Located in the Uptown District of Houston, The Galleria is an upscale, mixed-use urban development shopping center. In addition to the retail center, hotels, and health club, the Galleria is a popular location to lease office space. Galleria office space tenants include financial services firms, law firms, and energy companies, ranging from multinational corporations to local businesses.
Galleria Office Space | Lease Data and Trends
|Class A Office Space||$38/sf||21%||18,000,000 sf|
|Class B Office Space||$28/sf||16%||5,000,000 sf|
The West Loop – Galleria office space sub-market features nearly 25 million square feet of office space inventory. 18 million square feet of space is categorized as Class A, renting at an average of around $38 per square foot. The remaining Class B space rents at a more affordable $28 per square foot. Approximately 20 percent of office space Galleria is vacant, slightly below the Houston metro average of 25 percent. Vacancy rates have steadily climbed since 2015, leading to a decline in new construction and an increase in Houston sublease activity.
Galleria is one of the more expensive sub-markets outside of Downtown Houston, with asking rents similar those in Katy, The Woodlands, Greenway Plaza, and Midtown. The past year has seen significant transaction activity in the area. Notable leases include Stuart Title’s 156,151 square foot sublease at 1360 Post Oak Blvd., Apache Corporation’s 524,342 renewal at Post Oak Central, and Transcontinental Gas Pipe Line’s nearly 300,000 square foot renewal at 2800 Post Oak Boulevard.
In addition to leases and renewals, West Loop/Galleria also saw two significant sales in Q1 2018. Baupost Group LLC purchased the 1.1 million square foot Marathon Oil Tower at 5555 San Felipe for $175 million, and Griffin Partners bought three Loop Central buildings for an undisclosed amount.
What Our Brokers Say About Galleria Office Space
The Galleria Financial Center is occupied by many financial, legal, and energy firms, including Merrill Lynch, UBS AG, Morgan Stanley, CBRE, and Citigroup. The other two office buildings in the area are Post Oak Tower and the Galleria Tower. Additionally, the Williams Tower is connected by a walkway.
In addition to the wealth of Class A office space, Galleria office space is in high demand because of its convenience and accessibility. It’s a short drive from Downtown, Midtown, Texas Medical Center, and Sugar Land.
Uptown is easily accessible via the West Loop and is home to more than 2,000 businesses, representing nearly 15 percent of Houston’s total office space inventory and around 17 percent of Class A space. Uptown ranks as one of the 20 largest business districts in the United States, comparable in size to the downtown areas in Pittsburgh and Denver.
The Galleria consists of a retail center, as well as the Galleria Office Towers, two Westin hotels, and a private health club. The office towers and hotels are owned and managed separately from the shopping center. The mall is the seventh largest in the United States and most extensive in Texas. Current anchor tenants include Neiman Marcus, Nordstrom, Saks Fifth Avenue, and Macy’s.
The Galleria was developed by Gerald D. Hines, and opened in1970. The center was modeled after the Galleria Vittorio Emanuele II in Milan, and mimicked its distinctive glazed barrel vault, spanning the central axis of the mall.
Upon opening, the mall had 600,000 ft² (56,000 m²) of retail space. Today that has expanded to 2.4 million square feet and features many high-end boutiques, such as Louis Vuitton, Gucci, Cartier, Valentino, Coach, Fendi, Chanel, Carolina Herrera, Giorgio Armani, Jimmy Choo, Bvlgari, Christofle, Tiffany & Co. Yves Saint Laurent, Burberry, and Versace. Galleria is also home to Texas’ first Tesla Motors and Prada stores.
About the Author
Graham Shorr is the Chief of Staff at SquareFoot. In addition to supporting the executive team on corporate strategy and operations, Graham leads North America Market Research & Analysis. Graham is an alumnus of Carnegie Mellon University.