Construction and engineering giant Fluor is moving its Houston-area hub to the Energy Corridor after almost 40 years in Sugar Land, the company said Wednesday.
Irving-based Fluor recently signed a 12-year lease for the entire 308,186-square-foot office building known as Three Eldridge at 737 Eldridge Parkway, according to landlord Plano-based real estate firm Granite Properties. The lease is one of the largest publicly known new office leases signed this year in the Houston area, according to Cushman and Wakefield, the real estate brokerage that represented Fluor in the transaction.
Fluor plans to move more than 1,300 employees to the 13-story building in summer 2024 from the firm’s campus at 1 Fluor Daniel Drive in Sugar Land, said Jennifer Kim, vice president and general manager of Fluor’s Houston office. The company is hiring 170 people this year and looking to fill another 400 positions, she added.
The Irving-based firm has long looked to modernize its Houston offices, originally planning to build a 50-acre campus near the Smart Financial Centre in Sugar Land. But as the company has been trying to shrink its worldwide real estate footprint, and instead it sold the land in late 2022 to Sugar Land real estate firm Dhanani Private Equity Group.
Fluor’s relocation represents the loss of a major employer in Sugar Land, which in years past has offered a variety of incentives to try to retain the Fortune 500 company in the southwest Houston suburb. But Fluor wasn’t able to find a newer office building with the square footage it needed in Sugar Land, Kim said.
“It’s not about moving from Sugar Land; it’s really about optimizing our footprint. And this is something we’ve been looking at globally — understanding today’s workforce, in terms of anticipated workload and growth in the organization, as well as this flexible workplace that has evolved over the past several years,” Kim said.
On any given day, about 85 percent of its Houston workforce is coming in the office, with about 15 percent operating on flexible or remote schedules, she said.
Fluor built its 1.2 million-square-foot offices in Sugar Land in 1984 to accommodate some 5,000 people, although the campus never reached its full capacity, Kim said. The company hasn’t owned the Sugar Land campus for a number of years, she said. The firm planned to stay there until 2026, but now will move out by late June 2024, she added.
Its future West Houston building can accommodate up to 1,600 employees. There is also room for Fluor to grow into nearby buildings as needed, Kim said.
Fluor’s Houston operations also are the home for its energy solutions business, so relocating to the Energy Corridor will put the company closer to many of its clients, as well as top talent at nearby engineering firms.
“We see this as strategic for being able to retain and recruit employees,” Kim said.
Fluor’s is the latest in a flurry of large office deals signed in recent months in the Energy Corridor, including deals by Kiewit Engineering, Technip Energies and Modec International. Nearly 19 percent of all Houston-area office deals signed in the first quarter were in the Energy Corridor, edging out the rate of activity downtown, which accounted for 16 percent of leases last quarter, according to real estate firm CBRE.
“I think we’re seeing a resurgence in the Energy Corridor,” said Scott Martin, executive managing director at Granite Properties, in part because employers are trying to cut commute times for West Houston-area employees.
Granite Properties bought the three-building Eldridge office complex for $78.4 million in 2019. At the time Granite was aware British oil major BP would be vacating Three Eldridge (where Fluor is now going), Martin said. Since then, Granite has poured some $10 million into upgrading and modernizing the complex.
“If you walk in there today, you’d feel like this is a brand-new building inside stylistically,” said Martin.
Jon Dutton and Andrew Elliott of Granite represented the landlord in lease negotiations. Rick Kaplan, David Guion, & Chris Oliver of Cushman & Wakefield represented Fluor.
See article at Chron.com.
