 hour ago, H-Town Man said:

Costar's mid-year report is out... downtown Houston has had 600,000 SF of Class A negative absorption this year, with a vacancy rate at 16%. Houston as a whole has its highest office vacancy since 1999. Would be a miracle if this building happened. That being said, for some reason Chicago has been able to build a steady stream of Class A+ office towers over the past 15 years despite vacancy hovering around 14% the whole time. I'd guess that is the result of the Class A+ market being a bit unique and hard to measure, as well as Chicago being a destination for foreign investment. Not sure if Houston could pull off something like that.

 

I wonder if at some point this block could be considered for hotel/residential, with maybe a small office component, and of course retail. As the neighborhood takes off with the influx of new residents, this could start to look attractive.

 

 

I think of it like this. I want to live in a specific neighborhood... In this neighborhood, 16% of the homes are available for sale. I also could build new. If there are enough people out there, some will decide to buy existing while others buy new. Since Skanska's tower is U/C, this means there is some "spec homes" coming online... However, it just takes one domino to fall for a builder to take the plunge. 

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We don't have to go as far as Chicago to see a market that builds office buildings in spite of high vacancy rates.  Downtown Dallas hasn't seen vacancy rates below 20% in more than 30 years, and yet they've built new office buildings.  Granted, nothing nearly as large as the proposed One Market Square, but the point remains.  No miracle is required, just a significant tenant or two.

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26 minutes ago, Houston19514 said:

We don't have to go as far as Chicago to see a market that builds office buildings in spite of high vacancy rates.  Downtown Dallas hasn't seen vacancy rates below 20% in more than 30 years, and yet they've built new office buildings.  Granted, nothing nearly as large as the proposed One Market Square, but the point remains.  No miracle is required, just a significant tenant or two.

 

I thought their new construction was more in the Uptown submarket? We've seen Skanska go ahead with a building with just a quarter of the space leased, but that was a unique situation where they had invested so much in demo, and already had a foundation poured. I am skeptical that we will see a procession of buildings going up with only a fraction of space leased in each.

 

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4 minutes ago, H-Town Man said:

 

I thought their new construction was more in the Uptown submarket? We've seen Skanska go ahead with a building with just a quarter of the space leased, but that was a unique situation where they had invested so much in demo, and already had a foundation poured. I am skeptical that we will see a procession of buildings going up with only a fraction of space leased in each.

 

 

Yes, Dallas has had much more office construction in their Uptown submarket.  But a couple things:  (1) There has been some construction (3 multi-tenant buildings I can think of) in the traditional downtown in spite of 25% plus vacancy rates, and (2) if you combine the traditional downtown with Uptown (as Dallas likes to do when it tells the right story for them), the combined market is north of 20% vacancy and has been for 30+ years.

 

I too doubt we'll see a procession of buildings going up with only a fraction of space leased in each and no one suggested such. The One Market Square tower seems to be developing in much the same manner as the Skanska development, so that "unique" situation could be playing out again.

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27 minutes ago, Houston19514 said:

 

Yes, Dallas has had much more office construction in their Uptown submarket.  But a couple things:  (1) There has been some construction (3 multi-tenant buildings I can think of) in the traditional downtown in spite of 25% plus vacancy rates, and (2) if you combine the traditional downtown with Uptown (as Dallas likes to do when it tells the right story for them), the combined market is north of 20% vacancy and has been for 30+ years.

 

I too doubt we'll see a procession of buildings going up with only a fraction of space leased in each and no one suggested such. The One Market Square tower seems to be developing in much the same manner as the Skanska development, so that "unique" situation could be playing out again.

 

I hope they get a tenant and build, but I don't think we should read too much into their decision to build a parking garage. The demand for parking is incredible and it makes oodles of sense to build a garage there. Freestanding garages are sprouting all over downtown Houston, as well as downtown Dallas. Also helps them deal with holding costs over a long hold.

 

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The amazing thing about downtown Dallas is that the vacancy rate has remained the same despite enormous amounts of square footage being converted to residential/hotel. We need a major tower (like the Exxon) to flip purposed to help this market out. Dallas has seen a handful of towers around that side converted. 

