HOUSTON- Skanska announced Wednesday that it has started construction on Capitol Tower, a 35-story office development in downtown Houston, after reaching a lease agreement with Bank of America.
Bank of America leased 210,000 SF and it expects to move into the new building in first half of 2019. JLL represented Bank of America.
Warren Savery, Kristen Rabel and Roma Soroka of CBRE represented Skanska, which announced several years ago its plans to build the office tower on the downtown site, a block bounded by Capitol, Rusk, Milam and Travis streets.
In recent weeks, several large construction cranes have been erected on the site, indicating that Skanska was ready to start. The foundation for the new tower was poured in August 2015 and a parking garage has been built on the site. In October of 2014, the 18-story Houston Club building was demolished to make room for Skanska’s Capitol Tower, 800 Capitol.
The tower, designed by architectural firm Gensler, offers 754,000 SF of office space and an expansive, two-level atrium that features more than 26,000 SF of retail and restaurant space. It will be connected to the downtown tunnel system.
For years, Bank of America has been the anchor of the Bank of America Center, a tower developed by Hines at 700 Louisiana.
“Houston is an important growth market for Bank of America,” said Hong Ogle, Houston President, Bank of America. “We are pleased to be the anchor tenant at the tower, giving us the opportunity to co-locate our Merrill Lynch, U.S. Trust, Global Banking & Markets, Retail and Home Loans teams so we can have stronger collaboration in better serving our clients while ensuring responsible growth to our company.”
Last fall, Skanska engaged the CBRE real estate firm to find tenants even as the Houston office market showed signs of weakness. Downtown has a significant amount of vacant space and sublease space, most notably over 800,000 SF in One Shell Plaza which Shell has vacated to go to a suburban campus.
Houston has the highest office vacancy rate (21.5 percent) in the nation, according to a recent report by Marcus & Millichap.
Houston recorded almost 800,000-SF of negative absorption in the first quarter, says NAI Partners.
April 12, 2017 Realty News Report Copyright 2017