Real Estate 2011
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Oil powered real estate: Chevron buys former Enron digs in one of the biggest deals ever

Oil powered real estate: Chevron buys former Enron digs in one of the biggest deals ever

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The building, 1400 Smith, is one of the biggest sales to come down the pike. Photo by Alex/Flickr

Chevron has purchased the 50-story 1400 Smith building in downtown Houston for $340 million in one of Houston’s biggest real estate deals ever.

The building at one time was used as the headquarters for Enron Corp. Chevron already has been occupying the 1.3 million square-foot building for several years in a long-term lease.

Some had speculated that the sales price in this anticipated deal could go as high as $380 million, but the official statement released Friday stated the sales price was $340 million, which is still a sizable amount.

The seller, Brookfield Office Properties, bought the building in 2006 for $120 million and soon thereafter leased the entire building to Chevron. A scant five years later, in a deal closed this week, Brookfield sold the property for $220 million more than it paid for it – an impressive gain.

Chevron already owns the nearby 1500 Louisiana building and it is planning to buy the site of the former YMCA building also. Chevron has a massive presence in Houston with a reported 10,000 employees in the city, which has the nickname of the “Energy Capital of the World.”

However, Chevron remains based in San Ramon, Calif. — like Exxon Mobil — without its official headquarters in the world’s most significant energy hub.

Brookfield Properties has a number of major office buildings in Houston.

Brookfield also announced a major lease for downtown Houston in Friday’s press release. The company announced Chevron signed a seven-year lease renewal for 311,000 square feet in Brookfield’s neighboring Continental Center building at 1600 Smith.

Brookfield Office Properties owns, develops and manages downtown office towers in the United States, Canada and Australia. The company’s portfolio is composed of interests in 109 properties totaling 78 million square feet in the downtown cores of New York, Washington, D.C., Houston, Los Angeles, Toronto, Calgary, Ottawa, Sydney, Melbourne and Perth.