Leased Office Space on Post Oak Parkway — Prime Houston Location
4400 Post Oak Parkway
HOUSTON – HighTower Texas, an investment advisory firm headquartered in Chicago, has signed an eight-year lease for 15,780 square feet at Five Post Oak Park, located at 4400 Post Oak Parkway, establishing its new Texas headquarters. HighTower entered the Houston market in April through its acquisition of Houston-based Salient Partners LP, which had been located at 4265 San Felipe.
Avison Young Principal Harry Holmes, based in the firm’s Houston office, represented the tenant in the transaction alongside Trey Strake of Cushman & Wakefield. The landlord was represented by Damon Thames of Colvill Office Properties.
Holmes said HighTower will occupy the twenty-sixth floor of what he called “a great building,” citing strong local amenities and convenient access to the firm’s upscale client base. The anticipated move-in is January 2019, and the space will receive modern upgrades prior to occupancy. The property recently added a 3,600-square-foot conference center and a 3,000-square-foot fitness center.
Harry Holmes
Holmes added that he believes the office market has likely bottomed out, but leasing rates have not fully recovered. “Until we see more white-collar job growth, it will take time to absorb the available space,” he said.
An Avison Young report notes that the market remains tenant-friendly. While overall rental rates have inched up slightly, tenants continue to hold leverage because of high availability. The report also cites “flight-to-quality” trends and ongoing mergers and consolidations as factors likely to keep overall availability elevated.
Most commercial real estate firms are reporting modest improvement in vacancy and a small amount of positive absorption for the year, following three years of sizable negative absorption.
Damon Thames
Recent large leases demonstrate continued activity: Transocean leased a completed but previously unoccupied 300,000-square-foot building in the Energy Corridor, and Waste Management committed to 284,000 square feet in Skanska’s new downtown building. Even so, those moves often leave behind available space, and several new projects will add inventory. Skanska’s tower, scheduled for completion in 2019, is only one of nearly three million square feet currently under construction, with additional proposed developments in the pipeline.
Energy market dynamics remain a headwind for Houston office demand. West Texas Intermediate crude rose into the $70-per-barrel range over the summer but retreated sharply in November; WTI traded below $52 per barrel on Monday morning. Lower oil prices reduce confidence among energy-sector executives and can delay decisions to lease new office space. Further uncertainty surrounds upcoming OPEC meetings.
