HOUSTON, Feb. 12, 2020,/PRNewswire/ — A joint venture of Patrinely Group, USAA Real Estate, and CDC Houston, today announced the start of construction on Hewlett Packard Enterprise’s (HPE) new campus. Located in Spring, Texas, this development will house the fourth major corporation to choose CityPlace at Springwoods Village, joining HP Inc. (HPI), Southwestern Energy (SWN) and the American Bureau of Shipping (ABS).
Scheduled for completion in spring 2022, the HPE development will consist of two buildings located at the southwest corner of East Mossy Oaks Road and Lake Plaza Drive and include approximately 440,000 square feet of rentable space. The two, 5-story buildings will have a bridge connector at each level for easy accessibility and structured parking for 2,055 cars.
“Breaking ground on HPE’s campus is another major milestone reinforcing CityPlace as the most important and vibrant, 18-hour mixed-use destination in north Houston,” said Robert Fields, President, and CEO of Patrinely Group, the managing partner of the joint venture. “2019 was a significant year with the opening of ABS headquarters, the HP Inc. campus, Star Cinema Grill, 24 Hour Fitness, and two Class A multi-tenant buildings, CityPlace 1 and 1401 Lake Plaza Drive.”
Within the HPE campus, amenities will include a fitness center, café, kitchen and pharmacy, laboratory and office space, and a large central courtyard with a multi-use basketball pavilion, fitness/yoga lawn, water feature, outdoor tables, seating and games, and a large green space lawn. Adjacent to HPE’s main conference center will be a green roof terrace. The development is planned to achieve LEED Silver certification.
A primary location for core research and development, the HPE Houston site will support customer engagement, sales operations, supply chain, and other global functions for the company including finance, HR, and marketing.
Antonio Neri, President, and CEO of Hewlett Packard Enterprise stated, “We are very excited to be breaking ground in CityPlace for our new Houston office. This bright and vibrant workspace we’re constructing will excite our team members with world-class amenities, and features design elements that bring our teams closer together to further inspire innovation and our culture.”
Pickard Chilton is the design architect; Kirksey is the executive architect; REES is the interior architect; D.E. Harvey Builders is the general contractor. Ronnie Deyo, John Roberts and Beau Bellow of JLL represented HPE. Dennis Tarro of Patrinely Group, and Chrissy Wilson and Russell Hodges of JLL represented the Landlord.
“With today’s announcement, it is clear that major employers are recognizing the benefits of Springwoods Village’s location and its high quality, walkable, mixed-use environment as we continue to create an unparalleled new employment hub,” said Warren Wilson, Executive Vice President of CDC Houston, the master developer of Springwoods Village.
CityPlace is a 60-acre, fully-integrated, mixed-use development providing the growing area along the Grand Parkway corridor near the ExxonMobil campus with a new destination of choice, integrating working, shopping and living. When fully developed, the project will include a full-service Houston CityPlace Marriott, 8 million square feet of Class A office space with 500,000 square feet of integrated retail space and additional luxury multifamily projects. The development’s five to 10-story Class A office buildings will offer parking at a ratio of up to 4.5 cars per 1,000 rentable square feet, with spaces located in all structured parking. CityPlace is the commercial center of Springwoods Village, a 2,000-acre master-planned community. For more information about CityPlace at Springwoods Village visit www.cityplacespringwoods.com
Springwoods Village is a 2,000-acre sustainable master-planned community coming to life in Spring, just south of the Woodlands and 20 miles north of downtown Houston. The community is a new model of sustainability and greener living for the Houston region, preserving its natural ecosystems, building energy smart homes, and reducing dependence on the car by providing a walkable mix of retail, dining, offices and public amenities. The community is home to ExxonMobil, HP Inc., ABS, and Southwestern Energy corporate campuses, several residential communities, a Kroger-anchored retail center, 290 acres of green spaces, including a 150-acre Nature Preserve, and more. When completed the sustainable residential and commercial community will provide diverse housing options, civic facilities, outdoor recreation and the 60-acre CityPlace with office space, shopping, dining and lodging in a walkable environment.
Thompson & Knight LLP has expanded its Real Estate and Banking Practice as well as its New York and Houston presence with the addition of two new Partners.
Michael H. Jo of New York and Doug Stewart of Houston are leading real estate practitioners and their wealth of experience and strong client relationships are a complement to the Firm’s existing practice.
