Houston Office Space
Houston Office Space. Counsel Cut Costs On Houston Office Space,Houston,Texas
October 23, 2009 by HSACQ · 3 Comments
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By Brenda Sapino Jeffreys
Texas Lawyer
March 02, 2009
Article Link
The troubling news about the nation’s economy may really be a glimmer of good news for Texas firms looking to cut costs by renegotiating their office space leases or moving to new space.
“If you are in the position right now where you want to stay in the building and you want to extend your lease, this is a great time to go talk to your landlord about different terms,” says Jim Leary, executive director for Akin Gump Strauss Hauer & Feld. “Some landlords are hurting, too, because they have overextended because they’ve bought new buildings over the past two or three years.”
Leary, who oversees Akin Gump’s leases from his office in Washington, D.C., says Akin Gump has been very active in recent years in managing its office space throughout its 13-office network.
“We have been actively doing this in good times and bad,” says Leary, who says the 913-lawyer firm has returned some space to landlords in recent years and is currently trying to sublease some excess space in a couple offices. He declines to identify those offices.
Akin Gump isn’t alone in seeing opportunity to cut real estate expenses, or to increase their space at better terms.
Miles Holsworth, executive director at Dallas-based Locke Lord Bissell & Liddell, says the 710-lawyer firm began to evaluate its leases as a part of due diligence prior to the October 2007 merger of Texas firm Locke Liddell & Sapp and Lord Bissell & Brook of Chicago.
“We were really in front of what’s going to happen in the market,” Dallas-based Holsworth says.
Since the merger, the firm has made several office space adjustments that have cut costs, he says. That includes subleasing a floor at its Chicago office, and combining offices in Washington, D.C., into new space subleased from Sprint, he says. In New York City, the firm negotiated a lease in Three World Financial Center that had been previously occupied by Morgan & Finegan. On Feb. 2, Locke Lord announced that 33 lawyers from Morgan & Finnegan, including 13 partners, joined the firm.
Holsworth says the firm, which has offices in 13 cities, is “saving a lot of money” in rents over the past year-and-a-half because of the space adjustments.
Meanwhile, Holsworth says, the firm recently entered into a new long-term lease in JPMorgan Chase Tower in Houston that gives the firm new space for a conference room floor and the opportunity to build out the space in a way that standardizes offices to two sizes. Currently, there are about six different sizes of offices, he says. The new space takes up seven-and-a-half floors, compared to the current nine floors, but Holsworth says the floors are contiguous and the firm will use the space more efficiently once a build-out is complete later this year.
Some Subleasing
Renegotiating leases isn’t on the table at some Texas firms.
M. Lawrence “Larry” Hicks, administrative partner in Thompson & Knight in Dallas, says the firm is not trying to renegotiate its leases, but did take on additional space in Three Allen Center in Houston about six months ago. The firm has sublet that space, he says, but the firm intends to add lawyers in Houston and will fill it over time, he says.
“We are always looking for ways to save expenses, but we don’t have an abundance of excess space,” he says.
Kevin Richardson, office administrator in Houston for Jones Day, says the firm has exercised an option to take on an additional half floor at 717 Texas in Houston later this year. The firm is now housed on two floors in the building and is in the sixth year of a 15-year lease, he says.
Richardson says the firm negotiated the expansion more than a year ago.
John Strasburger, the partner in charge in Houston for Weil, Gotshal & Manges, says the firm redid its lease in the Bank of America Center in Houston in 2008 by extending it and renegotiating a blended rate for the longer term.
“We did it because it was a good time to do it. The interesting thing is, it’s kind of like housing prices, they never seem to go down in neighborhoods you want to live in. The same thing is true of Class A office space,” he says.
Strasburger says the firm may be able to capitalize at bit on the down economy in Austin when negotiating a new lease there, because the firm’s current lease in the Arboretum area is up in 2010.
Dan Butcher, managing partner of Strasburger & Price in Dallas, says the firm is looking at its leases, even though most have significant terms left on them. The firm has offices in Dallas, Houston, Austin and Frisco.
“We haven’t made any decision, but we are evaluating whether this is a good time to look at extending our leases and get a better rental or lease rate right now,” Butcher says.
He says the most likely action is subleasing some space in Frisco. The firm’s office is in Hall Office Park.
Tenant Retention
The opportunities for firms to have leverage over their landlords when negotiating new long-term leases varies from city to city in Texas, says Bob Cromwell, managing director of the office services division at Moody Rambin Interests in Houston.
