q4 2009 houston office market report

8/14/2019 Q4 2009 Houston Office Market Report

1/9

COLLIERS INTERNATIONAL | HOUSTON OFFICE MARKET | 4TH QUARTER 2009

HOUSTON | 4TH QUARTER | 2009

Our Knowledge is your Pro


2/9


3/9


Occupancy & Availability

Houstons office occupancy continued

Absorption & Demand

Weak tenant demand for office space in

2009 TOP OFFICE LEASES

-

for all property classes at 83.6% in the

fourth quarter, down from 86.5% at this

time last year. Overall, suburban office

properties recorded substantially largerdecreases in occupancy compared to CBD

properties over the past twelve months.

consecutive years of positive net absorpti

A dismal outlook for the local employme

sector in 2010 suggests continued losses

occupied space over the next twelvemonths.

Although Houstons office market poste

Hess Corporation

Hess Tower (formerly Discovery Tower),

CBD

Jan-09 844,763 SF

Technip

Energy Tower II, Katy Freeway

Aug-09 378,375 SF

sharpest decline to 81.3% at the end of the

fourth quarter from 87.4% one year ago.

Suburban Class B occupancy also

increased, although more moderately to

82.7% from 85.2% in the fourth quarter

last year.

236,880 SF of positive net absorption

citywide in the fourth quarter, it was not

enough to offset the significant losses in

occupied space recorded in the previous

three quarters, resulting in 1.2 million S

of negative net absorption for the year.

Citywide, Class B properties were the

Locke Lord Bissell & Liddell*

Chase Tower, CBD

Aug-09 246,381 SF

NRG Texas

Houston Pavilions, CBD

Jun-09 232,962 SF

In the CBD, Class A office properties

managed to hold occupancy above 90

percent, closing the fourth quarter at

92.2% occupancy marking a slight increase

from 91.9% twelve months earlier.

Boosting occupancy for top-tier properties

were several key leases, as office tenants

hardest hit in 2009 with 1.6 million SF

negative net absorption, compared to Cl

A properties with 212,900 SF positive ne

absorption.

Rental Rates

Tax MastersDairy Ashford Plaza, Energy Corridor

Aug-09 107,890 SF

King & Spalding*

1100 Louisiana, CBD

Jul-09 105,151 SF

continue to ene it rom mar et

conditions in their favor including lower

rental rates and increased concessions.

Sublet space continued to increase with a

total of 4.7 million SF on the market atyears end, including 2.3 million SF of

vacant space and an additional 2.4 million

t supp y cont nu ng to outpace tena

demand, and pervasive uncertainty

regarding the possibility of economic

recovery in 2010, landlords again lowere

their quoted rental rates for all propertyclasses. Also significant to effective offic

rental rates in the fourth quarter was the

ConocoPhillips Chemical Company*

Ashford 7, Katy Freeway

Nov-09 104,615 SF

Southwestern Energy

One Commerce Green, North Belt

May-09 101,330 SF

SF of subleases available for occupancy in

2010. The largest sublease space being

marketed is located downtown in the RRI

Energy Plaza building (1000 Main, CBD)

where 432,662 SF is available for

occupancy in October 2010 (through

October 2018), and the 120,550 SFCBD VS. SUBURBAN

ncrease n ease concess ons, nc u ng

rent and generous tenant improvement

packages, as landlords aggressively

competed for tenants.

On a year-over-year basis, CBD Class A

average quoted rental rates fell 2.7% to

$37.36 per SF (from $38.41), while

Washington Group International

Richmond Park, Westchase

Feb-09 96,225 SF

*Renewal

available (through January 2020) at Three

Allen Center (333 Clay Street, CBD).

Outside the CBD, major sublease

assignments include the 119,107 SF

(through December 2013) available at 9700

Bissonnet (Southwest); 110,000 SF

(through 2013) at San Felipe Plaza (5847$25$27

$30

$32

$35

$37

$40$42

%

%

%

%

%

%

%

%%

suburban Class A rental rates dropped

2.2% to $27.26 per SF (from $27.88). In

contrast, CBD Class B average quoted

rental rates plunged 16.4% to $23.91 pe

SF (from $28.60), while suburban Class

rates slipped 2.0% to $18.09 per SF (fro

$18.46) on a full-service basis. A weak

San Felipe, San Felipe-Voss;, and 36,309 SF

(through February 2012) at The Braeswood

Tower II (9009 West Loop South, West

Loop/Galleria).

