Low Vacancies Spur 303,000-SF Three Eldridge

Three Eldridge Place is estimated for a 2010 delivery and is going vertical on 3.7 acres adjacent to the 518,746-sf One and Two Eldridge Place at 777 N. Eldridge Pkwy. and 757 N. Eldridge Pkwy. The Dallas-based Behringer Harvard acquired One and Two Eldridge Place in December 2006, and the complex is 99% occupied. The company bought the adjacent acreage a few months later for $3 million.

A press release about the acquisition says Three Eldridge Place, which will qualify for LEED Silver certification, is going up because of demand for office space in the west Houston market. Gensler's Houston office is the designer, and EE Reed Construction LP of Sugar Land is the general contractor. Representatives from Behringer Harvard could not be reached before deadline.

"There is absolutely a need for space in the Energy Corridor. Unlike previous development cycles in Houston, many of the buildings coming out of the ground are close to 100% preleased before being finished," says J. David Baker, EVP with Transwestern's Houston office. Current occupancy rates in the submarket are at 92.5%.

Though Baker is not involved with the Behringer Harvard project, he is familiar with the west Houston submarket. He tells GlobeSt.com that rents for existing class A buildings in the area range from $19 and $23 per sf net. "Buildings coming out of the ground now will have asks of $22 to $23 per sf net, and the landlords will get it," he adds. "There's a need for the office space, but very little land left for development out there."

Furthermore, the remaining land in the submarket requires more work and capital investment to make it usable, Baker continues. "The best sites have been taken. A lot of infrastructure work needs to be done to the remaining sites to bring them to the level where they can be developed," he says.