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27 minutes ago, KinkaidAlum said:

The amazing thing about downtown Dallas is that the vacancy rate has remained the same despite enormous amounts of square footage being converted to residential/hotel. We need a major tower (like the Exxon) to flip purposed to help this market out. Dallas has seen a handful of towers around that side converted. 

 

Flipping the Exxon building will help the overall vacancy rate but not the Class A vacancy rate, which is what developers look at. And converting it to residential might slow the pipeline of new residential construction, although it would let people live downtown at a lower price point. Might be popular among Rice students and Med Center residents. One of the few great things about the downturn though is that it saved that building from having its style and history erased.

 

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Stupid question here but was the slab engineered to hold a 40 or 50 story skyscraper or just the garage? I would assume it would be far cheaper to build a foundation just for a garage than a skyscraper. Therefore maybe its an indication that eventually there will be a skyscraper here?

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^I think the tower is supposed to go on the other half of the block if it ever comes to fruition (???) so I think it was only designed for the garage. 

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17 hours ago, cspwal said:

I think the plans to re-clad it are still on going

 

I'm sure Shorenstein still has those plans officially on the books, but I don't think it's going to happen.

 

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2 hours ago, H-Town Man said:

 

I'm sure Shorenstein still has those plans officially on the books, but I don't think it's going to happen.

 

 

Lets hope not.. convert the fins to balconies with glass railings for a residential conversion if they must, but don't turn it into another boring tower with a bland facade.

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That actually sounds like an awesome idea

It would rival Houston house in balcony size for each unit.  I wonder how well a Commercial -> Residential conversion would go - they'd have to plumb in a lot more bathrooms and kitchens

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It has been discussed a bit, but I don't think those things are designed to hold anything other than their own weight. The look could be replicated with balconies in a retrofit, but who knows how much that would cost.

 

That would be a massive residential building. The old Petroleum Club at the top would make for something pretty special too.

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2 hours ago, H-Town Man said:

At 19.5 percent, downtown Houston's vacancy rate is still well-above the national average of around 14 percent. But since 2016, downtown Houston's trophy towers have been home to 64 percent of signed leases in downtown greater than 20,000 square feet, per the report. This is despite those towers comprising 36 percent of downtown's office inventory.

Among those deals is Targa Resources Corp. (NYSE: TRGP), a Houston-based energy company, signing a 127,734-square-foot lease in 811 Louisiana in March.

And though this tower is still under construction, Charlotte, North Carolina-based Bank of America Corp.(NYSE: BAC) preleased 210,000 square feet in Capitol Tower in the second quarter. The building's underway at 800 Capitol St.

The healthy activity in downtown Houston signals an ongoing flight to quality, per the report. Among the submarket's top Class A towers, which includes Hines' new tower 609 Main, rent rates are 28.8 percent higher on-average than other Class A buildings in downtown.

The average asking rent in top-tier Class A buildings in downtown is $46.46 per square foot gross, per the report. Throughout Houston, the average Class A asking rent is $33.04 per square foot gross.

“Despite ongoing headwinds in Houston’s office market, many tenants in the market are still seeking trophy and Class A+ space,” said JLL's executive vice president John Pruitt in a statement.

The steady rent and healthy leasing activity among downtown's top-tier buildings is attracting investors, too, per the report. Discrepancies in seller expectations versus the realities of what buyers were willing to spend hindered investment activity in 2016.

But things are starting to pick up in that sphere. In 2017, Houston's seen roughly 1.3 million in total investment volume, a stark increase from the $330 million in investments that closed throughout all of 2016, according to the report.

“Cautious optimism and the belief that the worst may be behind us has investors feeling more positively about Houston," said Rudy Hubbard, managing director of JLL's capital markets group, in a statement. "Many groups who have been on the sidelines waiting for the right opportunity and the right time are beginning to look again.”

Several new investors have entered the Houston market this year. Earlier this month, Lingerfelt Commonwealth Partners made its first Houston purchase by acquiring the property 1700 West Loop South. It won't be the last Houston acquisition from Lingerfelt, a company executive told the Houston Business Journal.

San Francisco-based Spear Street Capital purchased three Houston properties– 5 Houston Center, Energy Center I and 515 Post Oak Boulevard – in a 1.2 million-square-foot deal valued at $272 million. That deal closed in January.

Shortly after, Spear Street acquired Exxon's former 16.88-acre campus in the Greenway Plaza area.

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