Capital Commercial Investments, an Austin-based real estate firm led by Doug Agarwal, has expanded its presence in Houston’s Energy Corridor with the acquisition of Energy Crossing I. The purchase follows the firm’s acquisition of the neighboring Energy Crossing II last November. Both transactions were brokered by JLL, which represented the seller, Dallas-based Invesco Real Estate.
Energy Crossing I is a three-story office building located at 15021 Katy Freeway and encompasses 240,000 square feet. Built in 2010, it was most recently appraised at $17.25 million. Its counterpart, Energy Crossing II at 15011 Katy Freeway, is an eight-story building with 327,000 square feet and was built in 2014; it was appraised at $23.5 million and was about 30 percent occupied at the time of sale.
The two properties are situated on more than five acres and include amenities such as an on-site fitness center. They are positioned within Houston’s Energy Corridor submarket, which has attracted tenants like DNV USA—a company that signed a lease for 63,000 square feet at another Capital Commercial Investments property called the Offices at Greenhouse.
The vacancy rate for office space in Houston’s Energy Corridor stood at 21.5 percent at the end of the first quarter this year, according to Partners Real Estate. Capital Commercial Investments has been focusing on reviving suburban office properties in both Dallas and Houston markets. Last summer, it also acquired the Offices at Greenhouse on Katy Freeway.
Upon purchasing Energy Crossing II last year, Capital Commercial Investments indicated plans to leverage what it described as a “flight to quality” trend among office tenants seeking newer buildings to attract employees back to physical workplaces.
Data from the end of the second quarter show that vacancy rates for properties constructed within the past fifteen years averaged 14.9 percent—significantly lower than older buildings built before 2009, which had vacancy rates averaging 27.5 percent.
