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Downtown Houston Market Update 1st Qtr 2017

SuperBowl LI kicked off 2017, accelerating completion of several projects. Downtown was the epicenter of activity, attracting over one million visitors that took part in Super Bowl LIVE, a week- long fan festival, centered in and around Discovery Green, George R. Brown Convention Center and the newly transformed plaza at Avenida Houston. The first quarter of 2017 was off to a good start with the comple- tion of The Star, a new residential property, bringing Downtown’s residential unit count to 4,777. Market Square Tower, which opened in December 2016 is already 50 percent leased. The completion of Hines’ 609 Main at Texas also added 1.05 million SF of new office space to Downtown’s office inventory; the building is close to 60 percent leased. Seven projects are under construction for delivery in 2017, bringing in another 1,382 residential units, 480 hotel rooms and a new 10-story parking garage.

RESIDENTIAL A modern makeover and redevelopment of the historic Texaco Building, The Star, a 323-unit mid-rise luxury residential build- ing, opened in February. Located at 1111 Rusk, the building includes 21,000 sf of retail space, and a 9-story, 685-car park- ing garage that will incorporate retail. (The Star, HBJ, Bisnow) Camden Property Trust is delaying the construction of its pro- posed 20 oor, 550 unit luxury apartment project until there is some moderation in construction prices. (HBJ)

OFFICE 600 Je erson has been renamed 1801 Smith, and is under- going a multi-million dollar renovation. This includes adding a main entrance on Smith Street, to leverage the prominent address of one of the most well-traveled streets in Downtown. (Realty News Report) Je erson Smith LLC bought 500 Jefferson from New York- based W.P. Carey. The new owners aim to begin renovations on the building in late 2017. With the change in ownership, plans to convert 500 Je erson into Je erson Towers at Cullen Center have been canceled. (HBJ, Bisnow) Hines’ 609 Main at Texas is complete and about 60 percent leased. McKinsey & Co., Russell Reynolds, and Johnson Downie LLC joined the growing number of major tenants inking space at the new 1.05 million SF building. Kirkland & Ellis also nearly doubled its footprint in the building to about 105,000 SF. (Hines, HBJ)

Accenture recently opened a new 13,500-SF innovation hub in February, in the heart of Downtown as part of the company’s accelerated innovation investment in the U.S. The innovation hub is designed to help clients grow, compete and transform in the digital economy. Located on the 18th oor of 1301 Fannin, the innovation hub includes a liquid studio and innovation center. These are highly collaborative environ- ments where Accenture works side-by-side with its clients to leverage digital and emerging technologies, including arti - cial intelligence, blockchain, drone and computer vision, and virtual reality to create innovative and competitive business solutions. (Accenture, HBJ) Houston-based Hilcorp Energy Co will be demolishing the 10-story Americana Building at 811 Dallas, across the street from the company’s new headquarters at 1111 Travis. The building’s 550-car parking garage will remain. (HBJ)

OFFICE (CONTINUED) Skanska USA has begun construction on Capital Tower, a 35-story, 750,000 SF o ce tower at 811 Rusk. (Realty News Report) Brook eld is creating DesignHive, a collection of ‘o ce of the future’ prototypes, on the 37th oor of 1600 Smith, featuring spaces ranging from 2,815 SF to 4,193 SF. These innovative spec suites will cater to Houston’s increasingly younger and more mobile workforce, and tenants’ increasing demand for innova- tive and progressive work environments. (HBJ) Atlanta-based Columbia Property Trust sold all of its three Hous- ton o ce properties to Spear Street Capital for $272 million. These properties, including 5 Houston Center, totaled about 1.2 million SF. (HBJ, Realty News Report)

