609 Main At Texas

[H-Town Man]

I hope that if and when Hines builds a tower here they will take more into consideration the impact on the street than in BG Group Place. This is historically the most important intersection in the city. Downtown's two most important streets cross here, and the catty-corner was the site of the national capitol of Texas, then later Jesse Jones' signature hotel. A building that addresses the street with stimulating architecture at ground level, perhaps some sort of glass complement/homage to the Rice Hotel's veranda, could really make for a memorable crossroads.

Right now Hines' quotes tell how the public improvements to Main Street have made it a more desirable location for a tower, but in my opinion the previous tower (though it looks great in the skyline) added little to those improvements with its lack of differentiation on the lower floors. Hopefully next time they will consider "What can I do for Main Street?" in addition to "What can Main Street do for me?"

Edited March 19, 2011 by H-Town Man

[wxman]

I called Hines' Interest and spoke with the media relations lady. She confirmed for me what was in the biz journal. There is no tower imminant at this time. There is no timeline. There are no set renderings. No official height. No floor count. She just said that at this time, there is a tower that may go there in the distant future. Not anytime soon.

[kdog08]

I called Hines' Interest and spoke with the media relations lady. She confirmed for me what was in the biz journal. There is no tower imminant at this time. There is no timeline. There are no set renderings. No official height. No floor count. She just said that at this time, there is a tower that may go there in the distant future. Not anytime soon.

Bummer.

[Houston19514]

Could be a while...

That was nothing but the Chron's typical negative spin on the same information.

[Houston19514]

Absolutely, screw inconvenient economic realitites. Let's build something really big that we don't have any tenants for! Oh...wait....didn't they do that in Dubai...

and Dallas ;-)

Edited March 20, 2011 by Houston19514

[LTAWACS]

I called Hines' Interest and spoke with the media relations lady. She confirmed for me what was in the biz journal. There is no tower imminant at this time. There is no timeline. There are no set renderings. No official height. No floor count. She just said that at this time, there is a tower that may go there in the distant future. Not anytime soon.

no good.

[Mister X]

I don't like this. Everyone please note this important information in your journals. Mister X does not approve. In other words - "ugh".

[shasta]

Can we get at least one building with a spire. I'm all for designing a building to the street level but a spire sure would add to our skyline.

[TheNiche]

Why do brand new class-a skyscrapers buck the trend? My thought is that if Class B and C towers sit empty, it doesn't really matter b/c some companies are interested in class-a. Whether B's and C's sit empty is irrelevant. Just b/c there are old cars in the junk yard does not keep GM from making new cars and people buying them.

Cars in a junk yard are not analogous to a Class B or Class C building. These buildings still have life in them; they have an in-use economic future.

So let's fix your analogy. "Just b/c there are old cars [on the road] does not keep GM from making new cars and people buying them." This becomes analogous, however it is now a false statement. In fact, the government's Cash For Clunkers program was specifically designed to increase demand for new cars by removing old cars from the road. If they had only provided a rebate on the purchase of a new car but not destroyed a corresponding used car, then the bid price for used cars would simply drop to the point where the rebate on new cars was built-in. And at a new price equilibrium level, it really wouldn't affect new car sales; hence the number of used cars would still have kept GM from making new cars and having people buy them.

[lockmat]

Cars in a junk yard are not analogous to a Class B or Class C building. These buildings still have life in them; they have an in-use economic future.

So let's fix your analogy. "Just b/c there are old cars [on the road] does not keep GM from making new cars and people buying them." This becomes analogous, however it is now a false statement. In fact, the government's Cash For Clunkers program was specifically designed to increase demand for new cars by removing old cars from the road. If they had only provided a rebate on the purchase of a new car but not destroyed a corresponding used car, then the bid price for used cars would simply drop to the point where the rebate on new cars was built-in. And at a new price equilibrium level, it really wouldn't affect new car sales; hence the number of used cars would still have kept GM from making new cars and having people buy them.

