New Biotech Building for Houston

Dec. 14 - Houston developer Frank Liu is buying the former headquarters buildings of Tanox Inc., with the intention of using them as the first components in a new biotechnology park.
Liu's Lovett Commercial is acquiring the two buildings, which total 110,000 square feet, as well as 24 acres of vacant land that's earmarked for future biotech development. The property is located just south of the 610 Loop on Stella Link, a couple of miles from the Texas Medical Center.
"We're planning on creating a much-needed biotech park to serve the thriving Medical Center," Liu says. "The park will feature state-of-the-art, cutting-edge facilities."
Lovett Commercial is buying the site from California-based Genentech Inc., a large pharmaceutical company that completed the acquisition of Houston-based Tanox several months ago. Genentech paid approximately $919 million for Tanox, which developed the asthma drug Xolair.
Retail landlords offer blue-light specials to tenants
Dec. 7 - Not too long ago, retail broker Joel English was offering neighborhood retail center tenants about $15 to $20 per square foot as an improvement incentive. These days, that sum just won't cut it.
English and other brokers and landlords in the retail real estate field have had to up the ante, offering as much as $35 per square foot or more for tenant improvements. And in some cases, landlords are throwing in other deal sweeteners such as longer build-out periods, and even free rent, in an effort to shore up the struggling sector.
"It's a citywide problem," says English, president of Houston-based CEC Brokerage. "Landlords are getting anxious because there's too much retail on the ground and it's getting tougher to compete with the grocery-anchored centers."
Indeed, the third quarter of this year represented the third straight year-to-year drop in occupancy levels in the neighborhood center sector, as overall occupancy fell to 84.57 percent. That's down from 85.09 percent in the third quarter of 2006 and 85.68 percent in the third quarter of 2005, according to Houston-based real estate services firm O'Connor & Associates.
The south sector of the city recorded the highest occupancy rate, 93 percent, while the lowest occupancy was found in the far north sector at 77 percent.
"It appears that occupancy is trending down, so it would make sense that landlords are offering discounts to lease the vacant space," says Kathryn Koepke, a researcher at O'Connor & Associates. Even with the incentives, English says, some centers are taking as long as three to four years to fully lease.
West Houston office-building boom getting more fuel
Nov. 30 - Two office developments planned in West Houston stand to add nearly half a million square feet of prime space to the booming area where many energy companies and oilfield service firms do business.
Dallas-based Behringer Harvard Real Estate Investments plans to add a third building to its Eldridge Place office complex, with construction slated to start in the spring.
And Houston-based Woodcreek Development Co. is entering into the office development business with plans to start construction on two facilities in Park 10 during 2008 -- a 150,000-square-foot Class A building and a 90,000-square-foot tiltwall building.
Behringer Harvard is making plans for Three Eldridge Place, an office building with 275,000 square feet to 300,000 square feet of Class A space.
"Since that property is not scheduled to start construction until '08, we honestly aren't able to disclose any details," says Jasmine Bouyer, a Behringer Harvard spokeswoman.
The new structure would be added to One Eldridge Place, which was built in 1984, and Two Eldridge Place, which went up in 1986. The real estate investment trust acquired the buildings in December 2006.
Those two buildings -- located in the Energy Corridor submarket -- have a total of 519,000 square feet of space. They are located at 757 N. Eldridge Parkway and 777 N. Eldridge Parkway, just south of I-10 near Memorial Drive. For more information see www.houstonrealtyadvisors.com or www.houstonrealtyadvisors.net