HOUSTON – (Realty News Report) – Since 1983, Marathon Oil has been the namesake tenant of a 41-story skyscraper near Houston’s Galleria area. Now, Marathon Oil is preparing to relocate to a new headquarters under construction near CityCentre, leaving the iconic tower with a new identity and a significant amount of available office space.
Formerly known as the Marathon Oil Tower, the building is being rebranded as 5555 San Felipe. Marathon Oil occupied roughly 62 percent of the 1.2 million square-foot property. With the company’s departure, approximately 21 contiguous floors—about 600,000 square feet—will be available for lease beginning in 2022, making this one of the largest blocks of office space to open in Texas.
5555 San Felipe has been repositioned to respond to evolving tenant needs in a challenging market. Houston’s office vacancy rate is among the highest in the nation, with availability near 25 percent, so the building’s owner, M-M Properties, invested heavily to make the property competitive. The firm completed roughly $15 million in interior renovations aimed at modernizing the tenant experience and preserving the tower’s Class A status.
“We were able to collaborate with M-M Properties throughout the redesign process and the result is a truly stunning office tower that exceeds all expectations,” said John Spafford, Executive Vice President with CBRE, which is handling leasing for the property. “Tenants don’t need to leave the building to take advantage of upscale amenities, but if they do, they’re right in the middle of Uptown with convenient proximity to outstanding restaurants, retail and hotels.”
M-M Properties acquired the tower in 2018 for $175 million, about $146 per square foot. The company’s founder and CEO, Ken Moczulski, anticipated the need for a comprehensive refresh long before Marathon Oil’s lease ended in 2021. With an investment background that includes Hines Interests and Crescent Real Estate Equities, Moczulski guided a redevelopment strategy focused on amenity-driven tenant experiences tailored to today’s social, collaborative workforce.
The firm engaged Page architecture to lead the redesign and renovations. The project transformed the building into a modern, sustainable workplace with extensive amenity floors and upgraded common areas designed to attract and retain tenants. Key improvements include three full floors of curated amenities:
- The redesigned lobby lounge featuring a coffee bar, new collaborative seating areas, a large media wall, Wi‑Fi and curated art installations by national artist Margo Wolowiec and international artist Michael Pendry.
- Café 5555, a chef-driven, food‑hall–style café on the first floor that offers remote ordering, full-service catering and event planning.
- Fit 5555, a full-service fitness center on the third floor with resort-style locker rooms, state-of-the-art equipment, personal trainers and group fitness classes.
Planned future enhancements include a freestanding restaurant space on the building’s east lawn, between Yorktown and St. James streets. CBRE brokers are handling leasing for that roughly 5,000-square-foot venue.
CBRE leasing representatives John Spafford, Elliott Hirshfeld and Madeline Gregory hold exclusive listing rights for office leasing at 5555 San Felipe. The building is located between Chimney Rock and Sage roads in the Uptown/Galleria submarket.
Early Leasing Momentum
Renovations have already generated leasing activity. Flexible workplace provider Serendipity Labs signed for 28,000 square feet and will occupy the entire 20th floor. The leasing momentum marks a positive start for the newly rebranded property as it seeks tenants for the large contiguous floors vacated by Marathon Oil.
M-M Properties manages a diversified portfolio that includes roughly 29 million square feet of office projects and about 17,000 multifamily units. The Houston-based firm is also redeveloping its 56-story TC Energy Center (formerly Bank of America Center) downtown, an iconic tower designed by Philip Johnson and John Burgee located at 700 Louisiana.
Marathon Oil’s New Headquarters
Marathon Oil’s new headquarters is a 440,000-square-foot build-to-suit being developed by Hines on the south side of the Katy Freeway near Beltway 8. Marketed internally as “One MRO,” the project reflects the company’s NYSE ticker symbol and will house Marathon’s corporate operations in a single, modern campus. Before the COVID-19 pandemic, the company had indicated a planned move-in during the second half of 2021.
June 3, 2021 Realty News Report Copyright 2021
Photo(s) Courtesy CBRE
For readers interested in Texas development, consider the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins.