The Woodlands Township approved - on a 3-1 vote - a descending tax abatement for Alight Solutions, an HR outsourcing company owned by private equity firm Blackstone Group (BX). This comes as great news to an intrigued local workforce, as Chevron and Oxy continue to battle for Anadarko (APC) and the impact of this takeover to the community.
Alight’s abatement will be applied towards the $32MM+ building that Howard Hughes will build-to-suit on New Trails Drive. This investment comes as a result of their lease coming to term on Lakeside Drive with the Warmack brothers. This move is interesting on many fronts, as Blackstone/Alight move towards the eventual IPO of the company, after BX purchased it from Aon in 2017 for about $4.7B. Per the filing, the IPO is expected to raise close to $1B.
One of these interesting points is what this new space will represent to the emerging lakefront Class A(-) office market. The Warmacks already engaged Transwestern to lease a total of about 1.65MM square feet (1.0M of them in existing buildings). Our position is that it will be mostly occupied by larger energy corporations (vs service-oriented). With the former CB&I building (now known as Lake Front North) occupied by Arena Energy, Exxon and Entergy, it is natural to assume this will be the trend, even with Talisman’s departure (Newpark’s current building).
In connection to the abatement, Alight is to retain at least 950 jobs with an annual salary base of $47MM for ten years. For details on the abatement and the vote, follow this link.
For reference, Alight Solutions was formerly known as Aon Hewitt, Hewitt Associates, and Exult, Inc. The new building will not be too far from Exult’s prior Texas HQ on New Trails Drive.