New office building to rise in hot submarket
Houston-based Ersa Grae Corp. recently broke ground on a five-story speculative office project along the Katy Freeway. And while the Katy Freeway submarket is hot with new construction and low vacancies, this building’s location is a bit unique, according to the project’s contractor.
The 100,000-square-foot building, Gateway at Spring Valley, will be located at 9090 Katy Freeway on the north side of Interstate 10, which comprises mostly retail development, said a representative from Houston-based Arch-Con Construction, the contractor building the project.
The first floor of the building will be retail, with the other four floors set for offices. StrollerUSA, the co-developer of the project, will occupy the top two floors. Based in Houston, StrollerUSA develops and sells products that help plants to better grow and thrive.
CBRE’s Houston office has been tapped to lease the rest of the office space. NewQuest Properties is leasing the retail space. Husmann Architecture of Houston designed the space.
Wells Fargo is financing the project, which is being built for an undisclosed price. It is slated for completion in the fall of 2015.
“The Katy Freeway submarket has remained strong, absorbing over 1 million square feet over the last three years,” said Angie Hamilton, CBRE research analyst. “Along with a strong market comes low vacancy, high rates and new development. Currently, over 1 million square feet is under construction to help relieve this tight market.”
Class A vacancy in the Katy Freeway submarket is 2.4 percent and asking rates are $39.55, reports CBRE.
Katy Freeway and The Woodlands hold the lion’s share of office construction activity in the Houston area with the oil industry prompting much of the growth. Combined, the two submarkets have over 10 million square feet of office space under construction.