Chevron’s leased 20-story office tower in northwest Houston sells to New York developer

By Marissa Luck, Houston Chronicle

A New York development firm is making a bet on Houston’s office market after buying an empty 20-story office tower where Chevron has a major block of sublease space it’s trying to shed.

Williamsville, N.Y.-based Acquest Development revealed its plans this week for the 4.7-acre property, a major piece of the former Noble Energy headquarters in northwest Houston, that it bought through an affiliate in September. The deal at 1002 Noble Energy Way included a 20-story office tower, an eight-story parking garage and an adjacent 25,000-square-foot meeting/sports facility off Louetta Road and Texas 249.

“We do all understand that the office market has been hurt by COVID and working from home. What that means there is a flight to quality, which we believe the building is very, very high quality,” said Michael Huntress, manager at Acquest Development.

Acquest is offering to sell the property for $65 million, Huntress said, but that it’s more likely the space will be leased. Acquest is partnering with Chevron to market the space for sublease, he said, for about $14 a square foot. That compares to $21 a square foot in that same submarket, according to real estate brokerage CBRE.

Huntress said it took Acquest several months to convince itself that this was a good investment, considering the state of the office market.

Houston’s office vacancy rate increased slightly in the third quarter to 22.7%, as tenants gave back a net 1.5 million square feet in space, according to CBRE.

“The alternative to working from home is that (employees are saying), ‘I’m not going to spend an hour in my car to commute anymore.’ We feel this building location is exactly perfect for those people,” he said.

An Acquest affiliate paid $156 per square foot for the property, according to CBRE.