Cushman & Wakefield leases 23,417 square feet to Vaalco Energy in Houston

Cushman & Wakefield announced today that the firm represented the building’s ownership, Affinius Capital, in leasing 23,417 square feet to Vaalco Energy Inc. at 2500 CityWest in Houston.

Win Haggard of Cushman & Wakefield represented ownership, under the direction of Dennis Tarro and Phillip Moore with Patrinely. Joshua Brown and Audrey Selber of Newmark represented Vaalco Energy, which will occupy the fourth floor of the building. Patrinely oversees the building’s leasing and management.

Located at 2500 CityWest Blvd. near the intersection of Westheimer Road and West Sam Houston Parkway, the office tower totals 25 stories. Features and amenities include a fitness center; onsite coffee shop and deli; Common Desk flexible workspaces; a conference center with multiple, flexible meeting spaces; and dozens of restaurant and retail options nearby.

Counselors of Real Estate 2025 prediction? Plenty of uncertainty

Political uncertainty is the leading concern for top commercial and multifamily real estate advisors as 2025 approaches—but it has a lot of competition, according to the Top Ten Issues Affecting Real Estate®, a just-released annual report from The Counselors of Real Estate®, a global organization comprised of leading property advisors. Each year, the report poses potential solutions to the industry’s most critical challenges.

In addition to political uncertainty, the real estate industry also faces $1.8 trillion in commercial real estate debt set to mature before 2026; $380 billion in economic losses in 2023 due to extreme weather; soaring insurance costs; and persistent, still-elevated interest rates. On the bright side, interest-rate induced bleeding has slowed as deal volume has begun to stabilize heading into 2025.

Anthony DellaPelle, global chair of the Couneslors of Real Estate

“This coming year, elections in more than 70 countries could shake up an already volatile geopolitical landscape, and the U.S. elections in particular will have a significant impact on regulation, trade, corporate taxes, immigration policy and sustainability,” said Anthony DellaPelle, global chair of the Counselors of Real Estate®, in the Top Ten Issues report.

“The urgency of prioritizing sustainability and climate resiliency in real estate strategies has never been more apparent, as we saw massive economic losses last year due to extreme weather, which is also contributing to sky-high insurance costs.”

The Counselors of Real Estate® is approaching the disruptions caused by this pervasive uncertainty with a focus on solutions, enhancing the industry’s understanding of how these issues will impact various asset classes within commercial real estate.

