Former ConocoPhillips campus to hit market after Labor Day
Now that Occidental Petroleum no longer intends to occupy the former ConocoPhillips campus — the sprawling Energy Corridor office development it purchased just months before acquiring Anadarko — observers are wondering: What will come of the corporate hub?
The answer could come as early as October, according to brokers preparing to list the nearly 70-acre property for sale. They will likely target such groups as mixed-use developers, schools or universities, and perhaps even the Texas Medical Center.
“Someone could come in and redevelop it. Someone could utilize several of the buildings and redevelop parts of the campus. Someone could come in and focus on mixed-use, complementing the buildings with retail, hotel and other amenities,” said Brandon Clarke, executive vice president of the Houston office of CBRE, which plans to bring property to market just after Labor Day.
Prospective buyers will then have about six weeks to submit
bids for the property and the some 1.4 million square feet of buildings developed there for ConocoPhillips in the early 1980s. No asking price has been set.
The campus, just north of Interstate 10 along North Dairy Ashford, is valued at about $87 million, according to the Harris County Appraisal District. That’s down from last year when HCAD assessed it at around $95 million.
Oxy, which finalized its $38 billion acquisition of Anadarko Petroleum this month, purchased the west Houston property in January for an undisclosed price.
Oxy Chief Financial Officer Cedric Burgher, speaking at a recent conference in Denver, said the company would sell the west Houston property because it isn’t big enough for the combined company. He said Oxy will, for now, maintain its existing office space in Greenway Plaza and The Woodlands, where Anadarko occupies two office towers. With plans to relocate, Oxy last year had put nearly 814,000 square feet of its Greenway space on the sublease market. Clarke declined to comment on plans for the company’s other offices.
The company, which has had a presence in Houston for some three decades, moved its headquarters here from Los Angeles about five years ago, making Greenway Plaza its new corporate office.
Well outfitted
ConocoPhillips last year moved into a new headquarters facility across Interstate 10 from its former home, which is made up of a series of low-rise buildings connected by bridges and surrounded by lagoons stocked with fish and a one-mile jogging trail. The campus has a 100,000-squarefoot fitness center with a basketball court, swimming pool, soccer field and ping-pong tables for tournaments. There’s also a cafe and locker rooms with areas for massages.
“It will take somebody with a lot of creativity, but it could become a really unique place,” said David Hightower, a longtime developer in the area and member of the board of the West Houston Association, a nonprofit focused on mobility, infrastructure and quality of living.
Connecticut-based Kevin Roche John Dinkeloo & Associates designed the campus. An expansion, planned by Pickard Chilton, another Connecticut architecture firm, and Houston-based PDR, was completed in 2007 and included the fitness center.
Additional upgrades were done to the campus in recent years, including a new central plant, said CBRE’s Clarke, who is listing the campus with Jared Chua. The campus, which backs up to the Addicks Reservoir, did not flood during Hurricane Harvey, he adds.
Market watchers said Oxy would have been an ideal user for the campus. The office market has softened in recent years and there are few large tenants looking for big blocks of space.
Houston’s office vacancy rate in the second quarter was 21.3 percent, up from 20.6 percent in the previous quarter, according to data from commercial real estate firm NAI Partners. Offices in the Energy Corridor, an area along both sides of the Katy Freeway west of Beltway 8, showed a 33 percent vacant rate.
“It’s good Energy Corridor real estate, even though the Energy Corridor is not a great submarket,” Alex Taghi, a vice president with NAI.
Hightower said he’s disappointed Oxy won’t be moving to the campus, but he wasn’t surprised.
“Big corporate things like that can take 90- or 100-degree turns at any time,” said Hightower, who is also an executive vice president with Midway, a Houston-based development firm. “It happens.”