Downtown Office Market

[mattyt36]

Thought there was a generic downtown thread but I guess not.

 

Below are vacancy rates of most major office buildings downtown from HAR as printed in the HBJ.  Some notable exceptions like Wells Fargo Plaza.

 

Address/Bldg name/Total space/Avail space/Vacancy rate

 

800 Bell	Old Exxon	1,314,350	1,314,350	100%
Texas Tower	New Hines	1,106,581	705,774	64%
1001 Fannin	Old First City	1,365,801	586,811	43%
1600 Smith	Old CO	1,227,182	489,881	40%
600 Travis	Old Chase	1,916,394	456,600	24%
601 Travis	Old Chase garage	407,912	29,877	7%
1021 Main	One City Centre	554,953	424,260	76%
700 Louisiana	TC Energy Ctr	1,321,033	295,682	22%
1100 Louisiana	Enterprise Plaza	1,391,152	288,812	21%
1415 Louisiana	Wedge Int'l Tower	536,626	275,179	51%
811 Louisiana	Old Two Shell Plaza	577,735	236,380	41%
1201 Fannin	Greenstreet	656,994	230,532	35%
1000 Main	Reliant Energy Plaza	850,294	175,321	21%
808 Travis	Esperson	298,513	156,839	53%
1010 Lamar	Younan Sqaure	258,776	143,727	56%
910 Louisiana	One Shell Plaza	1,231,896	137,364	11%
712 Main	The Jones on Main	794,186	128,817	16%
800 Capital	Bank of America Tower	754,000	93,725	12%
919 Milam	Old Bank of the SW	723,130	89,550	12%
811 Main	BG Group Place	973,861	80,006	8%
1001 McKinney	Old City National Bank	378,101	78,997	21%
801 Travis		417,693	75,675	18%
601 Jefferson	KBR Tower	1,087,974	69,888	6%
1301 Fannin	Houston Data Center	766,950	65,000	8%
609 Main		1,057,658	64,109	6%
801 Louisiana	Goodrich Petroleum	105,145	38,670	37%
1801 Main	Amegy Bank	238,886	33,964	14%
917 Main		140,000	8,757	6%
711 Louisiana	Pennzoil Place South	712,081	308,153	43%
700 Milam	Pennzoil Place North	712,081	227,193	32%
	Total Pennzoil Place	1,424,162	535,346	38%
1221 McKinney	LyondellBasell Tower/1 HC	1,103,424	193,009	17%
909 Fannin St	2 Houston Center	1,102,279	276,353	25%
1301 McKinney	Fulbright Tower/3 HC	1,311,133	401,701	31%
1221 Lamar	4 Houston Center	1,526,323	404,282	26%
1401 McKinney	5 Houston Center	606,786	198,238	33%
	Total Houston Center	5,649,945	1,473,583	26%
500 Dallas	One Allen Center	930,730	140,781	15%
1200 Smith	Two Allen Center	1,075,210	361,621	34%
333 Clay	Three Allen Center	1,282,908	207,036	16%
	Total Allen Center	3,288,848	709,438	22%

Edited October 31, 2019 by mattyt36

[H-Town Man]

Couple of things that jump out:

 

Esperson at 53% vacant is getting murdered. Doesn't say much for our Class B office market if a building that beautiful can't succeed. Maybe if the hospitality market improves this will become a hotel.

 

Pennzoil at 38% is also doing terrible. Wasn't expecting that.

 

I remember a graphic on here back in 2013 or 2014 that showed a cross section of all the Class A buildings and only a few floors were vacant in all of downtown. What a gut punch we've taken since then.

 

[mattyt36]

It also does not include sublease space.

[Houston19514]

Link?

[mattyt36]

As printed in HBJ 2019 Fall Office Leasing Guide

[Luminare]

17 hours ago, H-Town Man said:

Couple of things that jump out:

 

Esperson at 53% vacant is getting murdered. Doesn't say much for our Class B office market if a building that beautiful can't succeed. Maybe if the hospitality market improves this will become a hotel.

 

Pennzoil at 38% is also doing terrible. Wasn't expecting that.

 

I remember a graphic on here back in 2013 or 2014 that showed a cross section of all the Class A buildings and only a few floors were vacant in all of downtown. What a gut punch we've taken since then.

