Quick Leases Fuel Plan for 180,000 SF

HOUSTON-A quick lease-up of the 62,040-sf Sam Houston Technical Center has encouraged the building’s local development company to construct three more of the same during the next several months. Sam Houston Tech, completed during spring 2006, was leased up within four months at a $18.50-$19.50 ask. According to Mark Preston, senior vice president with Moody Rambin Interests’ Houston office, all deals came in at pro-forma, complete with TIs ranging between $25 to $28 per sf. “We began marketing efforts on this during the first of the year, acquired four very good tenants, and closed on all those leases by July,” says Preston, who handled leasing arrangements on behalf of the building’s developer, Lone Star Alliance, led by read estate veteran Kirk Pfeffer.

The four tenants, Tesco. Corp. and Rapid Solutions Corp. both headquartered in Canada, a subsidiary of France’s Alstom Engineers and Germany-based Phoenix Contact GmbH & Co. KG, signed five-to-seven year leases.

Because of Sam Houston Tech’s quick lease-up, Lone Star Alliance is preparing to break ground on two of three more office buildings at 60,000 sf each on Beltway 8 between Texas 290 and US 249. The new projects are approximately five miles north of Sam Houston Tech. Costs could not be obtained, however, similar projects have come out of the ground at between $125 to $175 per sf. It’s not been determined when construction on the third building will begin.

Preston says the new buildings will be similar to Sam Houston Tech in style and size. “We’re not going to trifle with success,” he says. “There were a lot of things the market liked about Sam Houston Tech, and we’re going to stay with that.”

He anticipates that, given the demand for space at Sam Houston Tech, the remaining buildings should lease quickly as well. “The pent-up demand of that market means we’re looking further ahead,” Preston says. “Knowing that the product is coming in 2007, we thoroughly expect full preleasing of one or more of those buildings will likely occur prior to groundbreaking.”