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Those Magnificent Tilted Walls

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Sierra Pines II

Text by Paul Coonrod, Stream
Images by Raheel Photography and Mark Johnson


Over the last year, a couple of guys in our office gave me the best compliment I’ve ever received. They gave me the nickname, Tilt Wall Paul. With a last name like Coonrod, you can probably imagine that I’ve had my fair share of nicknames. This is the one I’m proudest of, for a variety of reasons. Personally, I think tilt wall construction is sexy, innovative and mysterious all at the same time. It attracts some of the most desired tenants you’d want in your office building, has aesthetically evolved so that is now accepted by traditional Class A office users, yet it remains mostly misunderstood. In a strange way, I feel like I’m one of the big brothers of tilt wall and want to stand up for this type of construction that has helped Stream make its mark in Houston. I’ve been fortunate enough to have the opportunity to share our thoughts about why these magnificent tilted walls will continue to be seen across the nation.


Houston has been at the leading edge of tilt wall office projects, with specific regard to transitioning what many users/tenants thought could be considered Class A office space. From a development standpoint, there are numerous benefits that tilt-wall office buildings provide over other conventional construction methods. Specifically in Houston, we’ve seen a tremendous growth of this type of construction across the city. The evolution of the exteriors and interiors (common areas) of these office buildings have changed significantly over the past 10 years. In the past, many tenants would view tilt wall office buildings as Class B space with surface parking and considered it a flex-type product. However, as construction techniques became more sophisticated and architects (namely Powers Brown Architecture in Houston) have pushed the envelope from an aesthetics standpoint, high-credit tenants are leasing these buildings on a long-term basis. Once this occurs, the developer sells the building to a big institution and other developers get wind of the profitability with that project. Then they “do what that guy did” and get into the tilt-wall game. It’s been a fast-moving cycle in and across Houston, and a trend that we’ll continue to see within many of the U.S. growth cities over the next several years.

Sierra Pines II


Houston led the nation with the amount of office development over the past couple of years. Before the last wave of construction began, the Houston office market was about 140 million square feet across 11 submarkets. There are a total of 84 office buildings currently under construction or recently completed totaling 26 million square feet. Within that number, about 33%, or 26, of those projects are tilt wall office buildings totaling 4.2 million square feet. The most exciting aspect of all the statistics previously cited, is that the majority of the tenants occupying these buildings have outstanding credit and have signed long lease terms. The combination of those two aspects is crucial for any developer because the sales price of their office building is calculated based upon the credit of the tenants in those buildings and how long of a term they have signed. Some examples of these tenants include URS, Praxair, GE Oil & Gas, Cameron, Mustang Engineering, GEICO, Subsea 7, Houston Offshore, Allstate, BBVA Compass, Texas Instruments, and many other household names. The acceptance and desire for investment-grade tenants to sign long-term office leases in these buildings is arguably the most critical reason why tilt wall construction will continue to evolve over the coming years. Long story short, investment-grade tenants that sign long leases will generally make the developer and its partners a lot of money.

Sierra Pines II


From a developer’s standpoint, time is not on your side. When entering into a joint-venture partnership, both sides agree on how to split all profits. These agreements are generally based upon one calculation, the internal rate of return or IRR. The IRR is a calculation of the return on the project to a percentage over the duration of the hold period. Or put another way, how much money did you put in, how much money did you get out, and when did you get it out? So the higher the IRR, the better. A higher IRR also means that there’s more profit to be shared within the partnership. So keeping everything else equal, the cost of the project (money in) and the sale of the project (money out), the only factor left is time (when did you get your money out?).

We can specifically point to tilt wall construction and acknowledge that this method will save time from a construction standpoint. Based on our experience, a tilt wall office building will save about six months of construction time for a 200,000-square-foot office building. These six months are absolutely critical in the early stages after the building delivers. These six months can offer two benefits when comparing tilt wall to conventional cast-in-place or steel-framed construction methods. The first is that if we’re comparing a 30-month hold period, tilt wall construction will then give you an additional six months to lease property once it is complete. Many times office tenants do not visualize the completed office building until everything is 100% finished, so leasing office space during construction is a challenging task. When using other construction methods, this 36-month hold period generally would have 18 months for construction and 18 months to lease the project. For this same building utilizing tilt wall methods, construction would only take 12 months, thus providing a total of 24 months to lease the project. These extra months for leasing efforts provide additional levels of comfort if the project is delivered during a market downturn.

