HOUSTON – (Realty News Report) – Linde Engineering leased 120,454 square feet of office space in The Woodlands – one of the largest office leases in the Houston area since the pandemic began.
The lease should be a welcomed positive development for the Houston office market, which has experiencing rising vacancy and softer rents in the Covid-era.
Kevin Saxe and Jon Lee with CBRE represented Linde, a global industrial gases and engineering company, in the lease negotiations.
The engineering firm is taking space in the Sierra Pines II building, a six-story, Class A office building located at 1575 Sawdust Road.
The landlord, VEREIT, was represented by Brad Fricks of Stream Realty Partners.
The lease transaction follows Linde’s merger with Praxair to form the world’s largest industrial gases supplier.
“Linde had some specific operational needs for their space that needed to be balanced with the emphasis on their people and their work environment. CBRE’s task was to find the best possible solution for them. Given Linde’s stature with investment-grade credit, we were able to leverage non-traditional real estate financing structures, which resulted in significant cost reduction,” said CBRE’s Saxe.
Along with the conditions damaging the overall Houston office market, The Woodlands office market also suffered a blow in the Occidental Petroleum and Anadarko Petroleum merger, which resulted in a downsizing of Anadarko’s huge office space footprint in The Woodlands, a 28,000-acre master planned community located 28 miles north of downtown Houston.
“Linde staying in The Woodlands area and creating a regional hub at Sierra Pines is a big win for the market,” said Lee of CBRE.
Linde is occupying the second and third floors of Sierra Pines II, a six-story building developed by Stream Realty Partners.
The building, designed by Powers Brown architecture, was described as “The Tallest Tilt Wall in Texas.” With tilt-wall construction, commonly used for warehouses, exterior walls are poured as wet concrete on the ground and then “tilted up” into position. But this office building, constructed in 2014, was the tallest tilt-wall ever built in the Lone Star State, Stream Realty told Realty News Report at the time.
Unlike a warehouse, however, the 154,000-sf structure was created as a Class A office building with high-end finishes, abundant exterior glass and a large exterior courtyard/garden with a fountain, Stream Realty said at the time.
Currently, Houston has the highest office vacancy in the nation, according to a new report by Yardi Systems Commercial Edge.
Houston’s overall office vacancy rate stood at 23.5 percent in February, far worse than the average national vacancy of 15 percent. But with the Linde lease, things just got a little bit better.
April 5, 2021 Realty News Report Copyright 2021
Caption: Photo credit: Courtesy CBRE
File: Positive Absorption in The Woodlands. CBRE. Stream Realty
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