Spear Street Capital Signs 277 KSF Lease in Houston

Energy Center I. Image courtesy of Transwestern

Kiewit Engineering Group has expanded and extended its lease at Spear Street Capital’s Energy Center I in Houston, boosting its space at the 13-story, 334,000-square-foot Class A office building to 277,104 square feet to accommodate the company’s growth.

The building at 585 N. Dairy Ashford Road in the West Houston submarket is now 86 percent leased, with two floors remaining for future tenants.

Transwestern Real Estate Services Executive Managing Director Eric Anderson and Senior Vice President Katy Gragg represented the landlord in the transaction. Louie Crapitto of JLL and David Kimball of SquareFoot represented the tenant.

Kiewit first leased space at the building in December 2019, when the company’s oil and gas division relocated its headquarters to the 5-acre site within the city’s Energy Corridor. The building was completed in 2007 and was acquired by Spear Street in January 2017 as part of a $272 million portfolio acquisition from Columbia Property Trust. Spear Street paid $51.8 million for the asset and has a $69.5 million 10-year loan from Prime Finance Partners that matures in September 2029, according to CommercialEdge data.

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The Houston portfolio totaled 1.2 million square feet and included 5 Houston Center, a 27-story, 581,000-square-foot office tower at 1401 McKinney St. in downtown Houston, and 515 Post Oak Blvd., a 12-story, 274,000-square-foot building in Houston’s Galleria submarket.

When Kiewit initially leased space at the property, the owners had recently completed a $3.5 million capital improvement program. Renovations at the time included the addition of a fitness center, coffee bar with lounge seating, tenant conference facility and upgraded elevators. The office property also offers tenants flexible and efficient 25,538-square-foot floorplates, 24/7 on-site security and 1,262 parking spaces in a multi-level structure.

Anderson said in a prepared statement Energy Center I is an excellent facility that provides Kiewit’s employees with a productive and attractive work environment. He said it’s an example of the flight-to-quality trend seen across the Houston office market, noting tenants want a comfortable employee experience with first-class office space that is convenient and highly amenitized.

The LEED Silver-certified building is adjacent to I-10 and Eldridge Parkway, providing optimal freeway access.

Spear Street activity

Spear Street, which has offices in New York City and San Francisco, recently completed a capital improvement program at another one of its U.S. Class A office properties. General contractor Skender announced the wrap up of renovations at the 615,000-square-foot 225 W. Wacker Drive in Chicago in January. Spear Street, which acquired the 31-story building in 2020 for $210 million, completed three different construction projects at the property, including upgrades to the lower lobby and Franklin Street entrance, fourth-floor amenity space and roof deck. The revitalized asset received a LEED Recertification, reaching Gold level status.

In February, Spear Street topped out 300 Kansas, a six-story, 150,000-square-foot research and development advanced manufacturing building in San Francisco. Construction is slated to be completed this summer, with the first tenants arriving in September. The building on the corner of Kansas and 16th streets in the Design District, features an all-electric, zero-carbon design.