Backfill Begins for 300,000-SF Chase Vacancy

HOUSTON-With 300,000 sf about to go dark, Hines has pulled off a leasing coup for its landmark JPMorgan Chase Tower. The full-court press for the Chase Bank space has two tenants lined up to keep lights burning in 120,000 sf and talks under way for the 180,000-sf balance.

The law firm of Winstead, Sechrest & Minick has leased 100,000 sf at 600 Travis St. Meanwhile, talks with 25-year tenant, Andrews Kurth LLP, have produced a 10-year lease extension for 223,000 sf. With the new deals, the 1.98-million-sf high rise will be 88% occupied when 2007 begins.

As part of the workout, Chase will keep 5,000 sf for a bank branch in the 60-story trophy’s lobby. Of its 300,000 sf of long-time office space, 200,000 sf was set to expire at year’s end. In a mutually acceptable termination agreement, the locally based Prime Asset Management took back 100,000 sf. Dealmakers couldn’t be reached by publication time for comment about the space shuffle.

Chase, though, is a tenant in several Hines buildings in the country so the scene is being played out elsewhere. “Although we’re sad to see them consolidate, we’re now pleased to have the capacity to accommodate the expansion needs of existing tenants,” Hines executive vice president Mark Cover says in a press release issued late yesterday afternoon. He says new and existing tenants are negotiating for Chase’s balance.

Hines perceives the Chase consolidation as an opportunity to reposition the high rise, including a renovation of the tower’s lower level. Zeigler Cooper has been hired to redesign the retail area in line with the plan.

In the law firm leases, CB Richard Ellis executive vice president Charles R. Gordon and vice president Lance E. McCarthy were the tenants’ brokers. Prime Asset’s negotiating team consisted of Hines senior vice president David Kelley and leasing director Ronnie Martin. Details about the deal were unavailable last night, including the relocation timeframe by Winstead Sechrest & Minick from 919 Milam St. The average rate for CBD class A office space is $23.61 per sf, according to a local market report.

Martin and Hines vice president Clark Davis started the backfill scouting mission in 2005 when the JPMorgan Chase-Bank One merger went into play. In the workout talks, Mark Russell, senior vice president and branch manager for Studley, represented Chase.