Top Ten Issues Affecting Real Estate in 2025

  1. Political Uncertainty Pervades Every Corner – In 2025, the real estate sector is navigating uncertainty due to elections in more than 70 nations including the United States, Taiwan and the EU. In the U.S., notable real estate-related issues to watch include potential rent caps for corporate landlords and modifications to the 1031 like-kind exchange. Globally, elections could affect trade and military policies, with repercussions for the U.S. economy overall. This unpredictability complicates real estate transactions and real estate workouts for distressed assets, as investors seek clarity on economic growth, inflation, and interest rates.
  2. Transactions Will Remain Tepid Amid High Financing Costs – While interest rates came down in September 2024, the financing markets remain challenged due to still-elevated rates. As a result, deal assessments and market valuations remain complex. While transaction volumes are stabilizing, uncertainty still persists. Many owners are hesitant to sell, and potential buyers are wary of high prices, still expecting a surge in distressed asset sales due to upcoming loan maturities. The Counselors’ report predicts that buyers will continue to adopt a cautious approach, focusing on higher cap rate deals, with a more aggressive market re-entry likely not materializing for another two years.
  3. Commercial Real Estate Market on the Edge of a $1.8 Trillion Debt Cliff – The real estate sector faces a looming $1.8 trillion in commercial loan maturities by 2026. While lenders are increasingly extending these loans in hopes of better market conditions, this temporary relief may soon reach its limits as banks grapple with regulatory constraints and insufficient capital reserves. While forecasts suggest a decline in federal funds rates from 5.25–5.50% to around 3.5–4.0% by the end of 2025, borrowers who secured loans at sub-4% cap rates may encounter debt service payments that are 75% to 100% higher. This increase, combined with a reset in property values, complicates refinancing efforts for many owners. The resolution of these maturing loans will significantly impact market dynamics in 2025, potentially triggering a domino effect that could alter competition and tenant retention across properties.
  4. Expect Higher Cap Rates as Investors Price in Geopolitical Risks and Market Volatility – Ongoing geopolitical turmoil, from conflicts in Ukraine and Gaza to supply chain disruptions, is reshaping the real estate landscape. This instability drives inflation, affects labor and housing affordability, and complicates monetary policy, all of which impact real estate pricing and risk-adjusted returns. Expect higher cap rates as investors price in greater risk. The current environment of “higher-for-longer” interest rates means returns must expand beyond the Treasury rate. In this type of disrupted market, it’s key for investors to tailor strategies to specific market conditions, as they can no longer rely on historical cycles.
  5. Insurance Costs Soar as Natural Disasters Cause Hundreds of Billions in Losses– Towering insurance premiums, driven by inflation, increased property values and extreme weather, are hitting real estate owners hard. In 2023, natural disasters caused $380 billion in losses, with only 31% covered by insurance. Residential, hospitality, and senior living properties are particularly impacted, with rising claims and “runaway juries” inflating awards. Government legislation, like California’s habitability lawsuits, adds further pressure. The old model of buying insurance is fading as owners focus on risk management, rightsizing coverage, and exploring alternative risk transfer solutions to control escalating expenses.
  6. The Dream of Affordable Housing Slips Further Out of Reach – Housing affordability continues to worsen due to rising costs and a shortage of 4.4 million units. Multifamily rent growth has slowed, but rents have climbed 45% over the past 15 years. Despite increased construction, development is uneven, concentrated in major metros, and insufficient to meet demand. Nearly 54% of renters are now cost-burdened, spending over 30% of their income on housing. Declining multifamily construction and growing demand from younger renters suggest affordability challenges will intensify in 2025. Solutions require both building new housing and preserving existing affordable units, with private sector involvement crucial.
  7. Artificial Intelligence (AI) Impact Hinges on Data Accessibility and Accuracy – AI’s role in real estate is rapidly evolving, with focus shifting to the accuracy, granularity, and timeliness of data inputs that drive algorithms. While AI can optimize certain processes, commercial real estate still faces challenges with fragmented data and location-specific nuances. As AI algorithms demand significant computing power, data centers are booming, but advancements in algorithm efficiency could change their appeal as investment opportunities.
  8. Extreme Weather Events Propel Need for Resilience and Regulation – Increased frequency of hurricanes, wildfires, and floods have caused billions in property damages. In Europe, new regulations like the EU’s Corporate Sustainability Reporting Directive and the U.K.’s Minimum Energy Efficiency Standards are setting strict sustainability rules, while U.S. regulations remain fragmented. As extreme weather and investor demands grow, the business case for resilient properties is stronger than ever, driving a need for investment in green technologies and AI.
  9. Office Vacancies Will Drive Adaptive Reuse in Urban Cores – A generational shift is happening in cities, as how people use offices stabilizes into a new paradigm—leaving many office buildings poised for adaptive re-use into residential, healthcare and educational uses with the potential to revitalize urban cores. U.S. office vacancy rates are expected to peak at 19.7% by the end of 2024, leading to lower occupancy rates and declining property values, particularly in cities like New York and San Francisco. This structural shift impacts tax bases, city finances, and the broader real estate ecosystem; however, while converting offices is a potential solution, it’s costly and complex.
  10. Buyer-Seller Price Gap Narrows – Some good news amongst uncertainty: the divide between buyers and sellers on asset prices persists but is no longer widening. Pricing declines, especially in sectors like core business district (CBD) office, are slowing, providing hope for stabilization. Industrial real estate has been less affected, showing an 8.6% annual price increase. As interest rates stabilize, the worst of the pricing shock appears to be over. However, loan maturities could force sellers to adjust expectations, pushing more deals as refinancing pressures build. More declines in interest rates or stronger rent growth would also help further bridge the gap.

The full 2025 Top Ten Issues Affecting Real Estate report can be viewed online.

Navigating Project Pitfalls

How real estate attorneys can help project owners avoid delays, defects, and disputes

Brad Porter, Managing Partner and Owner
Porter Law Firm

Real estate development projects can be exciting undertakings for investors, builders, and other stakeholders, but it’s certainly possible for complications to arise. Projects of this nature often encounter hurdles related to miscommunications, unclear contracts, construction defects, or other causes, but these can be easily cleared by partnering with an experienced attorney early in the process.

There are, in fact, many steps that real estate attorneys can assist with, in order to help project owners find success. 

From the get-go, attorneys can help owners understand the complexities of their construction agreement to avoid unwanted surprises down the road. Negotiating these agreements before the project begins ensures everyone is clear about their responsibilities. 

