Full-Floor Lease Another Win for Houston’s Energy Corridor

The Energy Corridor is proving to be one of Houston’s most resilient office hubs.

Houston-based engineering and construction firm McDermott International is expanding operations and recommitting to the Energy Corridor with a lease at Westgate II, set to occupy the building’s entire top floor, according to a news release.

The engineering and construction leased 50,500 square feet at at 10190 Katy Freeway, the Houston Business Journal reported. The space will house 254 employees and include a mix of workstations, private offices, conference rooms and amenities.

JLL’s Tyler Garrett and Christian Canion handled leasing and marketing.

The owner of Westgate II is an entity tied to a group of businessmen led by investor Mohammed Ali Lakhany, which acquired it recently, public records show.

The same group purchased the distressed three-building Ashford Office Park in December, which was previously owned by Accesso Partners and also lies in the Energy Corridor. Lakhany, also a philanthropist, is CEO of CSM Group, a restaurant franchise and real estate development company.

The deal is the latest in a steady stream of leasing wins for Houston’s Energy Corridor, where energy and utilities tenants have accounted for a sizable share of office demand.

To name a few: SM Energy doubled its space at Granite Properties’ Eldridge One at 777 North Eldridge Parkway in late February, and in January, Mac Haik’s $5 million renovation pitch successfully hooked Kansas engineering firm Black & Veatch, which signed a lease for nearly 41,000 square feet of spruced up office space in Haik’s Energy Tower II at 11720 Katy Freeway. The Katy Freeway West submarket trails only the central business district in office leasing activity, according to JLL.

McDermott will maintain its existing project-focused space at Trammell Crow Company’s Energy Center 5, also in the Energy Corridor at 915 North Eldridge Parkway.

In West Houston, office demand remains relatively strong compared to other suburban markets. The energy and utilities sector saw a 6 percent increase in leasing activity between the first and second halves of the last decade, JLL said.

McDermott has deep roots in Houston and operates in over 50 countries with more than 30,000 employees globally. The company has focused heavily on engineering services for onshore and offshore energy infrastructure.

— Judah Duke