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HOUSTON-Six months after it unveiled plans for a two-tower, 700,000-sf office project, Transwestern Houston has commenced construction on the project in the far west submarket. Dubbed Eldridge Oaks, the 350,000-sf phase one will cost $80 million to $85 million to bring out of the ground.

Situated on 21 acres at Eldridge and Enclave parkways, Eldridge Oaks’ developers are seeking LEED certification for the project. The first phase is a spec building that will deliver in September 2009. The second tower will go vertical either as a multi-tenant spec building or a build-to-suit project.

“We’re really anticipating a broad range of interest for this,” says Peter Johnston, senior vice president with Transwestern. “The Energy Corridor isn’t just about energy companies. It attracts a broad range of companies.”

Johnston tells GlobeSt.com that asking rates will be $22 per sf to $24 per sf, triple net, adding that the timing is still excellent for speculative space in the far west submarket even with the nation’s economic downturn. “Houston has been somewhat insulated when it’s come to office absorption and economic fallout,” Johnston explains. “Job growth for our area has even been revised upward. With a September 2009 delivery, we feel really good about this.”

The class A project is going vertical in a submarket with a single-digit direct vacancy rate of 6.4% and a total inventory of 22.8 million sf, according to Transwestern’s 2007 yearend report. Although 1.8 million sf is anticipated to come on line this year, Johnston believes demand will continue to be strong for office space in the Energy Corridor well into 2009. “With the lack of big blocks of space out there, activity will be very strong from the get-go,” he says.

Transwestern’s managing director Carleton Riser and vice president Steven Kilcrease are spearheading Eldridge Oaks’ development. The firm’s executive vice presidents Eric Anderson and David Baker and vice president Paul Wittorf are running the preleasing campaign. Houston companies DE Harvey Builders Inc. and Kirksey Architecture are the general contractor and architect, respectively.

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