“Michael and Doug are well-respected attorneys, and we are very pleased that they chose to bring their practices to Thompson & Knight,” said Gregg C. Davis, Thompson & Knight’s Real Estate and Banking Practice Leader. “The real estate markets in New York and Houston are active and growing, and Michael’s expertise in commercial lending and securitization and Doug’s experience with large-scale and complex transactions will be a tremendous asset for our clients across the nation.”
“Expanding Thompson & Knight’s Real Estate and Banking practice in both New York and Houston is an important part of our overall growth plan. Michael and Doug have welcomed additions to the practice, as we continue to expand and meet our client’s growing needs,” said Mark M. Sloan, the Firm’s Managing Partner.
Mr. Jo’s practice focuses on counseling finance companies, REITs, and banks in negotiating, structuring, and closing complex transactions. His more than 19 years of experience includes mortgage and mezzanine financing, preferred equity and equity investing, and counseling lenders, special servicers, and investors with respect to workouts and investment management.
Additionally, Mr. Jo has a deep understanding of the legal and business issues that arise at both the commercial real estate loan and securitization transaction levels, including the legal aspects of post-securitization matters that include interactions with servicers and trustees.
In prior roles, Mr. Jo served as the managing director for a large bond rating agency where he managed the legal group responsible for new issuance and surveillance of commercial mortgage-backed securities and collateralized loan obligations. He also has experience leading legal departments for the commercial real estate group of a large publicly-traded REIT. Mr. Jo received his J.D. from the New York University School of Law and his B.A., summa cum laude, from the State University of New York at Stony Brook. Prior to joining Thompson & Knight, Mr. Jo practiced at the New York office of Carlton Fields.
Mr. Stewart has more than 40 years of experience representing lenders, banks, developers, builders, and corporations in matters involving real estate, lending, and project finance. In addition, he has experience assisting clients in achieving lines of credit, hotel financing, and syndicated credits, as well as negotiating land acquisition and development contracts, improved property sales and financing, and lender liability issues.
Mr. Stewart is a Fellow of the American College of Mortgage Attorneys and the Texas College of Real Estate Attorneys and has been consistently recognized on the lists of The Best Lawyers in America©, Texas Super Lawyers®, and H Texas Houston’s Top Lawyers. He has served as a Director of several Houston-area financial institutions and is a member of the Texas Association of Bank Counsel.
He earned his J.D., with honors, from The University of Texas School of Law, and his B.A., with highest honors, from The University of Texas. Prior to joining the Firm, he practiced at Winstead PC for ten years.
The par 3, like the rest of the course, also is deep inside the 100-year floodplain. Cypress Creek, which forms the club’s southern and western boundaries, jumped its banks and flooded the course in the Memorial Day and Tax Day storms. Four feet of water filled the clubhouse during Hurricane Harvey; it did not fully recede from the course for two weeks.
The club’s frustrated owner last week sold the 27-acre site containing the clubhouse, tennis courts and swimming pool for $11.5 million to the Harris County Flood Control District, which plans to raze the buildings. The county plans eventually to acquire the remaining 206 acres of the club and course and use the site for massive detention basins.
The initial transaction is emblematic of the county’s all-of-the-above approach to flood control. As engineers search for places to store stormwater, especially in heavily developed areas, the flood control district increasingly is turning to golf courses.
“Well over 600 homes experienced flooding in the general vicinity of Raveneaux Country Club in our recent flood events, from 2015 to 2019,” said Matt Zeve, the flood control district’s deputy director. “There’s a large need for stormwater detention volume in the Cypress Creek watershed.”
With an influx of capital from the $2.5 billion bond voters approved in 2018, the flood control district has more cash for a land acquisition than at any point in its history and golf courses often are ideal sites for detention projects, Zeve said. They frequently are located next to bayous, abut neighborhoods in need of protection and already are cleared of trees. They also have a single owner, allowing for a quicker acquisition than the county’s typical piecemeal approach to purchasing flood-prone properties.
A Chronicle analysis of the county’s interactive floodplain map found more than 30 Harris County courses at least partly inside the 100-year floodplain, from municipal links to the private Golf Club of Houston, which hosts an annual PGA Tour event.
