Unfazed by Down Market, Spec Office Starts in West Houston
InSite Realty and Urban Cos broke ground on the second phase of Grandway West. It's spurred by a 21k SF pre-lease to Severn Trent Services, less than 20% of the 124k SF building. It's an interesting choice considering the huge amount of development lately; Katy's vacancy has risen from 4.5% to 11% since 2011. Transwestern SVP Paul Wittorf, who's leasing the property with colleagues Eric Anderson and Parker Burkett, is confident in the building's success, saying its site and product type will fare well even in a down market, especially since it has nimble and responsive local owners. Pictured are Parker and Paul.
Paul says there's strong momentum in the far west, particularly for new construction value office alternatives; Grandway West Phase 2 (delivering in March) will be less expensive than other new development nearby. He's also seen a nice activity boost from the maturing Grand Parkway (and he believes the ingress/egress at Grandway West is one of the development's best features), and predicts there will be other groundbreakings announced soon around it. Severn is taking the first floor, and Paul tells us his team is getting good activity from other potential tenants, which ultimately made them comfortable to break ground. Grandway West will be five buildings totaling 780k SF at full build-out. The first building delivered in January and is 90% leased, and Paul says the new phase will be accretive to the entire development and the Katy office market as a whole.