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PLANO, TX-With occupancy cresting 93% in a 369,000-sf class A tower, Granite Properties has jumped into design work for Granite Park Four, Five and Six. Pulling the trigger were 10-year headquarters deals for a combined 148,789 sf from Nexen Petroleum USA Inc. and Invensys Systems Inc.

Gregory Fuller, COO of the Dallas-based Granite, says ground could break next year on another office building, but first the market will be carefully monitored to ensure that it can absorb new space. “The market will tell us when it’s right to start,” he tells GlobeSt.com, adding “I wish we already had one up.” That wish isn’t unfounded since Granite Park’s class A trio of buildings is pushing toward full, with rent climbing 7% annually for two consecutive years.

For several months, brokers have been buzzing about the rapid leasing of the 10-month-old Granite Park Three at 5601 Granite Pkwy., a 14-story tower with an attached parking garage and another 50,000 sf in a two-story building with street-level retail and second-floor office. Nexen is relocating in June from 12790 Merit Dr. in Dallas, where it’s spent about 20 years, and Invensys is coming in February from Foxboro, MA. Nexen took 103,375 sf; Invensys leased 45,414 sf.

The headquarters leases were signed, sealed and delivered in just a few months of negotiating. “Fortunately, the market’s fairly dynamic right now,” Fuller says. “Tenants have to make decisions. We’ve had some we had to turn down and are moving them into our other buildings.” At last count, Granite Park Three has 28 tenants.

Fuller says Invensys’ finish-out design and permitting process are under way. The tenant’s executive team is getting the entire ninth floor and part of the 10th. Finish-out work is slated to start in 30 days. Nexen’s work will start shortly thereafter on floors 11 through 14. Jim Kirchhoff, Granite’s leasing director, negotiated both pacts.

Nexen stopped shopping within 45 of starting its search, according to Andy Leatherman, associate for Dallas-based Staubach Co. Nexen’s point man was Staubach executive vice president Scott Collier. “We zeroed in on Granite Three pretty soon after we started. There were other buildings, but Granite Three was the one with the best fit,” Leatherman says. “I think it’s the nicest building in the market.” Nexen’s lead-tenant status gets a top of the building sign visible from the Dallas North Tollway.

If street talk is right, Nexen will be exiting its long-time headquarters with three years left on its lease term. The location switch is practically a wash in terms of size, but Granite Park Three’s floor plates build in space-design efficiencies so more employees can be housed.

Invensys’ Staubach team was made up of vice presidents Josh White and Jeff Staubach, who started searching the market in May. The final round pitted Granite Park Three against Legacy Park in Plano and Hall Office Park in Frisco.

Staubach says Granite Park Three’s quality was the chief dealmaker. “There’s nothing out of the ground along the tollway of that quality,” he says, adding other perks for signing were the price, the landlord and the city of Plano, which kicked in some incentives. Invensys’ deal includes dibs on the balance of the 10th floor.

“We were competing with other buildings,” Fuller says. “We were market-oriented in order to get these deals.” The building’s quoted rate is $27 per sf plus electric.

In another new win for the project, Hartford, CT-based United HealthCare Services Inc. renewed, extended and expanded a regional office in Granite Park One at 5800 Granite Pkwy. An original tenant in the eight-year-old building, United HealthCare added 34,000 sf to push its bottom line to 80,900 sf. To close the deal, Granite bumped its headquarters team to Granite Park Three. Warren Willey, senior vice president for CB Richard Ellis in Dallas represented United HealthCare.

Granite bought 90 acres in 1997, 65 of which were developable. To date, it’s tapped about half of its land bank. Fuller says the next three buildings will be much like the first: class A space in 100,000-sf to 250,000-sf designs. The 260,000-sf Granite Park One is 99% leased and 10-story twin, Granite Park Two at 5700 Granite Pkwy., is 96% filled–both at $24.50 per sf plus electric quotes.

Fuller says the decision to build again will weigh absorption, rents and construction cost. “Construction costs definitely have outpaced rental increases,” he says. “Our challenge will be to deliver the next product and create something that will be unique to the market so that tenants will gravitate toward us versus our competitors.”

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