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HOUSTON-Through an equity syndication, Franklin Street Properties Corp. has raised $27 million for construction and leasing of a second building, with 155,000 sf of class A space, for the Offices of Park 10 in West Houston.
Franklin Street Properties contributed about three acres to the project in exchange for an equity stake. The REIT also set up FSP Park Ten Development Corp. to oversee and lease the building.
"Most developers who develop a spec building tend to use construction financing or some kind of loan," says George Carter, FSP Park Ten Development's president and CEO for the Wakefield, MA-based REIT. He says the $27 million is the estimated cost of construction, tenant improvements and leasing commissions.
The project is scheduled to break ground in 30 to 60 days. It will abut the park's first building, a 269,073-sf design built in 1998. The REIT's affiliate, FSP Park Ten, bought the asset three years ago. "When we purchased the initial building, as part of that acquisition, we purchased the vacant land next to it as well, with the idea of developing a second building on it," Carter tells GlobeSt.com.
Park 10 is a 550-acre, mixed-use development along Interstate 10 at Katy Freeway in the heart of the Energy Corridor. "We really thought that, with what was going on in the energy business and in West Houston, and more specifically, what was going on in the Park 10 development, that the market could absorb and would absorb and receive well a newly developed office building," Carter says.
Yancey-Hausman & Associates of Houston, which developed the first structure, will oversee construction, lease and manage the second building. Carter says there has been no preleasing to date and quoted rates have yet to be set.
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