These Are Houston’s Biggest Office Projects Under Construction
Several large Class-A office developments are under construction across Houston, with many slated to come online during 2021 and 2022.
The development pipeline totals nearly 4.2M SF, with 45% of that space already pre-leased, according to Madison Marquette Senior Vice President Ariel Guerrero. The largest concentration of activity is found in the Inner Loop, where 1.7M SF is underway.
However, the city continues to struggle with high vacancy and availability rates. Houston’s total office vacancy rate was 23% in the third quarter, while its total availability rate was 27.1%, according to NAI Partners’ Q3 office market report. Coupled with the uncertainty of the coronavirus pandemic, office construction is expected to slow in 2021.
“Office construction activity has slowed due to constraints from COVID-19,” Guerrero said. “Limited groundbreakings are expected over the next 12 months due to weaker demand and an oversupply of existing space.”
Guerrero said the continued flight to quality will continue to place pressure on existing office buildings to measure up to the amenities and tenant experiences that new developments can offer. As a result, property owners are focused on repositioning their existing inventory to be more competitive with significant capital improvement projects.
“The pandemic will likely reinforce this trend, as companies and their workforce will prefer buildings with state-of-the-art HVAC, elevator and security systems,” Guerrero said.
Here are the top 10 office developments underway in Houston by square footage, excluding corporate-owned projects, according to data from Madison Marquette.
Project Name: Texas Tower
Developer: Hines
Size: 1.1M SF
Target Completion: Q4 2021
Texas Tower is a 47-story, 1.14M SF office tower on the 800 block of Texas Avenue in Downtown Houston, the former site of the Houston Chronicle. The building will feature multiple restaurants, networking spaces, a full-service conference facility, public gardens on level 12, a high-performance fitness center and an internal 11-level parking garage to accommodate more than 1,500 cars. Hines broke ground in July 2018, and the project is expected to reach completion in late 2021.
Texas Tower is 40% leased. Hines is relocating its global headquarters to the property, with a 15-year lease for 180K SF across six floors. Law firm Vinson & Elkins signed a 16-year lease for 212K SF to occupy the top seven floors, and law firm DLA Piper signed a 14-year lease for 31K SF on one floor of the building.
Project Name: Hewlett Packard Enterprise HQ
Developer: Patrinely Group
Size: 568K SF
Target Completion: Q4 2021
Hewlett Packard Enterprise landed in the spotlight last week when it announced plans to relocate its corporate headquarters from San Jose, California, to its new Houston campus.
The project is in CityPlace, the urban and commercial center of Springwoods Village, a 2,000-acre master-planned community in north Houston. The campus will consist of two five-story buildings totaling 440K SF, with a bridge connector at each level. There will also be structured parking for 2,055 cars. Patrinely Group, in partnership with USAA Real Estate and CDC Houston, broke ground in February and topped out the project in October. The campus is expected to open in spring 2022.
Project Name: Texas A&M Innovation Plaza – Horizon Tower
Developer: Medistar Corp.
Size: 485K SF
Target Completion: Q1 2023
Texas A&M University announced in February that it planned to build a $546M campus in the Texas Medical Center, one of several major projects underway in the area. Texas A&M Innovation Plaza will consist of two new towers, as well as the purchase and renovation of 1020 Holcombe Blvd., an 18-story building. One of the new towers is a student housing project, while the other is a mixed-use development for medical offices and retail.
The mixed-use building, known as Horizon Tower, is an integrated medical plaza of 17 stories sitting atop a 13-story parking garage and will cater to life sciences, clinical, biomedical, technology and office uses. Medistar Corp. held a virtual groundbreaking ceremony for the campus on Oct. 1, and Horizon Tower is slated for completion in January 2024.
Project Name: One MRO (Marathon Oil)
Developer: Hines
Size: 440K SF
Target Completion: Q4 2021
Marathon Oil Corp. is building its new headquarters, One MRO, at 990 Town and Country Way near Midway’s CityCentre mixed-use development. The 15-story, 440K SF office building will replace the firm’s existing offices at Marathon Oil Tower at 5555 San Felipe St., near the Houston Galleria. Company employees will move to the new office workspace in the second half of 2021.