He says the citywide office space vacancy rate in the Dallas area is around 20 percent, while it’s only about 12 percent in Houston. He believes that’s because Houston’s energy-based economy has not been as affected by the economic downtown. Cromwell says the Austin office market is “overbuilt” a bit, but San Antonio is “holding its own.”
Cromwell, who represents building owners, says while tenants believe rents should be going down because of the economy, those rates haven’t been affected much yet. He says rental rates have jumped 30 percent in Houston since the last economic downtown in 2001, and he doesn’t see landlords giving up those gains over the short term.
He says many tenants are negotiating one- or two-year leases because they are waiting to see where the market lands.
Theodore Brakatselos, president of Houston Site Acquisitions, who helps clients find office space, says landlords are being a little more aggressive at trying to retain tenants. However, he notes that there’s a “certain level of uncertainty in the market.”
He says some clients are wondering: “If we sit and wait, will we get a better deal?
Theodore Brakatselos is the President of Houston Site Acquisitions, a commercial real estate company. He has over 17 years of experience in commercial real estate and has represented a broad range of tenants and landlords over his career including star-up companies, publicly held companies, and overseeing portfolios for institutional landlords & investors. You can reach Theodore at 713-789-8700 or via the Web at www.hsaleasing.com
Houston Office Space, Houston Industrial Space, Houston Warehouse Space, Houston Office Buildings, Houston Commercial Real Estate, Houston Tenant Representation, Houston Office Lease, Houston Office Leasing,Houston Warehouse Lease,Houston Commercial Real Estate Company,Houston Commercial Real Estate Broker
The Houston comercial real estate market offers some good opportunities for businesses in need of Houston office space.
Experts: Sublease Space Has Uses
By Amy Wolff Sorter News Tip?
http://www.globest.com/news/1529_1529/houston/181963-1.html?st=rss
HOUSTON-Two recent, and sizeable, office sublease deals have been transacted in the area. Sigue Corp. took 35,790 square feet of space in the Reserve at Greens Crossing II in the Greenspoint submarket; while Eagle Rock Energy Partners LP signed for 53,232 square feet at Wedge Tower in the CBD.
According to reports, and to few local experts’ surprise, the amount of sublet space has been on the rise in recent months. CB Richard Ellis’ Q3 MarketView Houston put sublet vacancy at 4 million square feet out of a total inventory of 190.5 million square feet. Meanwhile, Grubb & Ellis Q3 market report showed a sublease vacancy of 3.9 million square feet, out of a total inventory of 167.8 million square feet.
But first vice president Rich Pancioli with CB Richard Ellis’ Houston office says the sublet amount shouldn’t be considered alarming. “Less than 3% of sublease space available in our market is still fairly healthy,” remarks Pancioli, who represented Sigue Corp. in the Reserve at Greens Crossing II transaction.
Grubb & Ellis’ Houston vice president Jim Arket, who represented lessor Dominion Exploration & Production Inc. in its deal with tenant Eagle Rock Energy, agrees. He tells GlobeSt.com that the percentage of sublet space in Houston, compared to the rest of the nation, is low. Furthermore, “this is less than it was during the last slump in 2001-2002,”
Pancioli
he says. “At that time, we had something like 5.5 million square feet of sublet space on the market.”
Both brokers tell GlobeSt.com that sublet space has its advantages including compressed rates compared to direct lease asks and short-term deals. Arket explains that sublessors’ main goals are to reduce costs and get space filled. This is a boon for tenants, he goes on to say, because they can get great value. In the case of Eagle Rock Energy, “they wanted a presence in downtown Houston for image and recruiting purposes,” Arket remarks. “Recruiting in downtown has a lot of attraction, and a larger pool of potential employees with which to fill a business.”
In the Sigue deal, the tenant, a provider of electronic money transfer services, need a quick occupancy and preferred a discounted rate, which was obtained. Even better, “it came with furniture, fixtures and equipment,” Pancioli remarks. “This is why subleases are so attractive and we always advise our clients that if they can leave furniture, fixtures and equipment in place, tenants find that more attractive.”
Does this mean that tenants are going to flock to sublet space, eschewing the hire-priced direct-lease stuff. Not necessarily. Pancioli points out a major downside to sublet space, which is that the tenant is inheriting the sublessor’s tastes. Furthermore, there are few, if any expansion options or landlord service guarantees.