Harris County’s push for better flood protection, made more urgent after Harvey flooded more than 200,000 homes in 2017, comes at a time when Americans are playing fewer rounds of golf. About 10 percent of courses in the United States closed between 2006 and 2018, according to the National Golf Foundation, a research firm for the industry.
A glut of course building in the 1980s and ‘90s and a 30 percent decline in golfers since 2000 have been major causes of club closures. Houston’s climate is a blessing and a curse for course owners; tee times are available year-round, though several clubs have been subjected to repeated flooding.
Harris County decided against rebuilding the Bear Creek Golf World course after it was swamped by Harvey. The storm also inundated Kingwood Cove Golf Club for the third time in two years, convincing the owners to sell the parcel on the San Jacinto River to developers. The City of Houston closed the money-losing Brock Park course after it flooded in 2016.
Voluntary buyouts
Zeve said several courses have approached the county about selling out. Ongoing negotiations are secret until a deal is reached, he said, though he encouraged interested owners to call the flood control district. The county is open to deals where courses can remain open while helping reduce flooding, he said.
“If a golf club wants to re-do their course … so that during a storm event, that course can temporarily store some stormwater, and maybe provide some flood damage reduction benefit, we’re happy to partner,” Zeve said.
Sometimes, flooding experts and residents in vulnerable neighborhoods try to move the process along. Phil Bedient, a professor at Rice University’s severe storm think tank, said much of Meyerland would be protected if Westwood Golf Club and Braeburn Country Club on Brays Bayou were used to store floodwater. He proposed partnerships in which clubs agree to host detention projects and the county commits to repairing courses after storms. He said the county should seize needed property, if necessary.
“It’s better to clean up a golf course than thousands of homes,” Bedient said.
The general manager at Braeburn declined to comment; his counterpart at Westwood did not respond to requests for comment.
Zeve said he sometimes gets frantic calls from course owners who suspect the county is trying to force them to sell. He assures them all course buyouts are voluntary.
Former golf courses also are attractive acquisitions for developers, as they often are the only open parcels in densely populated neighborhoods. Commercial real estate developer MetroNational bought the former Pine Crest Country Club in Spring Branch and in 2017 flipped the property to a homebuilder.
Houston City Council unanimously approved permitting 900 homes on the site, which sits almost entirely inside the 100-year floodplain. Several civic groups opposed the project and questioned city leaders’ commitment to flood protection. Just weeks earlier, council members enacted stricter floodplain building standards.
Zeve said the flood control district would have liked an opportunity to purchase the Pine Crest plot for a flood mitigation project. Ed Browne, founder of advocacy group Residents Against Flooding, said Pine Crest was a missed opportunity. He said the group “wholeheartedly supports conversion of golf course lands to regional detention basins.”
The county jumped at the chance to dig detention ponds on the former Inwood Forest Country Club on White Oak Bayou. The City of Houston purchased the 227-acre site in 2011 to build two basins; the county joined the project three years ago to construct an additional 10. The volume of water that can be stored there exceeds that of the Astrodome. In southeast Houston, the Clear Lake City Water Authority partnered with a nonprofit to convert a former golf course into a 200-acre detention pond.
Final round
The county’s deal with Raveneaux allows the club a year to wind down operations and sell equipment.
A foursome of retirees, all longtime members, said during a recent weekday round they doubted a detention basin would provide many benefits.
“They’re going to buy these big, expensive buildings, tear them down, and put a hole in the ground,” said Ben Mason on the 14th fairway. “It won’t hold much water.”
Bernie Hollenshead said the flood control district instead should build a long-debated third reservoir in northwest Harris County, to complement the existing Addicks and Barker dams. The quartet conceded, however, they are biased in favor of keeping their tee times.
The shame in the Raveneaux sale, club Vice President Lou Mills said, is the course never has been in better shape. Greens and sand traps are in pristine condition, and the course looked verdant on a recent soggy morning.
He conceded Cypress Creek poses a constant threat, however. Walking along the second hole, he pointed to a section of the waterway that swelled during a recent three-quarter-inch downpour. He said residents of the Champions Forest neighborhood north of the club, where tony homes top $1.3 million, are wary when the forecast includes rain.
“Every time there’s a rain event here, they’re all freaking out,” Mills said. “The minute you get rainfall, this becomes a raging river.”