$22%4Q -08 1Q- 09 2Q -09 3Q -09 4Q -09

C BD VAC ANC Y SUB URBAN VAC ANC Y

CBD RENTS SUBURBAN RENTS

employment outlook for 2010, leading t

minimal (if any) gains in occupancy, is

expected to drive further rental rate

decreases over the next six to nine mont


4/9


Top Performing Office Buildings

ells Fargo Pl

1000 Louisian

CBD

RBA: 1,72

Built: 1983

Leased: 84.9

Available: 260

Bank of America Ctr.

700 Louisiana

CBD

RBA: 1,268,480 SF

Built: 1983

Leased: 88.1%

Available: 140,830 SF

Five Houston Center

1401 McKinney Street

CBD

RBA: 580,875 SF

Built: 2002

Leased: 91.0%


Rents: $42.

Owner:

Metropolitan L

Insurance Com

Rents: $37.96/SF

Owner:

The Novarti Group

Rents: $42.62/SF

Owner:

Wells REIT II

Five Post Oak

4400 Post Oak

Galleria/West

Wells Fargo Tower

1300 Post Oak Blvd.

Galleria/West Loop

Marathon Oil Tower

5555 San Felipe

Galleria/West Loop

RBA: 567

Built: 198

Leased: 90.4

Available: 53,6

Rents: $34

Owner:

RBA: 491,254 SF

Built: 1983

Leased: 93.0%


Rents: $34.55/SF

Owner:

RBA: 1,070,209 SF

Built: 1982

Leased: 85.4%

Available: 156,075/SF

Rents: $27.59/SF

Owner:

Shorenstein CoTIAA-CREFHanover Real Estate

Partners

The Plaza at Enclave

1254 Enclave Parkway

Energy Corridor

RBA: 343, 541 SF

Built: 2008

One Eldridge Place.

777 N. Eldridge Parkway

Energy Corridor

RBA: 239,417 SF

Built: 1985/2001

One BriarLak

2000 W. Sam

Pkwy

Westchase

RBA: 502

Leased: 82.5%


Rents: $32.00/SF

Owner:

Core Real Estate

Leased: 92.1%


Rents: $31.22/SF

Owner:

Behringer Harvard

Leased: 93.0

Available: 34,

Rents: $40

Owner:

Behringer Har

ices at en

1600 HighwaySugar Land/

E. Fort Bend

RBA: 85,2

Built: 199

Leased: 94.6

11 Greenway

Greenway

RBA: 745,956 SF

Built: 1979

Leased: 84.5%


aterway aza

10003 WoodlochForest

Woodlands

RBA: 223,483 SF

Built: 2000

Leased: 98.4%

Available: 4,5

Rents: $25

Owner:

KBS Real Esta

Investment Tr

Rents: $30.47/SF

Owner:

Crescent RE Equities

Available: 3,557 SF

Rents: $34.00/SF

Owner:

Triple Net Properties


5/9


Leasing Activity

Houstons office leasing activity reached 2.4

Sales Activity

Investment sales activity remained weak

,

to 3.1 million SF in the fourth quarter of

2008. Despite the slowdown from twelve

months earlier, the Houston market posted

seven office leases over 100,000 SF in 2009,as credit-strong tenants capitalized on

prevailing weak market conditions.

,

credit posing the greatest challenge to

closing a transaction. Transactions in the

twelve-month period totaled 86 with a total

dollar volume of $161.0 million, averaging$56 per SF and an average 9.1%

capitalization rate.

dgestone I*

0 N. Loop Freeway

thwest Submarket

Significant non-renewal office leases signed

through the fourth quarter included: Hess

844,763 SF lease at Hess Tower (formerly

Discovery Tower, CBD); Technips 378,375

SF lease at Energy Tower II (Katy Freeway-

Energy Corridor); NRG Texas 232,962 SF

lease at Houston Pavilions (CBD); Tax

t oug sa es transactions o properties

with less than 50,000 SF continued to

predominate, several significant

transactions over 100,000 SF closed in the

fourth quarter including:

Fausset Neely Inc. purchased the 126,015

SF Northwest One located at 13100

RBA: 135,400 SF

Built: 1976

Buyer: Fuller Realty Partners

Seller: CHRISTUS Health

ale Date: February 2009

asters , ease at airy s or

Plaza (Katy Freeway-Energy Corridor); and

Washington Group Internationals 96,225

SF lease at Richmond Park Westchase

(Westchase).

