Office Basis Offers Dramatic Discount to Current Market Rents

HOUSTON—1111 Fannin is a 17-story 428,629-square-foot office tower located in Houston’s central business district. This CBD location was one of the key investment points for Triten Real Estate Partners and Taconic Capital Advisors, which recently purchased the asset for an undisclosed purchase price.

“1111 Fannin represents one of the best redevelopment opportunities in downtown Houston,” says Scott Arnoldy, managing partner at Triten Real Estate Partners. “The project is well-located within the CBD, has direct access to the tunnel system and is steps away from an incredible slate of amenities, including Discovery Green, the Four Seasons Hotel and the Green Street development. More importantly, our basis will allow us to offer a completely unique experience at a dramatic discount to current market rents. It’s also an attractive option for any user looking to control their own environment.”

1111 Fannin, which is 100% leased to a single investment-grade tenant, features a podium-style design with center-core floor plates that average 31,500 square feet.

“We have selected HPA Architecture out of Chicago to help us conceptualize the possibilities of the building,” continues Arnoldy. “HPA has worked on notable creative office developments and redevelopments across the country including headquarter buildings for two of the big five tech companies nationally.”

Triten’s partnership with HPA aims to design an experience that will meet changing market needs, he says.

“Our general plan is to refresh the lobby area and update other onsite amenities, as well as repurposing space and addressing infrastructure quirks like redundant power for data centers,” Arnoldy tells GlobeSt.com. “Plans should be finalized by end of the year.”

Current on-site amenities include a conference center, card key access, 24/7 security and an attached parking garage. The property has direct access to Houston’s tunnel network, which features more than seven miles of underground climate-controlled walkways with retail and dining amenities.

Additionally, the property’s CBD location provides access to The Shops at Houston Center, The George R. Brown Convention Center, Market Square, Minute Maid Park and the Toyota Center. 1111 Fannin is also centrally located between Interstates 10, 45 and 69, providing connectivity to the greater Houston area.

“A heavy focus within Triten Real Estate Partners is to create an urban, modern progressive amenity set within our properties. You see this at M-K-T, our mixed-use redevelopment project in the Heights, and at Lockton Place, our office building in Westchase,” Arnoldy tells GlobeSt.com. “We think we can put the same touch on 1111 Fannin as we have to these properties. You see this trend being carried into the CBD with a lot of the progressive updates that owners like Brookfield are accomplishing.”

JLL Capital Markets represented the seller and procured the buyer. The JLL team representing the seller was led by senior managing director Dan Miller, senior director Martin Hogan and analyst Ethan Goldberg.

The Federal Reserve Bank of Dallas reported that Houston added 143,200 jobs from April to September, meaning that almost 41% of pandemic job losses have been recovered. In September, jobs grew by 20,500, the largest monthly increase since June. Overall, Houston job growth so far in 2020 is down an annualized 8.5%. That’s a smaller decline than the nation as a whole at 8.9%, but larger than the state, which is down 7.3%.