Makeover of Houston’s 1.2 MSF Marathon Oil Tower Revealed
M-M Properties commenced the $15 million interior renovation of the landmark high-rise in 2019, one year after acquiring it in a $175 million transaction.
M-M Properties has delivered on its promise to transform Marathon Oil Tower in Houston with the completion of a comprehensive renovation of the interior of the 1.2 million-square-foot trophy office property. The $15 million project marks a veritable renaissance for the iconic high-rise, just as the city begins to grapple with the workplace’s new normal.
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M-M Properties acquired Marathon Oil Tower, originally developed as the headquarters for Marathon Oil Co. in 1983, from CBRE Global Investors for approximately $175 million in January 2018, and immediately announced plans to transform the building. One year later, the company commenced construction on a renovation designed to reposition the multi-tenant asset as a practically brand-new office destination.
With Page Architects aboard to guide the vision for the structure occupying a nearly 5-acre site at 5555 San Felipe, M-M Properties upgraded three floors with curated amenities, starting from the bottom. The lobby lounge now features a new coffee bar, collaborative seating zones and a large media wall, while the first floor has become home to the food-hall style Café 5555, which offers such timely accommodations as remote ordering. On the third floor of the 41-story tower, full-service fitness facility Fit 5555 provides state-of-the-art equipment, as well as personal trainers and group fitness classes.
The renovation program has also left room for a new freestanding restaurant space on Marathon Oil Tower’s east lawn. Additionally, the building, already LEED Gold-certified, will be in line for the International WELL Building Institute Health Safety-Rating.
Good as new
The Houston office market has its challenges. The energy industry’s difficulties damaged the office market well before COVID-19 took its toll, and now the city is struggling with an average vacancy rate of nearly 23 percent, more than half-a-million square feet of negative absorption and declining rental rates, according to a first quarter 2021 research from CBRE.
However, property owners like M-M have found a sweet spot in the market. “Well-capitalized local companies and multinationals looking to differentiate their workplace experience continue to eye unique and high-quality office buildings for leasing and investment in a post-COVID-19 world,” according to the Oxford Partners report. And in Avison Young’s first quarter 2021 report, the firm notes, “Flight to quality remains a significant influence as evidenced by those companies opting for newer buildings or buildings with substantial upgrades.”
Other companies engaging in major office renovation projects in Houston include Hines and Cerberus Capital, which are making a substantial capital investment in upgrades to the lobby and common areas of the JP Morgan Chase Tower at 600 Travis, the tallest building in Texas. Lovett Commercial is in the midst of an adaptive reuse of a former historic U.S. Post Office property that will result in Post Houston, a mixed-use destination with office space and coworking accommodations.
M-M Properties attests that upgrades at Marathon Oil Tower have already attracted new tenants, Serendipity Labs among them. The flexible workplace provider inked a 28,000-square-foot lease of the entire 20th floor of the building. CBRE’s John Spafford, Elliott Hirshfeld and Madeline Gregory are spearheading office leasing at the property, which will have a total of 600,000 square feet of contiguous space available for lease come early 2022 due to the long-planned relocation of Marathon Oil Co.
