Howard Hughes Picks Up Office Building in The Woodlands

Howard Hughes Holdings is increasing its office space in the Woodlands with the purchase of a property in the community’s popular Waterway District. 

The firm picked up the 207,000-square-foot 10101 Woodloch Forest Drive for $16.3 million, according to a news release. That works out to about $79 per square foot. Howard Hughes plans to rebrand the property as 7 Waterway. 

The 8-story building was constructed in 2009. It’s located right off the Woodlands Waterway and near the community’s central shopping mall.  

The office market in the Woodlands submarket generally performs better than the Houston market, since the master-planned community is able to control office development in the community. Office vacancy in the Woodlands was 15.2 percent in the fourth quarter, while the overall Houston office market had a vacancy rate of 27 percent, according to Colliers. 

The rate also represents a decline from a year before, when vacancy was at 16.3 percent in the submarket. Office inventory in the Woodlands totals about 12.5 million square feet. 

News of the transaction comes at a time of transition for the Woodlands-based company. 

Earlier this month, Bill Ackman’s Pershing Square reached a $900 million deal to increase its stake in Howard Hughes. Pershing Square is acquiring 9 million newly issued shares for $100 apiece, increasing its stake to 47 percent. 

The deal will keep the company public. CEO David O’Reilly is staying on, too. 

Ackman’s inspiration is Warren Buffet’s transformation of Berkshire Hathaway. He said he wants to turn Howard Hughes Holdings into a diversified holding company, including buying or building an insurance company.  

In addition to the Woodlands, Howard Hughes also owns Summerlin in Law Vegas and Columbia in Maryland. The developer’s newest community will be Teravalis, a master-planned community that will be located in Phoenix.

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