HOUSTON-Parkway Properties Inc. has added two new tenants to its class A office building at 1401 Enclave Pkwy. in the Energy Corridor. Chemical Market Associates Inc. signed a 10-year lease for 26,000 square feet, and Callon Petroleum Co. signed a 10-year new lease for 12,000 square feet.
The new tenants will backfill a large portion of space Parkway Properties got back last year, according to Mike Fransen, vice president and asset manager for Parkway Properties' local portfolio. The Jackson, MS-based REIT has owned 1401 Enclave Pkwy. since 2007, and it underwrote the 209,000-square-foot office building with the expectation that Parker Drilling would vacate 52,000 square feet – the entire fifth and sixth floors – when it relocated to Greenway Plaza.
"We started marketing the space almost immediately, and we thought we had found the perfect tenant for the majority of the space in December 2008, but when the contract got to the CFO's desk, he was concerned about what happening in the economy, and the company decided not to take the space," Fransen tells GlobeSt.com. "At that point, we had to ramp up our efforts to fill the space, and we toured just about every sizeable deal that was looking in the Energy Corridor."
Chemical Market Associates currently is located in an older building off Katy Freeway. "This is an opportunity for them to get into a better building at a better value," Fransen says, adding that the firm will move into its new space in January 2011 and will occupy the entire fifth floor. "Their new space will improve their image and will help with employee retention."
Callon Petroleum will take possession of its sixth floor space in March 2011. Currently, the firm has an office nearby at 1200 Enclave Pkwy., which is in receivership. "Tenants today are very concerned about the financial health of the building ownership, and we were able to demonstrate our stability," Fransen says.
Parkway Properties has a contract out for the rest of the sixth floor. When that lease is signed, the six-story 1401 Enclave Pkwy. will be fully leased.
"We ultimately want to make deals that make sense for everybody, and we're glad we were able to find established, credit worthy companies that were willing to make long-term commitments and that are excited to be in our building," Fransen says.
Joe Petty with Cushman & Wakefield of Texas Inc.'s local office represented both Chemical Market Associates and Callon Petroleum in lease negotiations.
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