Energy firms dominate year’s largest real estate deals
By Katherine Feser, Houston Chronicle
Three years into the pandemic, companies are pushing ahead with major commitments to office space, renewing current leases or trading for better space in new locations, often trimming their footprints in the process.
Ten of the biggest deals of 2022 in Houston topped 100,000 square feet each, led by EOG Resources renewing nearly 370,000 square feet at downtown’s Heritage Plaza. Among the larger deals, Houston attracted out-of-state companies such as Cellipont Bioservices, a San Diego-area cell therapy development and manufacturing company joining The Woodlands.
“It was good news to see these corporate decisions being made and finalized,” said Robert Kramp, a vice president of research at commercial real estate firm Transwestern. “While hybrid work is here to stay, the office environment is very much a key to each company’s culture and its forward success.”
The deals come as Houston’s office market faces headwinds as companies downsize real estate needs amid ongoing work-from-home trends, and overhang of available space in top-quality Class A buildings, according to Transwestern. Overall, the office vacancy rate rose to 20.4 percent in the third quarter.
Among several of the year’s biggest leases, companies reduced their overall footprint by 25 percent or more as hybrid schedules provide employees flexibility beyond the once traditional five-day workweek. Companies are creating workspaces with collaborative areas and amenities that draw employees back.
“You can be just as successful in less office space by giving people more flexibility in it,” Kramp said.
Here are details on the biggest transactions as of mid-December, according to Transwestern.
No. 1. EOG Resources, a Houston-based oil and gas company, signed a deal to stay at its longtime home in Heritage Plaza, where it has been a tenant since 2007. The lease totaled more than 367,000 square feet.
No. 2. Apache Corp. agreed to occupy about 328,000 square feet at One Briarlake Plaza, where it currently leases 210,000 square feet, in early 2024. The Houston-based oil and gas company will consolidate all 800 Houston employees to the new headquarters building in early 2024 after exiting its larger office in Post Oak Central near the Galleria.
No. 3. Enbridge, a pipeline company based in Calgary, Alberta, cut its requirement in half when it leased more than 290,000 square feet at Energy Center V in the Energy Corridor for the relocation of its Houston office. The company previously occupied more than 600,000 square feet at 5400 Westheimer Court near the Galleria.
No. 4. Bechtel, an engineering and construction firm, leased more than 282,000 square feet in two buildings in CityWestPlace in Westchase. The company will relocate from 3000 Post Oak near the Galleria at the end of 2023.
No. 5. Wood PLC, a Scotland-based global engineering firm with about 2,200 employees in Houston, renewed a roughly 226,000-square-foot lease at 17325 Park Row on its west Houston campus.
No. 6. Invesco, an Atlanta-based financial services firm, signed a lease extension this spring for more than 180,200 square feet at its longtime office at 11 Greenway Plaza.
No. 7. Baker Botts extended its nearly 175,000-square-foot lease for eight floors at 910 Louisiana. The Houston-based law firm has been a tenant in the downtown building since it opened more than 50 years ago.
No. 8. Cheniere Energy, a liquefied natural gas company, will relocate its downtown headquarters to about 151,000 square feet in the recently completed Texas Tower. The company will move from 188,100 square feet at 700 Milam at Pennzoil Place.
No. 9. Baker Hughes signed a lease for nearly 130,000 square feet of office space at Energy Center II, at 575 Dairy Ashford Road, for the relocation of its headquarters to the Energy Corridor in 2023. The energy services company will be consolidating from its north Houston offices on Aldine Westfield Road and two other locations in the Spring Branch area.
No. 10. Callon Petroleum Co. signed a lease for more than 107,000 square feet at 9753 Katy Freeway in Memorial City, a building by MetroNational set to open in 2023. The company will relocate its headquarters from 75,059 square feet at One BriarLake Plaza in Westchase.
No. 11: Perry Homes leased about 77,200 square feet in Phoenix Tower in Greenway Plaza to relocate its headquarters from 9000 Gulf Freeway. The new space is to provide a larger, modern workspace and central location for the Houston-based homebuilder’s employees.
No. 12. Cellipont Bioservices leased nearly 75,300 square feet at 9501 Lakeside Blvd. in The Woodlands.
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