47-Story Downtown Houston Office Tower Foundation Poured

HOUSTON – (By Ralph Bivins, Realty News Report) – Over the weekend, a steady stream of concrete trucks poured the foundation for Houston’s next skyscraper: Texas Tower, a 47-story Class AA office building developed by Hines.

Already 33 percent leased, the building is scheduled for completion by the end of 2021.

Hines is also developing a 46-story apartment tower across the street, making this section of downtown one of the most active construction hotspots in the country.

The Texas Tower site, known as Block 58, occupies a block in northern downtown Houston bounded by Texas Avenue, Milam, Prairie and Travis streets. Crews spent months excavating the site and preparing the steel reinforcing for the foundation. On Saturday (historical marker: March 9, 2019) concrete trucks began arriving for the large mat pour, which continued through the night and into Sunday.

The parcel was the longtime home of the Houston Chronicle until the building was demolished. The newspaper relocated to the former Houston Post building near the Southwest Freeway and Loop 610. In October 2015, a Hines-led group purchased Block 58, including a half-block that had served as the Chronicle’s garage, from Hearst Newspapers for $54 million.

Hines reported the foundation required 14,000 cubic yards of concrete—enough, by Realty News Report’s estimate, to pave a sidewalk from downtown Houston to Galveston Island.

Hines and Canada-based Ivanhoé Cambridge are partners on Texas Tower, a roughly 1 million-square-foot project designed by Pelli Clarke Pelli. Hines and Pelli recently collaborated on San Francisco’s 61-story Salesforce Tower, one of California’s tallest buildings.

The Texas Tower footprint is set on a diagonal across Block 58, which helps open view corridors amid the surrounding high-rises. Directly across the street stands the 75-story 600 Travis tower—built by Hines in the early 1980s and originally opened as Texas Commerce Tower, later known as JPMorgan Chase Tower until the bank relocated. The historic Rice Hotel also adjoins the former Chronicle site.

Diagonal to Block 58, on the half-block that contained the Chronicle garage and bounded by Preston, Milam and Prairie, Hines is building The Preston, a 46-story apartment tower with 373 units. Nearby, Hines recently completed Aris, another high-rise apartment building, and finished the 1 million-square-foot 609 Main at Texas a few years ago.

In short, Hines has transformed northern downtown Houston with four major high-rise projects in roughly four years.

Texas Tower opened with substantial pre-leasing. Law firm Vinson & Elkins, represented by Tim Relyea and his team at Cushman & Wakefield, signed a 16-year lease for 212,000 square feet across the top seven floors. Hines is relocating its global headquarters from Williams Tower near the Galleria to the new building, committing to a 15-year lease for 155,000 square feet over five floors. Colvill Office Properties is handling leasing for the tower.

The foundation pour comes as Houston’s office market continues recovering from a downturn triggered by low oil prices and cutbacks in the energy sector.

Citywide office vacancy stood at 18.6 percent at year-end, according to CBRE. Including sublease space, the availability rate rose to 22.4 percent.

Leasing activity improved late in 2018, yet about 8 million square feet of sublease space remained on the market, and significant portions were expected to revert to landlords in 2019.

More office inventory is arriving. Skanska’s 35-story downtown tower was scheduled for completion within months.

New buildings continue to attract tenants and command premium rents, a trend leasing professionals describe as a “flight to quality.” These modern developments offer advanced technology, amenities such as terraces and green spaces, upgraded dining options and floor-to-ceiling glass, plus flexible workspace that allows tenants to reduce footprint. For example, Vinson & Elkins’ 212,000-square-foot lease in the new Hines tower represents a 37 percent reduction from the 338,920 square feet the firm currently occupies in First City Tower, according to Avison Young.

The influx of new construction and extensive renovations by existing landlords intensifies competition downtown. As the flight to quality continues, CBRE planned a reclassification of downtown office properties in 2019, Cody Armbrister, CBRE’s senior managing director in Houston, said—meaning some buildings could be recategorized from Class A to Class B.

Downtown’s office market is evolving. New developments like Texas Tower are unlikely to struggle for tenants, but owners of older properties may face increasing pressure as tenants gravitate toward newer, more efficient space.

March 11, 2019 Realty News Report Copyright 2019