Marathon Oil Sets Eyes On New Building In West Houston
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Marathon Oil is relocating into a new office building in West Houston when its lease in Uptown expires in late 2021, the Houston Chronicle reports. The new building will be built on the corner of Interstate 10 and Beltway 8 near CityCentre, a mixed-use development by Midway.
The company is moving out the 41-story Marathon Oil Tower at 5555 San Felipe St. in the Galleria submarket. Built in 1983, the 1.2M SF asset was sold earlier this year for $175M. At the time the tower was 90% occupied and 60% belonged to the namesake tenant. Before that, CBRE purchased the building in 2013 for $245.5M.
In Houston's rebounding office market, this is the latest deal to highlight a growing trend: flight to quality. Limestone Commercial President Brandi McDonald noted a few other trends driving demand for new office properties.
"Tenants are willing to pay more for better quality," she previously told Bisnow. "Coworking spaces are contributing to high-quality low-cost, low-commitment inventory. Startups begin with great quality and refuse to settle for Class-B."
Last quarter, for the first time since the 2014 oil downturn, the overall office vacancy in Houston decreased. While still nearly double the vacancy of Q4 2014, citywide vacancy stands at 24.2% for Q3 2018, according to a report by JLL.