How much does a “flight to quality” cost? For law firm Clifford Chance’s new digs, Hines is shelling out $20 million.
The Houston-based developer is spending the sum on building out 60,400 square feet of space in Houston’s Texas Tower, according to a recent filing with the state. That comes out to more than $330 per square foot for the British law firm’s new Houston office.
Hines is expected to start work on the build-out before the end of the year; the project is expected to be completed next summer. Hines and Ivanhoe Campbridge developed Texas Tower, a 47-story office building located at 845 Texas Street in downtown Houston. It was delivered in 2021.
The latest office trend is pivoting to trendy spots with lots of amenities.
This Clifford Chance deal provides a sense of how much money developers are willing to spend to attract clients to their developments.
As part of its relocation from California to Texas, oil and gas company Chevron is spending $66.5 million renovating its Houston headquarters. The 40-story building is located at 1500 Louisiana Street; details about the square footage of the renovation haven’t been released.
As this part of Houston’s office market attracts tenants, the city’s older office product is struggling.
Houston’s office vacancy rate was 26.3 percent midway through this year, according to Partners Real Estate. That’s a jump from 24.7 percent a year before.
Older buildings account for most of the vacancies. About 28.7 million square feet is available among Houston office buildings constructed in the 1980s, a rate of 30 percent, while less than 5 percent, or 4.3 million square feet are available in buildings constructed since 2010, according to Avison Young.
Nationally, foreclosure activity fell slightly in the third quarter, but Houston is still one of the cities with the most foreclosure starts, according to ATTOM Data Solutions.
Houston ranks fifth (behind New York, Chicago, Los Angeles and Miami) with 1,791 foreclosure starts. Last month, $260 million in commercial real estate loans faced foreclosure in Harris County, including four multifamily properties.
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