Noble Energy Signs 497 KSF Office Lease in Houston
- Jan 24, 2012
January 24, 2012
By Barbra Murray, Contributing Editor
Approximately eight months after Trammell Crow Co. and Principal Real Estate Investors snapped up the former Hewlett-Packard headquarters in Houston, the joint venture has secured a commitment from Noble Energy Inc. to occupy the 497,000-square-foot office building in its entirety.
“When we purchased the property from Hewlett-Packard, we saw it as a very high quality property in a good location that would be attractive to large corporate users,” Jim Casey, a senior managing director with TCC, told Commercial Property Executive. “It’s a big building and we had aspirations of finding a large tenant or a couple of tenants that would fill it.”
Carrying the address of 20555 State Highway 249, the 10-story tower first opened its doors in 1998 as Compaq Computer Corp.’s corporate headquarters, and later served as HP’s home. The partners are presently submitting the property to a major capital renovation program that will add more shine to the Class A structure, as well as LEED Certification by the U.S. Green Building Council.
Noble will consolidate its offices currently located around the city, including the company’s corporate headquarters 15 miles away at 100 Glenborough Dr., under one roof at 20555 State in the summer of 2013, making the upgraded campus its new global headquarters. And there is plenty of room for Noble’s growth at the site, as TCC and Principal’s acquisition of the asset last year included an adjacent 3.5-acre parcel of developable land.
Noble’s commitment takes one of Houston’s largest vacant office buildings off the market, thereby going a long way to bring down the city’s office vacancy rate, which stood at 15 percent at the close of the fourth quarter, as per a report by commercial real estate firm CBRE Group Inc., which represented TCC and Principal in the lease transaction. Grubb & Ellis Co. represented the tenant.
The timing was just right for securing a sizeable occupant in a market where the availability of premier accommodations with over 400,000 square feet of contiguous space is limited. “There hadn’t been any new development projects in the last couple of years,” Casey said. “There have been buildings that delivered a couple of years ago, but no one’s started anything new. So we thought it was a good window to land a big tenant and we wanted to move faster than what it would take to build a whole new building.”
It remains unclear if the Noble lease is represents a shift in the Houston office market; conditions are improving but only time will tell. “I don’t know that this marks a trend indicating that there will be more large leases or not, but we think that there will be continued expansion of companies in the energy sector here and then maybe other industries as well.”