JV Unveils 630,000-SF Energy Center Plan

Based on today's construction costs for upper-end class A space, the 330,000-sf first phase most likely will cost $60 million to $70 million to get out of the ground. A September groundbreaking is planned for the 13-story building along Eldridge Parkway between Dairy Ashford Road and Katy Freeway. It's estimated the spec project will take a year to 14 months to deliver.

"Hopefully, 12 to 18 months after we get started on phase one, we might be looking at commencing phase two," Aaron Thielhorn, a TCC principal of development and investment in Houston, tells GlobeSt.com. The second leg will be a 300,000-sf, 12-story building.

Thielhorn says the entire project will be 100% spec, with no preleasing goals leading off the development play. But, Energy Center is being developed in a hot submarket in which the class A occupancy is north of 95%. "We're trying to capitalize on that market," he adds. "We felt it was necessary to get up and get out there and wanted to be in a strong position to deliver the product."

Despite the preponderance of energy-related users in the submarket, Thielhorn says the leasing team plans to target a variety of businesses that would be interested in locating to the city's west side. He says the quoted rate will be about $18.50 per sf net. The complex will include an eight-level parking garage and a small retail component for an on-site "to go" restaurant and fitness center.

Hellmuth Obata + Kassabaum Inc. in Houston is the project architect. TCC principal Mark Taylor and vice president Steve Rocher are leasing and marketing the project while Thielhorn is overseeing the development. Joe Wanninger is Principal Real Estate Investors' asset manager and project overseer.

Energy Center is one of two spec office projects in Texas set up as lead-off plays for the program. The Dallas-based TCC and Des Moines-headquartered Principal also will build a two-building, 243,000-sf office project in northwest Austin.