By Georgiana Mihaila, Associate Editor
The Houston office of international real estate firm Hines landed what is considered to be this year’s largest office lease in the world, renewing Shell’s lease at One Shell Plaza and Two Shell Plaza for a total of 1.2 million square feet. According to an official release, the 15-year lease term commences retroactively on Jan. 1, 2011, and expires in 2025, at which time Shell will have been a tenant for more than 55 years. This renewal represents the peak of Shell’s downtown consolidation plan and a commitment to keep a major presence in Houston’s Central Business District, while it is also working with Hines on expanding its Woodcreek and Westhollow campuses.
Shell Oil Co. first signed its lease back in 1967 with Hines founder & chairman Gerald Hines, awarding him with the financing needed to proceed with construction; as a tradition, Gerald Hines was the one to sign the lease renewal in 1990 for an additional 25-year term and the latest one, in 2011. With the 1990 renewal came some major capital improvements to the buildings as well as refinancing. Along with the new 15-year term, Hines committed itself to upgrade the buildings through another major capital improvements program.
The 2 million-square-foot Shell Plaza was developed by Hines 40 years ago, with the international real estate firm serving as owner and manager ever since, while also handling leasing for the two buildings. Designed by renowned architect Bruce Graham with the Chicago office of Skidmore, Owings & Merrill, the 50-story One Shell Plaza was the first major high-rise project by Hines and to this day remains the tallest lightweight concrete structure in the world. The 26-story sister building, Two Shell Plaza, consists of office, retail and parking. Both properties were acquired by the Hines U.S. Core Office Fund in 2004.
Cushman & Wakefield vice chairman Tim Relyea and executive vice president Joe Peddie represented Shell in the transaction, while senior vice president Charles Elder and vice president Chrissy Wilson of Hines represented owner Hines U.S. Core Office Fund.