On the other hand, if you’re lucky enough to land a couple tenants during the construction period that put you into a position to sell the property before construction is complete, then you can do that six months earlier. This will push your IRR dramatically up and that means good news for everyone.

At the time of this publication, the price of oil has dropped about 50% in the last eight months, which means that Houston will feel a slowdown over the coming quarters. That being said, when a developer has vacancy during a potential slowdown they want to be able to compete as low as possible from a rental rate perspective. Based on our experience, tilt wall office buildings cost roughly $30 per square foot less to build versus other durable building systems. From a rental rate standpoint, this means tilt wall office buildings could save tenants at least $3.00 per square foot per year. For a 100,000-square-foot tenant, those savings equal $3 million over a ten-year lease. That’s serious negotiation power all thanks to those magnificent tilted walls!

Sierra Pines II


Numerous exciting advancements in tilt wall technology have occurred over the past couple of years, and Stream has been fortunate to be involved in many of them. Working with Powers Brown Architecture, we’ve led the pack continuing to innovate with tilt wall. We’ve pioneered several techniques for delivering multistory tilt wall offices including the first six-story tilt wall office building in Texas. These buildings have a tremendous amount of glass on the exterior and stacked panels designed to break down the panelization of the old tilt wall building. This has allowed tenants to take a new look at tilt wall. We brand our buildings now as Mid-Rise Class A Office Buildings, and no one can dispute that. The lobbies feature materials that you would see in large office towers and the restrooms are comparable to anything you’d see in a country club. We’ve included other amenities such as an enclosed, air-conditioned walkway connecting the parking garage to the lobby, striking landscaping with dynamic fountains and a building conference facility fully equipped with state-of-the-art technology. Outside of the perception that tilt wall is an inexpensive option, the interior quality and plethora of amenities offered rival that of any top-tier office building. At the end of the day, we always ask tenants, when was the last time you’ve thought about what your office walls were made of? They never do, and quickly realize they can get more value from a tilt wall office building because developers will many times take those savings and the reinvest them back into the building.


Based upon our experiences in the market, we believe that we’re only scratching the surface with value-office tilt wall construction. The rapidly changing industry will only continue to benefit the tenants because these buildings offer more total value than office buildings constructed with other methods. We’re so proud to be squarely involved in this tilt wall revolution and looking forward to the next big innovation!


Paul Coonrod serves as Managing Director of Stream’s Houston office team and is a Partner in the firm’s Houston office. Paul is responsible for developing the platform’s principal service initiatives, expanding Stream’s leasing portfolio and the origination of key joint-venture relationships through acquisitions and development partnerships. Over the past five years, Paul closed over 5 million square feet of transactions with a total value of over $1.5 billion while sourcing numerous acquisitions and developments for its strategic clients. Paul is a nationally recognized commercial real estate expert and is consistently touted as such through industry awards and leading real estate publications, such as: CoStar Power Broker, Houston Business Journal “Heavy Hitter,” Black’s Guide “Top Leasing Gun under 35,” and Stream Partners’ Club (National Top 10). Paul recently presented, “Capitalizing Tilt Wall Office Buildings” at the Tilt-Up Concrete Association Annual Convention in San Jose, California.

Stream is a commercial real estate services organization working for owners, investors and occupants. Stream is privately held and specializes in leasing, property and facilities management, tenant representation, development, investment, and sustainability. Stream’s national headquarters are located in Dallas, with an operational area covering some of the most active real estate markets coast to coast.

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TILT-UP TODAY, a publication of the Tilt-Up Concrete Association, is THE source for Tilt-Up industry news, market intelligence, business strategies, technical solutions, product information, and other resources for professionals in the Tilt-Up industry. A subscription to TILT-UP TODAY is included in a TCA membership. Subscriptions for potential TCA members are also available. If you would like to receive a complimentary subscription to the publication, please contact the TCA.