McCarthy leaves distressed office for premier Post Oak development

General contractor McCarthy Building Companies is set to relocate from its Greenway Plaza offices to BBVA Compass Plaza. 

The St. Louis-based company signed a 38,230-square-foot lease in the 22-story office tower nestled in Houston’s Galleria submarket at 2200 Post Oak Boulevard, with a move-in set for next year. Stream Realty’s Brad Fricks and Adam Ross representing the building owner, Masaveu Real Estate. McCarthy Building Companies was represented in the lease negotiation by JLL agents Scott Wetzel and Beau Bellow. 

200 Post Oak spans 360,000 square feet and is currently undergoing renovations to update its interior. Work is slated for completion in 2025. When the building was developed in 2013, it was the Galleria’s first office project since Williams Tower and Four Oaks Place in 1983. Its major tenant is PNC Bank, which occupies about 58 percent of the net rentable area. 

PNC Bank completed a $2 million renovation of its tenant space last year, according to state filings. Other major tenants in the luxury office building include coworking company Firmspace Houston, temp service Insight Global, upscale eatery Caracol and the United Arab Emirates Houston Consulate.  

McCarthy Building Companies is ending its lease at 8 Greenway Plaza after the distressed office building has faced a series of valuation dips and financial woes. Back in August the 10-building Greenway Plaza office campus saw a 60 percent drop in assessed value, representing a $575 million loss, due to cashflow issues, increased vacancies and a default on the complex’s $465 million loan that matured two years ago. 

The 4.5-million-square-foot plaza is owned jointly by CPP Investments, Nuveen Real Estate and Silverpeak Real Estate Partners. Dallas-based firm Triglid Texas assumed control of it as its court-appointed receiver last year and replaced management team Parkway Property Investments with Lincoln Property Company. Trigild Texas is currently shopping Greenway Plaza around for a potential sale. 

Notably, research firm Savills found that rental rates in the Galleria office market are slightly less expensive than Greenway Plaza rates, with an average rate of $33.86 per square foot compared to $35.56 per square foot. However, both rank within the top three most expensive submarkets in the metropolitan area when it comes to rent per square foot — only Central Business District offices charge more.

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