HOUSTON – Hines, one of the world’s most successful skyscraper developers, is expected to acquire the Houston Chronicle’s downtown property later this year and demolish the newspaper building.
But with the Houston office market headed for the doldrums it will be years before the Chronicle site, 801 Texas Avenue, will have a new skyscraper on it. A groundbreaking in 2018, with a tower being completed in 2020, seems like a good timetable estimate.
Houston-based Hines contracted to buy the Houston Chronicle property, reaching an agreement with the newspaper’s owner, Hearst Corp., after negotiating through the summer. Holliday Fenoglio Fowler represents Hearst.
The newspaper’s facilities, including its headquarters building and newsroom at 801 Texas Ave., cover 99,184 square feet of land on two prime city blocks. The Chronicle property includes a 10-story building, on a full block at the intersection of Texas at Milam, and a 560-space parking garage on a half-block at Prairie and Milam.
The newspaper relocates next summer to its 4747 Southwest Freeway facility, the former Houston Post building near Loop 610.
The Chronicle’s old downtown building is expected to be demolished in 2016, but there are reasons new construction won’t happen soon on the Chronicle site. Currently, Hines is constructing a 48-story spec office tower only a block away on Main Street and no tenant has been announced – so that’s a million square feet of new space to be digested. With the energy industry suffering, the Houston office market is softer and occupancy rates are falling.
Obviously, the $50 million Chronicle acquisition is a move for the future – when the Houston economy is in its next up-cycle and the city needs more new office buildings.
There’s no guarantee that Hines will build an office tower there and it’s too early for Hines to articulate its vision. But the Chronicle site is certainly a good investment, regardless of what is built there. Hines knows downtown Houston intimately and the company didn’t get to the top rung of the real estate business by making $50 million mistakes.