Key office lease renewals signed in 2009

included Locke Lord Bissell & Liddells

Northwest Freeway (Northwest) forapproximately $5.1 million, or $40 per SF,

from RPD Catalyst. Built in 1982, the

property was 44% occupied at sale.

Khosbin Properties purchased the 121,997

SF 6001 Savoy Drive property from BGK

246,381 SF lease at Chase Tower (CBD);

King & Spaldings 105,151 SF at 1100

Louisiana (CBD); and ConocoPhillips

104,615 SF lease at Ashford 7 (Katy Freewa

Energy Corridor).

For other significant office lease transaction

.

$36 per SF. This Southwest submarket

property was 50% occupied at sale.

Key office properties under contract at year

end included the 162,900 SF One ParkTen Plaza (94% leased) and 130,822 SF

Timberway II (97% leased), both located in

st Pointe Center*

0 W. Sam Houston Parkway

rthwest Submarket

RBA: 170,823 SF

Built: 2009Buyer: Undisclosed

Seller: White Rock Commercial

HOUSTON OFFICE MARKET SUMMARY (CBD, SUBURBAN, & CITYWIDE)

,

page 3.the Katy Freeway-Energy Corridor

submarket.lliers International sales transaction

Rent

Class

Total

Inventory

Sq. Ft.

Direct

Vacant

Sq. Ft.

Direct

Vacancy

Rate

Sublease

Vacant

Sq. Ft.

Sublease

Vacancy

Rate

Total

Vacant

Sq. Ft.

Q4 Vacancy

Rate

Q3 Vacancy

Rate

Q4 Net

Absorption

Sq. Ft.

YTD Net

Absorption

Sq. Ft.

Wgtd. Av

Quoted

Rate

Existing Properties Absorption

CENTRAL BUSINESS DISTRICT

A 27,837,503 1,858,659 6.7% 323,065 1.2% 2,181,724 7.8% 8.5% 188,132 67,959 $37

B 8,476,935 1,845,132 21.8% 91,324 1.1% 1,936,456 22.8% 23.0% 14,442 (222,825) $23

C 1,521,580 718,054 47.2% 0 0.0% 718,054 47.2% 48.5% 19,758 64,099 $15

Total 37,836,018 4,421,845 11.7% 414,389 1.1% 4,836,234 12.8% 13.4% 222,332 (90,767) $28.

SUBURBAN TOTAL

A 69,289,235 11,887,352 17.2% 1,039,726 1.5% 12,927,078 18.7% 18.1% (78,402) 144,962 $27

B 69,573,370 11,226,177 16.1% 787,637 1.1% 12,013,814 17.3% 17.2% (39,389) (1,408,754) $18

C 19,823,164 2,392,235 12.1% 28,603 0.1% 2,420,838 12.2% 12.9% 132,339 192,606 $15

Total 158,685,769 25,505,764 16.1% 1,855,966 1.2% 27,361,730 17.2% 17.0% 14,548 (1,071,186) $22.

GRAND TOTAL

A 97,126,738 13,746,011 14.2% 1,362,791 1.4% 15,108,802 15.6% 15.3% 109,730 212,921 $28

B 78,050,305 13,071,309 16.7% 878,961 1.1% 13,950,270 17.9% 17.8% (24,947) (1,631,579) $18

C 21,344,744 3,110,289 14.6% 28,603 0.1% 3,138,892 14.7% 15.4% 152,097 256,705 $15

Total 196,521,787 29,927,609 15.2% 2,270,355 1.2% 32,197,964 16.4% 16.3% 236,880 (1,161,953) $23.


