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PEARLAND, TX-More than two years after construction began on the 80,000-square-foot Shadow Creek Business Center, the just-completed building has its first tenant, Altus Harbor., which took about 5,500 square feet. The reason why the tenant could take that amount of space, is because a master lease backed by the Pearland Economic Development Corp. meant the building didn’t require an anchor tenant to be built.

“PEDC underwrote the lease costs of the building as an inducement to the ownership to develop a spec building,” explains Mark Preston with PRS Realty Services, who represented owner ZT Group Business Center One (Pearland), LP in the lease transaction for the building at 11233 Shadow Creek Pkwy. “This means we don’t have to keep the building closed while we wait for a cost-effective, break-even tenant to lease prior to opening this building.”

Pearland Economic Development Corp. executive director Fred Welch says the board approved a master lease to jump-start construction and leasing of the city’s first class A office building. “At that time, we figured having a guarantee in there was probably important to put the initial construction financing together and bring this forward,” he tells GlobeSt.com. “The board looked at this as a one-time deal to prime the pump; this was done to establish the presence of this building.”

Preston, who partnered with Derek Beck of Moody Rambin Interests on the transaction, tells GlobeSt.com that sometimes emerging submarkets such as Pearland find challenges when it comes to leasing office buildings, especially when competing with other, more established, markets. The PEDC’s aggressive stance in signing a year-long master lease, he goes on to say, could prove to be helpful in showcasing Shadow Creek as a viable option to other office space. What’s also helpful, he continues, is the project is close to the Texas Medical Center, meaning the building could appeal to healthcare clients like Altus Harbor.

In the meantime, Welch and Preston acknowledge there has been tremendous interest in Shadow Creek, with some deals currently in the pipeline. Preston adds that activity has been ramping up since the building opened recently. “We have every reason to believe that, based on the current activity, that occupancy should reach 95% within a year of opening,” Preston says.

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