HOUSTON – (Realty News Report) – Skanska USA Commercial Development held a groundbreaking Thursday for a new 28-story, 375,000-square-foot office tower in downtown Houston adjacent to Discovery Green urban park.
Located at 1550 Lamar Street, the tower is scheduled for completion in 2024, according to Skanska.
The announcement arrives amid challenges for the Downtown Houston office market. More than 13 million square feet of space is currently vacant or being offered for sublease. First-quarter data from Madison Marquette reported a downtown office vacancy rate of 22.6 percent and an availability rate of 29.7 percent—figures that highlight the market’s current softness.
Houston is experiencing its highest office vacancy rates in decades as a prolonged contraction in the energy sector and pandemic-driven demand shifts have weakened market fundamentals.
Despite the broader market pressure, the new Skanska tower is positioned to benefit from a “flight to quality” trend: tenants are increasingly seeking modern buildings with upgraded amenities, leaving older properties at a competitive disadvantage.
Skanska is not proceeding entirely on speculation. The global law firm Norton Rose Fulbright has already committed as a key tenant.
CBRE leasing agents Kristen Rabel, Parker Duffie, and Joel Douthit represent the landlord for the Class A office building, which will anchor “Discovery West,” a three-block, master-planned district developed by Skanska.
Skanska acquired the 3.5-acre site in fall 2019 for $55 million. The four downtown parcels—formerly surface parking lots—are adjacent to Dallas, Lamar and La Branch streets and include a full city block across from the One Park Place residential tower by Marvy Finger.
Skanska, a global construction and development firm headquartered in Sweden, specializes in building construction, civil infrastructure and commercial property development. In 2019 the parent company reported sales of SEK 74 billion and employed approximately 7,900 people in its operations.
This tower marks the first project in Texas designed by BIG-Bjarke Ingels Group, the internationally recognized architecture firm.
To celebrate the groundbreaking, Skanska executives were joined Thursday by Houston Mayor Sylvester Turner and other local leaders at The Grove restaurant in Discovery Green park near the George R. Brown Convention Center.
“It’s a great day for Houstonians, Skanska, and BIG-Bjarke Ingels Group as we share our plans for 1550 Lamar Street and begin transforming the site into a striking development with spacious offices, extensive greenery and sustainable features that promote tenant health and wellness,” said Matt Damborsky, Executive Vice President for Skanska USA Commercial Development’s Houston market.
Architect Michael Hsu has been selected to design the interior amenity spaces. Planned features include a fully equipped fitness center, a rooftop event space and terrace on level 28, and community-oriented spaces distributed throughout the property.
Hsu’s recent local work includes the Understory food court inside Downtown Houston’s 35-story Bank of America Center, the most recently completed office tower downtown.
Skanska’s tower is one of several high-rise projects under construction in Downtown Houston. Hines is developing a 47-story, 1 million-square-foot building on Texas Avenue that is roughly 40 percent leased and expected to be finished by year’s end.
June 24, 2021 Realty News Report Copyright 2021
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Image Courtesy Skanska
File: Downtown Skyscraper Breaks Ground