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CBRE Finds Tenants to Fill 165,000 SF of Sublease Space in Heritage Plaza

 

HOUSTON – CBRE has leased 165,000 SF of sublease space in Heritage Plaza, a skyline landmark at 1111 Bagby in downtown Houston, to five subtenants.

CBRE represented sub-landlord Noble Energy is securing the five sub-tenants, in deals signed in 2016.

“The sublease of the Heritage Plaza property resulted from the completion of our acquisition of Rosetta Resources and integration of its workforce to our north Houston headquarters,” said Robert Marlatt, Vice President Corporate Real Estate at Noble Energy.  “We appreciate that CBRE worked collaboratively – in a challenging market – and maintained a sharp focus on finalizing the sublease.”

CBRE’s Lucian Bukowski, Kevin Kushner and Wyatt McCulloch, represented Noble Energy, in negotiating the five subleases.

“To be successful in a market like this quality inventory/space needs to be priced appropriately and clients and their brokers need to be aligned on what are and are not acceptable deal terms. By coupling this with a willingness to subdivide larger spaces and being responsive, you can net a rewarding outcome,” Bukowski said.

“CBRE and Noble worked together to develop and execute a plan to sublease the space,” Kushner, First Vice President, CBRE said. “Noble was responsive and decisive when it came to making decisions, which is critical to maintaining momentum on transactions amidst difficult market conditions. Noble is a terrific partner to work with.”

According to CBRE Research, sublease space has grown to 12 million square feet, with 2.5 million square feet or 22 percent of the total being in the CBD.

Remaining large blocks of sublease space in Houston include 801,990 SF that Shell is subleasing at One Shell Plaza (910 Louisiana) in the CBD; 597,628 SF that ConocoPhillips is subleasing at Energy Center Four (925 N Eldridge Parkway) in the Energy Corridor; and 559,094 SF that BP is subleasing at Four WestLake Park (200 WestLake Park) in the Energy Corridor.

“Subleasing space for clients is challenging in any market, but successfully subleasing multiple floors in this market is grueling,” McCulloch, Senior Associate, CBRE said. “Our first deal involved multi-tenanting a full floor for a 3,500 SF subtenant, followed by three more partial-floor deals to sublease our first two floors. By building momentum on these smaller successes, we were able to land a larger subtenant to acquire the remaining space.”

However, there is some positive news in the third quarter of 2016 as nearly 600,000 SF of sublease space was absorbed as tenants took advantage of quality space at reasonable rates.  In the third quarter, sublease activity represented nearly 33 percent of the total square footage leased.

The 1.2 million-SF Heritage Plaza, is a 53-story tower that once housed the headquarters of Texaco. The distinctive top of the building resembles a Mayan temple. The tower, designed by M. Nasr & Partners, was completed in 1987.

Brookfield Properties owns the Heritage Plaza, which is on a block bounded by Dallas, Lamar, Smith and Bagby, about two blocks from City Hall. Rosetta Resources signed the lease for the space in the tower in 2012.

Nov. 17, 2016 Realty News Report Copyright 2016

 

 

 

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