HOUSTON – (By Ralph Bivins of Realty News Report) – Skanska Commercial Development has acquired 3.5 acres near Discovery Green for $55 million, setting the stage for a major mixed-use project in downtown Houston.
The purchase covers four downtown parcels currently used as surface parking near Dallas, Lamar and LaBranch streets, including a full city block directly across from Marvy Finger’s One Park Place residential tower.
Skanska is now master-planning the site. The scale of the acquisition could accelerate development in the eastern section of downtown, pushing forward the gradual eastward expansion of Houston’s Central Business District.
“For this project, Skanska will draw on our global experience in multifamily, office and retail development as we evaluate the best uses for these sites, which sit in the city’s front yard at Discovery Green,” said Matt Damborsky, executive vice president of Skanska’s Houston office. “These prime acquisitions include a full city block that we plan to transform into sustainable, high-quality urban space.”
Skanska paid roughly $360 per square foot for the portfolio, which was purchased from MIPS Investments LLC, led by Marianne Pfiel-Schneider.
In June, Skanska Commercial Development—part of the Stockholm-based global construction firm—completed the 35-story Bank of America Center in downtown Houston. That office tower, financed internally by Skanska without bank loans, showcased the company’s substantial financial capacity and raised expectations that its next downtown project could be significant.
Given the site’s proximity to the Finger tower and the Four Seasons hotel/condo tower, observers have speculated whether Skanska will include a major high-rise element. Recent projects elsewhere in Texas, like The Independent in Austin—a successful 58-story residential tower—suggest tall downtown towers remain feasible. If such heights are achievable in Austin, similar ambition could be plausible in Houston.
Some critics say Skanska may have “under-developed” the full downtown block where it built the Bank of America Center—a 35-story, 750,000-square-foot tower completed this summer. That project began during the 2015 energy downturn when market confidence was low, and a 35-story tower may now appear modest compared with larger neighboring developments.
Prime downtown land like Skanska’s recent acquisition is rare. The company carries a responsibility to the city to deliver a high-quality, catalytic project that stimulates further growth.
Skanska has not announced a timeline, nor revealed architects or planners for the new development. Still, the project has the potential to become a strong attractor of investment and activity on the eastern edge of downtown Houston.
Oct. 22, 2019 Realty News Report Copyright 2019
Read the New Book by Ralph Bivins, Editor of Realty News Report
Houston 2020: America’s Boom Town – An Extreme Close Up
Available on Amazon