Galleria's Largest Office Tenant Renews, Extends 142,955 SF

The Paris-based company has had its US headquarters in the Galleria Tower I at 2700 Post Oak Blvd. since 1995. The renewed footprint spans six floors, four of which are contiguous, in the 24-story, 490,000-sf high-rise, one of three office buildings directly connected the Galleria mall. The reworked pact includes an expansion option for contiguous space to the large block, should it become available. But, the exchange also eliminates the right to an early termination and relocation, the door opener used to get negotiations rolling on the new contract, Robert S. Parsley with Colliers International in Houston tells GlobeSt.com. The signed lease is a five-year renewal and five-year extension with some upfront tenant improvement dollars to refresh the office space, he explains.

Parsley says the company started shopping the submarket about 10 months ago, finding "three or four" viable alternatives. The decision to stay, he adds, was due in large part to the building owner's deep-pocketed renovation investment. "The key was Air Liquide being confident the ownership was working to keep the building as a class A property," he explains.

In the past four years, the Chicago-based owner, Walton Street Capital LLC, put $2 million into interior and exterior cosmetic changes and $3.5 million into elevators in the parking garage and high-rise. The work is just wrapping up, says Chip Colvill of Colvill Office Properties, who leases the Galleria office complex, built in the 1970s. The property is managed by CB Richard Ellis Inc.

Since the year began, Colvill has sealed 225,000 sf of office leases for the three buildings. The financial center held onto an 87% occupancy with the Air Liquide signing, he says. Besides the trio of towers, Walton Street's Galleria foothold includes the Westin Oaks and Westin Galleria and 40% of the Galleria mall, now the nation's fifth largest with 2.4 million sf of retail space and restaurants. At the second quarter close, the Uptown Galleria submarket's class A space was going for $20 per sf, a weighted average, according to Grubb & Ellis Co.

Air Liquide, with a presence in 65 countries, is a world leader in industrial and medical gases and related services. The 102-year-old company has more than 31,900 employees worldwide.