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HOUSTON—Call it the real estate space race. Developers in the nation’s fourth largest city are sensing the opportunity to construct one of the first new “spec” office towers for Downtown Houston in more than a decade — and are racing to be the first in the ground.

Crescent Real Estate Equities, a Ft. Worth-based real estate investments trust, is expected to announce development of a 25-story, 500,000-sf office tower at Austin and Walker, real estate sources told GlobeSt.com. Insiders have dubbed the building, Five Houston Center.Crescent already owns several structures in the multi-use Houston Center. In the race for space, Century Development and Hines also are contemplating property developments in the city’s central business district. Brokers say Century has renewed its interest in developing a 38-floor officer tower on the site of the former Lamar Hotel at Main, Travis, Lamar and McKinney.

Hines, responsible for such Downtown landmarks as the 75-story Chase Tower and Pennzoil Place, is working on blueprints for a 600,000-sf structure to be erected on three quarters of a CBD block bounded by Texas, Milam, Prairie and Louisiana.

After more than a decade of double-digit vacancy rates, the office towers in Downtown Houston are 90% full, according to the real estate firm of Trione & Gordon. The vacancy level in the Houston CBD hit 9.5% during this year’s second quarter, down nearly four percentage points from the year-ago period. Meanwhile, the city’s overall office vacancy rate is 11.7% in comparison to 12% for second-quarter 1999.

Tight space inevitably means higher rents. Trione & Gordon places the city’s average per sf rental rate at nearly $18 for the second quarter, up 56 cents from this time last year.

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