Founded in 1957 by Gerald D. Hines, Hines is a privately owned global real estate investment, development, and management firm. The company operates in 24 countries and has $116.4 billion of assets under management. Over the firm’s 62-year history, Hines has developed, redeveloped or acquired over 1,300 properties with a total of more than 431 million square feet of space.
The property and asset management portfolio at Hines currently includes over 224 million square feet of space from 527 properties. The firm provides integrated real estate services, investment management, and real estate development service in all asset classes.
Integrated Real Estate Services
Hines knows that anyone can invest in real estate. The firm combines its local market knowledge with its inside-out knowledge of real estate development, property management, and engineering to add value for its clients through:
- Global development – feasibility, design, pre-construction, construction, and project management.
- Acquisitions and dispositions – deal sourcing, property evaluation, market analysis, pro-forma projections, strategic planning, due diligence, financing, closing and startup.
- Asset, property and facility management – third-party property and facility management, acquisition and disposition coordination, marketing and leasing, tenant relations, comprehensive asset analysis, preventive maintenance, energy management, operating cost management, building commissioning, project redevelopment, construction management, capital expenditure forecasting, benchmarking and market analysis.
- Conceptual construction – product innovation, continuous improvement, multifaceted perspective, quality and efficiency.
Real Estate Development
The real estate development projects from Hines have a history of setting standards for success in every market and asset class that the firm operates. The company’s skill at value engineering consistently brings development projects in, at, or below budget.
In addition to financial returns, real estate development projects from Hines always seek to improve the cities they’re located in and pioneer new practices for sustainability. Recent development projects from Hines include:
- Salesforce Tower in San Francisco with over 1.4 million square feet of space,
- 609 Main at Texas in Houston with over 1 million square feet of space,
- 300 North LaSalle in Chicago with nearly 1.3 million square feet of space,
- 800 Fifth Avenue in Seattle with over 930,000 square feet of space,
- Atlantic Yards in Atlanta with 500,000 square feet of space.
Over its more than 60-year history, Hines has developed investment management experience in all property asset classes:
- Living / Housing
- Industrial / Logistics
- Land development
Since 1991 the firm has sponsored 57 strategic investment funds and numerous one-time investment vehicles with more than $49 billion of total equity. Hines’ current investment partners include over 185 institutional investors, more than 600 high net worth individuals, and over 120,000 retail investors.
The firm pursues opportunities across the full risk-and-reward spectrum of core, value-add, and opportunistic investments. Investment vehicles are designed to match the objectives of Hines’ partners and include joint ventures, REITs, individual accounts, and both open- and closed-end comingled funds.
All the investments Hines manages are guided by:
- Alignment of interests,
- Local expertise,
- Proprietary research,
- Hands-on execution.
Sustainability, Diversity, and Inclusion
Trained as a mechanical engineer, Gerald D. Hines has always believed that sustainability should be at the forefront of the company’s activity. The firm operates over 69 million square feet of space that has been certified, pre-certified, or registered under LEED. Nearly 78 million square feet are in the ENERGY STAR program, and over 30 million square feet of office space are in the Hines Green Office for Tenants program.
With offices in 24 countries staffed by over 4,000 people, Hines understands that diverse skills and viewpoints make the firm stronger and better equipped to serve its investors, partners, clients, and communities. The OneHines initiative supports an inclusive culture under which all employees feel valued and have equal opportunity to reach their maximum potential.
The goal of the OneHines Women’s Network is to attract more women into the field of commercial real estate and increase female leadership at Hines. The Network started as a grassroots effort and evolved informally before being embraced by the Executive Committee at Hines.
Hines at a Glance
Philosophy: Hines operates under five guiding principles:
1) Set the global real estate benchmark for value creation, integrity, services, and quality for all clients,
2) Highest standard for products and services to accomplish the mission,
3) Employees are the firm’s most valuable assets and set the standard of excellence at Hines,
4) Commitment to fostering an inclusive culture where diversity is respected and valued,
5) Strive to be the industry leader in sustainability and the premier real estate company in the world.
Launched: as a one-man office in Houston, in 1957, by Gerald D. Hines.
Global Headquarters and World Markets: Houston is the home of Hines’ Global Headquarters. The firm has its European Headquarters in London and its Asian Pacific Headquarters in Hong Kong. Hines has a presence in 207 cities in 24 countries around the world including all regions of the USA, Australia, Brazil, Canada, China, Germany, Greece, Luxembourg, Panama, Russia, and South Korea.
Key Executive Management at Hines
With an average Executive Committee member tenure of over 25 years, the executive management team at Hines provides experienced and trustworthy leadership:
- Gerald D. Hines – Chairman
- Jeffrey C. Hines – President & CEO
- Laura Hines-Pierce – Transformation Officer
Office of Investments and Central Leadership
- Hastings Johnson – Vice Chairman
- Keith H. Montgomery – Chief Financial Officer
- David L. Steinbach – Global Chief Investment Officer
- Christopher D. Hughes – CEO, Capital Markets
- Thomas D. Owens – Chief Risk Officer
- Sherri W. Schugart – CEO, Core Fund, REIT & BDC Group
Google signed a 15-year lease with Boston Properties to anchor the redevelopment of 325 Main street at Kendall Center in Cambridge, Mass. Construction is set to begin later this year, and wrap up in 2022.
The ground-up redevelopment project will replace the existing four-story, 115,361-square-foot property with a 16-story mixed-use building that will encompass roughly 400,000 square feet, including retail space. The new building will be connected to Google’s existing space at 355 Main St. Plans also incorporate public perks like access to the Kendall Square Roof Garden from street level, improved pedestrian experience along Main Street and on the adjacent Kendall Plaza, as well as increased programming both at the Roof Garden and on the Plaza.
