HOUSTON—New downtown class-A office assets, 609 Main and 1600 Louisiana, for example, have had an effect on tenants' leverage when negotiating for space within trophy buildings such as the JPMorgan Chase Tower, a 75-story class-A building located at 600 Travis St. Tenants have a negotiating advantage as both lease and sublease class-A space is available. Additionally, new luxury residential downtown, Market Square Tower and Aris Market Square, have had an influence on large companies vacillating between downtown, uptown, the energy corridor or other submarkets.

Case in point, in one of the largest oil and gas transactions of last year, a lease extension and expansion of 67,710 square feet was completed for Indigo Resources Inc. and M5 Midstream LLC at Chase Tower. Colvill Office Properties represented the landlord in this transaction. The tenant will move into the newly renovated space at the end of first quarter 2017, according to tenant rep firm, Savills Studley.

“This is a trophy space for a distinguished company,” notes Savills Studley executive vice president and co-branch manager Mark Russell, who represented the client in this transaction. “Following cooperative negotiations with this sophisticated ownership group, we were able to leverage and improve our client's position in the marketplace. The continued growth of this marquee tenant within the Chase Tower is a win for both the energy sector and downtown.”

Indigo Resources Inc. and M5 Midstream LLC share common management. Indigo Resources acquires and develops operated oil and gas properties, primarily in North Louisiana. M5 Midstream focuses on the development of greenfield midstream projects that meet the emerging needs of Indigo and of third-party customers.

“This transaction will expand Indigo and M5's downtown Houston footprint and facilitate recruitment and retention of top talent within both companies,” said Bill Pritchard, executive chairman of Indigo Resources. “To secure these long-term objectives under favorable lease terms and without leaving our current address is a major success.”

The building's amenities include a fitness center, concierge, 24-hour security, auditorium and conference rooms, a private sky lobby and multiple onsite dining options. Hines professionally manages the building. The tower stands above a 15,000-square-foot pedestrian plaza featuring the distinct “Personage and Birds” sculpture by Joan Miró.

“The energy sector and office market in general still have a long recovery ahead, but there is growing confidence among stakeholders that the worst is behind us,” Russell tells GlobeSt.com. “Tenants must not forget that they possess a significant negotiating advantage in this environment, as there is still extensive direct and sublease class-A space available in addition to several incoming amenity-rich new developments.”

JPMorgan Chase

Instant Insights /

Downtown Tenants Have Negotiating Advantage

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