Skanska USA sells prominent Energy Corridor campus to Houston buyer for $147M

By Jeff Jeffrey, Houston Business Journal

Even amid the dreary office market here in Houston, major deals are still getting done.

New York-based Skanska USA Commercial Development announced Feb. 1 that it has found a buyer for its mixed-use West Memorial Place campus, which is home to two of the most prominent office towers in the Energy Corridor.

A joint venture led by Houston-based Fuller Realty Interests paid $147 million to purchase West Memorial Place I and West Memorial Place II at 15375 Memorial Drive.

The first building consists of 331,404 square feet of Class A office space, while the second building encompasses 385,274 square feet. Additionally, the campus is home to more than 5,000 square feet of retail space, as well as outdoor green spaces.

Jeff Hollinden, Kevin McConn and Katherine Miller of Chicago-based JLL (NYSE: JLL) represented Skanska in the sale. Fuller will oversee day-to-day operations, leasing and management, Skanska said.

“Skanska’s Houston team has celebrated many great milestones over the last few years, from delivery of Bank of America Tower to breaking ground on 1550 on the Green. The sale of West Memorial Place signifies the value of Skanska’s developments in this market and demonstrates our team’s commitment to creating superior products for the Houston community,” said Matt Damborsky, executive vice president for Skanska USA Commercial Development’s Houston market. “As the new buyer begins operations, we are confident that its team and tenants will experience the value of West Memorial Place for years to come.”

The West Memorial Place campus sits on a 12-acre property adjacent to Terry Hershey Park.

The two buildings offer 29,000-square-foot floor plates and four parking spots per 1,000 square feet, which are accessed through an air-conditioned corridor.

The campus offers such amenities as a fitness center and on-site dining.

Additionally, the campus was the first in the Energy Corridor to obtain LEED Platinum certification, according to Skanska.

Skanska broke ground on West Memorial Place in 2013 after demolishing the 350,000-square-foot office building that once housed Arco. At the time, the project was viewed as controversial by some Houstonians because it involved filling in Lake Thicket, a 2-acre, man-made pond that was home to ducks and other wildlife. Area residents rallied unsuccessfully to try to save Lake Thicket in 2012. At the time, Skanska said the wildlife moved to other locations.

For Skanska, the sale of West Memorial Place marks the company’s latest high-profile play in the local office market.

After completing Bank of America Tower at 800 Capitol St. downtown in 2019, the company sold a 90% stake in the 35-story office tower to an affiliate of Boston-based Beacon Capital Partners for $373 million. In July, Skanska sold the rest of its stake in the building, also to a Beacon affiliate, for $24 million.

The building’s tenants include Bank of America, Skanska, Houston-based Waste Management Inc. (NYSE: WM), Houston-based Quantum Energy Partners and international law firm Winston & Strawn. The building also features Understory, a 35,000-square-foot community hub and culinary market on the lower levels.

Also downtown, Skanska broke ground last year on its 1550 on the Green development, a 28-story, 375,000-square-foot tower at 1550 Lamar St. overlooking Discovery Green.

The plans for 1550 on the Green include extra-wide pedestrian zones covered by dense foliage, two tenant-exclusive outdoor roof terraces located on the 12th and 20th floors, and an additional terrace on the roof deck. Tenants will also have access to 7,000 square feet of ground-floor retail as well as a lobby featuring touchless security turnstiles, app-based guest registration and destination dispatch elevators. Austin-based architect Michael Hsu designed the building’s interior amenity spaces, including a fitness center.

When 1550 on the Green is completed in 2024, Skanska aims to have the building certified LEED Platinum.

Finally, Skanska is in the planning stages for a new development at 1001 Westheimer Road, at the southwest corner of Westheimer Road and Montrose Boulevard. Skanska paid $27 million to acquire the 2.86-acre site in August 2020. The prominent piece of land, in the heart of Montrose, was once home to a retail plaza that counted Half-Price Books, Mattress Firm, Spec’s Wine and Spirits, and Mattress Pro among its tenants.

Skanska has not said what its plans for the Montrose property entail. However, the site is currently being used for a pop-up market hosted by Houston-based Curb Coalition.