Real Estate Round-up
The Galleria finally lands a new office tower, Houston FBI turns to bomb-proofdigs & Teas Nursery goes green
It’s been almost 30 years since the 64-story Transco Tower was completed on a site between the Water Wall and The Galleria shopping center.
Since then, developers have been pretty quiet in the Galleria area, in terms of new office buildings. Vacancy in the Galleria area went sky high. Several Galleria area office buildings went into foreclosure and their owners took trips to bankruptcy court.
Even in a town like Houston, where developer machismo is measured by the towers they build, for years, no one came forth with a new office project in the Galleria area.
That has changed.
The time has come for a new building to be erected in the Galleria area. And it will happen this time.
The sexiest rumor is that master developer Gerald Hines is back in the game. Hines' organization has been tire-kicking on a site at Post Oak Boulevard at San Felipe. The site is part of Ed Wulfe’s BLVD Place mixed-use development. Wulfe has plenty of prime land there and Hines certainly has the ability to attract a major tenant to occupy a tower to be built at that location.
But it is unlikely that Hines would move forward without a large anchor tenant in tow.
Almost certain to beat Hines to the punch will be a groundbreaking that should be happening soon on Post Oak at Hidalgo. The Skanska organization has a 19-story tower teed up there.
Skanska controls a 2.3-acre site, a parcel of vacant land formerly occupied by Tony’s Ballroom, across the street from the Water Wall.
Skanska will build 12 levels of office space (302,000 square feet) atop seven levels of parking. The building, designed by the Kirksey architecture firm, will have an address of 3009 Post Oak.
The developer, an arm of a large international development and construction firm based in Stockholm, declines to discuss the cost of the project, but it is projected to be well in excess of $50 million.
Getting the financing to construct new projects, has been a problem for many developers during the recent credit crunch. But Skanska has a solution for that. The Swedish firm will finance the Houston building with its own internal funds — no bank loan required, thank you. Skanska will be willing to start its building on a “spec” basis — unlike most projects today that require part of the building to be leased before construction begins.
Skanska is no ordinary developer. Founded in Sweden in 1887, the company has some 50,000 employees. (Does Skanska sound familiar? It is. If you’ve been reading Steig Larsson’s popular Swedish crime novel, The Girl with the Dragon Tattoo, which was recently on the New York Times Bestsellers List, the Skanska firm is mentioned in the first chapter of the book.)
Greg Mondshine, who is handling leasing for Skanska’s new building, says the date for the start of construction has not been set. But the company is projecting the building will open in 2012, which means construction will probably be underway in the first quarter of next year.
“By the time we deliver this thing in the fourth quarter of 2012, it will have been 30 years since a building has been delivered in the Galleria,” Mondshine says.
A real drag on the Galleria area office buildings has been the road construction, such as the huge reconstruction of Loop 610 and the Katy Freeway, which clogged traffic in the area. “All of those projects have been completed as it’s so much easier to get in and out of the Galleria now,” Mondshine says.
Whether it’s Skanska or Hines or some other developer, it sounds reasonable to add another office project in the Galleria. After 30 years, there’s bound to be demand for a new generation of office tower.
J. Edgar’s Footprint Fades
The office building that used to house the FBI in Houston has been sold.
Last year, the FBI moved to a new building in northwest Houston, leaving behind a five-story building at 2500 East T.C. Jester, just south of Loop 610 North.
The empty building was recently purchased by Houston-based Boxer Property. The 160,000-square-foot building contains no secret rooms, jail cells or special phone lines that you might expect to find in the television version of an FBI building. It does have a large built-in safe, though, says David Kayle, a Boxer executive.
The FBI is now ensconced in a new building on Highway 290. The new building, which has a green glass exterior, is loaded with security measures and engineered to withstand a bomb attack.
Teas Nursery Site Saved
The Teas Nursery site in Bellaire is closer to becoming a public park. The owners of the Teas' land, the Jerry and Maury Rubenstein Foundation, have reached an agreement that will lead to the donation of the five acres to the city.
The Teas Nursery was in operation for 100 years before it closed about a year ago. The property, 4400 Bellaire Boulevard, is one of the largest green spaces remaining in the Bellaire area.
A few years ago, another chunk of the Teas property was sold to developer Frank Liu of Lovett Homes, who built a dozen or so million-dollar mansions there.
Park space is hard to come by and it’s good to see some green space remaining green.
Ralph Bivins, former president of the National Association of Real Estate Editors, is editor-in-chief of RealtyNewsReport.com.