6/9


HOUSTON SUBURBAN OFFICE MARKET

Total Direct Direct Sublease Sublease Total

Q4 VacancyQ4 Net YTD Net Wgtd. Avg.

ass nventory

Sq. Ft.

acant

Sq. Ft.

acancy

Rate

acant

Sq. Ft.

acancy

Rate

acant

Sq. Ft.Rate

sorpt on

Sq. Ft.

sorpt on

Sq. Ft.

uote

Gross Rate

Suburban Total

A 69,289,235 11,887,352 17.2% 1,039,726 1.5% 12,927,078 18.7% (78,402) 144,962 $27.26

B 69,573,370 11,226,177 16.1% 787,637 1.1% 12,013,814 17.3% (39,389) (1,408,754) $18.09

C 19,823,164 2,392,235 12.1% 28,603 0.1% 2,420,838 12.2% 132,339 192,606 $15.24

Total 158,685,769 25,505,764 16.1% 1,855,966 1.2% 27,361,730 17.2% 14,548 (1,071,186) 22.09$

Baytown

B 525,544 5,400 1.0% 0 0.0% 5,400 1.0% 0 (850) $17.74

C 60,396 4,787 7.9% 0 0.0% 4,787 7.9% (1,040) (1,661) $14.78

Total 585,940 10,187 1.7% 0 0.0% 10,187 1.7% (1,040) (2,511) 16.35$

Bellaire

A 1,390,034 97,229 7.0% 17,905 1.3% 115,134 8.3% 20,668 (9,112) $23.19

B 945,345 50,567 5.3% 0 0.0% 50,567 5.3% 25,090 (4,639) $17.66

C 567,560 32,201 5.7% 0 0.0% 32,201 5.7% (7,622) 1,395 $15.25

Total 2,902,939 179,997 6.2% 17,905 0.6% 197,902 6.8% 38,136 (12,356) 20.22$

Conroe

A 60,000 0 0.0% 0 0.0% 0 0.0% 0 0 -

B 287,739 23,421 8.1% 0 0.0% 23,421 8.1% 315 (5,345) $15.18

C 157,335 4,275 2.7% 0 0.0% 4,275 2.7% (4,275) (4,275) $15.00

Total 505 074 27 696 5.5% 0 0.0% 27 696 5.5% 3 960 9 620 15.15, , . . , . , , .

E.Fort Bend/SugarlandA 3,382,755 507,315 15.0% 5,339 0.2% 512,654 15.2% 8,881 51,315 $28.88

B 1,907,135 296,005 15.5% 4,228 0.2% 300,233 15.7% (9,068) (9,281) $18.74

C 174,013 6,492 3.7% 0 0.0% 6,492 3.7% (4,319) (5,692) $15.45

Total 5,463,903 809,812 14.8% 9,567 0.2% 819,379 15.0% (4,506) 36,342 25.07$

FM 1960

A 2,341,171 1,541,677 65.9% 23,511 1.0% 1,565,188 66.9% (9,899) 11,668 $26.96

B 5,142,610 1,637,343 31.8% 78,132 1.5% 1,715,475 33.4% 55,464 (27,189) $16.14

C 828,120 85,638 10.3% 13,619 1.6% 99,257 12.0% 4,893 22,731 $14.25

Total 8,311,901 3,264,658 39.3% 115,262 1.4% 3,379,920 40.7% 50,458 7,210 21.20$

reenway

A 6,069,998 892,027 14.7% 144,181 2.4% 1,036,208 17.1% 75,210 (67,963) $30.38

B 2,745,088 244,909 8.9% 3,500 0.1% 248,409 9.0% 23,778 18,597 $21.05

C 954,859 247,055 25.9% 0 0.0% 247,055 25.9% (5,481) (30,090) $16.35

Total 9,769,945 1,383,991 14.2% 147,681 1.5% 1,531,672 15.7% 93,507 (79,456) 26.22$

