Bank of Texas has given Downtown Houston’s office sector something to cheer about, which hasn’t happened often since the remote work era’s gut punch to the market.
The subsidiary of Oklahoma-based BOK Financial added the 29,000-square-foot 11th floor to its operation in 5 Houston Center, at 1401 McKinney Street, the Houston Business Journal reported.
Bank of Texas already occupied the 10th floor of the 142,000-square-foot building. It plans to expand into its new space later this year.
The building’s owner has the same San Francisco address as Spear Street Capital. The terms of the lease weren’t disclosed. Jon Lee of CBRE represented Bank of Texas in the deal. San Francisco-based IA Interior Architects will redesign the space.
The decision to up its office footprint can be attributed to the bank’s growing workforce; it employs somewhere between 250 and 275 people in Houston and has run out of space to accommodate its workers.
“It’s a good problem to have, but it’s also a logistical thing that we have to work through, as well,” the bank’s Houston region CEO Randall Walker told the outlet
Despite the economic challenges of last year, such as rising interest rates and bank failures, Walker has an optimistic economic outlook for 2024.
In addition to its downtown expansion, Bank of Texas is planning a location in The Woodlands, which will be its 12th branch. The Woodlands is a gateway to customers in northern Harris County, Montgomery County, Conroe and the broader north Houston region, Walker said.
The lease expansion is a bright spot in the Houston office market. In the third quarter of 2023, the city’s vacancy rate surged to a record high of 26 percent, and leasing activity fell 53 percent compared to the previous quarter.
Years of poor performance in the office sector has caused distress to ripple throughout the city. In the downtown area, where the vacancy rate is 25 percent, Houston officials are exploring a tax-incentive program that could spark more office-to-residential conversions.
—Quinn Donoghue
Read more
Commercial
Texas
Houston office leasing activity falls 53%
Development
Houston
Tax breaks pitched for office-to-resi conversions in Houston
Commercial
Houston
Harris County pays $26M for Downtown Houston office building