According to the Boston Business Journal, initial plans also included the addition of new Cambridge coworking space in a neighboring building, where nonprofits working to provide education to underrepresented groups in tech can teach and collaborate. Google also announced contributions to the community in the form of three grants: one to the Cambridge Public Library to create a mobile computing “tech bar,” one to the Tech Talent Exchange, a Skillworks pilot program to partner on an IT/tech workforce development program, and one to the Cambridge Housing Authority for a remodel of the authority’s Windsor Street computer lab.
Boston Properties has been the designated master developer of the Kendall Center redevelopment project since the late 1970s. Google established a presence in Cambridge in 2013 and has since grown to employ over 1,500 people, working on major projects like Search, Android, Cloud, YouTube, Google Play, and more. The Mountain View-based tech company will occupy 362,000 square feet of the new Kendall Center office space. According to Boston Properties, that rounds up the developer’s collaboration with Google to over 800,000 square feet of leased office space.
Bryan Koop, executive VP at BP, stated: “We’re thrilled that Google continues to grow within our Kendall Center properties. Their presence adds to the dynamic innovative spirit of the Kendall Square ecosystem and we look forward to building Google’s newest home.”
Google Cambridge Site Lead Brian Cusack added: “This new space will provide room for future growth and further cements our commitment to the Cambridge community. We’re proud to call this city home and will continue to support its vibrant nonprofit and growing business community.”
Property images courtesy of Yardi Matrix.
Taubman Centers, Inc. (NYSE: TCO) said Feb. 14 that it has agreed to sell half its interest in its three Asia shopping centers to The Blackstone Group in a transaction valued at $480 million. The centers are located in South Korea and China.
On a fourth quarter 2018 earnings call, CEO Robert Taubman said the transaction confirms the value the REIT has created with its Asia platform, noting the company is recycling capital through the deal and improving its liquidity by nearly $500 million.
The flexible workspace sector is starting to impact the commercial real estate world as more providers and business models enter the market, according to a recent report.
The market is growing at a compound annual growth rate of almost 50% in the U.S., with flexible workspaces accounting for one-third of office leases in the last 18 months.
However, the Colliers U.S. Flexible Workspace Outlook Report states that “coworking’s footprint is still quite insignificant—only 1.6% of all office space in the markets we surveyed.” What’s more, the report notes that the pace is slowing as the market matures.
So, what does the future hold for flexible workspaces in the U.S.? The report reveals several important insights:
Coworking space abounds in NYC
The survey identified more than 27 million square feet of flexible workspace in 19 markets across the U.S. Almost 40% of that space is located in Manhattan and another 12.7 million is spread across 10 leading office markets, with four million in nine secondary markets. Interestingly, growth rates for flexible workspaces in the primary and secondary markets were virtually identical between 2016 and Q2 2018.
Dallas, Raleigh-Durham, Boston, and Seattle were the fastest-growing flexible workspace regions, in terms of percent growth. Philadelphia and Miami realized the slowest growth rates out of all the U.S. regions.
In terms of inventory growth, Manhattan was well ahead of other areas, adding more than 3.3 million square feet of coworking leases between 2016 and Q2 2018. That’s three times higher than Boston, which was the area recording the next-biggest inventory growth.
The top 10 coworking providers lead the pack
The top 10 operators account for 80% of flexible workspace in the U.S., leasing almost 23 million square feet of flexible workspace. Smaller operators–defined as any firm outside the top 10–account for just over five million square feet of flexible workspace.
WeWork accounts for more than 45% of flexible square footage. This high proportion is thanks to a large amount of space used by WeWork, an average of 79,000 square feet of space per site. Regus owns the highest number of sites (224) but only uses 21,000 square feet of space per site.
Coworking spaces now have corporate appeal
Flexible workspace providers are now focusing on attracting large corporations and enterprise clients, according to the report.
Several core motivations for corporates using flexible workspaces are identified, including the ability to try new locations thanks to flexible and short-term leases, reduced capital expenditure, the opportunity to work in a creative environment, access to the startup community and the ability to accommodate temporary swings in headcount.
Flexible workspaces are talent magnets
Companies are now using flexible workspaces to attract and retain their top talent. The report states: “Traditionally, firm locations were governed by the location of senior executives, and the rank and file workers followed. The logic is now reversed: corporations are now going to where the young talent is instead.”
“With companies in intense competition to attract the brightest minds, they must be creative about their working space to draw them in, with amenities that appeal to younger workers.”
Different work environments to suit different needs
Flexible workspace operators are using three basic environments to meet the needs of different occupiers, the report reveals.
First, executive suites provide a traditional office space akin to Regus. Second, hotel-curated spaces offer high-end and tailored spaces for professional clients. Last, mainstream coworking spaces offer the flexibility and high worker densities of spaces such as WeWork.
Shared space providers offer alternative leasing models
“The workplace is increasingly becoming more digital and mobile. There is a growing corporate need for flexibility and an efficient way to work with leasing accounting changes,” according to the report.
As a result, operators need to adapt by providing alternative leasing models. For example, an occupier may want to take a long-term lease for its core operations and uses flexible workspaces for surges in headcount. Alternatively, a business may use a long-term lease for its main headquarters and use flexible workspaces to provide a series of satellite locations for its mobile workforce.
The future of flexible workspaces
The longevity of the flexible workspace market is questioned by the report, which states: “Since the vast majority of flexible workspace came online after the Great Recession (late 2007 to mid-2009), its performance during a downturn is untested, but it could provide a buffer to landlords as tenants seek short-term, flexible space.”
We now need to test the economics of the flexible workspace market, according to the report, which concludes: “While the growth of major providers, in terms of leasing volume and locations, is undeniable, some providers are highly leveraged and could be susceptible to a market downturn, particularly if office rents start to decline.”