 

 

When were the last times that Pennzoil and Esperson were renovated? These are landmark buildings downtown. I would assume that with the revitalization of other buildings right now they surely we will get an interior facelift at some point.

[mollusk]

Esperson takes a special type of tenant.  It has really weird floor plates that are pretty narrow - as in, if you're not taking down an entire floor or at least from the elevators over to the end wall there's no room for a private hallway, particularly in the Niels.  In other words, the public hallway is less than 15 feet from the glass.

[H-Town Man]

17 hours ago, Luminare said:

 

When were the last times that Pennzoil and Esperson were renovated? These are landmark buildings downtown. I would assume that with the revitalization of other buildings right now they surely we will get an interior facelift at some point.

 

I know Esperson's been done in the past 20 years. I don't really want Pennzoil to be renovated. It's perfect as it is, with that modernist solemnity. I get nervous when people start trying to add little splashes of new to things.

 

[downtownian]

 

17 minutes ago, H-Town Man said:

 

I know Esperson's been done in the past 20 years. I don't really want Pennzoil to be renovated. It's perfect as it is, with that modernist solemnity. I get nervous when people start trying to add little splashes of new to things.

 

 

Agree - Pennzoil is beautiful. Little disheartening to see the vacancy so high. 

[mollusk]

IIRC Pennzoil took a giant tenancy hit when Shell and/or some of its affiliates moved out. 

[X.R.]

On 10/31/2019 at 5:15 PM, Luminare said:

 

When were the last times that Pennzoil and Esperson were renovated? These are landmark buildings downtown. I would assume that with the revitalization of other buildings right now they surely we will get an interior facelift at some point.

 

This. Doesn't this all funnel into the conversations in the other office space threads where we talk about how alot of these buildings are still wayyyy behind the ball when it comes to catering to the new standard of beer fridges, colliding spaces, bike racks, bike rooms, innovative floor plans, group spaces, etc. Its cool that a building looks cool, and I don't know much about who keeping up with the market rests upon (the owner of the building or the management company), but I do know alot about lease agreements and client expectations. Space is expensive. WeWorks is only sort of expensive, and offers all the "start-up energy" one could ever want. Just saying, if your space can't beat a run of the mill coworking place, then what are you doing. 

 

Law firms, many of which call Dtown home, are even jumping on the updated floorplans and startup layouts, and law firms are notorious fuddy-duddies. If these building's floorplans are more than 15 years old, then I would expect them to take the loss when a big regional or national company is looking to house their employees (of which half are potentially younger than 40, or come from companies in NY/CHI/SF/BOS where the sexy interior space revolution has happened or is happening).

[mollusk]

I mentioned the issues with Esperson's floor plates a day or two ago.

 

However, a lot of the lease space in Pennzoil is cleared out glass to glass, so one can build out however one wishes.  The elevator cabs are recently redone, and there is a gym in the building - about all that's really lacking is some sort of bicycle facility (if there isn't one already - I don't spend much time lurking in parking garages).

[TheSirDingle]

Major lease transactions 2019-early 2020. 
http://www.downtowndistrict.org/static/media/uploads/attachments/major_lease_transactions_in_downtown_houston_january_and_ye_2019.pdf

[mattyt36]

Spring 2020 update.

 

The Pennzoil Place number shows a lot of absorption . . . I'm not sure what lease that would've been or if Fall 2019 was in error.  (Or maybe sublease excluded?)

 