Harris County Commissioner Jack Cagle, whose Precinct 4 includes Raveneaux, said he has sympathy for residents who bemoan the community’s loss when the club closes. The stately clubhouse, modeled after a French chateau, has held weddings, retirement parties, and other events since the late 1970s.
The prospect of providing badly needed flood protection on the site, however, is too golden an opportunity to pass up as neighborhoods along Cypress Creek continue to fare poorly in storms, he said. Cagle’s own home, three miles downstream from Raveneaux, flooded during Harvey.
HOUSTON—WeWork’s setback could lead to a number of landlords in various US markets wrestling with how to fill space, according to a new Transwestern research report.
There have been many measures of the impact coworking has had on the office sector; Transwestern offers a new one in its study: when comparing coworking expansion to the growth of top industries nationally since 2015, coworking ranks ninth. Just prior to WeWork’s IPO, momentum in the sector accelerated dramatically improving its ranking to sixth among all industries through the third quarter of 2019, and by itself accounts for nearly 8 million square feet of absorption.
Specifically, WeWork’s US portfolio currently comprises approximately 27 million square feet in 35 US metros, with New York accounting for 10.3 million square feet, followed by Los Angeles (2.2 million square feet), San Francisco (1.8 million square feet), Washington, DC (1.6 million square feet), and Boston (1.5 million square feet).
To state the obvious, the success or failure of these locations has the potential to affect availability, lease terms and other real estate fundamentals, impacting neighboring properties and entire submarkets, Transwestern says.
The math on that point is clear: WeWork committed to more than half the total space it has leased within the past two years at a time when rent was rising nationwide, according to Jimmy Hinton, senior managing director, investments and analytics. More than a quarter of that space remains ‘unsold,’ presenting a significant amount of financial liability for the company, he says in prepared comments. Now WeWork finds itself in the position of having to market more than 7 million square feet of space as the economy is beginning to slow and businesses are taking a cautious stance in an uncertain political environment, Hinton adds.
Hinton explains that WeWork’s business model, grounded in its strategy to build communities by saturating select markets, was predicated on positive leasing spreads between its own base rent and that of its sublessees, an increasingly difficult balance as prevailing market rents increased over time.
“As a result, risks inherent in WeWork’s business plan would most probably have played out in periods of adverse market conditions,” he says. “As we now know, such circumstances came in the form of restrictive capital supply to WeWork, not from a dearth of tenant demand.”
As the company explained in its IPO, WeWork’s workstation pipeline included five distinct phases—Find, Sign, Build, Fill and Run. The first three categories captured locations before opening, while the last two reflected open locations, Transwestern explains. As of November 2019, 66.6% of WeWork’s Build space, 20% of Fill space, and 6.5% of Run space were vacant nationwide, with Atlanta exhibiting the greatest percentage of availability, at 42.4%, compared to the total market portfolio.
The report concludes that the overwhelming majority (90.5%) of risk is related to lease commitments still in the Build and Fill phases—in other words, where WeWork is constructing space it intends to sublease or is currently subleasing, to corporations or individual memberships.
Of the top five metros, as measured by WeWork total square feet, New York, Washington, DC, and Los Angeles have the greatest percentage of available space classified in these phases.
Commercial property values in Houston should trend upward in 2020, as the region’s positive job growth will increase demand for development opportunities, according to Houston-based valuation firm Deal Sikes. Bisnow/Catie Dixon Matthew Deal and Mark Sikes DATACENTER INVESTMENT CONFERENCE & EXPO (DICE) SOUTH 2020 APRIL 9, 2020 | REGISTER NOW FEATURED SPEAKER ROMELIA FLORES Distinguished Engineer & Master Inventor, IBM “Houston’s commercial real estate values will be on a solid upswing in 2019,” Deal Sikes principal Matthew Deal said. “With Houston expected to gain population significantly in the next decade, the long-term forecast must include rising property prices that will be very impressive over the long haul.” The firm said rising land prices have pushed industrial development farther away from the center of the city, and outer suburban land prices have increased accordingly. But that hasn’t stopped development: More than 15M SF of warehouse and industrial space is under construction in the greater Houston area, the firm said. Meanwhile, property values in the urban core remain strong, as developers and builders locate buildings for redevelopment, or seek sites that are appropriate for new construction. “Multifamily construction is strong in Houston and researchers report more than 25,000 units are now under construction, although the pace is expected to be slightly more moderate in 2020 as the new inventory is absorbed,” principal Mark Sikes said. “Investor demand is good and multifamily valuations have not yet peaked in most submarkets.” Though newer office buildings and Class-A towers under construction are leasing briskly, Houston’s office market is its most sluggish sector, according to the firm. The energy industry — a juggernaut in Houston’s leasing arena — is in the midst of a downturn, which is hurting growth. The healthcare sector is faring better. The firm identified the Texas Medical Center as a source of growth for Houston, pointing to the expansion of several hospitals and research facilities. “Although there are a few exceptions, the real estate market in Houston is headed for another good year,” Sikes said. “The region’s economy is healthy and although the energy industry is in a lackluster period, the overall economic outlook is outstanding.”
