TX Real Estate Firms See Windfall in New Assignments

HOUSTON—JPMorgan Asset Management spent much of late January and early February outsourcing leasing and management for the nearly nine-million-square-foot office portfolio it once co-owned with Crescent Real Estate Holdings LLC. In October 2011, JP Morgan bought out the Crescent stake, with the original plan focused on retaining Crescent Real Estate to continue leasing and managing the assets.

JPMorgan, however, has awarded leasing and management assignments for the 1.2-million-square-foot Fountain Place in Dallas and the 1.3-million-square-foot Post Oak Central in Houston to Cassidy Turley. Meanwhile, CBRE's Houston office won the assignment to handle the 4.2-million-square-foot Houston Center and Fulbright Tower, with Stream Realty Partners LP tapped to reposition and fill the 1.2-million-square-foot Trammell Crow Tower, located in Dallas. As of now, the 1.1-million-squarefoot Crescent Office Towers in Dallas is being leased and managed in-house.

As part of the outsourcing activity, thirdparty brokers have hired former Crescent property managers. For example, Eric Siegrist, who once worked for Crescent on Post Oak Central, came on board with Cassidy Turley's Houston office; while Debbie Wilson, once part of the Crescent real estate team handling Houston Center, joined CBRE. "On the property management side, we brought over a number of people from Crescent and supplemented them with our own," says Mark D. Taylor, CBRE's Houston-based senior managing director. Clint Bawcom, senior managing director and principal with Cassidy Turley's Houston office, adds that the hire of Siegrist made sense because of his familiarity with Post Oak Central.

Both Dallas and Houston passed through the Great Recession in better shape than other cities and these days, constrained supply and growing demand are working in favor of building owners, managers and brokers. As such, the brokers awarded the assignments don't anticipate much trouble filling the buildings and retaining tenants.

"There is no new construction downtown and there won't be new buildings for years," Taylor explains. "As Houston continues to experience positive employment growth, we'll see a higher demand for a finite amount of space."

In Dallas, the fundamentals are somewhat different, with a lot of rollover taking place in the CBD and tenants wishing to upgrade their addresses. "There aren't a lot of options out there to do that," Stream Realty SVP and co-manager Sarah Erickson remarks. "We're the only 100,000-squarefoot block of space that can accommodate those tenants."