But an empty class b or c building won't prevent tenant demand for new class a next door, correct? We know lots of empty space will be coming on the market soon downtown but Hines still will build brand new class a if they can find a large enough tenant.

[TheNiche]

But an empty class b or c building won't prevent tenant demand for new class a next door, correct? We know lots of empty space will be coming on the market soon downtown but Hines still will build brand new class a if they can find a large enough tenant.

Demand is best defined by a demand schedule. That is a chart indicating the quantity of a good that is purchased at any possible price. But then you also have to acknowledge that a change in relative pricing between the product in question and a substitute product can influence that demand schedule.

For instance, a glut of Class B space will make the Class B market more competitive, causing rents to decline. But a decline in Class B rents will entice some Class A tenants to become Class B tenants, which in turn affects that Class A market. Landlords are in direct competition with one another, and so they are not capable of practicing price discrimination, even against tenants that they know will never go to Class B space.

As so often happens in recessions (not always, but typically) is that there is a flight to quality within capital markets and also within the market for physical space. This is what is meant by the terms, "buyer's market" or "tenant's market". And these are not good times for a landlord to be bringing forth new product.

[swtsig]

Seems like this will happen relatively quickly. There is a lot of momentum for this project. It would be great if we could get another residential tower or two in the next few years.

funny this topic came back up... i heard the same thing last week.

[sargento03]

There was an article about this on Culture Map:

http://houston.culturemap.com/newsdetail/03-15-11-what-recession-hines-plans-another-new-office-tower-at-block-69-for-downtown-houston/

[shasta]

There was an article about this on Culture Map:

http://houston.culturemap.com/newsdetail/03-15-11-what-recession-hines-plans-another-new-office-tower-at-block-69-for-downtown-houston/

I wonder if Hines would consider a mixed use project (office, hotel, residential, entertainment) since this is such a high profile and historical site. Anyone know if Hines has done project like this elsewhere in other cities?

[TheNiche]

I wonder if Hines would consider a mixed use project (office, hotel, residential, entertainment) since this is such a high profile and historical site.

No. Hines is in the business of developing buildings that neatly fit into the well-defined portfolios of insurance companies, pension funds, REITS, etc.

[Montrose1100]

Good to see the Texas econony still kickin'! I would have thought after BG & Hess we wouldn't see another skyscraper for a long time. This pipeline tower and BBVA on Post Oak are great news!

[shasta]

No. Hines is in the business of developing buildings that neatly fit into the well-defined portfolios of insurance companies, pension funds, REITS, etc.

I just checked some properties on their website and they do have some mixed use properties. Here's one I found

http://www.hines.com/property/detail.aspx?id=144

Judging from the importance of the site (both historically and today. I hope they consider something more ambitious than the bland 30 story office building. I'm sure the leasing levels for the Rice across the street prove that that location can support residential and the magnolia not too far proves a hotel can compete. Combine either of those with offices and retail and they can add something to Main Street because the current trend is to move towards discovery Green and the improvements there.

[Houston19514]

I wonder if Hines would consider a mixed use project (office, hotel, residential, entertainment) since this is such a high profile and historical site. Anyone know if Hines has done project like this elsewhere in other cities?

Do a web search for Hines mixed use and you will see Hines has certainly considered mixed use towers

[roadrunner]

I just checked some properties on their website and they do have some mixed use properties. Here's one I found

http://www.hines.com...ail.aspx?id=144

Judging from the importance of the site (both historically and today. I hope they consider something more ambitious than the bland 30 story office building. I'm sure the leasing levels for the Rice across the street prove that that location can support residential and the magnolia not too far proves a hotel can compete. Combine either of those with offices and retail and they can add something to Main Street because the current trend is to move towards discovery Green and the improvements there.

I don't think they have final drawings, but the last rendering I saw was a lot different than the one being thrown around in this thread.

