Leasing Spree at Historic Building

HOUSTON – (Realty News Report) – Ten leases have been signed for office space in the historic building in the rugged downtown Houston office market.

CBRE has facilitated 10 leases totaling 64,991 SF of office space since the start of the pandemic at 1001 McKinney, a 23-story office tower completed in 1947.

The leases were signed following $4.3 million in renovations that included reimagining the lobby in the style of a boutique Art Moderne hotel, modernizing elevators, and creating a tenant lounge and fitness center.

The owners of many older office buildings have been spending heavily to improve their properties because of stiff competition from newer buildings. Tenants are attracted to new Class AA buildings in a trend called “flight to quality.”

Designed by famed architect Alfred Finn

The 375,400-SF art deco 1001 McKinney building, designed by famed architect Alfred Finn, was one of Houston’s early-day skyscrapers. It was built to house the offices of City National Bank.

In 2018, TRC Capital Partners, led by CEO Steve Lerner, acquired the building from a partnership of Cameron Management and Silverpeak Real Estate Partners. (TRC was formerly known as The Redstone Companies.)

The Downtown office market, like most of the city’s office space, has been soft. Houston’s downtown availability rate is approaching 30 percent.

Construction has not stopped. New space is coming online in downtown Houston. The 1.1 million SF Texas Tower, developed by Hines, is slated for a fourth quarter opening. Lovett Commercial’s redevelopment of the old Post Office on Franklin Street, will chip in about 150,000 SF of new supply soon.

According to CBRE Econometric Advisors, Houston’s short-term forecast calls for overall growth in the number of office workers through year-end 2022. With increased touring and rising confidence, deal cycles are expected to churn increased leasing activity within the next few months as many firms already returned to their offices in Houston.

The recent spate of leasing activity at 1001 McKinney was completed by CBRE veteran Jason Presley, who represented the landlord, an affiliate of TRC Capital Partners.

“1001 McKinney is the ideal location for tenants seeking a historic office environment with the technology and amenities of newer buildings,” said Presley, a Senior Vice President at CBRE. “The recent building upgrades were critical to the property’s success in attracting and retaining tenants during the challenging last year.”

The leases completed include:

Perkins + Will: 19,968 SF lease renewal
ConnectGEN Management: 11,397 SF expansion and lease renewal
Monroe VOS Consulting Group: 7,420 SF lease renewal
Schaffer, Carter & Associates: 7,869 SF new lease
Kinetica Partners: 7,267 SF lease renewal
International Bank of Commerce: 2,603 SF lease renewal
Stinnett & Associates: 2,486 SF lease renewal
TRC Capital Partners: 2,473 SF new lease
Charles Weber: 1,934 SF lease renewal
Androvett Legal Media & Marketing: 1,574 SF lease renewal

The property includes direct lobby access to Morton’s Steakhouse restaurant and the Central Tunnel Loop amenities. The building is near the MetroRail.

Earlier this year, a TRC Capital affiliate acquired Galaxy II, 455 East Medical Center Blvd, 106,000-SF office property near NASA’s Johnson Space Center.

For more about Texas real estate, check out the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins. Available on Amazon http://tiny.cc/4a2g6y

Houston 2020 Ebook version https://tinyurl.com/4xm7z8b5

Photo: Courtesy CBRE

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