On Oct. 5, a partial stairway collapse at the One MRO construction site killed three workers and injured one other. The families of two workers killed in the incident have since filed a lawsuit against Marathon Oil and several contractors involved in the construction.
Project Name: Museo Medical Office Building
Developer: Testa Rossa Properties
Size: 364K SF
Target Completion: Q4 2021
Testa Rossa Properties broke ground on its 10-story, 364K SF medical office tower at 5115 Fannin St. in the Museum District in January. The building represents Phase 1 of Museo, a mixed-use development touted as a gateway to the district.
Mann Eye Institute founder Paul Michael Mann and his son, Paul Mann, are the driving force behind the building. Their clinic will anchor the project, occupying 37K SF on the top floor and an additional 10K SF surgery center. The building will feature five parking garage levels above the ground-floor lobby, which will include 16K SF of event space.
Project Name: 9753 Katy Freeway
Developer: MetroNational
Size: 190K SF
Target Completion: Q2 2021
MetroNational is building a 190K SF, nine-story tower at 9753 Katy Freeway as part of a 4-acre mixed-use project at the southwest corner of Bunker Hill and Katy Freeway in West Houston. The first floor of the building will have retail and restaurant space, a two-level lobby, public WiFi and conference rooms. It will connect to an elevated parking garage via a skybridge.
The developer broke ground on the building in February, and according to Madison Marquette, it is slated for completion in the second quarter of 2021. Other buildings in the mixed-use project include The McKinley, a 332K SF, 25-story luxury residential tower.
Project Name: Montrose Collective
Developer: Radom Capital LLC
Size: 170K SF
Target Completion: Q3 2021
The Montrose Collective is a mixed-use development underway on lower Westheimer. The project will comprise five buildings, including 100K SF of creative office space, and more than 50K SF of retail space. In addition, the project has 10K SF set aside for the relocation of the existing Freed-Montrose Library branch at 4100 Montrose Blvd.
The Montrose Collective will provide six new dining options, as well as 15 boutique retail spaces for local and first-to-market merchants. Construction began in February, and a topping-out ceremony was held on Oct. 28.
Project Name: 9655 Katy Freeway (Village Tower Two)
Developer: Moody National Cos.
Size: 150K SF
Target Completion: Q1 2021
Moody National’s multiphase, mixed-use development at Bunker Hill and I-10 sits just east of Memorial City. The development is composed of two six-story office buildings with ground-floor retail space. Each office building is 150K SF, and the development will have a seven-story open parking garage.
Tower One was completed in June. Tower Two is still under construction and has an estimated completion date of March/April 2021.
Project Name: POST Houston
Developer: Lovett Commercial
Size: 150K SF
Target Completion: Q1 2021
POST Houston is a mixed-use project in Downtown Houston, redeveloping the former Barbara Jordan Post Office, which was occupied by the U.S. government until 2015. The project will have restaurants, retail, an international market hall, creative workspace and a 210K SF rooftop park and farm. Future expansion plans include a concert venue, a hotel and an entertainment room.
POST Houston was originally slated to open to the public in 2020, but public health concerns and tenant fit-out have delayed the opening to 2021. The project is 19% pre-leased, according to Madison Marquette.
Project Name: 7500 Fannin St.
Developer: Healthpeak Properties Inc.
Size: 116.5K SF
Target Completion: Q4 2021
Healthpeak Properties broke ground on its 116.5K SF medical office development at 7500 Fannin St. in late May. The five-story, Class-A building is on the campus of The Women’s Hospital of Texas and is being constructed alongside a new parking garage.
The building is part of a larger master-planned expansion that includes a redesigned hospital entrance that will provide access points from Old Spanish Trail and Fannin Street. The property is 42% pre-leased with the largest commitment from Houston Women’s Care Associates, a 14-provider practice that is expanding its on-campus footprint.