[bachanon]

Good to see the Texas econony still kickin'! I would have thought after BG & Hess we wouldn't see another skyscraper for a long time. This pipeline tower and BBVA on Post Oak are great news!

good see montrose1100 checkin' in every now then! seems like we've known you forever!

it seems their is plenty of positive expectation for new projects right now. i hope it continues. by observing haif these last few years, we can be sure that expectation and the patience that reality requires will continue to bring frustration (and joy) for many of us.

[TheNiche]

I just checked some properties on their website and they do have some mixed use properties. Here's one I found

http://www.hines.com/property/detail.aspx?id=144

Judging from the importance of the site (both historically and today. I hope they consider something more ambitious than the bland 30 story office building. I'm sure the leasing levels for the Rice across the street prove that that location can support residential and the magnolia not too far proves a hotel can compete. Combine either of those with offices and retail and they can add something to Main Street because the current trend is to move towards discovery Green and the improvements there.

South Station is historic structure, the northern terminus of the Acela line (which runs at up to 150 mph between Boston and D.C.), and is in a municipality that is a 'gateway city' for capital that has extraordinarily high physical and regulatory barriers to entry.

Hines' Houston site is a good site; it is by no means an irreplacable vacant lot. Barriers to entry are low, incentives are scant, and we are a second-tier city where the capital markets are concerned.

Edited April 16, 2011 by TheNiche

[shasta]

South Station is historic structure, the northern terminus of the Acela line (which runs at up to 150 mph between Boston and D.C.), and is in a municipality that is a 'gateway city' for capital that has extraordinarily high physical and regulatory barriers to entry.

Hines' Houston site is a good site; it is by no means an irreplacable vacant lot. Barriers to entry are low, incentives are scant, and we are a second-tier city where the capital markets are concerned.

The site that Hines owns is at the corner of Texas and Main. When downtown was laid out those two streets were made wider because they were the two 'main' streets of downtown. Across the street is the Rice Hotel 2 which was the site of the original capitol building of the Republic of Texas dating back to 1836. This alone makes it one of the most important vacant lots in the state of Texas. The site today is along Main Street. Present day planners have revived Main Street as the central axis through downtown but Texas Avenue still remains a very important street. We all know of the failed Shamrock proposal, but that developer realized the significance of the location.

The intersection of Texas and Main is the cultural and historical center of downtown Houston and hopefully Hines is working on a building that keeps up with the reputation and adds synergy to the site.

[TheNiche]

The site that Hines owns is at the corner of Texas and Main. When downtown was laid out those two streets were made wider because they were the two 'main' streets of downtown. Across the street is the Rice Hotel 2 which was the site of the original capitol building of the Republic of Texas dating back to 1836. This alone makes it one of the most important vacant lots in the state of Texas.

No. Those things are no longer true. What was important is gone, with scant context remaining.

Besides. How, precisely, would condominiums in conjunction with office space be paying homage to the past?

The site today is along Main Street. Present day planners have revived Main Street as the central axis through downtown but Texas Avenue still remains a very important street. We all know of the failed Shamrock proposal, but that developer realized the significance of the location.

That's nice. How, precisely, would condominiums in conjunction with office space be paying homage to the present or future? If demand supports both projects, why not just build an office building here, and condos nearby, or vice versa?

[shasta]

No. Those things are no longer true. What was important is gone, with scant context remaining.

Besides. How, precisely, would condominiums in conjunction with office space be paying homage to the past?

In context of the current urban fabric, we already have a rental building across the street in the Rice. So, we know we already have a successful residential component in this area so it works. We also know that we have a light rail, and Main street upgrades, that the city has invested in to become the main axis of downtown. We also know that another light rail is under construction nearby connecting the Theater district. We also know that there is some foot traffic near this intersection.

A mixed use building, not just condos, will continue the synergy that has been created. A good example is the Discovery Green- Hilton- GRB connection. These developments spill into each other.....the crowd from the GRB visits DG and some stay in the Hilton. Walk in the lobby of the Hilton on a given Saturday and look at what you see. Compare that activity and synergy to the spill over affect with Hess Tower and its lobby...It is not the same.