Gulf Freeway/Pasadena

A 88,000 44,000 50.0% 0 0.0% 44,000 50.0% 0 44,000 $16.50

B 1,561,870 159,629 10.2% 4,294 0.3% 163,923 10.5% 64,669 25,860 $18.48

C 1,144,329 136,919 12.0% 0 0.0% 136,919 12.0% 6,291 (29,671) $14.41

Total 2,794,199 340,548 12.2% 4,294 0.2% 344,842 12.3% 70,960 40,189 14.46$

I-10 East

B 318,516 90,474 28.4% 9,260 2.9% 99,734 31.3% (9,260) 5,527 $15.21

C 165,473 16,748 10.1% 0 0.0% 16,748 10.1% 0 0 $8.70

Total 483,989 107,222 22.2% 9,260 1.9% 116,482 24.1% (9,260) 5,527 14.19$

Katy Freeway

A 11,193,349 2,452,879 21.9% 154,772 1.4% 2,607,651 23.3% (289,428) 718,334 $28.30

B 6,869,739 1,012,747 14.7% 115,578 1.7% 1,128,325 16.4% 3,053 (227,911) $19.07

C 1,812,915 209,946 11.6% 0 0.0% 209,946 11.6% 6,935 (27,478) $14.93

Total 19,876,003 3,675,572 18.5% 270,350 1.4% 3,945,922 19.9% (279,440) 462,945 24.99$

Kingwood/Humble

A 134,000 25,904 19.3% 0 0.0% 25,904 19.3% 0 0 $27.50

B 2,489,582 213,243 8.6% 8,400 0.3% 221,643 8.9% 134 (13,276) $19.71

C 746,003 31,033 4.2% 0 0.0% 31,033 4.2% (9,787) 325 $16.55

Total 3,369,585 270,180 8.0% 8,400 0.2% 278,580 8.3% (9,653) (12,951) 20.09$NASA/Clear Lake

A 699,707 32,594 4.7% 9,152 1.3% 41,746 6.0% (3,079) (12,974) $23.62

B 3,038,159 262,669 8.6% 13,609 0.4% 276,278 9.1% 38,507 25,861 $20.75

C 1,227,256 125,141 10.2% 13,047 1.1% 138,188 11.3% 12,277 1,846 $14.11

Total 4,965,122 420,404 8.5% 35,808 0.7% 456,212 9.2% 47,705 14,733 19.00$

Neartown/Allen Parkway

A 1,613,358 239,370 14.8% 133,930 8.3% 373,300 23.1% 11,559 (172,300) $24.06

B 2,583,793 148,586 5.8% 36,600 1.4% 185,186 7.2% (19,397) 81,580 $20.63

C 1,191,545 402,997 33.8% 0 0.0% 402,997 33.8% 4,597 23,843 $19.20

Total 5,388,696 790,953 14.7% 170,530 3.2% 961,483 17.8% (12,435) (114,563) 20.94$

Greenspoint/North Belt

A 5,060,046 355,182 7.0% 80,739 1.6% 435,921 8.6% 70,848 (41,494) $19.88

B 4,747,096 1,090,002 23.0% 63,063 1.3% 1,153,065 24.3% 16,319 (313,592) $16.72

C 1,384,999 253,009 18.3% 1,937 0.1% 254,946 18.4% 6,033 36,559 $13.14

Total 11,192,141 1,698,193 15.2% 145,739 1.3% 1,843,932 16.5% 93,200 (318,527) 16.85$


7/9


HOUSTON SUBURBAN OFFICE MARKET

Total Direct Direct Sublease Sublease Total

Q4 Net YTD Net Wgtd. Avg.

Class Inventory

Sq. Ft.

Vacant

Sq. Ft.

Vacancy

Rate

Vacant

Sq. Ft.

Vacancy

Rate

Vacant

Sq. Ft.

acancy

RateAbsorption

Sq. Ft.

Absorption

Sq. Ft.

