DEAL OF THE WEEK
Latest Grandway West building in Katy adds tenants
Grandway West’s newest office building has landed the Jones & Carter engineering firm and Gallagher Benefit Services as tenants.
The deals, totaling more than 30,000 square feet, bring the 72,045-square-foot building, at 2322 W. Grand Parkway North in Katy, to 93 percent leased.
A partnership of InSite Realty Partners and Urban Cos. is developing Grandway West on 56 acres, about a mile north of Interstate 10 east of the Grand Parkway. The new building is one of four completed since 2015 in Grandway West, which has room for eight total. The partnership utilizes in-house architecture and construction teams to complete projects more quickly.
“We try really hard to deliver value — high quality at a good price,” Kris Van Norman of InSite Realty Partners said.
Jones & Carter will occupy 17,900 square feet, and Gallagher Benefit Services has leased 12,239 square feet. Derrell Curry of Savills Studley negotiated the lease for Jones & Carter, while Bill Boyer and Trevor Jeske of CBRE represented Gallagher Benefit Services. Transwestern’s Eric Anderson and Parker Burkett represented the landlord.
The two firms join PCL Construction in the building.
Grandway West represents one of the few new office developments in the Katy area. It has attracted a steady stream of companies despite being built during a downturn in the market that has delayed the expected buildout from five or six years to six or seven, depending on market conditions, Van Norman said.
The Grand Parkway has also spurred industrial projects, apartments and retail centers. NewQuest Properties developed a center anchored by Kroger and Walmart stores north of Grandway West.
“Three years ago, the location felt a little bit pioneering,” Transwestern’s Eric Anderson said. “The location is showing pretty clear trends of a demand for office users.”
Grandway West’s first office building is 97 percent leased, and the second multitenant building is 84 percent leased. Construction of the next building won’t start until an anchor tenant is signed.
The Houston office market dipped to 22.8 percent availability, including sublease space, from its peak of 23.5 percent in the second quarter, Transwestern said. Absorption, which measures the change in the amount of occupied direct space, was negative 4 million square feet in 2017 and negative 1 million square feet in 2016.
“We believe 2018 will be the year we will start to see positive absorption overall and more activity throughout the city overall,” Anderson said.