San Antonio-based USAA Real Estate Co. picked the Houston office of Insignia/ESG Inc. to handle the 370,000-sf 1001 McKinney in the CBD while Houston-based Redstone Cos. hired PM Realty Group to take over a three-building, 305,000-sf portfolio.

Cushman & Wakefield of Texas Inc.'s Houston office previously held the contract for the 22-story 1001 McKinney. Cushman & Wakefield did not respond to telephone calls by press time for comment. Insignia was one of three brokerage houses on the short list for the assignment.

The class B 1001 McKinney, built in 1947, underwent a major overhaul in 1999. Current occupancy stands at 76%. Insignia's Derek Beck and Greg Shaw are assigned to the property.

Beck tells GlobeSt.com that the strategy is to "get in front of the downtown community" and reposition the building through "aggressive marketing." He says several deals, ranging from 2,000 sf to 8,000 sf, are in negotiations. The goal is to reach 90% occupancy by Q3 2003.

Beck says the steadily rising vacancy in the CBD shouldn't seriously hinder the push for more tenants because most of the submarket's available office space is class A and in buildings suited to tenants with larger space requirements. He believes 1001 McKinney is positioned to perform because of its class B status and strong appeal to tenants needing less than 20,000 sf, such as the law and energy-related firms that are now on board.

PM Realty outdistanced three others for the Redstone package, previously leased and managed by Rob Johnson Interests of Houston. The firm did not return telephone calls by press time for comment.

The Redstone assignment consists of the MedCenter Building at 6631 S. Main St. in the Texas Medical Center; and the Redstone Building at 109 N. Post Oak Lane and 2200 Post Oak, both in the Galleria. The 40,000-sf MedCenter and 142,400-sf Redstone Building are fully occupied. The 123,375-sf Post Oak is 85% leased.

Bill Goeke, PM Realty's senior vice president and director, will oversee the construction and property management team of Ken Lund, vice president of operations, and Donna Buchanan, senior property manager, assigned to the fully leased buildings. Joel Dalak, under the direction of senior leasing vice president Doug Little, is tasked with the Post Oak leasing duties.

Goeke says 2200 Post Oak's strategy will involve renewing ties with the brokerage community and other more grassroots tactics such as cold calls and mail-outs. The plan is to target prospects needing between 1,000 sf and 2,500 sf. Several years ago, Dalak held the leasing assignment when it was owned by Compass Bank, still a major tenant. Goeke says Dalak kept the building performing above the market before and will be applying the same magic the second time around.