$100M Office Breaches Preleasing Threshold

The 27-story, 320,000-sf Saint Ann Court at 2515 N. Harwood St. will rise 350 feet. Ground breaks in May; delivery is planned for early 2009.

The lease that put the office project over the top is McGuire, Craddock & Strother PC, which has its law offices at 500 Akard St. in the Downtown. The 18,000-sf deal is the third reservation for the upcoming trophy addition to the developer's 17-block foothold, now being branded as the Harwood District.

Gabriel-Mueller has reserved the 23,000-sf 15th floor for the Harwood team and Aldus Equity, Erasmus Advisors has dibs on the 16th floor, bumping preleasing to 43%. The project's architect of record is Dallas-based BOKA Powell Architecture LLC and design architect, including landscaping, is Shimoda Design Group of Los Angeles. Local firm, Austin Commercial Inc., is the general contractor.

Barbier-Mueller predicts market conditions are right to spike the present 43% preleasing to 80% at Saint Ann Court by fall. And, he adds, "85% will get us started on the next one." The second building is a 220,000-sf design.

In the interim, Barbier-Mueller plans to unveil his first residential rental property in July--just as the cranes come down at the Azure, his 202-condo high rise at 2900 McKinnon St. Design-build negotiations already are under way for the next residential piece, the Glacier.

"We're trying to populate our Harwood District with residential and office. There will be more news in 90 days," Barbier-Mueller vows. He has built about seven million sf or roughly one-third of his 17-block claim, which also holds the Rolex Building, Jones Day Building, Centex Building and 2828 N. Harwood, all constructed between 1999 and 2000. The only vacancy is the 12th floor in 2828 Harwood, which was given back as part of Centex Corp.'s downsizing due to the sale of its construction services division.

With the office space nearly full, Barbier-Mueller says the Harwood team must relocate in 2009 from 2828 N. Harwood St. so an existing tenant can add another floor. As it stands, two tenants recently went from the 17th floor to the 12th so the 18th-floor tenant could get another contiguous floor.

Uptown buildings have long commanded some of the highest rents and occupancies in the city. As a result, at least four spec office buildings are coming out of the ground in step with fast-paced residential development on what land is left.

"It seems like there's a lot of construction, but they are four very well-preleased buildings going up at the same time for the first time since 2000," Barbier-Mueller says. As a key player in the growth period of seven years ago, he says "what we're seeing is a bit of a repeat of that."

Competition for office tenants might be fast-paced and furious, but it's also not producing bargain-basement rates. Barbier-Mueller says his closed deals and those in the pipeline are seven- to 10-year terms at a pre-construction rate of $31 per sf. When ground breaks on Saint Ann Court, he says the price will climb to $37 per sf to match his other buildings in the mixed-use district, laid out with an outdoor cafe and gardens as part of the branding initiative.

Ross Perot Jr. has shown what branding can do with Victory, which has its opponents and proponents for the uber atmosphere that it's promoting. Saint Ann Court's boundary line is 200 yards from the doorstep of Victory's American Airlines Center and within 1,000 yards of 53 high-class restaurants and walking distance of the Ritz-Carlton and the Crescent. "It's become a very convenient set of amenities that's going to become harder and harder to live without," Barbier-Mueller believes.

Saint Ann Court will carry the uber torch as well. The trophy will have four penthouse levels with private European gardens and terraces with fireplaces; "samurai" lobby espresso bar with 18th century armor and helmets plus art from Barbier-Mueller's renowned collection; Marie Gabrielle restaurant with in-office room service; and must-haves like a private health club and general valet parking.

"Clearly, there were many factors to consider, but for our client, the efficient use of space and the opportunity to be well positioned in the city landscape were key," Ed Nash with locally based McLeod Zei Inc., principal broker for the 14-year-old law firm, says in a press release. Representing Harwood were in-house brokers Nathan R. Durham and Jihane A. Boury.