HOUSTON – Third Palm Capital has opened Republic Square, a major development on a large, heavily wooded parcel in Houston’s Energy Corridor that previously served as the Exxon Chemical campus.
As confusion circulated about Republic Square, Realty News Report was the first outlet to publish an in-depth interview with a Third Palm executive in June 2015. That Q&A with Cameron Graham continues to draw online interest.
When Realty News interviewed Graham in Miami in 2015, oil prices topped $100 per barrel and the Energy Corridor was one of the most active office markets worldwide. Since then, oil prices fell and Houston’s office market has faced significant oversupply. Third Palm is leasing existing buildings on the Republic Square campus while planning long-term development.
Realty News Report republishes this popular exclusive interview from 2015:
Third Palm’s Cameron Graham, who also directs Dart Enterprises Contracting Co. in the Cayman Islands, said the firm has been acquiring development land and assets in Florida and New York and is in a phase of strategic planning before expanding development and marketing efforts nationally.
Third Palm purchased the former 35-acre ExxonMobil Chemical campus in Houston’s Energy Corridor. Over several years, the site will be transformed into Republic Square.
Republic Square, situated near the intersection of Interstate 10 and North Eldridge and bordering Terry Hershey Park, is planned to include approximately 2.6 million square feet of office space, 100,000 square feet of restaurant and retail space, two hotels, a fitness center and around 800 multifamily residential units. The project is financed with international private equity capital through Third Palm and Dart Enterprises.
Graham attended the NAREE (National Association of Real Estate Editors) conference in Miami and took time during the event to give Realty News Report the first detailed interview outlining Third Palm’s Houston plans and the company’s North American expansion strategy.
Below are edited excerpts from Graham’s interview with Ralph Bivins, editor of Realty News Report.
Realty News Report: Republic Square was promoted as a future “Central Business District of the Energy Corridor.” With office occupancy softening recently in west Houston, what is your timetable?
Graham: This is a long-term project and won’t be built all at once. Market conditions will guide the pace of construction and leasing. Initially, we expect to prioritize a hotel, food-and-beverage retail, a fitness center and some multifamily units, with office development to follow.
Realty News Report: Your project team includes Elkus Manfredi Architects, Pickard Chilton, Kirksey, Sasaki Associates and PM Realty Group (PMRG). Will Third Palm establish a local office in Houston?
Graham: We may place one or two people on the ground in Houston to support the project.
Realty News Report: Does PMRG hold an ownership stake in Republic Square?
Graham: It’s possible they could take a stake in the future. (Third Palm notes that PMRG’s investment in Republic Square ultimately did not materialize and PMRG is not affiliated with the project today.)
Realty News Report: The 35.2-acre site has frontage on Interstate 10 and Memorial Drive and borders Terry Hershey Park. How did Third Palm acquire such a prominent parcel?
Graham: HFF assembled the offering and auctioned it on behalf of ExxonMobil. PMRG initially identified the site, we performed due diligence and the acquisition made sense for our strategy.
Realty News Report: Are you pursuing other deals in Houston?
Graham: We aren’t actively targeting additional Houston properties right now, though we remain open to compelling opportunities if they arise.
Realty News Report: Beyond Houston, which markets would you consider for future projects?
Graham: We’re looking at major markets such as San Francisco, New York, Orange County and cities across the Texas Triangle. Based on the data, the Texas Triangle is among the strongest growth regions in the country.
Realty News Report: Why did you choose to make a major investment in Houston?
Graham: Houston offers growth opportunities, strong job creation and broad economic activity. The city is business-friendly and presents favorable conditions for development.
Realty News Report: What was your impression of the recent Urban Land Institute (ULI) conference in Houston in May 2015?
Graham: Houston is a can-do city with a positive attitude toward development and growth.
Realty News Report: Why does Republic Square emphasize mixed-use design, lifestyle amenities and walkability?
Graham: We see a market niche for projects that combine office space with nearby fitness facilities and retail. Mixed-use, walkable environments meet long-term demand from companies and residents seeking convenience and amenities.
Realty News Report: With holdings in Houston, Florida and New York and financing from international capital, what’s next for Third Palm? Will you focus on development or on acquiring more land?
Graham: Third Palm is still in its early stages—just over a year old at the time of the interview—so we are working to finalize a comprehensive strategic plan. We have acquired some properties already, but many decisions remain as we shape our long-term direction.
(This interview with Cameron Graham was first published on Realty News Report on July 7, 2015.)
Nov. 17, 2016 Realty News Report Copyright 2016