The ground-breaking is taking place nearly nine months after the project had been made public. The development will be located at 1401 McKinney and is an expansion of Houston Center, a large collection of office towers, retail space and a hotel owned by Crescent since 1997.
The building is only a few blocks from the city's new stadium, Enron Field, and is part of a rebirth of the Eastside of Downtown. Nearby, work already is under way to turn Texaco's old headquarters building into a new Ritz-Carlton hotel. And a proposed basketball arena--which faces a test at the ballot box Nov. 9--could bring additional vitality to the Eastside.
The original Houston Center development dates back to 1970, when Texas Eastern Corp. developed the project. JMB Realty of Chicago had bought the development in 1989 for about $400 million. Eight years later, Crescent had picked it up for about $325 million. The deal had included the office complex, a Four Seasons Hotel, a high-rise apartment building, the Park Shops shopping center and 20 acres of mostly vacant land.
Timing has been on Crescent's side, with Houston's Downtown starting its renaissance as the decade drew to a close. In February, Crescent had added two more blocks to its holdings. Part of that additional land will be used to build 5 Houston Center.
Alan Friedman, Crescent's president of development and private equity, says the decision to move forward with the 5 Houston Center project is an easy one. "Demand by our own customers for additional office space, as well as a 97% occupancy rate in Downtown class-A buildings, affirms that the time is right for this development," Friedman says. "Crescent's earlier investments in land in the area allow us to be in a prime position to be able to respond to our customers' and the marketplace's needs," he adds.
Crescent has signed the Big Five professional services firm Ernst & Young to a 10-year lease for about 127,000 sf in 5 Houston Center. Carlton E. Baucum, Ernst & Young's Houston office managing partner, says the firm's new offices will use the technologically progressive, employee-friendly Workplace of the Future office model.
"Our Workplace of the Future model employs a heavy investment in technology to create a more ideal and flexible work environment for employees," Baucum says. The office will mirror the layout, ultra-high technologies and people-friendly support systems already in place in many of the firm's offices.
Five Houston Center is designed for the 21st century office customer, featuring high-tech must-haves such as availability to excess power; two telecommunications rooms per floor; broadband capabilities; taller floor-to-floor heights; larger and more efficient floor plates and a parking garage boasting a ratio of 2.2 cars per 1,000 sf.
The building will be connected by skybridge to Chevron Tower, giving direct access to Houston Center's existing three million sf of office space and amenities, including retail shops, restaurants and food court at the Park Shops, Four Seasons Hotel, Houston Center Club and Houston's underground tunnel system.
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