Once the project is underway, delays can be common, ranging from regulatory or approval obstacles, supply chain issues or labor shortages, or contractor performance issues, to coordination or communication challenges. The exact causes and impact of these delays can vary greatly, but having an attorney involved from the beginning can help mitigate or even prevent these hold-ups. For instance, developers may sometimes face unexpected regulatory hurdles midway through a project, causing significant lags. But with the help of an attorney, all stakeholders can be briefed in advance on locally-relevant regulations, so that none of them are surprises.

Another type of mid-project complication is the construction defect. There can be numerous such defects – including problems with the building envelope, a poorly laid foundation, plumbing errors, or water intrusion – that can cost potentially millions to rectify, depending on the project’s size and scope. Attorneys can play a crucial role in such a circumstance by collaborating with third-party experts who can inspect the site and identify potential problems early on. If a construction issue leads to litigation, these experts can also gather information on-site to determine what happened and who is liable.

Speaking of litigation, attorneys who specialize in real estate see project-related disputes with some frequency, so they know the sort of minor issues that can turn into bigger problems without attention. When disputes arise, several steps can be taken. Initially, many contracts require all parties to participate in dispute-related discussions. Attorneys are often involved before this initial step, with the hope that these negotiations will lead to a successful resolution. If these initial negotiations are unsuccessful, the next step is mediation. If mediation fails, the next step is likely to be private arbitration or a public lawsuit. Before filing, owners or developers will rely on their attorney to gather evidence through the aforementioned third-party experts to fully understand the project’s issues: what went wrong, why it happened, and who is responsible.

While attorneys are best known for handling lawsuits, their expertise can be highly valuable to developers and owners during other stages of their projects, with the goal to keep them out of the courtroom and instead headed for their ribbon-cutting.

About Porter Law Firm

Founded in 2009, Porter Law is a Houston-based boutique law firm known for its extensive experience in real estate law. The firm advises on investing in a business, buying or selling commercial real estate, HOA law, construction matters, and planning for the next generation. For more, visit www.porterfirm.com

Partners Capital closes disposition of Trails 620 in Austin

Partners Capital, the investment platform of Partners Real Estate Company, closed the disposition of Trails at 620, a retail property in Austin, Texas.

The property at 8300 N FM 620, spans 69,037 square feet across seven buildings on 15.42 acres. Partners Capital acquired the asset in October 2020.

JLL brokers Shea Petrick and Chris Gerard represented Partners Capital in the transaction.

Harmony at last? Unispace survey shows that U.S. employers, employers find middle ground on hybrid work

After years of conflict and tension around return-to-office mandates and hybrid schedules, the latest annual survey from design-build firm Unispace shows that U.S. employees and employers have finally found an acceptable middle ground.

According to the report, From Restrictions to Resilience, 98% of employers in the region are happy with their current hybrid working arrangement, while 90% of employees feel the same. In fact, American companies and workers demonstrate more harmony on this issue than their global counterparts at 95% and 87% on average, respectively. U.S. employees are currently in the office 3.8 days per week, a slight increase from 2023 (3.6 days).

While the amount of time spent in the office hasn’t changed dramatically in the past year, employers’ attitudes about the return-to-office (RTO) have evolved. Last year, 80% of employers in the U.S. mandated their employees to return to the office. However, they acknowledged that employee retention and attraction suffered as a result – half (50%) of these employers experienced higher turnover than normal, and more than a quarter (27%) found it harder to recruit. When you consider this was the general sentiment just over a year ago, the current mutual contentment around hybrid schedules is even more notable.

“For years, U.S. employers have been experimenting with the carrot vs. stick approach when it comes to RTO. This year, it’s firmly in the carrot’s favor as evidenced by the mutual agreement on hybrid work schedules,” said Albert DePlazaola, Senior Principal, Strategy, Americas at Unispace. “Employees’ goodwill must continue to be earned, however. To ensure the office continues to work for employees, organizations must offer quiet workspaces that enable focused, heads down work in a shared space.”

The survey data puts a finer point on this. While employees emphasize that “building social connections” and “face-to-face collaboration” are top office benefits, they also expect to have the opportunity to do focus work so they can “feel more productive” – and this is where the current office is missing the mark.

Striking the balance between concentration and connection

While face-to-face collaboration remains a top incentive for coming to the office, U.S. employees spend most of their time (60%) at their desks, doing focused work. Unfortunately, they’re finding that limited space options, noise and in-office interruptions often disrupt their focus. The difficulty in doing heads-down work is just one of several challenges highlighted in the survey results.

