HOUSTON — Targa Resources Corp., one of North America’s largest independent midstream energy companies, has signed a long-term office lease at 811 Louisiana, a Class A office tower totaling 577,735 square feet in Houston’s Central Business District.
Targa will occupy 127,734 square feet across four floors in the recently renovated 811 Louisiana building. This transaction represents the largest new lease in Houston’s CBD so far in 2017.
The tenant was represented by a Cushman & Wakefield of Texas team that included Tim Relyea, Chad Beck, David Guion, Morgan Relyea and other strategy and support members. Chip Colvill, Paula Bruns and Damon Thames of Colvill Office Properties represented the building’s ownership. Hines manages the property.
Originally developed by Hines in 1970, 811 Louisiana was designed by noted architect Bruce Graham of Skidmore, Owings & Merrill, who is also known for designing the Sears Tower in Chicago and other prominent structures.
“We’re extremely proud to add Targa to our roster at 811 Louisiana,” said Chip Colvill, president of Colvill Office Properties. “Targa’s selection of 811 Louisiana reinforces their commitment to the Louisiana Street corridor in downtown Houston and gives them upgraded amenities, operational efficiencies and room to expand as they grow. This lease further validates the positive response from the real estate community to the property’s renovations and enhanced amenities.”
The property was rebranded as 811 Louisiana and recently underwent a comprehensive renovation led by Page (formerly Page Southerland Page) architects. Improvements included a full redesign of the building lobby, updates to the lower-level exterior façade and renovations to the retail tunnel.
As part of the repositioning, the tower’s official address was changed from Walker Street to Louisiana Street, a historically significant business thoroughfare in downtown Houston. The Hines organization has developed several major buildings on Louisiana Street, including Pennzoil Place, Bank of America Center and One Shell Plaza.
Located at a primary junction of Houston’s downtown tunnel system, 811 Louisiana offers convenient pedestrian connections to many of the city’s major office towers.
The ownership invested substantially to upgrade building amenities and compete in Houston’s challenging office market. Current and planned offerings include an on-site conference center, in-building parking, a variety of restaurants and retail shops at the tunnel level, and a fitness center that is under construction.
Securing Targa Resources brings a high-profile energy tenant to the building. Targa, a Fortune 500 company traded on the New York Stock Exchange, is among the largest suppliers of natural gas and natural gas liquids in the world.
The Cushman & Wakefield team representing Targa was led by veteran broker Tim Relyea, who has leased more than 60 million square feet of office space over his career for major clients including Chevron, Apache Corp. and Hess.
“The Colvill leasing team, the landlord’s representatives and Hines property management were very responsive and professional as we evaluated the property and addressed our client’s requirements,” the Cushman & Wakefield team said in a statement. “That strong collaboration enabled us to close this very important lease for the building and for downtown Houston.”
As the largest downtown leasing transaction so far this year, the Targa Resources lease is a positive sign that the downtown office market may be stabilizing after several difficult years.
A steep decline in oil prices that began in late 2014 hit the Houston office market hard, triggering workforce reductions, rising vacancies and three years of negative absorption while many new suburban buildings were completed. Last year downtown experienced roughly 500,000 square feet of negative absorption, according to CBRE, while large tenants such as Shell Oil and Freeport-McMoRan placed significant blocks of space onto the sublease market.
CBRE recently identified Houston as the market with the largest supply of sublease office space in the nation. However, there are early signs of improvement: sublease availability, which topped 12 million square feet last year, has been reduced to about 11 million square feet.
Additional positive momentum includes the recent opening of the new 1 million-square-foot Hines tower at 609 Main at Texas, which launched with more than 50 percent occupancy—an impressive result given the recent challenges in Houston’s office market.
March 22, 2017 Realty News Report Copyright 2017