HOUSTON — Skanska announced on Wednesday that it has broken ground on Capitol Tower, a 35-story office building in downtown Houston, after completing a lease agreement with Bank of America.
Bank of America has leased 210,000 square feet and plans to relocate to the new building in the first half of 2019. JLL represented Bank of America in the transaction.
Warren Savery, Kristen Rabel and Rima Soroka of CBRE represented Skanska. The developer first revealed plans for the office tower several years ago on a downtown block bounded by Capitol, Rusk, Milam and Travis streets.
In recent weeks, several large construction cranes have risen at the site, signaling Skanska’s move into active construction. The tower’s foundation was poured in August 2015 and a parking structure already stands on the property. In October 2014, the 18-story Houston Club building was demolished to clear the way for Skanska’s project, known as Capitol Tower or 800 Capitol.
Designed by architecture firm Gensler, Capitol Tower will deliver approximately 754,000 square feet of office space and a striking two-level atrium that includes more than 26,000 square feet of retail and restaurant space. The building will connect to downtown’s tunnel system, offering direct access for tenants and visitors.
For many years, Bank of America has anchored the Bank of America Center at 700 Louisiana, a tower developed by Hines.
“Houston is an important growth market for Bank of America,” said Hong Ogle, Houston President, Bank of America. “We are pleased to be the anchor tenant at the tower, which allows us to co-locate our Merrill Lynch, U.S. Trust, Global Banking & Markets, Retail and Home Loans teams. That closer proximity will strengthen collaboration and improve service to our clients while supporting responsible growth for our firm.”
Last fall Skanska retained CBRE to market remaining space in the tower even as indicators showed softness in the Houston office market. Downtown Houston has considerable vacancy and sublease availability, including more than 800,000 square feet left behind at One Shell Plaza after Shell relocated to a suburban campus.
According to a Marcus & Millichap report, Houston currently has the highest office vacancy rate in the nation at 21.5 percent.
NAI Partners reports that Houston experienced nearly 800,000 square feet of negative absorption in the first quarter, reflecting the broader challenges facing the downtown office market.
April 12, 2017 Realty News Report Copyright 2017