Brookfield Properties, the largest landlord in downtown Houston, is taking note of growing flexible office demand.
The firm will once again partner with Industrious, known for its property management agreements, to open a new coworking space at the 3 Houston Center building.
The new location is expected to open in May of 2023, incorporating 277 seats across 23,500 square feet, as well as private offices, shared spaces, conference rooms and more.
Although it is unclear whether Brookfield and Industrious will enter into a management agreement, this business model has become increasingly popular within the coworking industry and is expected to be more prominent in the future.
By opting for a management deal, both parties are able to reduce their risk in the face of economic uncertainty, while still sharing a portion of the revenue.
“It’s a really good example of where we think this business is going, a tool belt for landlords to attract tenants and retain them,” said Peri Demestihas, senior director of real estate at Industrious.
This deal comes at a time when Houston’s Downtown Redevelopment Authority is urging developers to rethink how old office buildings can be used through its “adaptive reuse incentive program.”
According to CoStar, Houston currently has the largest office vacancy rate in the country, priming these inexpensive spaces for repurposing.
“The economic challenges of conversion will most likely require an incentive program to encourage adaptive reuse in much the same way that historic structures receive tax credits for renovation, or through a program similar to the Downtown Living Initiative that incentivized the residential construction or conversion in the Downtown Houston market,” the proposal read.