Developing a speculative office building in one of the country’s most vacant office markets may not sound desirable to financiers, but Lincoln Property Co. has a public-private partnership and significant experience on its side.
Courtesy of HKS/Neoscape
A rendering of the Arc at the Ion District
Lincoln is developing The Arc at the Ion District, a nearly 200K SF research, laboratory and office building to be anchored by Rice University. The estimated cost has not been publicized, but the company is counting on the partnership, liquid debt markets and its own confidence in the project to help it secure financing and potentially break ground next quarter.
The company is always looking for viable development opportunities, but this one arose when Rice reached out to several developers, including Lincoln, Executive Vice President Gabe Lerner said.
“We have a lot of experience working with public groups that need to understand how the funding mechanisms and infrastructure get put into place,” Lerner told Bisnow.
“There are not many groups that can say they’ve done multiple private-public partnerships nationally and have the kind of development chops that we do,” he added.
That partnership, plus the strength of debt markets right now, should help the project secure construction financing, Lerner said. A third party is beginning outreach on debt options this month, and early conversations have been promising, with Rice’s involvement working to Lincoln’s advantage.
It also helps that Lincoln is willing to invest in the project.
“Lincoln, unlike some other larger developers, puts their own skin in the game,” Lerner said. “That helps get equity comfortable.”
Equity is largely still sitting on the sidelines, being selective, and requiring more information to become confident in their investments than ever before. Lincoln has received questions about the building’s life sciences component, since life sciences development is currently seen as a high-risk investment nationally.
The life sciences space in Boston, the largest lab market in the country, was more than one-third vacant at the end of the third quarter, following a surge in development over the past five years. Houston also took a gamble in developing significant life sciences space in recent years but found it paying off with proportional demand and an investment from pharmaceutical giant Eli Lilly.
It’s yet to be determined how much lab and life sciences space versus office will be in The Arc, Lerner said, adding that they are building in the capability for some spaces to be flexible based on market conditions.
Bisnow/Maddy McCarty
The Ion in the former Sears building in Midtown Houston
The Arc will be part of the second phase of Rice University’s 12-block Ion District. The innovation-focused hub is in Midtown Houston, a submarket with about 15% office vacancy, much less than Greater Houston’s 26.5%, according to Avison Young.
Houston’s office vacancy rate is still higher than the national average of 20.5% at the end of Q4 2025, per Cushman & Wakefield.
Midtown offers proximity to Downtown and the Texas Medical Center, a critical component of Houston’s growing life sciences ecosystem.
The Arc will share its plaza with The Ion District‘s main building, a 287K SF adaptive reuse of a former Sears department store with 50K SF of space for events and programming in addition to office, academic and restaurant space. The district also includes Greentown Labs, a 30K SF climate tech startup incubator.
The former department store building is more than 90% leased, with tenants including Chevron, Microsoft, Aramco and BP.
The developers anticipate delivering The Arc in the first quarter of 2028. It will add to an extremely limited office development pipeline in Houston, with only 582K SF under construction, according to Avison Young.
Rice is driving an attractive redevelopment of the entire area, which made The Arc an enticing opportunity for Lincoln, Lerner said. Rice will be a lead tenant at The Arc, occupying nearly 30K SF of office and lab space for its faculty and students.
Within Midtown, the Ion building was a needle mover, and more development will likely follow.
“When you have a university, like Rice University, that is building a district, and you see what their vision and plans are for the future, that’s one box easily checked,” Lerner said. “Yes, I want to be a part of that.”