THE WOODLANDS – (By Ralph Bivins, Editor of Realty News Report) – A 30-story office tower located about 30 miles north of downtown Houston will be vacated.
The immediate reaction from many is alarm: crisis alert — hit the red emergency button.
It’s true the Houston office market shows softness overall (roughly 20 percent vacancy). Some suburban submarkets are struggling. But broad statistics don’t always tell the whole story.
The 30-story tower formerly known as the Anadarko Hackett Tower will be vacated by Occidental Petroleum. That said, this is not expected to trigger a chaotic scramble to backfill the space.
The 595,854-square-foot office tower at 9950 Woodloch Forest Drive has been renamed The Woodlands Tower at the Waterway, and Colliers International has been retained to lease the building.
Immediately, building owner Howard Hughes Corp. announced plans to relocate its corporate headquarters into the tower later this year.
Howard Hughes Corp. develops master-planned communities nationwide, including The Woodlands, Bridgeland, The Woodlands Hills and Summerlin in Las Vegas.
Howard Hughes intends to occupy roughly 60,000 square feet — possibly more — in the former Anadarko Hackett Tower.
Compared with many suburban markets, The Woodlands office market remains relatively healthy. Colliers reports a Class A average asking rental rate near $40 per square foot, and almost 400,000 square feet of positive absorption in 2020.
There have been setbacks in some northern suburban areas. For instance, Southwestern Energy listed about 290,000 square feet for sublease in its new Springwoods Village building.
Paul Layne, a Houston real estate veteran recently named CEO of Howard Hughes Corp., noted the company’s substantial office portfolio in The Woodlands had been 94 percent leased. From his perspective, having high-quality vacant space to market is not necessarily disastrous. Howard Hughes’ acquisition of Anadarko properties also included the 800,000-square-foot Anadarko Allison Tower, which remains leased by Occidental for another 13 years, and a nine-acre site along Interstate 45 for potential future office development.
Bob Parsley, co-chairman and principal of Colliers International in Houston, said his firm is enthusiastic about leasing the former Anadarko Hackett Tower. Parsley described the building as a Class AAA waterfront property offering the chance to secure a large, contiguous block of premier office space in The Woodlands.
The Woodlands community leaders are downplaying concerns about reductions at Occidental, where layoffs had been anticipated. On the positive side, Howard Hughes reported that 255 new single-family homes were sold in The Woodlands during the nine months ending Sept. 30, 2019 — nearly identical to the same period in 2018. Located roughly 27 miles north of downtown Houston, The Woodlands is approaching the later stages of its single-family construction lifecycle after decades of development. The Anadarko buildings remain the tallest towers between Houston and Dallas.
Realty News Report Editor Ralph Bivins recently received the Gold Award for Best Real Estate Column from the National Association of Real Estate Editors.
Feb. 25, 2020 Realty News Report Copyright 2020
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