This Week's Houston Deal Sheet
There is at least one way 2020 is better than 2019: Medical office space leasing is surpassing last year’s volumes in Houston.
There has been 1.2M SF of medical office leasing this year through the end of August, NAI Partners reports. That is up from 936K SF in 2019 through the end of August. That hasn’t been reflected in the vacancy rate, though — deliveries of 172K SF so far this year and net absorption of negative 126K SF year to date has pushed overall vacancy up 90 basis points since August 2019 to 17.2%. Rents have risen $0.41 in that time period, bringing the average full-service rent for medical office space to $25.71. Class-A has seen some softness, with average rents declining slightly to $33.19 per SF, NAI Partners found.
There is a large pipeline of medical office projects, with 920K SF under construction at the end of August. NAI Partners highlighted some of the most notable: the 427K SF O’Quinn Medical Tower, the 161K SF Museo Plaza Office Building and the 116.5K SF Healthpeak Properties building, all in the Texas Medical Center. The Med Center didn’t get all of the attention, though; also underway are the 64K SF River Oaks Medical building in Midtown, the 53K SF Bissonnet Medical Plaza in Bellaire, the 50K SF Woodforest Professional Plaza Building I in Montgomery and the 48K SF HCA Healthcare building in Pearland.
Midway’s Robert Williamson was promoted to senior vice president of investment management. Williamson now leads the firm’s investment management team and was appointed to the company’s leadership team setting and implementing Midway’s direction and strategy. He previously worked at HFF, Prudential and TIAA and has been with the firm since 2017.
Kennedy Oates joined JLL as global chief procurement officer. Oates, who is based in Houston, is responsible for JLL’s global sourcing and procurement and will manage a multibillion-dollar spend for JLL’s facility project and property management clients, as well as JLL itself. He was 28 years of global supply chain experience, including leading global procurement for Hertz Global and leadership roles at GE.
Marty Salinas joined NAI Partners as vice president of valuation and advisory services, a newly created role. Salinas, who came from CBRE, will focus on valuations across all property types. NAI Partners created its appraisal business last year and intends to keep expanding it.
Angel Gonzales was named associate principal of Method Architecture. He has been with the firm for eight years and has served as a studio manager over the firm's industrial, athletic and automotive portfolio.
An undisclosed buyer purchased Pearland Premier Surgery Center, an 11K SF ambulatory surgical center at 2813 Smith Ranch Road in Pearland. Colliers International’s Beth Young represented the seller, CMAS Interests. The property is on 4 acres in Houston’s South submarket, which Colliers reports has a 100% occupancy rate for healthcare properties and 86.3% occupancy for medical office properties.
An undisclosed local investor purchased a 15K SF shopping center on FM 1960 in Northwest Houston. The property was 100% occupied, received multiple offers and closed within 60 days, according to Newman Kelly’s Logan Kelly, who represented the seller. Jared Pinto represented the buyer.
Horn Solutions leased 12K SF at 301 Commerce Green Blvd. in Commerce Green Office Park. Poynter Commercial Properties Corp.’s Kevin Poynter and Peyton Poynter represented the landlord, Commerce Green Associates LP. Moody Rambin’s Al Gabosch represented the tenant.
Two different Toasted Yolk Café franchisees signed new leases for restaurant spaces in League City and Bellaire. Henry S. Miller Brokerage’s Paul Vernon and Campbell Vise represented the tenants. The restaurant leased approximately 6.1K SF, part of a larger vacated restaurant, in Pinnacle Park in League City. In Bellaire, it leased about 4.1K SF in the recently rehabilitated Bellaire Town Center. These are Toasted Yolk Café’s 15th and 16th locations.
Space systems development company Intuitive Machines has opened a new headquarters in 22K SF on the sixth floor of 3700 Bay Area Road in Clear Lake. Intuitive Machines is planning for a lunar mission with an anticipated launch in October 2021, according to Savills, whose Derrell Curry represented the company in its lease. Savills’ David Finklea handled project management, including overseeing design with architecture firm CDI Douglass Pye and construction by Byrd Construction. The new HQ is a relocation and expansion within the building, providing space for more staff and a mission control center. Intuitive Machines’ lease began in November, but the tenant build-out was completed during (and delayed by) the coronavirus pandemic.
Method Architecture and Johnson Design Group have teamed up to design The Mod, a 195-unit, six-story multifamily community with retail and coworking space by Deccan Development. The project has been proposed in Houston’s Greater Fifth Ward, a redevelopment of the Pleasant Grove Missionary Baptist Church. Deccan also has plans to build a 40K SF office building or artists collective on the 5-acre tract.
THIS AND THAT
Central Houston Inc. and the Downtown Redevelopment Authority have opened Downtown Launchpad, a 17K SF innovation hub on the 10th floor of Amegy on Main. MassChallenge and gener8tor, two startup accelerators, are partnering on the project, as is nonprofit incubator Impact Hub Houston. The Cannon will handle community management and operations of the space at 1801 Main St. The facility will host entrepreneur boot camps, workforce development, innovation labs, coworking and community events, particularly focused on bringing startups to maturation. The Cannon Tower, a coworking facility on the 13th floor of the building, opened in December. Downtown Launchpad fulfills part of the 2017 Plan Downtown, which called for the creation of a collaborative Innovation District in Downtown Houston, Downtown Redevelopment Authority board chair Curtis Flowers said in a statement.
Andrew Estes has rebranded his firm from Aloft to The Estes Cos. The name reflects the 10-year-old firm’s new focus on multifamily development, the company said in a statement. The Estes Cos. also provides services in construction, asset management and property management. The firm owns four renovated Class-B multifamily buildings in the Texas Gulf Coast region and is expanding its multifamily portfolio, seeking opportunities to develop Class-A properties or purchase Class-B or C assets and convert them to Class-A. Alongside Andrew Estes as CEO, leadership at The Estes Cos. includes President of Construction Johnnie Staggs and Estes’ wife, Rachel Estes, who leads the property management team.