December 6, 2011
By Nicholas Ziegler, News Editor
In what Hines is calling the “largest lease transaction in the world in 2011,” the firm’s Houston office has re-signed Shell Oil Co. for a lease that totals 1,222,425 square feet. The energy firm has renewed its terms at One Shell Plaza for 804,491 square feet and at Two Shell Plaza for 471,934 square feet in a lease that will commence Jan. 1, 2011 and go through 2025.
Hines, as part of the lease agreement, will upgrade the building’s mechanical and electrical systems in what Hines vice president Jeri Ballard calls a “commitment to energy and water conservation and to sustainable practices.” In 2009, both One and Two Shell Plaza were certified LEED Gold.
Houston has been a success story in the country, shining through the economic gloom with strong fundamentals. The city’s job growth between August 2010 and August 2011 was a net 65,600 jobs – meaning that one in every 20 American jobs created during that period was in Houston. The majority, of course, has been in the strong oil-and-gas sector, and a report by services firm Jones Lang LaSalle found that “U.S. rig count figures have increased by more than 300 from this time last year, and oil prices are at a level that promotes exploration.”
“Even though Shell’s existing lease agreement did not expire until the end of 2015, they started almost three and a half years ago in order to evaluate all possible options for such a large transaction because this much lead time is required,” Tim Relyea, vice chairman with Cushman, said.
Shell Plaza was developed in 1970 by Hines and has been owned by the company since. The 2 million-square-foot Class A property was developed specifically as the North American headquarters of Royal Dutch Shell Co., which relocated from New York City to Houston in that year.
Cushman & Wakefield represented Shell in the transaction and Hines represented itself as the building’s owner. At the expiration of this lease, Shell will have been a tenant in the same property for more than 55 years.