Massive Blue Cross Blue Shield expansion notches win for office sector

One of Texas’ largest health insurance providers is expanding its Houston footprint in a win for an office market that’s still reeling from the pandemic.

Blue Cross Blue Shield of Texas has signed an 11-year lease to occupy almost the entire 134,700-square-foot building at 8101 West Sam Houston Parkway South, in southwest Houston, the Houston Business Journal reported. The building, called West Belt Office Center I, is owned by an entity of Denver-based Sagard Real Estate, according to public records.

The lease, totaling 132,000 square feet, will undergo renovations by Houston-based Harvey Builders, with completion expected by next January. It will feature an on-site café, a large employee training room and a multipurpose room. 

“We are advancing our strategy to expand into neighborhoods where we can benefit from the skilled workforce in those communities and drive economic growth,” a Blue Cross spokesperson told the outlet.

The company stressed commitment to local job creation, although specific numbers were not disclosed. 

Blue Cross’ decision to expand its Houston footprint bodes well for an office sector that’s grappling with high vacancies and plummeting property values amid remote-work trends and spiked interest rates. Office leasing activity hit a five-year low in the fourth quarter of last year, falling by 35 percent from the previous quarter and 12 percent year-over-year. 

Years of poor performance in the office sector has caused distress to mount. As of last summer, nearly 1,300 commercial properties in the Houston area were backed with CMBS loans totaling $5.9 billion, all of which are set to mature within 18 months. Just 68 office properties in the region accounted for $2 billion of that debt.

Meanwhile, the 8101 West Sam building marks Blue Cross’ 17th location in Texas. The company’s first Houston office, located at 1800 West Loop Freeway South, will continue operations as normal. 

Blue Cross ranks as the top accident and health insurer in the state, with a 24.5 percent market share, the outlet report. 

—Quinn Donoghue 

Read more

Commercial

Houston

West Houston dominates first quarter office leasing 

Commercial

Houston

Houston office leasing dropped off a cliff in the fourth quarter

Commercial

Houston

Broadshore lures engineering firm to renovated office building