Bechtel will downsize and move its Houston office at the end of next year, halving its space after shifting to a hybrid work model.

The Virginia-based engineering and construction firm has rented the entirety of 3000 Post Oak for more than 40 years, leasing 440K SF in total, according to the Houston Chronicle. Its new space, at Building 3 in CityWestPlace in Westchase, is 205K SF. It's reportedly one of the largest deals signed this year. The new space was chosen due to employee and customer needs, along with the technology and facilities provided at CityWestSpace, Bechtel Energy President Paul Marsden told the Chronicle.

“From the beginning of the process, Bechtel Energy focused on ensuring the best workplace experience for its employee base in Houston,” CBRE Executive Vice President Kevin Kushner told the Chronicle. “The company has a long-standing local history, and this transaction shows a commitment by Bechtel Energy to its clients, employees and the city of Houston.”

CBRE represented Bechtel in the deal.

CityWestPlace landlord Parkway Properties was represented in-house by Eric Siegrist, Rima Soroka and JP Hutcheson.

Bechtel's old space will be renovated for a future tenant; Bechtel's lease expires in 2024. Cushman & Wakefield, which is leasing that property, told the Chronicle it is hoping for a headquarters tenant for the space and is already fielding inquiries.

The newly announced lease is one of the largest office deals of the year. Other major deals so far are Cheniere Energy's 151K SF Downtown lease announced late last month, Baker Hughes signing 111K SF in Katy Freeway West in the last quarter and UT Physicians moving into 139K SF in Bellaire. Though Houston had 29.6% office availability in the second quarter of 2022, it's down from 30.2% earlier in the year, according to new Cushman & Wakefield data, and office experts are optimistic.

"Leasing activity has increased significantly as employees are getting back to the office, with many large tenants finally beginning to focus on their upcoming lease expirations," Cushman & Wakefield Research Associate Director Sherra Gilbert said in a release. "The office market began the year on relative solid footing and continued occupancy gains are expected throughout the remainder of the year."