Situation Analysis
The 545,000-square-foot Park Towers, a two-building office
complex at 1233 and 1333 West Loop South, Houston, TX was
extensively renovated in 1999. Despite the owner's
multi-million-dollar investment in this well-located office
property, occupancy was stalled at 72 percent for five years
following the renovation. In 2003, only 37,000 square feet were
leased. The leasing momentum gained from the renovation had
been stalled. Leasing velocity was at a virtual
standstill.
Mark Preston and his team researched the market perception of
Park Towers. Prominently positioned in the Galleria/Post Oak
market, the property was being bypassed by brokers, regardless of
its high quality. Brokers perceived ownership as
unpredictable and, in some cases, intractable in the deal-making
process. In a market where almost every deal is represented
by a broker, the lack of broker confidence in ownership was a
significant detriment. A succession of three different
in-house leasing agents in three years had also contributed to the
breakdown in broker relations.
Owner's Goals
The owner hired Mark to lease-up Park Towers to 90
percent. In addition, the owner wanted to retain the in-house
leasing team to handle leasing and tenant retention after Mark's
specific assignment was complete.
Strategies & Solutions
Mark and his team developed a plan to work with the owner's
in-house leasing personnel. Mark's strong ties with the
brokerage community enhanced confidence in the project.
Brokers representing major tenants in the market were re-introduced
to Park Towers under the auspices of Mark Preston. Mark
assessed the space and put a 100,000-square-foot big block at the
top of the list. He inventoried transactions in the market
and identified large-user prospects. The team improved timing
and response to tenant and broker inquires. One
6,000-square-foot lease was closed within three days of the
tenant's first call to the property.
A 90,000-square-foot tenant, General Electric, was
identified. Following the advice of its broker, this major
tenant had not considered Park Towers. Mark introduced the
owner to the broker at the inception of the assignment. The
owner realized the potential of the deal and took the initiative to
close it. The GE relocation to Park Towers made the office
complex over 90 percent leased.
Results
Park Towers' occupancy soared from 72 to 92 percent in three
months. The negative perception of ownership by brokers was
converted into a positive by prompt deal follow-through. The
in-house leasing team participated in the lease-up and honed its
skills in successful transactions.