Additionally the prime sublease space on the market these days consists of smaller chunks. Arket points out that the Dominion Exploration-Eagle Rock Energy deal was a sublet anomaly in terms of size. “When you talk about filling subleases,” Arket explains. “you’re talking about filling space under 10,000 square feet. Large blocks of sublease face are not plentiful.”
But count on more of it to hit the market during the next year or two, Pancioli predicts. This, in turn, will continue a downward pressure on overall occupancy. “You’ll be seeing more and more sublease space hitting the market faster than it can be absorbed,” he remarks.
Houston Site Acquisitions. http://www.hsacq.com
Houston commercial real estate leasing and sales for Houston office space, warehouse space, industrial space, and retail space.
Weingarten Sells: Again
Harrison Takes Nine-Asset Self-Storage…
Weingarten Reports $9M Net Loss in Q3
284,000-SF Central Park Northwest Sells
http://www.globest.com
Last updated: November 12, 2009 04:05pm
Bayou Signs 49,000 SF in NW Submarket
By Amy Wolff Sorter
HOUSTON-The packaging distributor will relocate from its current location on the east side by early 2010 to the 374,160-square-foot Windfern Distribution Center through a five-year lease.
http://www.hsacq.com
Interesting Houston warehouse space-distribution center relocation from east Houston to Northwest Houston.
July 14, 2011 at 1:08 pm (Edit)
Real estate transactions HOUSTON CHRONICLEJuly 10, 2011, 8:31PM
http://www.chron.com/disp/story.mpl/business/realestate/7647720.html
Leases
OFFICE: ION Geophysical Corp., a global provider of geophysical technology, services, and solutions for the oil and gas industry, has renewed its headquarters lease for 115,056 square feet in CityWestPlace, 2105 CityWest Blvd. Chip Colvill, Michael Anderson and Win Haggard Jr. of Colvill Office Properties represented the landlord, TPG/Cal/STRS, a joint venture of Thomas Properties Group and the California State Teachers’ Retirement System. Mark O’Donnell of Studley Houston represented the tenant.
INDUSTRIAL: Houston Sound Service has leased 6,600 square feet at 352 Garden Oaks. Jeff Kuper and Preston Jaggi with the National Realty Group represented the tenant. Steve Hazel with InSite Realty represented the landlord, Houston Pine Forest.
RETAIL: Buffalo Wild Wings has leased 5,700 square feet at The Crossing at Fry Road in Katy. James Doyle of Texas-Southwest Group represented the tenant. Dale Davison represented the landlord, Centro Properties Group.
OFFICE: Association Management has leased 1,150 square feet at 4722 Riverstone Blvd. in Missouri City. Michael S. Holmes of Weichert Realtors-Wayne Murray Properties represented the landlord, Wayne Murray Holdings. Syd Talley of Association Management represented the tenant.
(www.hsaleasing.com)
RETAIL: Subway Real Estate has leased 1,200 square feet in Price Plaza Shopping Center at 1215 Fry Road. Alex Makris, Matt Keener and Jazz Hamilton of CB Richard Ellis represented the landlord.
RETAIL: Southside Skate Shop has leased 1,310 square feet at Shoppes at First Colony, 1930 Texas 6. Matt Keener, Alex Makris and Jazz Hamilton of CB Richard Ellis represented the landlord.
INDUSTRIAL: Nextel of Texas has renewed a 15,140-square-foot lease at 10718 Fallstone in the Sugar Land area and has renewed a 7,892-square-foot lease at 1291 N. Post Oak. Glynn Mireles and Jeff Everist of CB Richard Ellis represented Nextel. Steve Carter with Granite Properties represented the landlord at the Post Oak location, while Paul Magaziner represented the landlord at the Fallstone building.
RETAIL: Nova Healthcare has leased 5,995 square feet in The Loop Shopping Center at 9565 S. Main from Malladi Reddy, trustee. Abe Charski of ACI represented the landlord. Mark Davis of Davis Commercial represented the tenant.
RETAIL: Wonderwild has leased 7,483 square feet at The Grogan’s Mill Village Shopping Center, 2230 Buckthorne Place, for an arts-themed indoor party playground. Tim Maczko of the J. Beard Real Estate Co. represented the landlord.
OFFICE: Depression and Bipolar Support Alliance of Greater Houston has leased 3,470 square feet at 3800 Buffalo Speedway. Collin Grimes of CB Richard Ellis represented the tenant. Warren Savery represented the landlord, Crescent Real Estate.
RETAIL: Molina’s Restaurant has leased 5,600 square feet in Braes Heights at Bellaire Boulevard and Stella Link Road. Patrick Berna of Shanks & Associates represented the tenant. Stephen Swope represented the landlord, Centro Properties Group.
