X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

HOUSTON-The sight of the demolished JPMorgan Chase Tower has dominated headlines as a symbol of Hurricane Ike’s might, but the real story about the storm’s impact on the office sector can be boiled down to two facts: minimal to moderate damage and lack of electrical power.

Chase Tower did sustain the worst damage,” acknowledges Chip Clarke, president of Tranwestern Houston’s Gulf Coast and Mountain regions. “What they’re thinking is that it, and that part of the CBD, could have been hit by one of the small tornadoes from the storm.”

Most office buildings in Houston remained closed yesterday as owners and managers checked systems and assessed damage. The early assessments seem to reflect that damage wasn’t devastating to most office buildings, with many expected to reopen by the end of the week. Transwestern-managed buildings sustained moderate to minor damage, including Four Oaks Place in the Galleria submarket, “which had minor damage and was able to maintain power the entire time,” Clarke tells GlobeSt.com.

In a statement for GlobeSt.com, Dallas-based Behringer Harvard’s executive vice president Jason Mattox says its 14 buildings in the storm-struck area are still being assessed, but added it appears they incurred minor damage and were still functioning with little or no electrical power. As systems check out, the buildings will be reopened. Behringer Harvard’s portfolio is situated in the Greenspoint and Energy Corridor submarkets in west Houston.

John Cook, vice president of Los Angeles-based Younan Properties Inc., says their buildings also sustained minimal to moderate damage and also have little to no electrical power as yet. He says early reports show the three-million-sf portfolio did escape critical damage. Younan Properties’ assets are scattered across the city, with the greatest concentration on the west and north sides.

Just because the buildings didn’t sustain horrific destruction doesn’t mean they aren’t a hazard. “When buildings are shut down like this, they’re dangerous,” explains Cook, who is familiar with hurricane-ravaged buildings because of direct experience with office properties in post-Katrina New Orleans. “There are no systems, no fire safety systems, no HVAC, lights or any security.” He adds that the buildings will remain closed until power is restored and people can buy gas to make their way to the office buildings.

Once buildings are reopened, they could be filled to capacity at least on a temporary basis. Rusty Tamlyn, senior managing director of Holliday Fenoglio Fowler LP in Houston, points out that the 1.3-million-sf JPMorgan Chase Tower was the location of a lot of law firms, investment bankers and other professionals. With Downtown space already tight and new buildings not scheduled to come on line for at least a couple years, tenants are going to have to get somewhat creative with temporary space for the foreseeable future.

“The problem with a lot of those office buildings is glass–custom glass that will need to be ordered,” Tamlyn says. “That’s not the type of thing many companies just have on hand.”

Clarke agrees, saying that, while many CBD tenants would like to stay in and around the CBD, the first goal for them is to plug into an existing building that is already on line or can be brought on line fairly quickly. The brokerage firms in the city are already helping tenants find other solutions while damage assessments continue.

“We do a fair amount of business with the tenants in Chase Tower,” Clarke says. “We’re waiting to figure out the real estate of who’s impacted and how the recovery plan will work going forward.”

As of deadline, Galveston Island, situated about 50 miles southeast of Houston, is still off limits as officials struggle to assess damage and rescue people who opted not to evacuate. The eye of the storm passed over Galveston, which has been labeled as the hardest hit area along the Texas coast. Due to flooding and devastation, officials are unable to be reached for comment.

Also, there are no details available about the status of the 96,000-sf 251 Medical Center Blvd. in Friendswood, TX. The just-completed medical center, with a “green” roof and windows, was built to withstand more than 110 mph winds.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.