Quoted

Gross Rate

Northeast

A 0 0 #DIV/0! 0 #DIV/0! 0 #DIV/0! 0 0 $0.00

B 291,773 50,291 17.2% 0 0.0% 50,291 17.2% 0 4,612 $17.02

C 143,647 15,851 11.0% 0 0.0% 15,851 11.0% 1,196 36,172 $11.95

Total 435,420 66,142 15.2% 0 0.0% 66,142 15.2% 1,196 40,784 15.80$

Northwest

A 3,522,529 1,370,682 38.9% 27,944 0.8% 1,398,626 39.7% 16,678 134,754 $23.18

B 6,532,260 1,327,052 20.3% 42,690 0.7% 1,369,742 21.0% (132,691) (252,983) $15.66

C 1,584,361 107,491 6.8% 0 0.0% 107,491 6.8% 18,921 15,935 $12.31

Total 11,639,150 2,805,225 24.1% 70,634 0.6% 2,875,859 24.7% (97,092) (102,294) 19.21$

Northwest Outlier

A 89,750 0 0.0% 0 0.0% 0 0.0% 0 89,750 -

B 135,457 7,572 5.6% 0 0.0% 7,572 5.6% 3,276 (2,512) $13.80

C 0 0 0 0 0 0 -

Total 225,207 7,572 3.4% 0 0.0% 7,572 3.4% 3,276 87,238 $13.80

Richmond/Fountainview

A 0 0 0.0% 0 0.0% 0 0.0% 0 0 $0.00

B 643,051 62,902 9.8% 0 0.0% 62,902 9.8% 8,167 18,990 $13.84

C 794 419 123 802 15 6% 0 0 0% 123 802 15 6% 10 213 2 329 12 63, , . . , . , , .

Total 1,437,470 186,704 13.0% 0 0.0% 186,704 13.0% 18,380 21,319 13.04$San Felipe/Voss

A 1,741,228 219,194 12.6% 29,895 1.7% 249,089 14.3% (5,560) (71,381) $31.26

B 3,389,806 312,288 9.2% 22,723 0.7% 335,011 9.9% 11,592 (53,156) $19.51

C 161,393 21,900 13.6% 0 0.0% 21,900 13.6% 2,554 (6,099) $12.46

Total 5,292,427 553,382 10.5% 52,618 1.0% 606,000 11.5% 8,586 (130,636) 23.89$

South

A 105,869 105,869 100.0% 0 0.0% 105,869 100.0% (869) (869) $26.92

B 396,450 32,614 8.2% 0 0.0% 32,614 8.2% 15,536 (6,348) $23.60

C 223,029 42,220 18.9% 0 0.0% 42,220 18.9% (6,000) 7,942 $16.68

ota , , . . , . , .

South Main/Med Center

A 4,287,933 370,028 8.6% 0 0.0% 370,028 8.6% 16,335 169,470 $30.98

B 3,751,688 247,543 6.6% 4,800 0.1% 252,343 6.7% (34,477) 42,888 $20.45

C 2,745,096 153,505 5.6% 0 0.0% 153,505 5.6% 65,165 58,807 $18.26

Total 10,784,717 771,076 7.1% 4,800 0.0% 775,876 7.2% 47,023 271,165 25.07$

Southeast/Outlier

A 159,304 0 0.0% 0 0.0% 0 0.0% 0 0 -

B 461,945 71,479 15.5% 0 0.0% 71,479 15.5% 0 (10,492) $22.28

C 22,783 0 0.0% 0 0.0% 0 0.0% 9,036 9,036 $15.00

Total 644,032 71,479 11.1% 0 0.0% 71,479 11.1% 9,036 (1,456) 22.28$

Southwest

A 726,310 207,624 28.6% 20,719 2.9% 228,343 31.4% (12,089) (167,133) $18.28

B 6,964,376 1,434,019 20.6% 164,450 2.4% 1,598,469 23.0% (19,107) (141,842) $15.37

C 2,475,639 258,469 10.4% 0 0.0% 258,469 10.4% 11,254 142,215 $12.49

Total 10,166,325 1,900,112 18.7% 185,169 1.8% 2,085,281 20.5% (19,942) (166,760) 15.30$

Southwest Outlier

A 87,710 10,116 11.5% 0 0.0% 10,116 11.5% 10,577 9,196 $27.42

B 372,488 59,798 16.1% 0 0.0% 59,798 16.1% (396) (5,734) $26.65

C 150,735 5,500 3.6% 0 0.0% 5,500 3.6% 250 9,100 $16.08

Total 610,933 75,414 12.3% 0 0.0% 75,414 12.3% 10,431 12,562 25.98$

West Loop

A 16,245,407 1,584,553 9.8% 226,984 1.4% 1,811,537 11.2% (57,937) (521,650) $28.91

B 5,460,106 1,230,281 22.5% 50,800 0.9% 1,281,081 23.5% (32,578) (368,156) $22.09C 426,332 23,394 5.5% 0 0.0% 23,394 5.5% (36) (17,467) $16.50