HOTEL AC Hotel by Marriott, a 10-story, 185-room European style luxury hotel is being developed by Newcrest Image. A conver- sion of the Houston Bar Center at 723 Main, construction on the hotel commenced in 1Q 2017, and is slated for completion in 1Q 2018. (HBJ) RETAIL Allen’s Place, a two-level Houston history-themed neighbor- hood bar, opened on February 1 on the ground oor of the historic Dorrance Building at 114 Main Street. The upper level features ve semi-private areas for a luxury box stadium expe- rience. (Website) A new lobby bar and restaurant, Bayou & Bottle, opened in January at the Four Seasons as part of the hotel’s ongoing multimillion-dollar renovations. The concept o ers an upscale menu, Topgolf Swing suite and boasts the longest bar in Texas. (HBJ, Chronicle) Owners of acclaimed French restaurant Étoile opened Bras- serie du Parc on January 30 at One Park Place. The 2-level 5,500-SF French restaurant, across the street from Discovery Green, also includes Creperie du Parc, a crêpe concept for to-go orders. (HBJ) Casa Blanca Lounge, a Guatemalan-style bar and lounge, is open at 312 Main Street in Historic Market Square. The lounge features live DJ's on the weekend, and is available for party reservations. (Website) Capital Tower McAlister’s Deli, a fast casual restaurant o ering hand- crafted sandwiches and salads, opened just before the Super Bowl inside the George R Brown Convention Center. Located at 1001 Avenida De Las Americas, the restaurant o ers dine-in, take-out and catering services. Downtown’s prominent culinary incubator, the Conservatory Food Hall and Beer Garden, has added a new food vendor, Moku Bar. Open at 1010 Prairie, the vendor serves fresh cus- tomized Poké and tempura options. (Website) One of the newest additions to Avenida Houston, Pappadeaux Seafood Kitchen opened in the southwest corner of the Convention Center. The restaurant’s 30-year- old Cajun concept includes patio space and counter seating. (Website) The Sam Houston Hotel’s former restaurant and bar—“17” and “The Sam Bar”—have been rebranded as The Pearl, a new seafood restaurant and oyster bar, which opened in February. (HBJ)

RETAIL (CONTINUED) Astros owner, Jim Crane, opened his upscale, white table-cloth Italian restaurant, Potente, and his casual trattoria, Osso & Kristalla, on the ground oor of the 500 Crawford residential building at 1515 Texas, in February. (Chronicle; Houston Press) Downtown restaurant Prohibition Supperclub & Bar has rebranded, splitting its dinner and theater services to comple- ment downtown’s energetic, street-friendly vibe. The restau- rant, The Oyster Bar at Prohibition, will operate only for dinner, and the theater will continue as Prohibition Supper- club. Each concept has separate entrances and menus, and the theater is expanding to include more seats. (HBJ) Owners of Clé Club opened Spire, a mostly electronic dance nightclub, on January 15 in the former First Church of Christ Scientist building at 1720 Main. (HBJ) Owner of The Pastry War, Bobby Heugel, opened Tongue-Cut Sparrow, a new 25-seat formal cocktail bar and event space in February, on the second- oor of 310 Main. (HBJ, Houstonia Magazine) Torchy's Tacos and Shake Shack opened in Minute Maid Park on March 29. The renovated Budweiser Patio in the sta- dium also features new food selections, including a grab- and-go market serving food, beverages and other items. (HBJ) Wokker TX Ranger, a modern Asian-Southern local food truck, is open at 907 Franklin inside Craft Beer Cellar, in Historic Market Square. The food truck hand crafts unique avors that Xochi sum up the avors of Houston in one bite, and includes new menu items exclusive to this location. (Website) Hugo Ortega’s highly anticipated Oaxacan restaurant, Xochi, opened in January on the ground oor of the Marriott Mar- quis. Xochi features unique Mexican cuisine that incorporates traditional Oaxacan herbs and ingredients. (HBJ, Houstonia) COMING SOON: Houston's oldest and largest craft brewery, Saint Arnold Brew- ing Company, is planning a 20,000-SF expansion to its property: Saint Arnoldville will bring a new restaurant to seat around 100 people, an outdoor deck, a beer garden and lawn with games and more. (HBJ) Owners of Montrose co ee shop Blacksmith, Morningstar and Greenway Co ee & Tea plan to open Prelude Coffee and Tea inside 609 Main's lobby. (HBJ) The Tipping Point, Downtown’s rst and only creative lifestyle destination will be opening on the ground oor of the historic W. L. Foley Building at 214 Travis Street. in May. The retail store will feature select limited-edition footwear, books, art, apparel, music, and accessories. (Website)

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