Houston’s office market is bracing for another tough year as the energy industry shrinks in the face of lower oil prices, which dipped this week to their lowest level in more than a year.
“It remains a tenant’s market,” Lucian Bukowski, an executive vice president with CBRE, said. “I see that continuing.”
Oil companies, which have been steadily cutting costs and laying off workers, account for more than 30 percent of the local office market, said Bukowski, who represents companies looking for space. Demand is falling among other industries, as well. Leasing activity last year was down 17 percent from the previous year, CBRE data show.
That all amounts to a harsh reality for landlords carrying empty office space, and there are a lot of them. The vacancy rate for so-called Class A buildings — the newest properties with the most amenities — was 17 percent at the end of last year, the highest it’s been since at least 1992.
Large blocks of empty space fill skyscrapers from the city center to the suburbs. One of the former Anadarko towers in The Woodlands will be vacant by next month. The company was acquired by Occidental last year and employees are being consolidated.
Bob Parsley, co-chairman and principal in the Houston office of Colliers International, which is leasing the building for owner Howard Hughes Corp., said there’s been a strong interest in the tower.
“We were frankly very happy to get this building into the Howard Hughes portfolio because we didn’t have much space to lease,” Parsley said. “That market is tight up there.”
Jobs added – elsewhere
While certain submarkets have done better at controlling inventory, vacancy market-wide ended the year at 19 percent, well above the 10-year average of 15.3 percent, CBRE’s data show. Combined with sublease space, overall vacancy jumped to 22 percent across Houston.
Energy tenants are critical to the local office market. Yet employment in the industry is shrinking.
Houston is expected to gain 42,000 new jobs this year, but it will lose 4,000 in the energy sector, according to the Greater Houston Partnership.
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The energy sector won’t be a significant driver of demand for potentially years, said Patrick Duffy, president of Colliers International in Houston. Growth in 2020 is expected to come from health care, government, accommodation/food services, and construction, yet many of those companies are not big enough to lease the large blocks of space currently on the market.
“A huge medical deal is 100,000 square feet. A big law firm is 60,000, 70,000 square feet. And we need to take down millions of square feet,” Duffy said.
Houston is a roughly 213 million-square-foot office market. It could be a decade before the market returns to equilibrium, meaning anywhere from 11 to 13 percent occupancy, Duffy said.
“That’s assuming we don’t build a lot more and we don’t have a recession,” he said.
Powershift
Companies shopping for space today have leverage. Landlords are offering free rent, parking discounts, and generous tenant improvement allowances. Annual per-square-foot asking rents in Class A buildings range from $32.20 in the suburbs to $54.67, according to Colliers.
Bukowski, speaking at a commercial real estate market briefing last week, said landlords generally make money when their buildings are 85 percent to 90 percent leased.
Houston has 82 buildings with at least 100,000 square feet of space available. Twice as many buildings have at least 50,000 square feet up for grabs.
That’s why so many property owners are making improvements. Even Williams Tower, one of the city’s most prestigious office buildings, is undergoing a lobby facelift.
While the major energy players aren’t expanding — and are increasingly looking for ways be more efficient within their buildings — smaller, more entrepreneurial business is growing, said Griff Bandy, a partner with commercial real estate firm NAI Partners.
Bandy recently represented XCL Resources, a private oil, and gas firm, in a lease for 16,328 square feet at M-K-T, a new adaptive reuse project in the Heights. JLL is representing the landlord, a partnership of Radom Capital and Triten Real Estate Partners.
The development includes a collection of industrial buildings that are being repurposed to house offices, shops, restaurants and health, and fitness concepts.
