CBRE Signing Kicks Off $7M Rehab

Ken Wise, vice president and regional leasing director for Jones Lang LaSalle in Houston, tells GlobeSt.com that the renovation was on the drawing board for some time. But, he confides, owner Walton Street Properties wanted occupancy above 80% before kicking off the work. CBRE's long-term lease nudged occupancy to 83%.

The renovation will include extensive work to the main lobby and the addition of another lobby on the second floor with a "to be built" entrance to Post Oak Boulevard, one of the city's most high-profile thoroughfares. The entrance will be carved from a garden area. The second-floor tenant is none other than CBRE, which also has taken offices on the fourth floor.

The $7-million price tag includes upgrades to the mechanical system for the 11 elevators and interior improvements. It also calls for the addition of two more elevators to service the parking garage, another area that will be getting some polishing.

CBRE's pact was negotiated by Mark O'Donnell and Derrell Curry, both with CBRE. It is one of eight deals for newcomers and existing tenants to close off 70,010 sf in Walton Street Properties' Galleria portfolio, now boasting an overall occupancy of 88%. The owner controls more than one million sf at Post Oak Tower, Galleria Financial Center and 2700 Post Oak Blvd.

Wise says there are enough deals working to take the portfolio to 93% by mid-2003. "We have been making very aggressive deals," he says. Rents run from $21 per sf to $23 per sf. Plus, signed contracts come with memberships to the University Club to complement the built-in perk of being able to walk to hotels, restaurants and Galleria shops.

In addition to CBRE, inbound tenants at 2700 Post Oak Blvd. are Global Special Risks or Willis Caroon in a 3,274-sf pact and Ameripol Synpol, 1,599 sf. Global Special Risks, an international insurance firm, will get its keys in mid-November. Charles Goldstein of Strategis Cresa in Houston negotiated the lease. Ameripol Synpol did not use a tenant representative to broker its deal.

At Galleria Financial Center, Bancomer Securities will move in within 90 days to 5,847 sf in an expansion of its Houston operations. Bob Parsley and John Cox, both with Colliers International's Houston office, represented the tenant.

Wise says renewals are key to the strategy for maintaining solid occupancy in a depressed market such as the Galleria. To date, more than 90% of the tenants with leases set to expire have re-upped in the trio of office buildings.

CSC Consulting signed for 13,972 sf at Post Oak Tower in a deal negotiated by Bruce Dewberry of USI Real Estate. Thyssen Krupp remained in 8,097 sf at 2700 Post Oak Tower, with Kevin Gardner of Strategis Cresa handling its negotiations. And Galleria Financial Center cornered renewals from Sanford & Kuhl for 2,744 sf, and LHCO Petroleum, 1,795 sf. Both deals were cut without a broker.