Granite Properties Office Tenant Doubles Energy Corridor Lease

Granite Properties scored a lease expansion with a tenant that is doubling its space in the Energy Corridor.

SM Energy is moving into the 11th and 12th floors, spanning 41,500 square feet, in Eldridge One, at 777 North Eldridge Parkway. The firm will move from the 21,000 square feet it occupies on the building’s 10th floor.

The Energy Corridor is emerging as Houston’s most popular office submarket. It had a vacancy rate of 23.1 percent in the fourth quarter, according to Avison Young. By comparison, the rate was 28.6 percent in downtown Houston, 28 percent in Galleria/West Loop, and 30.4 percent in Westchase.

Terms of the SM Energy lease weren’t disclosed, but Plano-based Granite hinted in a news release that it is shelling out for tenant improvements. SM Energy plans to move in the third quarter.

Steven Mulhern of Mulhern Company, along with Bill Scott of Real Estate One, represented the tenant, and Granite was represented by its own Jon Dutton and Andrew Elliott.

The 12-story building spans 245,000 square feet and is 92 percent leased, according to the release. It’s part of a three-building complex spanning 828,800 square feet. Amenities include outdoor workspace, a fitness center and a conference center, plus a cafe scheduled to open in the second quarter. It’s within walking distance to Terry Hershey Park, which includes a 12-mile trail.

Houston’s office vacancy is a tale of two centuries, as buildings constructed in the 1970s, ’80s and ’90s average about 30 percent vacant, while those built since 2010 have an average vacancy under 14 percent.