Bandy and others said companies are looking for spaces that will wow potential employees and help retain the ones they have. To that end, new mixed-use developments and downtown towers with an abundance of amenities are winning out.
Colliers data show Houston office buildings constructed after 2005 have an 11 percent vacancy rate.
High Street Logistics Properties purchased the Beltway North Commerce Center, a Class-A, cross-dock industrial distribution center. Courtesy of JLL Beltway North Commerce Center The Beltway North Commerce Center comprises 353K SF and was completed in 2015. In addition, the property is fully leased by Air General, a national cargo handling company, and DB Schenker, a worldwide logistics company. The facility features 32-foot clear heights, 100 dock-high doors, 68 trailer spaces, LED lighting and LEED certification. JLL’s Trent Agnew, Rusty Tamlyn, Charlie Strauss, and Katherine Miller represented the seller, Nuveen Real Estate. The buyer, High Street Logistics Properties, represented itself. PEOPLE Chris Martin joined Levey Group as director of construction. Martin will oversee the construction of the company’s development projects. CBRE promoted Peter Mainguy to senior managing director and market leader for the company’s Houston office. Mainguy will oversee all Advisory Services lines of business and drive strategic initiatives and growth in the Houston market. Josh Ling joined Chamberlain Hrdlicka’s Houston office as an associate with the Tax Planning & Business Transactions group. Cody W. Johnson joined National Signs as CEO. The company is a Houston-based, national provider of signage and architectural accents. Julius Lyons also joined National Signs as vice president of operations. Lyons will oversee all aspects of the company’s engineering, permitting, project management, manufacturing, and installation. The Association of Commercial Real Estate Professionals announced the officers/directors for the 2020 board. Keith Holley of Method Architecture has been named president, while Tyler Ray of WGA Consulting Engineers has been named president-elect. SALES Courtesy of Newport Real Estate Partners The Fountains on the Bayou Newport Real Estate Partners has purchased The Fountains on the Bayou apartment community in the Southbelt/Ellington area, near Hobby Airport. The 460-unit, the 31-building apartment community will undergo significant renovation, maintenance, and rebranding. The asset will be renamed Valencia Grove Apartments. Newport Real Estate Partners’ Matt Wilson and Jack Franco represented the company, while Nitya Capital was the seller. A private investor purchased Miramesa Town Center in Cypress. The property comprises 13K SF and is a fully leased, multi-tenant strip center. JLL’s Ryan West, John Indelli and Ethan Goldberg represented the seller, Read King Commercial Real Estate. Also working on behalf of the new owner, JLL placed the five-year, fixed-rate, balance-sheet loan with a local credit union. JLL’s Michael Johnson and Tolu Akindele represented the owner in that process. MLG Capital purchased a 10-property workforce housing portfolio, comprising a total of 2,769 Class-B units in Houston, Oklahoma City, and Tulsa. Four of the properties are located in Houston. The seller, The RADCO Cos., was represented by CBRE’s Shea Campbell, Colleen Hendrix, and Ashish Cholia. They partnered with Clint Duncan and Matt Phillips in Houston and Brian Donahue in Oklahoma. Lone Star Auto Parts purchased a speculative warehouse at Clay Commerce Park. The 18.5K SF property comprises a building that is one of 11 concrete tilt-wall warehouses within The Warehouses at Clay Commerce Park, a joint venture development of Insite Realty Partners and The Urban Cos. Insite Realty Partners represented the seller, Westfield Commerce Center, while Walzel Properties’ Hua Tian represented the buyer. Morgan Group purchased The Beacon at Buffalo Pointe, a 281-unit, Class-A apartment community near the Texas Medical Center. The four-story, mid-rise property was completed in 2017. JLL procured the buyer, while JLL’s Chris Curry, Todd Marix and Bailey Crowell represented the seller, Allied Orion Group. Sonic Automotive Group purchased a vacant property that previously housed Porsche North Houston. The property comprises 2.27 acres and contains a 14.9K SF structure. The buyer represented itself, while NewQuest’s David Luther and Morgan Hansen represented the seller, indiGO Auto Group. Trammell Crow Residential purchased two parcels of land totaling 14.43 acres to develop 350 units of Class-A, garden-style apartments off Spring Cypress Road in northwest Houston. Dosch Marshall Real Estate was engaged to locate the land and assisted Trammell Crow Residential in purchasing the site. LEASES Courtesy of Parkway San Felipe Plaza at 5847 San Felipe St. in Houston P.O.&G. Resources leased 9.7K SF of office space in San Felipe Plaza. NAI Partners’ Dan Boyles and Michael Mannella represented the tenant. Parkway’s Rima Soroka and Eric Siegrist represented the landlord. FINANCING JLL has arranged a $20M refinancing for Sam Houston Crossing II, a 160K SF office property in northwest Houston. The property comprises a three-story office building and is fully leased to three tenants. JLL’s John Ream and Laura Sellingsloh represented the borrower to secure a five-year, 4% loan with East West Bank.
