HOUSTON—According to JLL Research, Houston's CBD has approximately 27 million square feet of class-A office space and approximately 2.5 million square feet of sublease space. Despite additional leasing activity during the third quarter of 2016, the CBD's total vacancy for class-A office buildings increased to 15.4%, up from 13.7% in the second quarter. The average size of sublease transactions in 2016 was approximately 6,200 square feet.

Despite the ongoing trials and tribulations facing the office market due to the oil downturn, some tenants have found opportunities in the uncertainty. Case in point being Black Falcon Energy's 16,579-square-foot office sublease at 717 Texas Ave. in Houston's CBD/downtown theater district.

Cushman & Wakefield's Trey Strake represented the energy company subtenant. JLL's Edward Prejean, David Bale and Diana Bridger, vice president within Houston's office tenant representation group, negotiated the terms on behalf of the sublandlord, Houston-based Contango Oil & Gas Company.

“As one of the trophy class-A buildings in downtown, 717 Texas has historically been fully leased,” Bridger tells GlobeSt.com. “In light of that, this sublease proved to be an excellent opportunity for a new tenant to quickly occupy a high-quality space in a premier building, with little need for renovation. This, coupled with the accessibility of its downtown location, made it an ideal fit for Black Falcon Energy.”

The 696,228-square-foot building was completed in 2003. It has 24 floors of office space above a 900-car enclosed parking garage. The tower's amenities include onsite banking, conferencing facilities and a Skyline Deli & Café.

Hines partnered with Prime Asset Management to develop the 33-story class-A office tower. Designed by Hellmuth, Obata & Kassabaum, the granite-clad building features some of the most energy-efficient and environmentally friendly office space in Houston, with a LEED-certified Platinum designation. When 717 Texas achieved certification at the platinum level under the USGBC's LEED rating system for existing buildings, it was the first skyscraper in the state of Texas to achieve the highest green building designation.

“Despite ongoing challenges, Houston's office market presents some users with the opportunity to backfill highly desirable properties,” said Prejean. “Black Falcon Energy has found an outstanding home for their business in one of the city's most sought-after locations.”

Instant Insights /

Despite Challenges, Office Market Has Opportunities

Related Stories

Recommended For You