Total 22,131,845 2,838,228 12.8% 277,784 1.3% 3,116,012 14.1% (90,551) (907,273) 25.85$

Westchase

A 7,994,528 1,245,505 15.6% 122,685 1.5% 1,368,190 17.1% (5,814) (204,845) $27.56

B 5,004,398 739,488 14.8% 92,797 1.9% 832,285 16.6% (4,519) (178,037) $19.70

C 509,131 58,785 11.5% 0 0.0% 58,785 11.5% 20,478 (1,745) $15.04

Total 13,508,057 2,043,778 15.1% 215,482 1.6% 2,259,260 16.7% 10,145 (384,627) 24.36$

Woodlands

, , , . , . , . , , .

B 3,007,356 415,855 13.8% 72,713 2.4% 488,568 16.2% (43,796) (11,326) $20.39

C 171,796 25,077 14.6% 0 0.0% 25,077 14.6% 0 (3,765) $19.60

Total 5,475,401 1,026,536 18.7% 114,683 2.1% 1,141,219 20.8% 31,721 171,105 25.14$


8/9


Office Development Pipeline

ous on s eve opmen ac v y s owe s gn can y a e en o , , o new o ce space a e n e our uar er

(bringing the year-end total to 4.5 million SF). Citywide, the Energy Corridor/Katy Freeway submarket dominated new development

activity accounting for 47% or 2.1 million SF of the total 4.5 million SF of new office space added this year. Among the most significant

office buildings delivered in the Energy Corridor this year were MacHaiks 428,831-SF Energy Tower II (11720 Katy Freeway),

Transwesterns 350,000-SF Eldridge Oaks (1080 Eldridge Parkway), MetroNationals 336,000-SF Cemex Center (920 Memorial City

Way) and Behringer Harvards 305,528-SF Three Eldridge Place (737 Eldridge Parkway). Other key submarkets adding inventory this

year included The Woodlands submarket with 702,990 SF in five new buildings (16% of the citywide total), the Northwest with 597,435

, , .

Of the 2.2 million SF of office space under construction at the end of 2009, two new buildings in the CBD - Hines 972,474-SF Main

Place (slated for delivery in 2011) and Trammell Crow Companys Hess Tower (formerly Discovery Tower, scheduled for completion in

2010) account for 82% of the total development underway. Outside the CBD, two new office projects are located in the Sugar Land-

East Fort Bend County submarket: Planned Communitys 157,619 SF office addition to the mixed-use Sugar Land Town Center and

Midway Companies 152,619 SF Eco Center at Lake Pointe, both scheduled to be completed by the end of the first quarter 2010. After

a short hiatus, Trademark Propertys is back on track to deliver approximately 80,000 SF of office space as part of their mixed-use High

Select Under Construction Office Buildings

Street project located 4410 Westheimer (inside Loop 610) in the West Loop/Galleria submarket. Weak market fundamentals havecontributed to slow lease-up of the speculative projects under construction, with the notable exception of Trammell Crow Companys

Hess Tower (formerly Discovery Tower) 100% preleased to Hess Corporation.

Submarket Building Name Building Address Sq. Ft. % Leased Developer Delivery

CBD MainPlace 811 Main St 972,474 11.2 Hines Holdings Inc. Feb-11

CBD Hess Tower 1501 McKinney St 844,763 100 TCC Development May-10

E Fort Bend Co/Sugar Land Sugar Land Town Center 2245 Texas Dr 157,619 0 Planned Community Development Co. Mar-10

E Fort Bend Co/Sugar Land Eco Centre at Lake Pointe 16750 Creek Bend Dr 152,619 0 Midway Companies Feb-10

West Loop/Galleria High Street 4410 Westheimer Rd 78,966 0 Trademark Property Oct-10

Total office properties under construction listed above 2,206,441Grand total office properties under construction over 20,000 sq. ft. 2,206,441