Bye Bye, Booze: WeWork Killing Kegs At North American Locations NationalCoworking January 27, 2020, Ethan Rothstein, East Coast Editor Bisnow/Ethan Rothstein A beer tap is kept locked in a Washington, D.C., WeWork location. WeWork’s free beer taps, one of the defining attributes of the halcyon days of the coworking company, are almost kicked. WeWork is phasing out free beer and wine at it North American locations, a spokesperson confirmed to Bisnow Monday. The company doesn’t have kegs at all of its 600-plus locations, but they were staples of WeWork’s earliest outposts, which were also its most successful, according to WeWork’s financial disclosures last year. By the end of February, the taps will all be phased out, the spokesperson said. Business Insider first reported the change Monday morning. “Data from an expanded member satisfaction survey we conducted last year indicated many of our members wanted a greater variety of beverage options, and we are pleased to roll out these expanded offerings, including a selection of cold brew, kombucha, seltzer, and cold teas, in response,” WeWork said in a statement. “As part of this beverage refresh, WeWork will also phase out on-tap alcoholic beverages in U.S. and Canada locations and aims to complete this process by the end of February.” The beer and wine taps are expected to be replaced with nonalcoholic options, rather than removed. The decision came as a result of new WeWork Chairman Marcelo Claure’s go-forward plan for the business, and was prompted by a member survey, not as a cost-cutting move, a WeWork source said. Booze will still be served at WeWork happy hours and other events, the source added. Alcohol was once a pillar of WeWork’s identity, from bottomless-drink member parties to CEO Adam Neumann’s infamous penchant for shots of tequila. But the company was sued in 2018 by a former executive who said she was sexually assaulted twice at WeWork events, which she claimed “center around partying and reflect the frat-boy culture that starts at the top.” That litigation is still ongoing and is in the discovery phase, according to New York State court records. A month after the sexual harassment suit was filed, WeWork shifted its alcohol policy, from offering unlimited drinks and blatantly promoting consumption to a four-drink maximum. While the company claims cutting kegs isn’t about costs, its other recent stratagems have focused squarely on its blood-red balance sheet. After losing $1.25B in Q3 2019, WeWork nearly stopped leasing new spaces altogether in Q4, laid off 20% of its staff and has sold several previous acquisitions, including its stake in women-focused co-working company The Wing and digital meeting startup Teem in the last month.
The Woodlands Towers at The Waterway The year for Houston’s commercial real estate sector ended with a bang as The Howard Hughes Corp. announced a $565M deal with Occidental Petroleum to purchase the company’s two Class-A office towers, warehouse space and land in The Woodlands and a 63-acre Energy Corridor campus. All told, the deal included 2.7M SF across three sites. What exactly Occidental Petroleum, commonly known as Oxy, would do regarding its real estate footprint in the wake of its $57B acquisition of Anadarko Petroleum in August has been the source of much speculation. Howard Hughes said Oxy will maintain occupancy at The Woodlands Towers, formerly Anadarko’s HQ. Oxy’s Century Park Campus in the Energy Corridor, a 17-building complex, will immediately be remarketed, in line with the firm’s recently announced commitment to sell noncore properties. The Howard Hughes Corp., which recently announced its HQ would be moving to The Woodlands, has settled on a new office and will be relocating its corporate headquarters into the approximately 595K SF tower at 9950 Woodloch Forest Drive. The company owns the master-planned community The Woodlands and nearby communities Bridgeland and The Woodlands Hills. The deal bolsters the firm’s office portfolio by 50%. Oxy was represented by CBRE’s Brandon Clarke, Jared Chua, and Steve Hesse.