Parkway Buys 3 MSF Office Portfolio in Houston

CityWestPlace comprises four buildings. Image courtesy of Parkway

Parkway, a newly created company between Parkway Property Investments and Midway, has acquired two significant Houston office campuses, Post Oak Central and CityWestPlace, that between them total more than 3 million square feet. The company purchased the assets from Parkway Property Investments’ previous unnamed partners.

Although a dollar value was not released in connection with the all-cash deal, Parkway’s assertion that the acquisition marks one of the nation’s largest real estate transactions so far this year seems plausible. According to The Real Deal, the assets have been appraised at nearly $350 million. Parkway touted the “strength of the submarkets, the institutional mix of the global tenant-base and the redevelopment potential of Post Oak Central” as crucial elements.

Parkway will continue to operate both properties, and its development partner, Midway, will oversee the redevelopment of Post Oak Central and the continued development of CityWestPlace.

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Parkway was created in 2023, when Parkway Property Investments, of Orlando, and Houston-based Midway partnered to form a private real estate investment, operations and management firm. Midway continues to operate as a separate development entity under its established name and also acts as Parkway’s development partner.

The three-building, mixed-use Post Oak Central is on Post Oak Boulevard in the Uptown business and entertainment district. Designed by Philip Johnson and constructed between 1975 to 1981, Post Oak Central comprises 1.2 million square feet of Class A office space and 90,000 square feet of pedestrian-oriented retail. The 17-acre campus provides ready access to the 610 Loop and U.S. 59, as well as to the new METRORapid Silver Line.

Post Oak Central comprises three buildings. Image courtesy of Parkway

In a prepared statement, Brad Freels, chairman & CEO of Midway and co-executive chairman of Parkway, said that while Post Oak Central is performing, it has been underappreciated in the market for some time.

CityWestPlace is a 39-acre campus in Houston’s Westchase District, off the Sam Houston Tollway near the Energy Corridor. The four-building Class A office complex was designed by Keating Mann Jerrigan Rottet and Daniel Mann Johnson & Mendenhall and built between the 1993 and 2001.

It totals nearly 1.5 million rentable square feet, in addition to four parking structures with ground-floor amenities. CityWestPlace’s outdoor spaces include extensive flower gardens, pine groves, sunken gathering areas and water features such as Japanese slit pools and a mist fountain. Tenant amenities include onsite conference space, multiple food and beverage options, two fitness centers, trails, a jogging track and sports fields.

Slow progress?

Whatever travails the office market might be going through nationally, Houston’s saw a 12 percent bump in leasing activity, to 3.7 million square feet, from the first to the second quarter, according to a report from Partners Real Estate.

Still, the metro’s overall vacancy rose 20 basis points, to 24.7 percent. And office construction is robust, with 2.9 million square feet underway.

In September, InLight Capital acquired a 143,410-square-foot Class A office property in Sugar Land, a Houston suburb, following an auction that resulted from a CMBS foreclosure.