To mitigate these challenges, the report recommends a combination of furniture and workplace configurations that cater to various tasks and working styles. Employers should consider designating quiet, peaceful spaces for concentration or rejuvenation, as well as more dynamic areas for connection and teamwork.

For example, Columbus, Ohio-based Bread Financial, a leader in data-driven payment, lending, and saving solutions, created ‘zones’ to support varying employee work styles, enabled by a phone app that allows staff to conveniently book a desk when they need to do focus work. 

With pioneering organizations like Bread Financial leading the way, U.S. employee and employer harmony on hybrid is notable compared to their counterparts in other regions. They’re among the most likely to say that their workplace enables employees to be innovative (80% vs. 76% globally).


Narrowing generation gaps in the office


Younger generations (ages 18-34) prefer remote work compared to their older counterparts. But their response to prized office ‘perks’ intended to entice them back to the office is the highest of all generations.

For example, younger generations see the most benefit from mentorship, and 79% of U.S. employees would be happier to spend more time in the workplace if they had access to it. And the vast majority of them said they would happily spend more time in the office if their employer provided subsidized travel (86%) or access to amenities like a gym (86%). 

“Clearly, investments in the office and incentives—not mandates—drive Gen Z office occupancy,” said DePlazaola. “It’s strategic for employers to explicitly understand these employees’ needs in order to create an office environment that works best for them.”

Creating welcoming spaces that inspire


To enhance the office’s appeal for all generations, the report notes that spaces must foster a sense of employee belonging and identity, reflect organizational values, and allow for flexible start times. In fact, nearly three-quarters of employees (71%) in the U.S. say they would be happier to spend more time in the office if their workplace had spaces that connect them to the organization’s brand, culture, and values.

People want to work in spaces that are bright, inviting and engaging, and that celebrate not only the organization, but the diverse individuals it comprises. For example, Downstream, Unispace Group’s experience design agency, recently transformed the employee experience within the New York headquarters for Google’s Global Business Organization in St. John’s Terminal. The new office includes a mix of spaces, enhanced by sculptural elements, QR code-driven story plaques, and advanced workplace technologies, to foster DEIB (diversity, equity, inclusion, and belonging) and accelerate innovation.

The importance of creating a workplace that fosters belonging and identity cannot be understated. When asked what elements U.S. employees would like to see in their “future workplace” (i.e. the office in five years), a workplace that fosters belonging and identity remains in the top three responses, along with access to a “tech-enabled workspace” that provides advanced collaboration tools and smart features, as well as flexible schedule options such as compressed workweeks.

Gauge Real Estate Partners to build three industrial buildings in Southeast Houston submarket

Gauge Real Estate Partners began construction on its latest Class-A industrial project and largest speculative development to date. Marketed for sale or lease, Gauge Southgate will feature three state-of-the-art industrial buildings designed to meet the demands of tenants in the strategically located Southeast Houston industrial submarket.

The development will offer 192,660 square feet of premium industrial space, with each building tailored to optimize distribution patterns and operational efficiency.

Building A will provide 33,600 square feet with a rear-load configuration and prime Beltway 8 visibility, 2,680 square feet of permit-ready office, 28-foot clear height, 15 dock-high doors, and 31 parking spaces. Building B will encompass 77,160 square feet with a front-load configuration, 2,400 square feet of speculative office, 32-foot clear height, 19 dock-high doors, 53 parking spaces, and the ability to provide 1,600 amps of power. Building C, at 81,900 square feet, will have a dedicated truck court, front-load configuration, 2,280 square feet of permit-ready office, 32-foot clear height, 15 dock-high doors, 55 parking spaces, and the ability to provide 1,600 amps of power.

Stream Realty Partners, a national commercial real estate firm, will oversee sales and leasing for the property.

The project is expected to deliver in the second quarter of 2025. With close proximity to Bayport Container Terminal, Barbour’s Cut Container Terminal, and Hobby Airport, Gauge Southgate presents a variety of locational and connectivity advantages for industrial users. Located entirely outside of the 500-year flood plain and offering superior access in all directions to both Beltway 8 and Interstate 45, this project is poised to become a key asset for businesses looking to expand their presence in Southeast Houston.

The Gauge development team includes co-founders Jeff Pate and Brian Attaway. Corvus Construction serves as the general contractor, and Powers Brown Architecture serves as the architect. Woody Hillyer and Managing Director Tyler Maner of Stream are responsible for building sales and leasing activity.