Some of west Houston’s best office space is filling fast up as companies hope to lure back employees
Katherine Feser, Houston Chronicle
A pre-pandemic trend of companies migrating to the west side of Houston has kicked into high gear as companies increasingly seal deals for better offices closer to employees.
A major lease by Bechtel last summer to relocate to Westchase kicked off a wave of leasing activity in west Houston totaling 3.7 million square feet in the last 12 months, according to a new report by commercial real estate firm JLL. The deals included 2.3 million square feet in the last six months alone, with Fluor’s lease for 308,200 square foot at Three Eldridge Place for its relocation from Sugar Land, Kiewit’s expansion to 277,105 square feet in Energy Center I and Fugro’s relocation to 75,000 square feet at Republic Square in the Energy Corridor among the largest in 2023.
In the largest west Houston deal over the past year, Apache Corp. in November leased 332,500 square feet at One Briarlake Plaza in Westchase to relocate its headquarters from the Galleria area.
What’s driving it? The answer is two-pronged, according to Tyler Garrett, JLL’s head of Agency Leasing in Houston.
A surplus of large blocks of available office space built when companies were in expansion mode before oil prices crashed in 2014 is aligning with a desire by companies to shorten commute times as employees return to the office, Garrett said. Many of Houston’s neighborhoods are concentrated on the city’s west side from Memorial to Fulshear and beyond.
The top nine deals came from the energy, engineering or energy services sectors and surpassed 100,000 square feet — and half of those were for more than 200,000 square feet, according to JLL.
“The higher quality options out there have all started to get taken down by tenants,” Garrett said.
Of 28 available spaces with at least 100,000 square feet on Houston’s west side, just six are in newer buildings, the segment with strongest demand, according to JLL. Nine of those options contain upward of 200,000 square feet.
Moving west is nothing new. A few years ago, Marathon Oil and telecommunications company Crown Castle left the Galleria for new buildings in west Houston. Shell Oil exited the bulk of its downtown space to consolidate at its west Houston campuses in 2017.
Companies have signed large office leases in west Houston over the last year, including:
Apache: 332,494 square feet at One Briarlake Plaza
Fluor Corp: 308,186 square feeet at Three Eldridge Place
Bechtel: 285,251 square feet at CityWestPlace
Kiewit: 277,105 square feet at Energy Center I (renewal and expansion)
Wood Group: 226,287 square feet at Westgate III
Technip Energies: 171,600 square feet at West Memorial Place 2
Baker Hughes: 129,231 square feet at 575 N. Dairy Ashford
Modec: 116,161 square feet at West Memorial Place I
Callon Petroleum: 107,171 square feet at 9753 Katy Freeway
Source: JLL
It’s a big score for the Galleria submarket, which typically has smaller tenants renting an average of 7,000 square feet, so it takes a long time to backfill space when a big company leaves, Garrett said.
The west Houston/Energy Corridor had a total vacancy rate of 23.3 percent in the second quarter, down from 23.6 percent in the second quarter of 2022, according to JLL.
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