HOUSTON – (Realty News Report) – An office building in West Houston’s Energy Corridor, one of the most highly recognized submarkets in the world, has been acquired by investors.
“The tide is turning rapidly in the Energy Corridor; demand is growing significantly from both tenants and investors, alike,” said Rick Goings, Senior Director of JLL Capital Markets, which represented the seller, USAA Real Estate. “At 94 percent leased, the sale of Park Ten Plaza represents the first stabilized multi-tenant office sale in the Energy Corridor in two years. The depth of the buyer pool is robust for this investment profile,”
Houston-based Fuller Realty Partners and ICP Funds acquired the asset. JLL also worked on behalf of the new owner to secure a loan through East West Bank.
Park Ten Plaza is a 158,000-SF Class A office building.at 15115 Park Row in the Energy Corridor.
The property is located within the Park 10, a 550-acre master planned business center developed along Interstate by Wolff Companies, a Houston development firm led by David Wolff. Mr. Wolff, known for developing and marketing land, is credited with coining the name “Energy Corridor.”
With a reputation that stretches to the Middle East and other global markets, the Energy Corridor is – or has been – home to the offices of hundreds of energy-related companies, including Exxon, Shell and BP.
Over a decade ago, the Energy Corridor had office occupancy over 95 percent. Developers responded with many new office projects. But a decline in energy prices – often pegged to a timeline that became a nightmare at an OPEC meeting that was held of Thanksgiving Day 2014, set the market on a downward path. Houston’s energy companies went into retreat, shedding employees and office space as the oil prices fell.
In the first quarter of 2022, the office availability rate in the Energy Corridor was well over 30 percent, according to experts in Houston real estate. Over 6 million SF of office space was vacant in the Energy Corridor and another 1.5 million SF was available as sublease, according to a year-end report by CBRE.
But oil prices have risen. West Texas Intermediate crude was at $102 a barrel on Friday. Two years ago, in April 2020, oil prices dipped into negative territory for a day – less than $0 a barrel.
Although many in Houston say energy companies will not expand their office footprints no matter what, Realty News Report projects that $100 a barrel oil will bring a return of positive momentum in the Houston office market. In a recent commentary Realty News Report “called the bottom” of the Houston office market on April 15, 2022 and said the office market is moving upward again toward brighter days.
In another positive milestone, a vacant Energy Corridor office building, which was completed in 2015 and has never been occupied, has been sold to a Los Angeles commercial real estate firm. The buyer, BH Properties, will make some improvements to the 128,000-SF Mason Creek II, and open it to tenants for the first time after seven years of sitting vacant.
April 22, 2022 Realty News Report Copyright 2022
JLL deal participants: The JLL Capital Markets Investment Sales team representing USAA, the seller, was led by Senior Director Rick Goings, Managing Directors Kevin McConn and Marty Hogan, and Analyst Jack Moody. Working on behalf of the borrower, Managing Director Cameron Cureton and Senior Managing Director Wally Reid led the JLL Debt Advisory team.
How to Fix Houston’s Shortcomings in Economic Development: Interview with David S. Wolff – THE RALPH BIVINS PROJECT Podcast
Image: Courtesy JLL
File: Energy Corridor Building Sold. USAA