Major developer eyes downtown Houston Chronicle building, with an eye on the future
Hines, the real estate developer that erected many of the iconic skyscrapers decorating the Houston skyline, is reportedly negotiating to buy the Houston Chronicle building in downtown Houston.
The deal is viewed as a way for Hines to make its next major downtown play by demolishing the old Chronicle building, 801 Texas Avenue, and building a major tower on the newspaper site.
Houston-based Hines is expected to pay more than $50 million for the property, according to Realty News Report, which broke the news in an exclusive story Monday.
Lesser developers would not be buying additional development sites when they own a 1 million square foot spec building, with no tenants, only one block away. But Hines is no ordinary developer.
The Chronicle plans to sell its downtown facilities and move next summer to the former Houston Post building, 4747 Southwest Freeway, near Loop 610.
In downtown, the Chronicle occupies a 10-story building, 801 Texas at Milam, and operates a nearby 560-space parking garage at 710 Preston. The newspaper recently began allowing the public to pay to park in the garage, which had been reserved for employees only for decades.
Last November, as reported in another exclusive story by Realty News Report, Hearst Corp., the owner of the Chronicle retained the well-known Holliday Fenoglio Fowler firm to market the Chronicle’s downtown property.
At first, the whisper number (rumored sales price) for the Chronicle property was about $40 million. With oil prices in a free fall, there was no certainty that any buyer would come forth at all. But oil prices have stabilized, the economic fear has subsided and Hines has zeroed-in the long-term value that lies in the Chronicle property.
The newspaper’s facilities cover 99,184 square feet of land on two city blocks and would be an ideal platform for Hines to construct its next Houston skyscraper at some point in the future.
However, there is one complication. Hines is currently building a 48-story skyscraper only one block away from the Chronicle building. The new 1 million square-foot Hines building, 609 Main at Texas, is slated to be finished around the end of 2016. The 609 Main building is a speculative project for Hines and no tenants have been announced.
Lesser developers would not be buying additional development sites when they own a 1 million square foot spec building, with no tenants, only one block away.
But Hines is no ordinary developer. It has $85 billion in assets under management and locations in 185 cities around the globe. Hines developed the Galleria, the First Colony community, and some 1,000 major projects around the world, including hundreds of skyscrapers, hotels, residential towers, business parks and retail centers.
So if the deal goes through, Hines is not expected to immediately demolish the Chronicle building and proceed with another new tower. The development firm, founded by Gerald D. Hines in Houston in 1957, is a long-term player and it appears to be seeking to lock up a prime skyscraper development site for future years.
Ralph Bivins, founder editor of Realty News Report, is a past president of the National Association of Real Estate Editors.