Atlanta-based Piedmont Realty Trust is selling a fully leased 301K SF building in the Energy Corridor as it plans to exit Houston altogether.
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The REIT is under contract to sell Enclave Place for $81.8M, with the deal set to close by the end of the year, Christopher Kollme, Piedmont’s executive vice president of investments, said during a third-quarter earnings call.
“We have been clear regarding our intention to exit the Houston market, and this is a big step towards that goal,” Kollme said.
As of December 2023, Piedmont reported that its Houston properties didn’t meet its definition of a reportable segment, as its chief decision-maker didn’t review the properties to allocate resources or assess their performance. It didn’t consider its presence in Houston to be significant and didn’t anticipate investing further in the market.
Piedmont’s only other property in Houston is 1430 Enclave Parkway, a 1993-built 313K SF office building adjacent to Enclave Place.
At 1414 Enclave Parkway, Enclave Place was vacant from its construction completion in 2015 until October 2018, when it secured a 17-year, full-building lease with oilfield services company Transocean. The move to the 301K SF building was an expansion for Transocean, which previously occupied 255K SF in Greenway Plaza.
Schlumberger Technology Corp. is the primary tenant of 1430 Enclave Parkway, occupying 226K SF through 2028. The building has about 55K SF available for lease, according to LoopNet.
In Dallas, Piedmont Realty Trust sold an 11-acre parcel along Royal Lane for $12M, generating a gain of $9M, Kollme said during the call. Houston-based Morgan Group plans to build a mixed-use development called Pearl Landing at the site.
This development will add multifamily and 20K SF of retail adjacent to Piedmont’s three office buildings totaling 605K SF at The Connection at Las Colinas, Kollme said.
Dallas, a strong market for Piedmont, is where it saw a quarter of its deal volume during Q3, co-Chief Operating Officer George Wells said.
“With few full floors available and a very active pipeline, we increased our asking rates between 20% and 30% over the past 12 months,” Wells said. “Record-high rental rates are translating into meaningful rent rollups of 30% or more.”
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