Historic Downtown Houston Office Building on the Market

Thursday, June 29, 2017

Holliday Fenoglio Fowler, L.P. (HFF), on behalf of the owner, is marketing the Esperson building in downtown Houston for sale. Recognized by the Building Owners and Managers Association (BOMA) as the Outstanding Building of the Year for 2016 in the Historical category, the 599,107-square-foot Esperson comprises two parts – Niels Esperson and Millie Esperson – built in 1927 and 1941 and stands as one of the two historic office buildings located in Houston’s central business district.

The Esperson is one of the most recognizable buildings in Houston. It is the only office building in the Houston CBD designed with Italian Renaissance architecture. Ideally located along the METRO Light Rail at 808 Travis Street and 815 Walker Avenue, the Esperson provides great ingress and egress for employees. The METRO Light Rail connects Downtown, Midtown, the Museum District, the Texas Medical Center, NRG Park and the South Fannin Park and Ride lot. The commercial property for sale is also easily accessible from the surrounding major highways. The Esperson is conveniently located at Travis and Rusk Streets, which serve as main arteries into the CBD.

In addition to the BOMA award, the building has also been awarded the ENERGY STAR® label in 2002, 2007 through 2012 and 2015 through 2016 from the U.S. Department of Energy and Environmental Protection Agency. These awards are a significant honor particularly for a building of this vintage. The current owner recently invested nearly $8.9 million in non-leasing capital that went toward building upgrades, including a redesigned lobby, new multi-tenant corridors, façade repairs, tunnel access renovations and more.

CBD Office Building for Sale Investment Highlights

  • Significant Upside Potential at an Attractive Basis:  At 62 percent leased, the office building for sale offers significant upside potential with 226,561 square feet available to lease. In addition, embedded upside exists as average in place rents are 30 percent below current market. One full floor with more than 30,000 square feet is immediately available along with five boutique high-rise floors that range between 2,267 and 9,057 square feet and are ideal for smaller tenants looking for unique office space. Additionally, the building can be purchased at a significant discount to replacement.
  • Irreplaceable Location in the Heart of the Houston CBD:  The Esperson is located on a full city block at the geographic center of the CBD. This central location is convenient to the Federal and County Courthouses, all of the major CBD hotels, Minute Maid Park, the Toyota Center and the Theater and Entertainment districts. More than 30 restaurants and other retail amenities are within a two-block radius of the building, providing the Esperson with a market-leading Walk Score® of 98.
  • Diversified and Loyal Tenant Roster:  The CBD submarket benefits from a diversified blend of companies located within its boundaries featuring market leaders in the banking and finance, energy, professional business service, and information technologies sections. Mirroring the overall CBD tenant mix, the Esperson has minimal exposure to any one industry. The CBD’s diverse blend of prominent companies coupled with the Esperson’s proven track record of attracting firms from a wide-array of sectors bodes well for the lease-up of the project. Additionally, there is limited tenant rollover thorough 2021.
  • Tunnel Access with Unmatched Amenity Base:  Direct tunnel access is essential for downtown buildings and provides an expansive amenity base for tenants. The Esperson sits at the epicenter of the downtown tunnel system and is one of only two buildings with four access points to the tunnel. Tenants and hotel guests of two recent, high-profile developments in the CBD, BG Group Place and the JW Marriott Downtown Houston hotel, must walk through the Esperson’s tunnels to access the rest of the system. Recently, ownership invested more than $3.1 million to the tunnel level amenities and food courts as well as new escalators connecting the tunnel to the building lobby. The tunnels consist of a 7.5-mile underground pedestrian tunnel system connecting most major CBD buildings offering consumers more than 400,000 square feet of retail space. Major demand drivers on site and adjacent to the Esperson include Amegy Bank, Allstate Insurance, Schlotzsky’s, Smoothie King, Mediterranean Grill, Peli Deli, Midtown Dentistry, Texas State Optical, Memorial Chiropractic and Vision Source. In addition to the retailers, the building offers valet parking, a tenant bike room, an Uber pick up/drop-off location and 24-hour security.

For more information on the Esperson or other office properties for sale, please contact Dan Miller or Martin Hogan in HFF’s Houston office. For information on financing, please contact Susan Hill. To view HFF’s current real estate investment sales listings, please click here to be directed to HFF’s property search page.

Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp, a Texas licensed real estate broker.

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