THE WOODLANDS – (Realty News Report) – Chevron Corporation’s move to acquire Anadarko Petroleum for $33 billion could have some aftershocks on the Houston real estate market.
Anadarko occupies a lot of office space in The Woodlands – two major towers named after iconic company leaders – the 32-story Allison Tower and the 31-story Hackett Tower. The buildings are on the suburban waterfront, set on the edge of Lake Robbins and The Woodlands Waterway.
The Anadarko headquarters campus in The Woodlands has about 1.4 million SF of space in the two buildings, which are just west of Interstate 45.
It’s too early to know if the pending Chevron deal will create vacancy in The Woodlands. But it would not be surprising. The Allison Tower (800,000 SF) and Hackett Tower (600,000 SF) are Class A properties, filled with amenities, including a glass-walled basketball court with a knockout view.
The Anadarko campus was developed by the Patrinely Group, a Houston firm founded by Dean Patrinely.
There’s more in the Permian Basin. Patrinely is developing a 350,000-SF, two-building regional headquarters office for Anadarko in Midland. Completion is expected in the third quarter of this year. The project is directly across the street from Chevron’s Midland campus and Occidental Petroleum. (OXY was preparing to make an offer of more than $70 per share for Anadarko, CNBC’s David Faber reported.)
For people who root for the landlords, the nightmare scenario is that the Chevron acquisition of Anadarko results in a big dump of office space onto the sublease market. Houston bloated up to a 12 million SF inventory of sublease space in 2016 and it’s finally subsided to 8 million SF.
Maybe we will be surprised, somehow. But for now, it’s hard to see how the Anadarko sale will be good for the Houston real estate market.
Chevron has been relocating personnel to downtown where it owns two former Enron buildings – 1400 Smith and 1500 Louisiana – a total of 2.5 million SF. Chevron sold its Bellaire campus last year and relocated the employees. Chevron also owns vacant downtown property on Louisiana Street.
Chevron confirmed in a news release late last week that it will keep its 1.4 million SF headquarters in San Ramon, Calif. There has been speculation over the years that Chevron could move its headquarters to the Energy Capital of the World – Houston. Like Exxon Mobil, Chevron manages its Houston hub from afar, without having its headquarters in Houston, the fourth largest city in the nation.