Top floors cost more $$$$$

Tenants take different views in regard to high-rise offices
Houston Business Journal - by Nicole Bradford Houston Business Journal

Offering a dizzying view of the city below on what seems like a microscopic scale, upper floors of Houston's tallest high-rises command premium leasing rates from companies who dream of moving up -- in the physical sense.
At least, that is the case with those who decide firmly beforehand that the prestige of high floors and captivating views is at the top of their want-list, says Dave Hanusa, senior vice president of CB Richard Ellis.
"If tenants have made the initial decision that they want to be in a high-rise, they are likely to put a higher value on upper floors -- so upper floors are generally more marketable," he says. "Also, many times lower floors have obstructed views, which generally hurts the marketability of the space."
CBRE manages the city's second-tallest building, Wells Fargo Plaza. At 71 floors, the building, owned by Met Life, boasts more than 1.72 million square feet of space. CBRE says it expects to get a premium rent for office space on the tower's 70th floor -- the highest currently available in the city with unobstructed views in all directions.
Those who lease such spaces "recognize the value in occupying some of the rarest space in the city," Hanusa says. But not all tenants have the same preferences.
"To some users, direct access is important," he says. "For them, lower floors offer the quickest access. To others, the prestige of high floors and premium views is paramount."
The view from the top is connected with the drama of a tall building, and the drama increases with each level skyward.
"The higher the floor, the better the view, the higher the rental rate," says Mark Preston, senior vice president with Moody Rambin Interests. "The 'wow factor' is closely tied in with the prestige, image and elevation of a building."
There are exceptions, of course. Arena Towers, a 21-story building managed by Boxer Property Management, offers its upper levels to the first to claim them.
"The rent is the same and is based on a first-come, first-served basis for higher floors," says Doug Pack, director of leasing.
Top floor views are indeed a main attraction, says Pack, since those up top don't have to wait for a traffic or weather report. However, he says, parking and convenience remain at the top of most tenants' wish lists.
"If you can walk to a good restaurant, people stay in the buildings much longer due to the convenience of not wasting gas just to have a meal," he says. "Convenient parking, as boring as that sounds, may be one of the most important amenities for an office building."
For more information see: www.houstonrealtyadvisors.com or www.houstonrealtyadvisors.net