HOUSTON – (Realty News Report) – FairfieldNodal, a firm involved in energy exploration, leased 46,720 SF in a sublease at Air Liquide Center, a new building in the Memorial City development in west Houston. The Air Liquide Center, 9811 Katy Freeway, was developed by MetroNational about three years ago.
NAI Partners’ Jon Silberman, John Ferruzzo and Nick Peterson, represented Sugar Land-based FairfieldNodal in the transaction.
“As FairfieldNodal has continued to grow in Sugar Land, an expansion to Houston became inevitable, and we’re pleased to have been able to partner with them and secure prime Class A space in one of the city’s fastest-growing submarkets,” Silberman said. “This deal also underscores the positive indicators we’ve been seeing in the office market, as sublease space continues to come off the table. Our recently released NAI Partners Sublease Index – a significant indicator of the health of the marketplace – is down to 15 percent, continuing a thinning out of available sublease space in Houston that began in the third quarter of 2016.”
Houston’s sublease supply soared to more than 12 million SF in 2016, but it has been subsiding in the last year or so. The supply of sublease space is now around 9 million SF. The positive narrative was dented earlier this month when TechnipFMC dropped 376,000 SF onto the sublease market with its space at the Energy Center II building on the Katy Freeway in the Energy Corridor.
The decline in energy prices – West Texas Intermediate crude fell from a high of $107 a barrel in June 2014 to a low of $26.21 a barrel on Feb. 11, 2016 – was painful for the Houston office market particularly Downtown, Westchase, and the Energy Corridor. One national real estate firm ranked the Energy Corridor as the worst submarket in America. When the energy industry took the downturn, a number of Houston energy companies laid off personnel and placed empty office space on the sublease market.
Even as the oversupply of sublease space put tarnish on the market, it opened opportunities for other companies to latch onto bargains. That’s how FairfieldNodal, which develops and manufactures nodal seismic data acquisition systems, was able to backfill quality office space at favorable terms at Air Liquide Center.