PROVEN PERFORMANCE
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Situation
- Two Riverway was 82% leased and in place rents were 40% below market. Several of the vacancies were in terrible condition, including one that had never been leased. The asset needed to be repositioned operationally to achieve more efficiency and be more competitive among the Class A properties.
- One of the lead tenants, IBM, leased over 50,000 SF, but needed to downsize and was considering relocation options upon lease expiration.
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Action
- Upon taking over the assignment, Stream initiated contact with each tenant in the project and began to educate all tenants on current market conditions in Galleria. Stream recommended demolishing the 2nd floor cafeteria that had never been leased since the building was developed in 1981.
- Stream then relocated IBM from the 15th and 16th floors to 24,668 SF on the 2nd and 8th floors. In July 2010, IBM became the first tenant to occupy the 2nd floor in the building’s 30 year history.
- In July 2011, Stream executed a 10-year lease with Gainer Donnelly & Desroches to back fill the former IBM space on the 15th and 16th floors for a total of 44,818 SF.
Results
- From November 2008 to July 2011, raised the occupancy to 94% and increased the rents.
- Improved the Energy Star rating from 70 to a score of 90 in less than two years.
- Awarded the prestigious BOMA 360 designation validating Two Riverway as having overall best-in-class practices.
Increased revenue by the following amounts:
- HVAC recovery and special billing = 375% increase
- Parking = 169% increase
- Recurring tenant bill-back = 184% increase
While initiating a robust services program, Stream reduced operating expenses.
- Implemented an on-line, automated service request system improving response by 46% and garnering positive tenant feedback.
- Kicked-off a daytime cleaning program resulting in 5% electricity savings – the only program of its kind in the Gulf Coast region for a multi-tenant building.
- Registered the building for LEED EB certification. Working toward certification and cost-savings, Stream completed the installation of a new cool roof and smart irrigation system and incorporated the use of green cleaning products.
Stream has done a superb job of rationalizing expenses, supervising several major construction projects and improving the relationships with our tenants. They have consistently demonstrated their expertise and professionalism in all aspects of their services.
