Five subtenants taking over Noble Energy sublease
HOUSTON – November 16, 2016 – Despite challenging market conditions, CBRE and Noble Energy have successfully leased 165,000 square feet at Heritage Plaza (1111 Bagby), to five subtenants, all in 2016.
“The sublease of the Heritage Plaza property resulted from the completion of our acquisition of Rosetta Resources and integration of its workforce to our north Houston headquarters,” said Robert Marlatt, Vice President Corporate Real Estate, Noble Energy. “We appreciate that CBRE worked collaboratively – in a challenging market – and maintained a sharp focus on finalizing the sublease.”
CBRE’s Lucian Bukowski, Kevin Kushner and Wyatt McCulloch, represented Noble Energy, in negotiating five separate subleases to account for all of the space.
“To be successful in a market like this quality inventory/space needs to be priced appropriately and clients and their brokers need to be aligned on what are and are not acceptable deal terms. By coupling this with a willingness to subdivide larger spaces and being responsive, you can net a rewarding outcome,” Mr. Bukowski, Executive Vice President, CBRE said.
“CBRE and Noble worked together to develop and execute a plan to sublease the space,” Mr. Kushner, First Vice President, CBRE said. “Noble was responsive and decisive when it came to making decisions, which is critical to maintaining momentum on transactions amidst difficult market conditions. Noble is a terrific partner to work with.”
According to CBRE Research, sublease space has grown to 12 million square feet, with 2.5 million square feet or 22 percent of the total being in the CBD. However, there is some good news in Q3 as nearly 600,000 square feet of sublease space was absorbed as tenants took advantage of quality space at reasonable rates. In Q3, sublease activity represented nearly 33 percent of the total square footage leased. Remaining large blocks of sublease space in Houston include 801,990 square feet that Shell is subleasing at One Shell Plaza (910 Louisiana) in the CBD; 597,628 square feet that ConocoPhillips is subleasing at Energy Center Four (925 N Eldridge Parkway) in the Energy Corridor; and 559,094 square feet that BP is subleasing at Four WestLake Park (200 WestLake Park) also in the Energy Corridor.
“Subleasing space for clients is challenging in any market, but successfully subleasing multiple floors in this market is grueling,” Mr. McCulloch, Senior Associate, CBRE said. “Our first deal involved multi-tenanting a full floor for a 3,500 SF subtenant, followed by three more partial-floor deals to sublease our first two floors. By building momentum on these smaller successes, we were able to land a larger subtenant to acquire the remaining space.”
In 2016, Bukowski, Kushner, McCulloch and Padon have transacted approximately 285,000 square feet of subleases across the Houston market.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
