Negotiations have begun to add the 18,431-sf third floor to the 144,000-sf deal for 2707 N. Loop West and first rights to the balance of the first floor when it opens up in February 2010, Robert S. Parsley, co-chairman and principal of Colliers International in Houston, tells GlobeSt.com. In addition, Christus has expansion rights to 2727 N. Loop West, a 120,000-sf, seven-story office building. Both buildings are managed by locally based Hines Interests on behalf of an investment group that bought the class B complex about four years ago.
The Christus deal has been in the marketplace since last July. The plan was to relocate, consolidate and sell its 133,924-sf, six-story office building at 2600 N. Loop West after spending at least 15 years in it. [IMGCAP(2)]Parsley says the price is still being discussed, but the marketing blitz should begin within 60 days. The Irving, TX-based Christus also has 109,576 sf at 1700 W. Loop South in the Galleria submarket, which it leased in October 2006. According to Parsley, the Sisters of Charity have been space planning since the September 2006 sale of St. Joseph Hospital in Downtown Houston.
"This is a tremendous opportunity for Christus to lease a building that will provide space for both its current and future growth needs in a location that's across the highway from its current office," Parsley says. Christus, a recognized name in the state, also gets its name on 2707 N. Loop West as part of the deal.
Christus plans to start transitioning into the new location in late summer. The complex has been leased for years to Enterprise Products Inc., which has been gradually transitioning its teams to 1100 Louisiana St. in CBD, a 1.3-million-sf, multi-tenant high rise that it bought in November 2005. In 2707 N. Loop West, EPCO still lights the third floor and is occupying the bulk of its sister.
Parsley teamed with Colliers' principal Bill Byrd for the site search and negotiations. Hines' team consisted of Ronnie Martin, Chrissy Wilson and Mark Janssen.
Parsley says there were "nine or 10 options" for Christus to consider--all leasing prospects. "This was the best alternative from a financial standpoint and a location standpoint," he says. The end result was a stair-stepped lease with a gross rental rate that starts in the upper teens and ends in the low $20 per sf range.
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