Stronger Economy Points to Accelerated Office Recovery
In an example of office-occupying activity, a long-term lease was recently inked by Waste Management Inc., which is to occupy nine floors at Capitol Tower consisting of approximately 284,000 square feet.
HOUSTON—Metro Houston had the fastest rate of job growth among the nation’s 12 largest metropolitan statistical areas. According to the Texas Workforce Commission, the Houston area created 101,800 jobs, a 3.4% increase in the 12 months ending July 2018, exceeding the national average for the ninth consecutive month.
Professional and business services added the largest number of jobs in this period with 40,900 positions. Within this sector, the employment services industry added 13,500 jobs, a sign that business activity in the office-occupying sector has increased but employers are not ready to commit to hiring permanent employees. However, overall, Houston’s economy has strengthened significantly during the last year; a fact which could help accelerate the city’s long-term office market recovery.
In an example of that type of office-occupying activity, a long-term lease was recently inked at a 35-story class-A office development. Waste Management Inc. will occupy nine floors at Capitol Tower consisting of approximately 284,000 square feet in Houston’s Central Business District. The Capitol Tower developer and owner is Skanska USA Commercial Development.
“Waste Management, like Skanska, is committed to leading in sustainability, so we are thrilled to welcome them to Capitol Tower, the first and only office development pre-certified as LEED v4 Platinum in Houston,” said Matt Damborsky, executive vice president for Skanska. “Capitol Tower and its wide range of thoughtful, green amenities provide Waste Management with a dynamic headquarters that is highly energy efficient and connected to the vibrant cultural fabric of downtown Houston.”
Waste Management will relocate its headquarters to Capitol Tower in 2020. The office portion of Capitol Tower is now 72% leased, with less than a year to go before completion.
“Capitol Tower continues to see significant interest from prospective tenants in the legal and financial services sectors,” Damborsky tells GlobeSt.com. “Many of the firms that we are engaging with are already located in the Central Business District and are drawn to Capitol Tower’s sustainable design and function, as well as a great amenity base that includes the SkyPark, the Assembly conference space and Understory.”
Located at 800 Capitol St., Capitol Tower is near cultural neighbors that include the Theater District, the historic Market Square and Buffalo Bayou Park. The tower offers 754,000 square feet of office space and more than 35,000 square feet of engaging public space at Understory, an open-air community hub that includes a full-service restaurant and a 9,000-square-foot culinary market with seven chef-driven concepts and a cocktail bar.
“It is situated on a prime block that offers an unparalleled five points of access to the downtown tunnel network–something we believe will have even stronger appeal with the addition of Understory,” Damborsky tells GlobeSt.com. “This, along with the proximity to key cultural landmarks including the Theatre District, the historic Market Square and Buffalo Bayou Park, will uniquely position Capitol Tower and its tenants at the center of the vibrant cultural life of downtown Houston.”
When Capitol Tower opens in 2019, it will be the most sustainable office tower in Texas, using 25% less energy than typical baseline facilities. One of only four core-and-shell projects nationwide to be pre-certified under LEED v4 Platinum, Capitol Tower will feature a number of green amenities, including the 24,000-square-foot SkyPark, the first and largest green roof in downtown Houston to be open to all building tenants. Other sustainable features include a 50,000-gallon rainwater collection system for reuse in landscape irrigation and restrooms, secured bicycle storage room with access to lockers and showers, a location within one block of three MetroRail stations, a facade that significantly reduces solar heat gain, an energy recovery wheel to precondition fresh air intake and district cooling to provide chilled water throughout the facility–lowering cooling costs and offering unlimited service capacity to tenants.
“This new work space is one of the many ways we are focused on investing in our people,” said Jim Fish, president and chief executive officer of Waste Management. “Additionally, the building will be one of the most sustainable office buildings in Houston and supports our company commitments to conserving natural resources.”
CBRE represented Skanska and Waste Management.
In addition to Capitol Tower, Skanska has also developed the LEED Platinum West Memorial Place campus in the heart of the Energy Corridor, which offers direct access to the Terry Hershey Park hike and bike trails.
The flight to quality continues as companies look for opportunities to attract and retain top talent, driving demand for more efficient floorplans, more glass and natural light for open planning, higher finished ceiling heights and improved technology, according to a third quarter office report by Cushman & Wakefield.