EOG Resources renews large lease in downtown Houston

2022-10-10 08:45:50 By : Mr. King Zeng

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Brookfield Properties completed an extensive renovation of Heritage Plaza's interiors and exterior landscaping in 2021.

The 52-story Heritage Plaza has been a defining landmark in downtown Houston since it was built in 1987.

Energy firm EOG Resources is recommitting to downtown Houston after renewing an office lease in one of the largest office lease renewals in the region this year.

EOG Resources is maintaining its long-time home in Heritage Plaza, Brookfield Properties’ 52-story office tower at 1111 Bagby Street, where it’s had offices since 2007.

Over the years EOG Resources has grown from about 200,000 square feet in the tower to more than 350,000 square feet in 2019. This latest renewal will leave EOG occupying about 375,000 square feet of space, Brookfield said.

EOG Resources is one of the rare firms in downtown requiring employees to come into the office full time as it transitioned from a hybrid schedule to a full-time, in-person office schedule in April 2022, a spokeswoman previously said. The company has about 675 employees working in its downtown Houston headquarters. EOG confirmed its lease but didn't comment further.

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EOG Resources’ lease marks one of the largest publicly-known office deals in Houston so far this year as leasing activity gradually recovers post pandemic. Elsewhere in downtown, law firm Baker Botts also recently renewed a big downtown lease for 172,000 square feet at  910 Louisiana.And Cheniere Energy announced it plans to relocate its headquarters to a 151,490 square-foot office at Hines’ Texas Tower (845 Texas) next year.

Meanwhile outside of downtown in the Energy Corridor, pipeline company Enbridge is moving from the Galleria into a 293,000 square-foot office at Energy Center V and energy firm Baker Hughes is relocating into a 130,000 square-foot lease at Energy Center II. Engineering firm Bechtel is also relocating to a 205,000 square-foot office next year in the Westchase area. Greenway Plaza, financial services firm Invesco renewed for about 180,218 square feet earlier this year.

All of these aforementioned companies reduced their office space footprints to varying degrees, with many adopting hybrid workplace strategies. Notably though Cheniere does require employees to come into the office full time. And of course there are some examples of companies expanding their offices too, such as Reed Smith's  new lease for two floors  at LyondellBasell tower downtown.

Although Houston still has plenty of vacant office space (with about 29 percent available for lease), the office market is showing some signs of improvement after the doldrums of days of 2020 and 2021.  There were about 2.8 million square feet of new leasing activity during the second quarter of 2022, bringing the year-to-date total to 5.3 million square feet,  according to commercial real estate firm Cushman Wakefield. That is 35.2 percent higher than the 3.9 million square feet recorded during the first two quarter of 2021.

Many office landlords continue to upgrade their office properties as tenants flock to higher-quality spaces. Last year, Brookfield wrapped up a multi-million-dollar remodel of Heritage Plaza. Renovations included adding an exterior glass curtain wall to the corner of Dallas and Brazos streets to offer more natural lighting in the lobby, which also saw refresh with new furniture and fixtures. The landlord also refreshed the fitness center, added a new conference center, new staircase and the addition of new landscaping.

“EOG was an integral partner as we worked to completely reimagine this iconic downtown Houston asset,” said William Holliday, Vice President of Asset Management at Brookfield Properties in a statement. “We look forward to continuing to have a thriving relationship with EOG.”

The landlord and tenant both represented themselves in lease negotiations, Brookfield reported.

Marissa Luck covers real estate for the Houston Chronicle.

Originally from Hawaii, Marissa previously covered refining and chemicals for the Chronicle and also had stints at Costar, the Austin Business Journal and The Daily News in Longview, Wash.

She grew up near Seattle and studied international political economy at The Evergreen State College in Olympia, Wash.

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