Woodlands Development Corp. will put 4 Waterway Square at thecorner of Waterway Square Place and Woodloch Forest Drive. Thebuilding will be connected to a 1,900-space garage, both situatedat the heart of the Waterway District in Woodlands Town Center andboth scheduled for completion in summer 2009. The Woodlands teamdidn't return telephone calls to comment on the project bydeadline, but market sources are pegging construction costs at $200per sf to $300 per sf.

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The building was designed by Elkus-Manfredi of Boston, with D.E.Harvey Builders of Houston as the general contractor. Gensler ofHouston is the architect of record. Conine & Associates of theWoodlands is handling the leasing.

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John Richardson, senior vice president in ColliersInternational's Houston office, says 4 Waterway Square is goingvertical in an area where class A office space is tight andcontiguous office space is practically non-existent. Richardsonisn't involved with the development, but does live in theWoodlands.

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"The Woodlands is heavily regulated," Richardson says. "It'sgreat for them, but not for the area. There's a lot of pent-upoffice demand and nowhere to put people. I have a number of clientsin the Woodlands that would love to expand, but can't because oflack of inventory."

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Grubb & Ellis Co.'s office market report for the firstquarter shows the 3.7-million-sf inventory has 394,064 sf vacant,factoring out to 10.5% of the stock. Transwestern's Q1 report showsa smaller inventory, 2.8 million sf and 6.8% vacancy.

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Richardson tells GlobeSt.com that in a tight market, tenantseither wait for new product to come on line or move out of theWoodlands to other locations like Greenspoint or Shenandoah, whichis just north. Developers too will "go to the outskirts to build,"he adds. "All of this is unfortunate for the businesscommunity."

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