INDUSTRIAL: Southern Fasteners and Supply has leased 13,645 square feet of warehouse space at 3341 Rauch St. from First Industrial Realty Trust. David Munson of Boyd Commercial represented the landlord. Richard Glass of CRC Real Estate represented the tenant.
RETAIL: Hilti has renewed a lease for 4,374 square feet at 6306 Fairbanks North Houston. Russell Janicek, Matt Keener and Mark Raines of CB Richard Ellis represented the tenant.
RETAIL: CiCi’s Pizza has leased 4,000 square feet at Clear Lake Center at 20700 Gulf Freeway. Mark Raines, Matt Keener and Russell Janicek of CB Richard Ellis represented the tenant.
Etc.
CITYCENTRE: Midway Cos. is adding a second conference venue to its mixed-use development near Interstate 10 and Beltway 8 in partnership with Hotel Sorella/Valencia Group. Construction is under way on the 8,500-square-foot Hotel Sorella Meetings & Events Centre, with completion planned in August to coincide with the hotel’s second anniversary. Houston-based Proem Design-Build is overseeing the build-out, and Los Angeles-based Jennifer Skaife is providing interior design services. The project includes the La Scala Ballroom, nearly 4,000 square feet, with seating for 300; four boardrooms; a 200-square-foot conference room; several pre-function areas — the largest approximately 1,300 square feet; and a partially open pantry kitchen. Bistro Alex’s culinary team will oversee food and beverage for the venue.
FINANCING: HFF has arranged financing for 712 Main on behalf of an entity owned by Brookfield Real Estate Opportunity Fund. John Ahmed led the HFF team in securing the non-recourse loan through Capital One Bank. Built in 1929, the 35-story gothic/art deco-style building contains 794,186 square feet and is the Texas headquarters of JP Morgan Chase’s southwest banking operations.
SERVICE KING: Service King has opened a 32,000-square-foot location at 5919 Westheimer. Service King redeveloped the long-vacated former Truluck’s restaurant location on Westheimer for its offices and built the collision repair center behind it. It is the 10th Houston-area location opened for the collision repair company since 2009.
APARTMENTS: Allied Realty is targeting a summer 2012 opening for its first project in The Woodlands: The Retreat at The Woodlands, a 240-unit luxury apartment community at 4400 College Park Drive. The property is designed by Steinberg Design Collaborative and will be managed by Orion Real Estate Services, a division of Allied Realty. Financing and capital is being provided by JP Morgan Chase and a partnership between Allied Realty and De Anda Sandoval Group.
APARTMENTS: Transwestern announced that its Houston-area multifamily services group has completed six transactions totaling over 2,000 units in the last six months. Most recently, The Brazos, a 160-unit apartment community at 1440 Brazos Drive in Huntsville, was purchased by a local private investor. Transwestern represented a California-based seller.
CHRISTIAN BROTHERS: Andy and Christie Miller have opened a Christian Brothers Automotive franchise at 1515 W. FM 646 at Walker Road in League City. The 5,000-square-foot location includes nine service bays and an upscale lobby with leather couches, decorative lighting, artwork and hardwood floors. The Millers opened their first Christian Brothers location in February 2007 in Clear Lake. The automotive service and repair franchise operates in 14 states and has 81 locations plus 35 under development.
LEASING: Rosemont Realty of Santa Fe, N.M., has chosen Moody Rambin Interests to handle leasing at 12621 Featherwood.
LEASING: The Finial Group has been selected to provide leasing for 1001 Texas- The Binz Building. Keith Bilski, Neil Martin and Ben Debayle will handle leasing of the 121,392-square-foot building.
APARTMENTS: Jones Lang LaSalle’s Capital Markets has been hired to market Legends at Cinco Ranch in Houston for sale for Sterling Investco, a Dallas-based multifamily developer. The new 260-unit community is expected to fetch in excess of $40 million. The firm has also been hired to secure $8 million in construction financing for the project’s second phase.
CITY VIEW LOFTS: Orion Real Estate Services has been selected to manage City View Lofts, a newly renovated historic property at 15 N. Chenevert, scheduled to open in August. The former Nabisco cookie factory has been converted into 57 loft-style units with original exposed brick and pipes, 14-to-30-foot barrel-vaulted ceilings, large factory windows and original maple floors. City View Lofts is two blocks from Minute Maid Park.
Interesting Article:
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