Hines, the Houston-based real estate firm that developed the tallest office tower in Texas, is expanding the size of its skyscraper proposal for a major scale office tower on Main Street.
The result will be one of downtown Houston’s premier office projects — what some in the real estate industry have been calling “Class AA.” Hines is moving ahead quickly and the tower is expected to be Houston’s next completed skyscraper and surprisingly, it may be started before any tenants are signed.
Earlier this year, Hines confirmed in an exclusive CultureMap story that the development company was planning to build a 41-story tower with 815,000 square feet of space at 609 Main Street. But the project is now planned to be a much larger building with high-grade amenities.
“We are moving full speed ahead on design and expect to break ground first quarter of 2014."
The Houston office market is exceptionally strong and a number of major energy firms need room to expand, so Hines has enlarged the scope of the project and it will be one of downtown most significant towers.
“Because of demand, the building’s size is expected to grow from the initial 815,000 square-foot concept,” John Mooz, senior managing director in Hines’ Southwest Regional Office, tells CultureMap.
The height and size of the building won’t be finalized until the fourth quarter of this year when design of the tower will be finished, Mooz says. The Pickard Chilton architecture firm, based in New Haven, Conn., is designing the skyscraper.
The First of The New Giants
Hines is expected to break ground before the other proposed Houston skyscrapers: The Market Square area building by Linbeck/Essex/Stream, the Skanska project at 811 Rusk and the proposed Chevron building at 1600 Louisiana.
“We are moving full speed ahead on design and expect to break ground first quarter of 2014,” Mooz says.
Mooz says no tenant has been signed. Typically, buildings of this magnitude have substantial pre-leasing before construction begins. But Hines is believed to be considering going forward with this building as a “spec” project without a tenant in-tow, although Mooz declined to confirm that and did not disclose other details. “We will break ground during the first quarter of 2014,” Mooz reiterates.
The building will be located at the southeast corner of Main and Texas Avenue, catty-cornered from the Rice Lofts, which was the historic Rice Hotel at one time. The Hines site is known as Block 69. The Block 69 site is only one block away from the tallest building in Texas — the 75-story JP Morgan Chase Tower, which Hines developed and completed in 1982.
The newest Hines tower will have the Metro rail running right by its front door on Main Street. In another Main Street project two years ago, Hines completed the BG Group Place tower, a 46-story tower at 811 Main Street, and that building is now more than 96 percent leased.
Having such strong leasing at BG Group Place could encourage Hines to start the 609 Main Street tower on a speculative basis. Spec projects are more risky and Hines, which was founded in 1957, is known for making shrewd moves and few mistakes. Or Hines may be close to announcing an anchor tenant for 609 Main, but there’s no indication of an imminent tenant signing.
Developers are moving ahead with downtown office towers because the Houston office market is exceptional tight — with vacancies near record-lows. The prime “Class A” space in downtown has a vacancy rate of only 7.6 percent, according to the CBRE real estate firm.
Ralph Bivins, former president of the National Association of Real Estate Editors, is editor-in-chief of RealtyNewsReport.com.