I'm not sure what the best use for this building will be but given the context of the site, I would hate to see a typical office tower with a guarded lobby that would just kill all of the momentum the city has worked so hard to re-create. A signature building with activity (rental, condo, hotel, retail, office, just some combination of these elements) will be better than a 9-5 structure.

Edited April 16, 2011 by shasta

[TheNiche]

In context of the current urban fabric, we already have a rental building across the street in the Rice. So, we know we already have a successful residential component in this area so it works. We also know that we have a light rail, and Main street upgrades, that the city has invested in to become the main axis of downtown. We also know that another light rail is under construction nearby connecting the Theater district. We also know that there is some foot traffic near this intersection.

A mixed use building, not just condos, will continue the synergy that has been created. A good example is the Discovery Green- Hilton- GRB connection. These developments spill into each other.....the crowd from the GRB visits DG and some stay in the Hilton. Walk in the lobby of the Hilton on a given Saturday and look at what you see. Compare that activity and synergy to the spill over affect with Hess Tower and its lobby...It is not the same.

I'm not sure what the best use for this building will be but given the context of the site, I would hate to see a typical office tower with a guarded lobby that would just kill all of the momentum the city has worked so hard to re-create. A signature building with activity (rental, condo, hotel, retail, office, just some combination of these elements) will be better than a 9-5 structure.

Your aesthetic vision is nice, I suppose, but how does it fit into Hines' investment criteria?

And don't just tell me that it's a proven concept or a signature property. BG Group Place is a proven concept and Hines believes that it is a signature property.

[bachanon]

unfortunately, hines has no obligation to make a contribution to the synergistic urban fabric of downtown houston. the bottom line is.....well, the bottom line. it is the suck, but it is true.

[shasta]

unfortunately, hines has no obligation to make a contribution to the synergistic urban fabric of downtown houston. the bottom line is.....well, the bottom line. it is the suck, but it is true.

but they have in other markets

[TheNiche]

but they have in other markets

I already told you:

South Station is historic structure, the northern terminus of the Acela line (which runs at up to 150 mph between Boston and D.C.), and is in a municipality that is a 'gateway city' for capital that has extraordinarily high physical and regulatory barriers to entry.

Markets that are not this markets are not this market.

[KinkaidAlum]

South Station already exists. There's quite a bit of retail/restaurant space inside the old train station. The Hines proposal is really just for the "air rights" over the old station. That proposal has existed for years if not a decade by now. However, there are strict height restrictions in downtown Boston and the likelihood of the Hines project ever getting built as it is currently proposed is slim to none. It's a shame too, because Boston's financial district needs a monument tower.

[Montrose1100]

Any modern tower is welcome on this lot as far as i'm concered, be it mixed use or not. My only hope is that it's atleast 50 stories, and isn't bland and boring. Another 700 footer close to the JP Morgan Chase Tower is something i've crossed my fingers for, for a long time.

Thanks Bach, i've been a Lurky Larry for A while, and now it's time to re-join since i'm moving back at the end of the summer.

[LTAWACS]

well anything is better than nothing. almost.

[tigereye]

I called Hines' Interest and spoke with the media relations lady. She confirmed for me what was in the biz journal. There is no tower imminant at this time. There is no timeline. There are no set renderings. No official height. No floor count. She just said that at this time, there is a tower that may go there in the distant future. Not anytime soon.

Not anytime soon, eh?!? 4 months later, it sounds like things may have changed...

http://www.houstonrealestateobserver.com/houston-developers-starting-new-office-buildings/

"The most surprising of the new office projects being discussed is the so-called Block 69 deal at Main Street and Texas Avenue in downtown Houston. Hines owns the block and it has retained an architect to design plans for a new tower there."

[swtsig]

2-3 years for a 717 Texas sized tower and 3-5 years for a BG Place sized tower, assuming lead tenant.

[lockmat]

2-3 years for a 717 Texas sized tower and 3-5 years for a BG Place sized tower, assuming lead tenant.

