NEW ORLEANS – Skanska USA won’t start construction on its proposed Capitol Tower office building until the Houston office market rebounds, says Richard Cavallaro, CEO of Skanska USA.
Skanska poured the foundation for the proposed 35-story tower in August of last year and a multi-level parking garage has been built on the site – a full city block bounded by Capitol, Rusk, Travis and Milam.
Cavallaro, commenting on Friday after a speech at the National Association of Real Estate Editors conference in New Orleans, said no timetable has been set for constructing the 750,000-sf downtown Houston building.
The proposed Capitol Tower in downtown Houston will not be starting unless there is significant preleasing, Cavallaro told Realty News Report.
In October 2014, Skanska demolished the Houston Club Building, 811 Rusk at Capitol, to make way for the new office tower.
A couple of blocks away from the Skanska site, Hines is already under construction with a 1 million SF spec building at the corner of Main and Texas Avenue. Hines will finish the project in late 2016 or early 2017.
But since the Hines project began, Houston’s office market has softened due to the contraction in the energy industry. Some 10 million SF of sublease space is on the market and another 6 million SF of space is still under construction.
It could be a long time before the Houston office market regains its footing.
Additional Houston area Skanska developments include West Memorial Place, a two-phase, 725,000-SF Class A office campus in the Energy Corridor; Spring Crossing, a proposed 850,000-SF Class A phased, master-planned office development on 14 acres across from the new Exxon Mobil campus; and a Class A, 302,000 SF office building at 3009 Post Oak Blvd, near Loop 610.
In his speech to the NAREE real estate editors last week, Cavallaro said Skanska, which has over 10,000 employees in the U.S., is undertaking a major redevelopment of La Guardia Airport in New York.
June 15, 2016