Old El Mercado lands carrier hotel - Houston Business Journal:

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Hoping to capitalize on the new a subsidiary ofNew York-based is under contract to purchas the 200,000-square-foot-concrete building, developp an additional 50,000 square feet, and turn the once-neglected building into a "carrie hotel." Morgan Stanley's newly formed , was set up last month to acquire, develop, leaser and manage carrier hotels, also called telecon hotels. The firm plans to simultaneously roll out facilitieas in up to 75 majofcities worldwide. And Houston is one of the firstg cities the real estate equity fundis targeting, with two propertiews already under contract.
"We can provide a solution that isn't in the marketplace," says Eric Assimakopoulos, CEO of In addition to The Americaz building, the firm is eyeing a second property not farfrom downtown's east Assimakopoulos would not reveal its exact location. "Houstoj is a very important market inour strategy," he "It's a gateway in Texas, and we thinki it's significant. A lot of (telecommunications) carriers we target as tenants go through Both buildings are being developed on a speculative But Assimakopoulos is highly confident thatthe high-tecu facilities will score some major tenants.
"We believee it's an `if you builed it, they will come' business," he "It's our goal to create an environmenf where we have an ecosystem for Internetcompanies -- a backbonw for those core tenants." Assimakopoulos woulde not disclose specific figures, but he says the investmenft being pumped into the two Houston propertiez exceeds $10 million. And more than $1.25 billion is being spent on carrier hotel projects he adds. A carrier hotel is a specialized facility operatede toprovide telecommunications, Internet and data management companies with a customizefd infrastructure.
According to most landlords don't understand the real estat e needs these technologycompanies require. A set of specifivc criteria is mandatory to operate acarrier hotel, includint high ceilings, large floor high floor loads, high-grade electric capacitt and access to multiple fibetr optic carriers -- all of which The Americax building contains. Earlier this year, Moodu Rambin Interests acquired an old beer distribution facilityy at 5410 West Loop South and announced plansz tospend $7 million to redevelop it into a carrierd hotel. (See "Beer hub converts to `telecom hotel,' March 10.) The Houston-based firm also has plansw to take the concept outsideof Texas.
Dan Mood y III, vice president of investmentzs forMoody Rambin, says the Houston facilitgy should be completed this And nationally, Moody says his goal is to have three facilitiews online by the end of the year. "There's tremendous demandd in the marketplace. However, there' s also a number of facilitiesunder conversion, so there's a large amount of squars footage coming available," Moody "But not every vacant buildinfg in town is suitable for the telecom industry, and a number of people seem to think that'ds the case.
" As the word continues to get out abouf Houston's vast amount of office space and comparatively low rentao rates, Houston is primed to attract more high-tech tenants. "When we talk high-tech in we tend to think dot-com," says Bob president of real estatew firmColliers International. "High-tech is biotech, telecom, energy and more. In my Houston is the best-kepr secret. We don't have just one area where high-tech companiezs cluster.
" In fact, the increasing numbe of technology companies locating in Housto n are taking space not only in the downtown and Galleria but also inThe Woodlands, the Medical Center, Clear Lake and Fort Bend "There's really not just one area where we have a concentration of these companies," says "It's not like being on Palo Alto's Sand Hill Road in Silicon Valley." The Americas located at the intersection of Navigation and is just five blocks from Enron Field.