Address	Bldg name	Total space	Avail space-Fall 2019	Vacancy-Fall 2019	Avail space-Spring 2020	Absorption	Vacancy-Spring 2020
800 Bell	Old Exxon	1,314,350	1,314,350	100%	1,314,350	0	100%
Texas Tower	New Hines	1,106,581	705,774	64%	673,142	32,632	61%
1001 Fannin	Old First City	1,365,801	586,811	43%	552,336	34,475	40%
1600 Smith	Old CO	1,227,182	489,881	40%	486,453	3,428	40%
600 Travis	Old Chase	1,916,394	456,600	24%	459,828	-3,228	24%
601 Travis	Old Chase garage	407,912	29,877	7%	26,817	3,060	7%
1021 Main	One City Centre	554,953	424,260	76%	356,391	67,869	64%
700 Louisiana	TC Energy Ctr	1,321,033	295,682	22%	303,390	-7,708	23%
1100 Louisiana	Enterprise Plaza	1,391,152	288,812	21%	267,344	21,468	19%
1415 Louisiana	Wedge Int'l Tower	536,626	275,179	51%		275,179	0%
811 Louisiana	Old Two Shell Plaza	577,735	236,380	41%	239,201	-2,821	41%
1201 Fannin	Greenstreet	656,994	230,532	35%	230,532	0	35%
1000 Main	Reliant Energy Plaza	850,294	175,321	21%	175,321	0	21%
808 Travis	Esperson	298,513	156,839	53%	236,518	-79,679	79%
1010 Lamar	Younan Sqaure	258,776	143,727	56%	132,045	11,682	51%
910 Louisiana	One Shell Plaza	1,231,896	137,364	11%	130,883	6,481	11%
712 Main	The Jones on Main	794,186	128,817	16%	128,817	0	16%
800 Capital	Bank of America Tower	754,000	93,725	12%	93,725	0	12%
919 Milam	Old Bank of the SW	723,130	89,550	12%	111,360	-21,810	15%
811 Main	BG Group Place	973,861	80,006	8%	67,349	12,657	7%
1001 McKinney	Old City National Bank	378,101	78,997	21%	78,997	0	21%
801 Travis		417,693	75,675	18%	75,675	0	18%
601 Jefferson	KBR Tower	1,087,974	69,888	6%	81,212	-11,324	7%
1301 Fannin	Houston Data Center	766,950	65,000	8%	60,000	5,000	8%
609 Main		1,057,658	64,109	6%	58,611	5,498	6%
801 Louisiana	Goodrich Petroleum	105,145	38,670	37%	38,679	-9	37%
1801 Main	Amegy Bank	238,886	33,964	14%	33,964	0	14%
917 Main		140,000	8,757	6%	8,757	0	6%
Pennzoil Place	Pennzoil Place South	1,424,162	535,346	43%	91,941	443,405	6%
1221 McKinney	LyondellBasell Tower/1 HC	1,103,424	193,009	17%	212,675	-19,666	19%
909 Fannin St	2 Houston Center	1,102,279	276,353	25%	215,859	60,494	20%
1301 McKinney	Fulbright Tower/3 HC	1,311,133	401,701	31%	346,045	55,656	26%
1221 Lamar	4 Houston Center	1,526,323	404,282	26%	419,538	-15,256	27%
1401 McKinney	5 Houston Center	606,786	198,238	33%	190,089	8,149	31%
	Total Houston Center	5,649,945	1,473,583	26%	1,384,206	89,377	24%
500 Dallas	One Allen Center	930,730	140,781	15%	150,323	-9,542	16%
1200 Smith	Two Allen Center	1,075,210	361,621	34%	361,621	0	34%
333 Clay	Three Allen Center	1,282,908	207,036	16%	166,058	40,978	13%
	Total Allen Center	3,288,848	709,438	22%	678,002	31,436	21%

These were not shown in the Fall 2019 numbers so I don't have a comparison.

 

Address	Bldg name	Total space			Avail space-Spring 2020		Vacancy-Spring 2020
717 Texas	Old Calpine	705,885			303,126		43%
1315 St. Joseph	Medical Place One	207,388			58,096		28%
917 Franklin	Commercial Bank	47,704			12,679		27%
440 Louisiana	Lyric Centre	402,559			8,890		2%
1018 Preston	Republic	22,204			4,982		22%
110 Bagby		33,124			3,067		9%
412 Main	State Nat'l Bank	55,844			2,000		4%

 

 

[Houston19514]

Vary interesting.  Thanks for posting.
 

The entry labeled as Pennzoil Place south, is actually for the total of both towers of Pennzoil Place, correct?

[H-Town Man]

18 hours ago, mattyt36 said:

Spring 2020 update.

 

The Pennzoil Place number shows a lot of absorption . . . I'm not sure what lease that would've been or if Fall 2019 was in error.  (Or maybe sublease excluded?)