That doesn't seem like such a bad pace for downtown. I'm assuming the time frames you gave are when they will break ground?

[Nate99]

Not anytime soon, eh?!? 4 months later, it sounds like things may have changed...

http://www.houstonre...fice-buildings/

I'm curious if the building that sits on the corner of that lot would come down or be built around ala the Stowers building. It looks like it has been empty for a long time.

[Houston19514]

Wasn't sure where to post this. It is relevant to when we might see new construction in downtown Houston, so I thought I would stick it in here.

Transwestern's 4th Quarter 2011 Office Market Report is out.

Downtown had more than 1.5 million square feet of positive net absorption of office space in 2011 and ended the year with a direct vacancy rate of 9.5%. Total vacancy rate (including available sublease space) stands at 10.6%.

Perhaps more important to the subject of new office tower construction, the Class A direct vacancy rate stands at 7.0% (8.6% with sublets). There is only a total of 2.1 million square feet of Class A space available in all of downtown. There may well be a rapidly-developing shortage of large blocks of Class A space. According to Colliers, at mid-year 2011 there were only 4 downtown buildings offering in excess of 100,000 square feet of contiguous space.

Another interesting tidbit from the Transwestern report: Continental/United plans to give up only 142,000 square feet of their downtown office space (when the lease expires in 2014). (IIRC, Continental had a total of 660,000 square feet of space in downtown; earlier speculation had them giving up a much larger amount of space)

[infinite_jim]

I'm curious if the building that sits on the corner of that lot would come down or be built around ala the Stowers building. It looks like it has been empty for a long time.

The Texas Tower will probably receive the same fate as the Montagu Hotel at 804 Fannin did. The difference with the Stowers bldg is that it has firewalls on two sides, whereas the Texas Tower has windows on all sides.

[Houston19514]

The Texas Tower will probably receive the same fate as the Montagu Hotel at 804 Fannin did. The difference with the Stowers bldg is that it has firewalls on two sides, whereas the Texas Tower has windows on all sides.

The Stowers Building has windows on all 4 sides. I walked by it last night to confirm.

[infinite_jim]

The Stowers Building has windows on all 4 sides. I walked by it last night to confirm.

Well that's some confounding info, I'll have to take a gander myself. I could have sworn that when 811 Main was built that the Stowers bldg was renovated at the same time and connected to the tower base?

[DrLan34]

http://www.chron.com...ape-2444724.php

"I think the potential for a new building to be announced in 2012 would be very high," said Chrissy Wilson, vice president of leasing for Hines, citing the single-digit vacancy rate.

The Houston-based development firm owns a site near the old Rice Hotel bordered by Main, Texas, Fannin and Capital where it could build a tower with up to 1 million square feet.

Developing without a commitment from a tenant is "very, very risky," said Paul Frazier, vice president of Brookfield Properties, which is also pondering a new building downtown.

The company has a 2.5-acre site near Allen Center where it could build a tower as big as 1.3 million square feet, Frazier said.

A third tower has also been talked about.

Skanska USA Commercial Development, a unit of Swedish construction giant Skanska, recently bought downtown's Houston Club Building at 811 Rusk and has said the company may redevelop the site. The Houston Club, which leases its facility there, is looking at space in other downtown buildings.

Edited January 6, 2012 by DrLan34

[Houston19514]

On 1/5/2012 at 9:29 AM, DrLan34 said:

http://www.chron.com...ape-2444724.php

"I think the potential for a new building to be announced in 2012 would be very high," said Chrissy Wilson, vice president of leasing for Hines, citing the single-digit vacancy rate.

The Houston-based development firm owns a site near the old Rice Hotel bordered by Main, Texas, Fannin and Capital where it could build a tower with up to 1 million square feet.

Developing without a commitment from a tenant is "very, very risky," said Paul Frazier, vice president of Brookfield Properties, which is also pondering a new building downtown.

