Hines, the international realty firm based in Houston, is considering the possibility of constructing an apartment building next to Market Square Park in the northern part of downtown.
If Hines elects to proceed, the multifamily project would be built on what’s now a downtown parking lot — a block bounded by Prairie, Preston, Travis and Main. Real estate professionals call it “Block 44.”
Hines has contracted to buy the site, but it does not own it yet. For now, Hines is conducting a feasibility study on the pros-and-cons of building a residential project on the parking lot, says George Lancaster, senior vice president of corporate communications for Hines.
Hines controls assets valued at $24 billion and the firm has been involved in more than 1,200 projects, including The Galleria and many downtown office towers.
Lancaster says the Market Square location has several ingredients that Hines appreciates: Public transportation (especially rail), restaurants and urban amenities in a pedestrian-friendly environment.
“Ultimately, if we choose to build, we will likely develop multifamily residences consistent with Hines' standard of quality set throughout the world,” Lancaster says.
A downtown residential venture by Hines, one of the largest real estate companies in the world, could be viewed as an endorsement of downtown residential projects that would influence other developers and lenders. Hines controls assets valued at $24 billion and the firm has been involved in more than 1,200 projects, including The Galleria and many downtown office towers.
After making other commercial development its bread and butter since 1957, Hines moved into the multifamily sector in early 2011 and it now has 15 apartment projects under development. The projects include one apartment building next to the Waterwall Park in the Galleria area and another on Westheimer Road, just west of Shepherd Drive on the site of the former Cafe Adobe eatery.
Although plans are tentative, Hines has another proposed Houston multifamily deal in the works on a block bounded by San Jacinto, Caroline, Southmore and Oakdale, near the acclaimed Asia Society Texas Center building (which CultureMap was first to report on last week). Located just north of Hermann Park, that site is in heart of the Museum District, which is surging with new projects and proposed deals.
“In the case of the Museum District location, the newest development near there — the Asia Society — is indicative of the forward motion the neighborhood is making and why it's a place where people want to be,” Lancaster says. “If we do build a project there, it will be upscale and terrific.”
Across Houston, apartment rents have been rising significantly and demand for new apartment units is high, partly because of the strong job growth the city has been demonstrating. During the recession, apartment construction dwindled and there is an undersupply of residential dwellings here, and in many parts of the country.
Much of the new multifamily development has been focused on close-in, urban areas that appeal to young professionals who have no desire to live in far-flung suburbs.
Notably, Marvy Finger, considered one of Houston’s most astute apartment developers, spotted this urban living trend several years ago. His 37-story One Park Place residential tower overlooking downtown’s Discovery Green has shown strong leasing activity and rent growth.
After a long climb, downtown living is being established as a viable market. If Hines joins the party, it will accelerate the momentum.
Ralph Bivins, a past president of the National Association of Real Estate Editors, is founding editor of RealtyNewsReport.