 

Address	Bldg name	Total space	Avail space-Fall 2019	Vacancy-Fall 2019	Avail space-Spring 2020	Absorption	Vacancy-Spring 2020
800 Bell	Old Exxon	1,314,350	1,314,350	100%	1,314,350	0	100%
Texas Tower	New Hines	1,106,581	705,774	64%	673,142	32,632	61%
1001 Fannin	Old First City	1,365,801	586,811	43%	552,336	34,475	40%
1600 Smith	Old CO	1,227,182	489,881	40%	486,453	3,428	40%
600 Travis	Old Chase	1,916,394	456,600	24%	459,828	-3,228	24%
601 Travis	Old Chase garage	407,912	29,877	7%	26,817	3,060	7%
1021 Main	One City Centre	554,953	424,260	76%	356,391	67,869	64%
700 Louisiana	TC Energy Ctr	1,321,033	295,682	22%	303,390	-7,708	23%
1100 Louisiana	Enterprise Plaza	1,391,152	288,812	21%	267,344	21,468	19%
1415 Louisiana	Wedge Int'l Tower	536,626	275,179	51%		275,179	0%
811 Louisiana	Old Two Shell Plaza	577,735	236,380	41%	239,201	-2,821	41%
1201 Fannin	Greenstreet	656,994	230,532	35%	230,532	0	35%
1000 Main	Reliant Energy Plaza	850,294	175,321	21%	175,321	0	21%
808 Travis	Esperson	298,513	156,839	53%	236,518	-79,679	79%
1010 Lamar	Younan Sqaure	258,776	143,727	56%	132,045	11,682	51%
910 Louisiana	One Shell Plaza	1,231,896	137,364	11%	130,883	6,481	11%
712 Main	The Jones on Main	794,186	128,817	16%	128,817	0	16%
800 Capital	Bank of America Tower	754,000	93,725	12%	93,725	0	12%
919 Milam	Old Bank of the SW	723,130	89,550	12%	111,360	-21,810	15%
811 Main	BG Group Place	973,861	80,006	8%	67,349	12,657	7%
1001 McKinney	Old City National Bank	378,101	78,997	21%	78,997	0	21%
801 Travis		417,693	75,675	18%	75,675	0	18%
601 Jefferson	KBR Tower	1,087,974	69,888	6%	81,212	-11,324	7%
1301 Fannin	Houston Data Center	766,950	65,000	8%	60,000	5,000	8%
609 Main		1,057,658	64,109	6%	58,611	5,498	6%
801 Louisiana	Goodrich Petroleum	105,145	38,670	37%	38,679	-9	37%
1801 Main	Amegy Bank	238,886	33,964	14%	33,964	0	14%
917 Main		140,000	8,757	6%	8,757	0	6%
Pennzoil Place	Pennzoil Place South	1,424,162	535,346	43%	91,941	443,405	6%
1221 McKinney	LyondellBasell Tower/1 HC	1,103,424	193,009	17%	212,675	-19,666	19%
909 Fannin St	2 Houston Center	1,102,279	276,353	25%	215,859	60,494	20%
1301 McKinney	Fulbright Tower/3 HC	1,311,133	401,701	31%	346,045	55,656	26%
1221 Lamar	4 Houston Center	1,526,323	404,282	26%	419,538	-15,256	27%
1401 McKinney	5 Houston Center	606,786	198,238	33%	190,089	8,149	31%
	Total Houston Center	5,649,945	1,473,583	26%	1,384,206	89,377	24%
500 Dallas	One Allen Center	930,730	140,781	15%	150,323	-9,542	16%
1200 Smith	Two Allen Center	1,075,210	361,621	34%	361,621	0	34%
333 Clay	Three Allen Center	1,282,908	207,036	16%	166,058	40,978	13%
	Total Allen Center	3,288,848	709,438	22%	678,002	31,436	21%

These were not shown in the Fall 2019 numbers so I don't have a comparison.

