Historic Stowers Building Transforms to Office-Condo

In a pioneering move, Spire Realty Group L.P. has redeveloped downtown Houston's Stowers Furniture Building into office condominiums. The converted 10-story historic building on the corner of Walker and Fannin streets, which opened in February, offers small-business owners the option of owning as little as 2,500 square feet of office space.

"We had noticed that in Europe, especially?and in some of our metropolitan cities such as New York, San Francisco, Phoenix and Los Angeles?developers have started doing office condominiums," said Spire Realty executive vice president William Franks. "We have quite a few buildings, and our thoughts were, 'Let's give it a go and see if we can make a market.' The more people we've talked to, including real estate professionals, (the more) I think that we're going to be successful."

Spire will seek prospective buyers in small, privately owned oil and gas companies as well as law, financial, advertising, architectural, accounting and engineering firms.

"I think that if you dissected the downtown Houston central business district," Franks said, "you would find quite a few different professions that would need and desire to have their own space and control their own destiny."

The Stowers Building?a former furniture showroom and then locally owned jewelry store that was later mothballed for 25 years?was purchased in 2002 by Spire as part of a three-building package. The second building was renovated into the Sam Houston Hotel; the third is still vacant and being considered by the company for a future office-condo conversion.

"You're going to see new construction that will parallel what's being done with residences," said Transwestern Commercial Services vice president Mark Fowler, who predicted that Spire's move could establish a trend for businesses to own condominiums rather than lease space Downtown. "(There's) the masonry outside, plus all the amenities that you would have in a modern, convenient office building, except it's a condominium."

He also noted that Spire's renovation efforts could become popular among business owners who want to lower costs by owning their space?particularly while interest rates remain low?and those who want the benefits of customizable space in a good location. "Plus," he said, "that type of user is looking for some type of identity; smaller buildings allow them to do that."

However, the main deterrent for developers who wish to make such conversions, Fowler noted, is the lack of appropriate property for office condominiums. Many of downtown Houston's historic buildings have been torn down, leaving few for conversion.