Shorenstein Properties, a prominent San Francisco-based developer, on Monday confirmed it has acquired the 45-story Exxon Mobil building in downtown Houston for a major redevelopment that may include linking the building into the downtown tunnel system.
Shorenstein recently received rave reviews for redeveloping a historic building in San Francisco for the headquarters of the Twitter company.
As part of the deal, Exxon Mobil agreed to lease back the entire building until 2015, when it will relocate its employees to its new corporate campus near The Woodlands.
The Exxon Mobil building, located at 800 Bell at Travis, was built in 1962 as the headquarters of Humble Oil & Refining, a predecessor to Exxon Mobil.
The sales price was not disclosed. As part of the deal, Exxon Mobil, the seller, agreed to lease back the entire building until 2015, when it will relocate its employees to its new corporate campus just south of The Woodlands.
The Exxon Mobil tower and its seven-story garage cover two downtown blocks. The 1.2 million square foot building is downgraded by real estate because it is not connected to the tunnel system that links many of the first-class office buildings and hotels in downtown Houston.
Although nothing is official yet, Shorenstein is expected to spend many millions to connect the building to the tunnel system, if possible, and make major upgrades to the office tower.
“We purchased this property markedly below current replacement cost, which gives us the opportunity, one the current user vacates, to employ all our company’s core skills in capital transaction execution, redevelopment, leasing and operations to increase the property’s value by establishing its long term position and further enhancing its reputation in the market,” Douglas Shorenstein, chairman and CEO of Shorenstein Properties said in a statement.
The price paid for the building was not disclosed, but people in the real estate community said it was around $50 million. By comparison, the Shell Plaza in downtown recently sold for around $550 million.
Shorenstein’s budget for renovating the property is expected to be significant because the company specializes in owning only prime “Class A” buildings and does not typically hold any dog-eared buildings in its portfolio.
Shorenstein owns dozens of office buildings across the nation including two others in Houston near the intersection of San Felipe and Loop 610: the 28-story Five Post Oak Park building, which is across the street from the St. Regis Hotel, as well as the 21-story 2000 West Loop South tower on the freeway’s west side frontage road.
The company’s founder, the late Walter Shorenstein, was a major supporter of the Democratic Party and was an advisor to presidents Lyndon Johnson, Jimmy Carter and Bill Clinton.