 

Address	Bldg name	Total space			Avail space-Spring 2020		Vacancy-Spring 2020
717 Texas	Old Calpine	705,885			303,126		43%
1315 St. Joseph	Medical Place One	207,388			58,096		28%
917 Franklin	Commercial Bank	47,704			12,679		27%
440 Louisiana	Lyric Centre	402,559			8,890		2%
1018 Preston	Republic	22,204			4,982		22%
110 Bagby		33,124			3,067		9%
412 Main	State Nat'l Bank	55,844			2,000		4%

 

 

 

Some brutal numbers in there. Looks like 80% occupancy is pretty much the yardstick for 1980's-era Class A... and that's before the effects of the current oil bust hit. The Gulf Building (excuse me, The Jones on Main) is a big success story with 84% occupancy. Its neighbor the Esperson buildings are in a tailspin with 21% occupancy. Are they letting leases expire for a hotel or residential conversion? And the latest crop of buildings (built 2008-) are in a class of their own, as though no oil decline had ever happened.

 

800 Bell is starting to look like a seriously bad investment for Shorenstein. Maybe it can go residential? Or government? I don't think regular office is in the cards there. Not with millions of square feet of empty space on the tunnel system.

 

Hate to think what this could look like in a year. Hopefully something good happens.

 

[zaphod]

I just hope Houston doesn't lose any tall buildings. Dallas demoed a couple of dead midcentury towers as I understand it, though nothing really big on the skyline. But then lots of great residential conversions happened to some of its worst vacant towers about a decade ago(the atmos buildings, the statler, elm tower, etc).

 

On the bright side, if some of these old office towers turn into apartments/condos it would really increase the liveliness of downtown after hours.

 

[mattyt36]

On 4/20/2020 at 8:59 AM, Houston19514 said:

Vary interesting.  Thanks for posting.
 

The entry labeled as Pennzoil Place south, is actually for the total of both towers of Pennzoil Place, correct?

 

Yes, my apologies.  The fall numbers reported them separately and the spring numbers reported them together.  I just don't think the absorption number is reliable because I think we would have heard of it.

[mattyt36]

Discussion of conversion of vacant space from March 2019 (probably not the best title)

 

 

 

[HoustonMidtown]

From Kinder Institute:

The return to work will determine the fate of downtowns. Is Houston ready for what’s next?

 

https://kinder.rice.edu/urbanedge/2021/06/10/return-work-downtown-houston-office-space?utm_campaign=sprout-schedule&utm_source=twitter&utm_medium=social

[Houston19514]

Sensor tech firm DarkPulse to move national HQ from New York City to downtown Houston

[j_cuevas713]

20 hours ago, Houston19514 said:

Sensor tech firm DarkPulse to move national HQ from New York City to downtown Houston

HUGE!!! 

[wilcal]

Looks like they have an O&G-focused product. I wonder if they are making headway there. 

https://darkpulse.com/oil-gas/

Quote

DarkPulse’s EREBOS™ Sensing system is an integral part of any Exploration/Production  engineering and safety program, helping to prevent major catastrophes.

With a DarkPulse system, critical temperature, pressure, and strain measurements are made on a continuous basis throughout the Drill String, Casing, Wellhead and Production Trees, allowing for comprehensive monitoring of critical values and early warning of changes and potential problems, resulting in corrective action before an accident occurs. 

 

[H-Town Man]

On 2/16/2022 at 12:14 PM, j_cuevas713 said:

HUGE!!! 

4,200 SF, to be exact...

 

[79ta]

Seems like this is bigger on the "cool" factor than anything else.

from the article:

Quote

DarkPulse (OTCMKT: DPLS) leased just over 4,200 square feet of space in the Mellie Esperson Building at 815 Walker St. The tech firm currently lists New York City as its headquarters, according to the U.S. Securities and Exchange Commission. The 10-year Houston lease commences on March 1.

DarkPulse said it plans to hire approximately 50 employees for its Houston headquarters. Additionally, some corporate members based in the U.K. will relocate to the Houston office, including the company's Special Teams unit...

The technology company recorded net losses of $275,841 and $1.83 million during 2020 and 2019, respectively, and to date hasn't generated operating revenue,  DarkPulse said in its latest annual report. During the nine months ended Sept. 30, 2021, DarkPulse reported a net loss of $1.92 million, the firm told investors in a  November quarterly report. DarkPulse is seeking to raise additional capital to accelerate sales and marketing efforts and to begin generating revenue.

 

[august948]

6 hours ago, H-Town Man said:

4,200 SF, to be exact...

 

That's just slightly larger than my house.

[bobruss]

Baby steps!