Tilt wall development is well established in the industrial sector, but suddenly it's taking the suburban Class-A office market by storm. We sat down with Powers Brown's Jeffrey Brown, who's pioneering tilt wall construction, making it stronger, taller, and sexier than you'd ever imagine.
Jeffrey tells us tilt wall office projects (or "
value office," a term Powers Brown trademarked) are largely taking hold in the market thanks to
equity requirements to develop. When you have to cough up
40% of your deal, you put more pressure on
decreasing construction prices. But you don't want to cut quality; we've all heard how companies are using their offices to recruit talent. Jeffrey believes value office is the only way to get there. It
saves $10/SF over traditional construction, with all the same appeal. That helps lenders get the
returns they need to
capitalize development.
Here's
CORE's 8 West Centre, which has an unheard of
67% glass-to-wall ratio, a significant stride in the appearance of value office (unless you're looking for a quick place to change). Jeffrey tells us tilt wall office projects actually have some
aesthetic advantages over traditional design; for example, the layout has
no exterior columns and can do cantilevered glass corner offices. Construction time is much shorter, but there's no difference in the DNA of the building. That's why he says
every major office developer in Houston is considering the product.
Jeffrey tells us Houston is on the
leading edge of the movement, largely because we have a plethora of
300-ton cranes that can lift the
30-foot panels required to do taller tilt wall facilities. (If your city doesn't have as many, the cost to get the crane cancels out savings from design.) 8 West Centre was the first property locally to use these larger panels, which Power Brown developed when creating a blast-resistant tilt wall facility in DC.
Above, an
introspective white car ponders whether its own creation was sort of like tilt wall. With 30-foot panels, Powers Brown is innovating
taller tilt wall properties. Houston's first five-story project is under construction—
Transwestern's Westgate office. And Stream Realty is about to launch a
six-story office, above.
Sierra Pines Phase 2 will be the tallest tilt wall project in Texas (and as far as Jeffrey knows, the country). He believes this is the tallest the industry can go with
load-bearing walls. If you want to know more about value office, keep your eyes peeled: Powers Brown has a
book out to publishers now on the topic.
Another positive ray of light in the lending world:
Flagship Capital Partners investment director
Jason Bartlein (right, with CEO
David Mincberg and managing principal
Jarrod Foerster) says his firm is
actively funding middle-market bridge loans in major Texas markets. Typically, transactions are higher leveraged, LTC structured loans that are also non-recourse. He tells us many debt maturities have not yet come full circle, and the
market will have substantial value plays over the next four or five years. As a direct lender and a non-regulated finance company, Flagship is positioned to
custom-tailor financial solutions for buyers and
streamline the closing process, allowing them to capture these opportunities. Jason tells us there's
strong demand in the B and C side of the middle market, which is typically underserved by national bridge lenders and where local and regional banks have
highly selective appetites and less structuring flexibility. For more info on our sponsor, click
here.
Come join us in
Philly in next week,
May 22-23, for our first
national Bisnow Annual Student Housing conference (
"BASH"). We're hosting 22 phenomenal speakers, including American Campus Communities'
Jamie Wilhelm, Campus Apartments CEO
David Adelman, Education Realty Trust CEO
Randy Churchey, and Harrison Street Capital's
Brian Thompson. And reps from universities across the country. All at the luxury
Rittenhouse Hotel, at a beautiful time of the year, just blocks from
Independence Hall, the
Liberty Bell, and Betsy Ross's house. And once you're there, be sure to meet with our reporter on the ground,
Catie Dixon. (Set up a meeting with her in advance—
catie@bisnow.com.)