The company has a 2.5-acre site near Allen Center where it could build a tower as big as 1.3 million square feet, Frazier said.

A third tower has also been talked about.

Skanska USA Commercial Development, a unit of Swedish construction giant Skanska, recently bought downtown's Houston Club Building at 811 Rusk and has said the company may redevelop the site. The Houston Club, which leases its facility there, is looking at space in other downtown buildings.

 

Houston Center also has plans for Six Houston Center. No doubt they are shopping those plans for potential tenants as well. Sad that our major paper's real estate reporter is so clueless.

Also, despite the impression given in the article, don't be surprised if Hines moves forward without a signed lease.

Edited August 8, 2016 by Houston19514

[Montrose1100]

Say a major tenant was in the market for space, it wouldnt be likely that all 3 sites mentioned would develope at the same time right? Unless we have another Hess situation with Mainplace?

[travelguy_73]

Say a major tenant was in the market for space, it wouldnt be likely that all 3 sites mentioned would develope at the same time right? Unless we have another Hess situation with Mainplace?

I wouldn't think so, unless more than one was self-financed (e.g., Skanska on Post Oak). Developers have spent a lot of time and money over the past few years leasing up buildings that were built partially-or-fully spec. So there is caution to not repeat the issues of the recent past.

Just guessing, but I would think that unless a tenant signs up for something approaching 50% of the space, a project wouldn't proceed.

[tigereye]

.

Also, despite the impression given in the article, don't be surprised if Hines moves forward without a signed lease.

Would Metro's "Central Station" plans next door possibly help get this project moving?!?

A Hines Tower added with Central Station, the new BG Group Tower, and existing development ranging from the Rice Hotel to Main Street Sq & Houston Pavilions suddenly has some potential. Still not sold it could become the grand shopping destination the city envisions, but atleast it will have a more presentable look.

[rsb320]

Just guessing, but I would think that unless a tenant signs up for something approaching 50% of the space, a project wouldn't proceed.

Discovery Tower did. It was almost finished by the time Hess signed up.

[travelguy_73]

Discovery Tower did. It was almost finished by the time Hess signed up.

That may be, but you have to look at the capital environment Discovery Tower (and MainPlace for that matter) was developed in. I'm talking current day, not 2008.

Edited January 30, 2012 by travelguy_73

[Houston19514]

On 1/29/2012 at 2:21 PM, rsb320 said:

Discovery Tower did. It was almost finished by the time Hess signed up.

 

Yes and no. Discovery Tower was indeed started without a tenant. But it was far from "almost finished" by the time Hess signed up. The number of floors and some floor heights were even changed upon the lease signing.

Edited August 8, 2016 by Houston19514

[rsb320]

Yes and no. Discovery Tower was indeed started without a tenant. But it was far from "almost finished" by the time Hess siged up. The number of floors and some floor heights were even changed upon the lease signing.

That's right. Height was added to the cafeteria floor, overlooking Disco Green, and it's near the bottom. That cafeteria is fancy enough to have a reception or banquet.

[Houston19514]

That's right. Height was added to the cafeteria floor, overlooking Disco Green, and it's near the bottom. That cafeteria is fancy enough to have a reception or banquet.

Yes. So with height being added to one of the near-bottom floors, it is safe to say that Hess signed up rather near the beginning of construction, not when it was almost finished. (its also very likely that the deal with Hess was in the works before construction started, or very shortly after.

[wxman]

I'm no expert, but I would assume that when you are going to build a highrise, you can't look at today's market conditions. Even a modest 30-story highrise takes at least 2 years to complete. The economy has been in the shitter since 2008 with little improvement. I can't imagine it being this way in another few years, but then again, what do I know. I assume we're seeing a lot of projects coming online now because A) oil futures are high. Like it or not, oil drives this city and when oil is high, Houston is making bank. B ) Houston adds 140,000 people a year. Always gonna need more space. C). The economic conditions should begin to improve as time moves forward.

Edited February 1, 2012 by wxman