HOUSTON – Hearst Corp. has selected the HFF commercial real estate brokerage firm to handle the sale of its Houston Chronicle property in downtown Houston.
Hearst interviewed a number of Houston’s leading commercial real estate brokers before selecting HFF, a national firm with a strong local office.
The 10-story Chronicle building, 801 Texas Ave., covers a full city block and comes with parking garage on another block. The newspaper, which has operated at that location since 1910, will move to the former Houston Post building on Southwest Freeway.
The Chronicle’s downtown facility, much of it classified as being in “poor” condition by the Harris County Appraisal District, is expected to be demolished.
The Chronicle property is in a hot sector. A number of new developments are being built nearby, including a 40-story apartment tower by Woodbranch Investments and the 48-story Hines office tower, 609 Main at Texas.
With the Chronicle building, located between Milam and Travis, and its garage on a separate block, the deal presents the opportunity to acquire a sizable piece of prime downtown real estate. The Chronicle sits across the street from two Hines Class A buildings – 717 Texas and the 75-story Chase Tower – and it is close to the Theater District and Metro light rail.
Although there’s a lot of downtown construction underway, Hearst’s timing to bring the Chronicle property to market is not ideal. The demand for downtown development sites has peaked as the real estate market moves toward its next cycle.
Residential developers and lenders may not be ready to launch another residential venture because more than a dozen residential projects are currently in downtown’s development pipeline. In the downtown office market, Hines’ 1 million square-foot spec office tower is slated for completion in about two years and other major developers, including Crescent, Skanska and Brookfield have new tower proposals already teed up.
So with a full inventory of office and residential space coming to the downtown market, Hearst would have met stronger demand by putting the Chronicle property on the market a year or two ago. Hearst moved too late to catch the crest of the wave.
The price for the Chronicle property is expected to be less than $50 million, possibly less than $40 million. But some significant players will be interested in evaluating the opportunity.
Hines has a heavy commitment to the Chronicle neighborhood. In addition to its existing office towers and the building under construction on Main Street – Hines is also planning a 32-story residential tower one block away from the Chronicle. So Hines would be expected to evaluate the Chronicle deal.
The newspaper will relocate its newsroom and offices to the former Houston Post building at 4747 Southwest Freeway, a 23-acre facility near Loop 610. Hearst acquired the Post building in 1995 when the Post shut down, leaving the city with one major newspaper.
In July, when the Chronicle announced its intention to leave downtown, it placed an 18-month timetable on the move. Hearst will renovate the Post building and the Chronicle should be ready to move in about a year.
By Ralph Bivins, Editor, RealtyNewsReport
Editor’s note: Ralph Bivins formerly covered real estate for the Houston Chronicle.