California-based real estate agency KBS Capital Markets has closed two leases at its Offices at Greenhouse in Houston, Texas.
The firm successfully renewed the property’s second-largest tenant, J. Connor Consulting, in the second quarter of 2021, according to a press release on its recent portfolio update meeting. The lease on the 32,066-square-foot building has been extended from 2023 to 2031.
KBS also signed a new lease for restaurant franchisor SPB Hospitality, who are subleasing the space from the American multinational engineering firm AECOM. The lease is renewed from KBS’s deal with SFB in March of this year and provides 42,000 square feet for a portion of that space that will be vacated by AECOM in 2025. The Offices at Greenhouse is located at 19219 Katy Freeway, and is owned by KBS Growth & Income Real Estate Investment Trust.
The portfolio consists of four assets with approximately 600,000 square feet and a weighted average lease term of 3.5 years, said KBS Chief Executive Officer and Eastern Regional President, Marc DeLuca in an interview.
The year with the largest expiration schedule depicted in the presentation of the portfolio is 2024, which DeLuca says is due to AECOM. Gio Cordoves, Western Regional President of KBS, went into more detail about the relationship between AECO and SFB Hospitality when signing the lease.
“They are currently a subtenant at AECOM expiring at the end of 2024, so this direct lease commences immediately thereafter and extends all the way through 2030,” he said.
“As Marc had touched on AECOM’s end of 2024 lease expiration, SPB’s lease now speaks for a considerable portion of that AECOM space and reduces our overall exposure to the AECOM lease expiration from 67 percent of this property all the way down to 46 percent. Between the SPB lease and the previous J. Connor’s early extension, those two deals provide meaningful stability to nearly 40 percent of this property and, as a result, making it a much more attractive investment offering to potential buyers in the future.”
KBS had 16 properties throughout Texas as of March 2022.
[KBS Capital Markets] — James Bell