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Boutique Office Buildings Dominating The Development Pipeline In Houston

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Downtown high-rise groundbreakings have been grabbing headlines, but they don’t really tell the story of office development in Houston right now.

The metro has 3.3M SF of office space under construction. Skanska's Capitol Tower and Hines' Texas Tower make up about 60% of that space. The remaining portion is comprised of 68 boutique office building ranging between 3K SF and 200K SF, according to CoStar data provided by NAI Partners.

Suburban development is leading the way to satisfy a demand from business executives who want to work closer to where they live and other amenities such as mixed-use, retail and restaurants.

Boutique Office Buildings Dominating The Development Pipeline In Houston
Wind Energy Plaza at 8917 Louetta Road, Spring

"The idea is to attract a certain type of tenancy opposed to a build-to-suit for a traditional [energy] user," NAI Partners Vice President Taylor Wright said.

Boutique office buildings are defined as smaller than 200K SF and are usually built speculatively, he said. The purpose-built facilities are attractive due to the location, amenities, culture or design.

Developers are seeking out a specific target market, which can vary from project to project. These boutique buildings are suitable for companies that have between five and 100 employees, Wright said. 

Into The Burbs    

New office development has sprawled in the direction of Houston's suburbs.  

Sugar Land is leading the suburbs with 12 projects underway totaling about 80K SF. Cypress follows behind with nine developments totaling 37K SF. The Woodlands area and Spring each have four office buildings going up, while Katy has three and Tomball and League City have two each. 

Developers have also broken ground on at least one office building in Baytown, Bellaire, Conroe, Deer Park, Friendswood, Missouri City, Mont Belvieu, Pearland and Waller. The CoStar data also includes 24 projects in Houston itself.  

A condensed list by NAI Partners highlights only seven office projects it deems significant in the Houston area. This breakdown includes buildings over 20K SF and excludes owner-occupied buildings and Austin, Liberty and San Jacinto counties. 

Boutique Office Buildings Dominating The Development Pipeline In Houston
Chasewood Crossing Three at 19350 Highway 249 in Houston

NAI Partners' tracked projects include Park Place | River Oaks, a multiphase, mixed-use development that includes a 210K SF office tower, CityPlace 1, a 150K SF office building in Springwoods Village and Chasewood Crossing Three, a multiphase office park in the Highway 249 corridor. 

Building Boutique  

The development of Chasewood Crossing Office Park is in response to the momentum for more Class-A office product in Houston's suburbs, B. Pennington Commercial Real Estate owner Brenda Pennington said.

The project is aimed at companies that want to decrease commute times and improve the quality of life by being closer to where employees live. 

Population growth, high traffic counts and 60- to 90-day home sale stats have this area buzzing, she said. Companies are also drawn to the nearby high-performing school districts, such as Tomball, Cy-Fair and Klein.   

Construction is 50% completed at Chasewood Crossing Three, the third phase of the six-building office park. The site is along Highway 249 between Grand Parkway and Beltway 8 off and north of Willowbrook Mall.  

The design of the building takes a more traditional approach, she said. Pennington said a modern building, which is usually constructed of glass and bricks, shows its age faster than a traditional building made with bricks and steel. 

The six-story building will accommodate multiple office tenants ranging between 5K SF and 75K SF, Pennington said. The building is 20% leased and offers on-site auto maintenance and detailing, a covered parking garage and green spaces throughout the 30-acre development.  

Already completed in the park are two 156K SF office buildings, where occupancy stands at 75% and 90%, Pennington said. The future plans include two 312K SF office buildings, which are slated to begin in the next 24 months. The park also has three restaurant pads available targeting white-tablecloth concepts.