BY LISA BROWN
HOUSTON—There is optimism due to a diversified economy beyond energy resulting in net positive job growth during the last 18 months, a rebound of the energy sector will stimulate added job creation and population in the region is increasing.
There is an increasing opportunity in Houston’s office sector as a result of the distress in the energy sector. Although the energy sector has recovered significantly, valuations have dropped materially, according to Buchanan Street Partners.
“Houston has experienced difficult times due to the energy sector’s instability. However, we are optimistic about the market long term,” says Matt Haugen, vice president at Buchanan Street Partners. “Houston is one of the top 10 population centers in the nation and we believe in its long-term economy.”
Amid that increasing opportunity and optimism, Buchanan Street Partners has acquired Sam Houston Crossing II, a 160,000-square-foot office building located at 10344 Sam Houston Park Dr. The seller was Duke Realty and the price was undisclosed.
Sam Houston Crossing II is a three-story office building that is 100% leased by subsidiaries of Forum Energy Technologies, PEMEX and First American Title Company. The property has frontage along Texas-8 Beltway between US-290 and Texas State Highway 249, in a location central to housing ranging from entry to executive level.
“The market surrounding Sam Houston Crossing II is becoming an increasingly popular employment hub in Houston because of its central location to a wealth of housing. Large companies are making office decisions based on location and are attracted to this region because it can minimize employees’ commute times and appeal to a larger percentage of the workforce,” said Haugen.
This is Buchanan Street’s sixth acquisition in Texas in the last 24 months. Buchanan Street plans to seek opportunities in Houston and anticipates actively acquiring significant assets in Texas in 2017.
“Buchanan Street is optimistic about Houston’s office market because of a couple of reasons: The business community has diversified beyond energy, resulting in net positive job growth during the last 18 months even though the number of energy jobs fell, a rebound of the energy sector will stimulate additional job creation during the next 12 to 18 months and drive absorption in the area, and there’s a growing population in the region,” Haugen tells GlobeSt.com.
Jared Chua of CBRE represented the seller in the transaction. Buchanan Street represented itself.
As previously reported, year-end 2016 total office leasing activity settled at 8.9 million square feet, down significantly from 18.4 million square feet in 2014.
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