Office tower slated for construction in Houston’s Energy Corridor

Construction on an office tower in Houston's Energy Corridor is expected to be complete in 2015.

The Energy Corridor in Houston offers some of the most desirable commercial property locations in the city, and it's about to land another large building.

Skanska USA Commercial Development stated it will construct a major office building in the area. The facility will be called West Memorial Place and feature 325,000 square feet of space.
The building already has one major tenant primed to move in when construction is completed. Petroleum Geo-Services will house employees in the 12-story building and is set to take 122,000 square feet of space.

"We are thrilled to welcome PGS (Petroleum Geo-Services) as the first tenant to our new sustainable development," said Mike Mair, executive vice president of Skanska USA Commercial Development in Houston. "With expanses of green space throughout the property, direct connection to Terry Hershey Park and easy access to  I-10, as well as the Energy Corridor's hotels, restaurants, retail and support services, it is an ideal location for our newest development."

The building is slated for completion in the fist quarter of 2015, with HOK handling the structure's architecture.

Skanska purchased the site in February 2012 and is funding the project 100 percent with internal revenue. Ralph Bivins from CultureMap reported that it is "extremely rare for a real estate firm to internally finance a project of this magnitude, at least for domestic real estate companies."

Bivins noted that a developer generally relies on borrowed money to build office towers. But Skanska AB, the parent company of Skanska USA, is a very wealthy European company. Skanska AB was mentioned in Steig Larsson's best-selling fiction novel, Girl with the Dragon Tattoo, and the parent company posted $19.5 billion in 2012 revenue.

Despite 100 percent financing, danger not looming
When a company completely finances a project by itself, it takes a bigger risk. But CultureMap reported that Class A office space in the Energy Corridor has more than a 99 percent occupancy rate and that rents are strong, making it one of the safer commercial real estate ventures.

The commercial real estate market in Houston has enjoyed a massive surge due to the energy industry, and the new Skanska building looks to be more energy efficient.

The building has targeted a LEED Golf Certification and is expected to consume 25 percent less energy than standard baseline buildings.

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