Parkway Acquires Houston Office Complexes

Parkway Ventures has made a big bet on commercial real estate, while other players are tossing their cards. The firm has pushed an undisclosed sum of chips onto the table to scoop up Post Oak Central and CityWestPlace.

It’s one of the largest real estate deals in Houston when it comes to space, totaling over three million square feet.

Though the price remains a mystery, the two properties are appraised at nearly $350 million. The deal was executed entirely in cash, according to a press release. Parkway, the joint venture between Parkway Property Investments and Midway formed earlier this year, will continue to operate both properties, with Midway overseeing the redevelopment of Post Oak Central and the ongoing development of CityWestPlace.

Post Oak Central is a massive mixed-use development located in the heart of Houston’s Uptown business and entertainment district and comprises three, 24-story buildings offering a total of 1.2 million square feet of so-called Class A office space and 90,000 square feet of pedestrian-oriented retail. Situated on a 17-acre triangular campus along Post Oak Boulevard, the tri-building asset has a combined appraised value of $215 million.

The other piece of Parkway’s acquisition, CityWestPlace, is just six miles away. The 39-acre office campus is located in Westchase on 2103 CityWest Boulevard. It consists of four buildings ranging from six to 21 stories spanning nearly 1.5 million square feet. In addition to office, the mixed-use complex includes restaurants, retail, recreational fields and other amenities. CityWestPlace tenants include Norway-based energy corporation Equinor, Bechtel Energy, American Midstream Partners, Bills.com and Honeywell among other occupants. According to the Harris County Appraisal District, the two tracts associated with the CityWestPlace address had a taxable value of $119 million as of January 2023.

Houston is an outlier in a national office market that has been mostly battered in most major cities. The city stands out as one of the nation’s top performers. During the first quarter, Houston ranked third behind Boston and Miami based on office transactions, according to Yardi Systems. During this period, the Greater Houston area recorded $431 million in office sales.
West Houston, in particular, has seen a boom in recent months and led the metropolitan area’s office market to a Q2 comeback with a 35 percent increase in leasing activity. The submarket accounted for nearly half of all office transactions in Greater Houston during the second quarter.