HOUSTON – Can a century-old office tower – which dominated Houston’s skyline for 35 years – succeed in today’s technology-driven world?
Midway and Lionstone Investments are betting the answer is affirmative. The two Houston-based firms have repositioned The JPMorgan Chase Building — formerly the Gulf Building — as well as the neighboring 708 Main structure in a complex renamed The Jones on Main.
“The new concept of rebranding the entire city block as The Jones on Main has been realized with the opening of the portal between the JPMorgan Chase & Company building at 712 and WeWork at 708 Main,” says Chris Seckinger, Investment Manager at Midway. “Now the entire block is a contiguous, revived experience.”
In addition, the Jones’ much-anticipated Food Hall – now named “Finn Hall” — will open next year. “It is a tribute to legendary Houston architect Albert Charles Finn, who met Jesse Jones when Finn supervised construction of the Rice Hotel in 1913, and whose landmark structures shape Houston even today,” says Seckinger. “And Midway and Lionstone are developing nearby Block 94 to bring expanded parking options to building tenants in late 2018.”
It is important for Houston that The Jones on Main remains relevant and prominent for many years to come, adds Damon Thames, Vice President at Colvill Office Properties. “Houston has not always had a reputation for appreciating the value of our architectural masterpieces from another era, but that is changing,” continues Thames. “We have seen very strong demand for office space from discerning tenants who are attracted to the strong historic character of both buildings, when combined with desired amenities.”
The layers of history are deep with early-day tenants that were once pioneers in a fledgling oil industry. The 708 Main building was once the headquarters of The Texas Company, which later became Texaco. The 712 Main, a former headquarters of Gulf Oil Co., is on the National Register of Historic Places. “Historic preservationists consider it one of the most significant examples of art deco architecture in the southwestern United States,” Seckinger continues. “Not only is it uniquely beautiful, but its location in the epicenter of a reviving historic district in the CBD is compelling.”
“The Jones on Main enjoys a competitive advantage because the unique nature of the property elevates it above being just another commodity,” Seckinger adds. “It offers the charm of an historic property and the brand positioning for companies to set themselves apart by locating there. People respond so enthusiastically to the authentic historic quality. There is not too much of this kind of distinctive office space and the market’s response has validated that.”
The complex’s design enables smaller tenants to command an entire floor that would be impossible in newer buildings. Jones on Main also offers competitive advantage for today’s millennial–driven workforce — the location has a perfect 100 transit score, a “walker’s paradise” score of 98, and one of the highest scores for “bike-ability” in the city.
Naturally, there were challenges to refurbishing the property common to any historic renovation. “Bringing properties built in 1908 and 1927 up to the highest standards of a desirable contemporary workplace always presents some challenges,” Seckinger says. “But the results are more than worth it. During the work, we rediscovered existing terrazzo flooring that had been covered over with carpeting for many years and we were able to restore it to its original luster. It is stunning.”
JPMorgan Chase & Company has been the major tenant at 712 Main Street since it opened. Having the name JPMorgan Chase & Company etched on the entrance of the building is an important part of its brand. So is the pedigree of Houston titan Jesse H. Jones. “He was the visionary developer who built the Gulf Oil Building in 1927, and it was the tallest building in Houston from the time it opened in 1929 until 1963,” says Seckinger. “His own personal office was next door at 708 Main in what was called the Great Jones Building. Arguably no single person had more influence on the rise of Houston than Jesse H. Jones. He was intimately involved with both properties that make up the block that we call The Jones on Main.”
Oz Rey is developing and will operate Finn Hall, honoring another famous Houstonian. “The food hall will offer all-day dining options at chef-driven restaurants and with a cocktail lounge and craft beer bar. This amenity will elevate and set the building apart in a very exciting way,” Seckinger says.
The entire two-property development is 86 percent occupied. In the last year, several new leases have been signed, as well as expansions and renewals of existing tenants. New signed leases total about 125,000 square feet and include Angelo Gordon, The Mitchell Group, Redbridge Debt & Treasury Advisory, Development Capital Resources, WeWork, and food hall operator Oz Rey. A number of existing tenants also have renewed and many of them are expanding, according to Seckinger.
“WeWork leased the entire 708 Main structure,” says Seckinger. “We are thrilled that WeWork at The Jones on Main put WeWork on the map in Houston. Established Bespoke is moving from its previous location in West University Place to The Jones. We definitely believe there is a customer base for additional retail. The type of tenant in this property is looking for high-end, customized experiences, and retail geared to that market is a great fit.”
Seckinger says a great deal of the credit for the excitement and momentum that The Jones on Main currently enjoys goes to Lionstone Investments. “Lionstone had experience with other historic properties and they had recently been involved with a successful renovation and repositioning of a property in Los Angeles that was similar to 712 Main. They were confident this historic property could have a bright future if properly repositioned to appeal to contemporary tenants. Lionstone’s commitment to this project was key to changing the dynamic for this entire area of downtown Houston.”
Attracted by its highly desirable location in Houston’s central business district, Lionstone Investments purchased the property in 2013. “We could see there was tremendous potential for transformation,” says Fernando Urrutia, Vice President, Asset Management, Lionstone Investments. “Our previous experience in Los Angeles with the PacMutual Campus and with CalEdison DTLA validated the wisdom of respecting the architectural integrity of a stunning art deco building, while updating it to serve modern business users.”
Lionstone was Midway’s partner in another downtown undertaking – GreenStreet — and as they looked to reposition and reintroduce the 712 Main property, they brought in Midway. Seckinger notes The Jones on Main has attracted tenants who also looked at new office towers and could have chosen to locate anywhere. “There are definitely more choices available to them,” he continues. “And yet, tenants are choosing to locate at The Jones on Main because they want something more than just square feet. They want an experience that is unique, and they want to provide a high quality environment that feels authentic. They have it at the Jones on Main.”