Over the last 50 years, Houston-based Hines has developed some of the world's most striking buildings, including the trapezoidal Pennzoil Place in Houston and 53rd at Third — the “lipstick building” — in New York City. It also has taken on hugely complex projects, like Diagonal Mar, a 34-acre, 4 million sq. ft. mixed-use development along the Mediterranean Sea in Barcelona.
But unlike other big-talking Texans, the private, family-owned Hines isn't one to brag, preferring instead to let its projects speak for themselves.
The company was launched by Gerald D. Hines, a native of Gary, Ind. who moved to Houston in the late 1940s to seek his fortune. He worked in sales, but combined his knowledge of engineering, mechanical systems and finance to undertake development projects on the side. By 1957, he had racked up enough business to go out on his own.
After a decade of working on smaller jobs, Hines got his first big break in the mid-1960s, when he persuaded Shell Oil to hire him to build a 50-story corporate tower. At the same time, Hines was working on The Galleria, his version of the shopping mall: a stunning 600,000 sq. ft. center with vaulted ceilings and several levels of stores surrounding an ice rink.
Fearful of becoming overextended on the two projects, Hines decided to spread out the risks and rewards with other investors. Initially mocked as “wimpish” by his Texas counterparts, the equity financing strategy helped Hines survive when the real estate market tanked in the 1990s — and continues to give the firm a competitive edge today, says Jeff Hines, who in 1990 was named president of the company his father founded.
“Debt has become more of a challenge with the recent flux in the capital markets, but generally that's a plus for us,” Jeff Hines says. “Many of the other buyers we compete against have been highly leveraged buyers. The credit market turmoil takes them out of the equation.”
Another key strategy, Jeff Hines says, is maintaining an entrepreneurial culture. In the early 1990s, for example, when the company wanted to expand into global markets, it assigned each of its U.S. regional partners an area of the world to explore — and let them gain financially from projects they brought to the table. “If people are good at creating value, they can create a lot of value for themselves as well as the firm,” Jeff Hines says. “We have a large piece of the pot available to non-family members. We think that's a very effective way to operate.”
Today, Hines has 100 offices in 16 countries around the globe and is particularly active in China, Russia, Brazil, India, Europe and Dubai.
Gerald Hines, who has lived in London for the past decade or so, remains involved with the company, but Jeff Hines, 52, oversees daily operations. He describes his father as a “frustrated architect,” and says his strengths line up more on the finance side.
“I think Dad would say he's proud of the buildings we have developed and the positive statement the firm has made on the cities with which we have been involved,” he says. “But I think he'd be more proud of the people who have worked with us and the organization he has put in place.”