Office Tenants Take Flight to Quality Approach

HOUSTON—Despite the general market sluggishness and higher available supply, there is still significant demand in a flight to quality approach taken by many office tenants. Having delivered earlier this summer, 1885 St. James Place is a 165,000-square-foot boutique office building located just south of the Tanglewood neighborhood.

As the newest class-A office building in the Galleria, 1885 St. James provides a fresh infusion of modern office space to an otherwise mature submarket. According to JLL Research, the Galleria's office inventory is, on average, the oldest in the city, with the vast majority of class-A properties more than 30 years old.

This new office building now has a new anchor tenant. Houston-based construction law firm Andrews Myers PC will relocate from its current office at 3900 Essex Ln. to the top two floors of 1885 St. James Pl. The company signed for 30,102 square feet, encompassing the 14th and 15th floors of the building.

“We'd been searching for a new location for our growing firm for the better part of a year,” said Patrick Hayes, managing shareholder at Andrews Myers. “It was perfect timing that our long-time client and friend, Dennis Nelson, and The Mission Companies, had partnered with another long-time client and friend, Tellepsen Builders, to develop 1885 St. James and that the building became available within our lease window. It's an exceptional property and we are excited to be the anchor tenant there.”

JLL's Chrissy Wilson and Russell Hodges represented the landlord, 1885 St. James Place Partners LP, in the transaction. Craig Hausman and Tony Allen of Pollan Hausman Real Estate Services LLC represented Andrews Myers in the transaction.

Additionally, a national financial services firm and the offices of a Houston-based family trust have also signed leases totaling 10,000 square feet at 1885 St. James. The building is 27% leased.

“Securing an anchor tenant substantiates the building's viability,” said Wilson. “Despite the general market slowdown and increased level of supply available to tenants today, there is still significant demand for non-commodity office space.”

The building features nine floors of office space situated atop six floors of above-grade parking and amenities including a fitness center, a conference center, food service, on-site security, on-site property management and covered in-building parking for all employees. Its location provides tenants an amenity-rich setting with more than 70 restaurants and five hotels within a one-mile radius of the property.

“We have always loved the St. James Place office environment, and the opportunity to redevelop a site there was at the top of our list,” said Dennis Murphree, a principal at Nelson Murphree Legacy PartnersLLC. “We felt St. James Place is an organic office environment and that a classic, traditional stone building would be the right fit.”

A top destination for professional services firms, the Galleria has continued to be relatively insulated from the effects of Houston's recent downturn. According to second quarter reports, the submarket's total vacancy remained below that of the overall Houston office market for the 10th consecutive quarter. The Galleria remains well positioned to attract prime tenants, as evidenced by an 84.2% preleasing rate on new construction and its ever-growing amenity base.

“Andrews Myers recognized a tremendous opportunity to capitalize on a compelling long-term value proposition,” Hodges tells GlobeSt.com. “Despite much of the negativity surrounding the Houston office market, there still exists a 'flight to quality' component associated with office space requirements for many tenants. 1885 St. James is very unique in that it meets that demand in a boutique setting with concierge-level services and offers all of the amenities of the Uptown Galleria area without being stuck in the thick of it.”

HOUSTON—Despite the general market sluggishness and higher available supply, there is still significant demand in a flight to quality approach taken by many office tenants. Having delivered earlier this summer, 1885 St. James Place is a 165,000-square-foot boutique office building located just south of the Tanglewood neighborhood.

As the newest class-A office building in the Galleria, 1885 St. James provides a fresh infusion of modern office space to an otherwise mature submarket. According to JLL Research, the Galleria's office inventory is, on average, the oldest in the city, with the vast majority of class-A properties more than 30 years old.

This new office building now has a new anchor tenant. Houston-based construction law firm Andrews Myers PC will relocate from its current office at 3900 Essex Ln. to the top two floors of 1885 St. James Pl. The company signed for 30,102 square feet, encompassing the 14th and 15th floors of the building.

“We'd been searching for a new location for our growing firm for the better part of a year,” said Patrick Hayes, managing shareholder at Andrews Myers. “It was perfect timing that our long-time client and friend, Dennis Nelson, and The Mission Companies, had partnered with another long-time client and friend, Tellepsen Builders, to develop 1885 St. James and that the building became available within our lease window. It's an exceptional property and we are excited to be the anchor tenant there.”

JLL's Chrissy Wilson and Russell Hodges represented the landlord, 1885 St. James Place Partners LP, in the transaction. Craig Hausman and Tony Allen of Pollan Hausman Real Estate Services LLC represented Andrews Myers in the transaction.

Additionally, a national financial services firm and the offices of a Houston-based family trust have also signed leases totaling 10,000 square feet at 1885 St. James. The building is 27% leased.

“Securing an anchor tenant substantiates the building's viability,” said Wilson. “Despite the general market slowdown and increased level of supply available to tenants today, there is still significant demand for non-commodity office space.”

The building features nine floors of office space situated atop six floors of above-grade parking and amenities including a fitness center, a conference center, food service, on-site security, on-site property management and covered in-building parking for all employees. Its location provides tenants an amenity-rich setting with more than 70 restaurants and five hotels within a one-mile radius of the property.

“We have always loved the St. James Place office environment, and the opportunity to redevelop a site there was at the top of our list,” said Dennis Murphree, a principal at Nelson Murphree Legacy PartnersLLC. “We felt St. James Place is an organic office environment and that a classic, traditional stone building would be the right fit.”

A top destination for professional services firms, the Galleria has continued to be relatively insulated from the effects of Houston's recent downturn. According to second quarter reports, the submarket's total vacancy remained below that of the overall Houston office market for the 10th consecutive quarter. The Galleria remains well positioned to attract prime tenants, as evidenced by an 84.2% preleasing rate on new construction and its ever-growing amenity base.

“Andrews Myers recognized a tremendous opportunity to capitalize on a compelling long-term value proposition,” Hodges tells GlobeSt.com. “Despite much of the negativity surrounding the Houston office market, there still exists a 'flight to quality' component associated with office space requirements for many tenants. 1885 St. James is very unique in that it meets that demand in a boutique setting with concierge-level services and offers all of the amenities of the Uptown Galleria area without being stuck in the thick of it.”