Select Year-to-Date Office Building Deliveries

Submarket Building Name Building Address Sq. Ft. % Leased Developer Delivered

Katy Freeway Energy Tower II 11720 Katy Fwy 428,831 98.27 MacHaik Management Aug-09

Katy Freeway Eldridge Oaks Phase 1 1080 Eldridge Pky 350,000 0 Transwestern Sep-09

Katy Freeway Cemex Center 920 Memorial City Way 336,000 70.32 MetroNational Sep-09

Katy Freeway Energy Center II 575 N Dairy Ashford 305,585 74.09 Trammell Crow Company Jan-09

Katy Freeway Three Eldridge Place 737 Eldridge Pky 305,528 0 Behringer Harvard Sep-09

Westchase Westchase Park 3700 W Sam Houston Pky S 272,361 38.09 Simmons Vedder Partners Sep-09

Northwest GE Oil & Gas 4424 W Sam Houston Pky N 250,000 68.04 Dienna Nelson Augustine Company Feb-09

Woodlands Waterway Square 4 Waterway Square 232,364 30.57 The Woodlands Development Compan Feb-09

Woodlands US Oncology 10101 Woodloch Forest Pl 204,000 100 The Woodlands Land Development Feb-09

Woodlands The Reserve at Sierra Pines 1585 Sawdust Rd 180,000 7.61 Stream Realty Partners, L.P. Jul-09Northwest Beltway Lakes II 5875 N Sam Houston Pky W 162,416 0 The Radler Limited Partnership Apr-09

Westchase One Oak Park 6002 Rogerdale Rd 153,342 37.39 MK Equity Partners, LP Apr-09

Katy Freeway Reserve at Park Ten - Phase I 15721 Park Row 150,000 0 Yancey-Hausman Jun-09

Katy Freeway CityCentre Two 811 Town & Country Way 129,200 56.25 Midway Companies Apr-09

Northwest Two Westway 11025 Equity Dr 95,269 0 Opus Corporation Dec-09

Northwest Outlier Det Norkse Veritas 22535 Colonial Pky 89,750 100 Duke Realty Mar-09

Gulf Freeway/Pasadena Deerwood Glen Office Park 4400 Highway 225 88,000 50 Clay Development & Construction Sep-09

South Shadow Creek Business Center 11233 Shadow Creek Pky 80,000 6.88 Wallace Bajjali Development Aug-09

Westchase 3131 Briarpark Office Building 3131 Briarpark Dr 69,000 74.28 PGAL Jun-09

West Loop/Galleria Blvd Place 6 1800 Post Oak Blvd 66,408 76.9 Wulfe & Co. Feb-09

Woodlands Woodlands 45 Corporate Center 24624 I-45 N 64,822 59.54 PHA/Houston LLC Mar-09

Greenspoint/North Belt 15109 Heathrow Office Building 15109 Heathrow Forest Pky 63,621 0 Transwestern Jun-09

FM 1960 Wortham Green 13100 Wortham Ctr 62,608 30.78 Panattoni Mar-09

FM 1960 Stress Engineering Office Bldg. 13606 Westland East Blvd 55,468 100 Westfair East Ltd. Jul-09

Total office properties delivered year-to-date listed above 4,194,573

Grand total delivered year-to-date (including properties below 50,000 sq. ft. not l isted above) 4,487,644


9/9


294 Offices Worldwide

NORTH AMERICA

EUROPE AND

MIDDLE EAST

HAWAII

SOUTH

AMERICA

AFRICA

ASIA PACIFIC

AUSTRALIA

61 Countries on 6 Continents

133 AMERICAS

94 USA

22 CANADA

17 LATIN AMERICA

COLLIERS INTERNATIONA

1300 Post Oak Blvd, 2nd Floo

Houston, Texas 7705

Main: 713.222.21

Fax: 713.830.21

www.collierstexas.co

64 ASIA/PACIFIC

97 EUROPE/MIDDLE

EAST/AFRICA

$1.6 BILLION IN GLOBAL

REVENUE

1.1 BILLION S UARE FEET

UNDER MANAGEMENT

12,700 PROFESSIONALS

q4 2009 houston office market report

Documents