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Jan. 13, 2013

Shorenstein Buys Exxon Mobil Building; Hilton Westchase Also Gets New Owners

By Georgiana Mihaila, Associate Editor

The downtown Exxon Mobil building recently traded hands, with San Francisco-based Shorenstein Properties becoming its new owner.  Shorenstein purchased the property for Shorenstein Realty Investors Ten L.P., a fund formed in 2010 with $1.2 billion in committed capital.

Along with the sale, former owner Exxon Mobil Corp. also leased back the entire building into 2015, when it plans to relocate to its new 385-acre corporate campus, currently under construction north of Houston.

The 45-story 800 Bell St. building, known as the Exxon Mobil Tower, was built in 1962 as the headquarters of Humble Oil & Refining Co., a predecessor to ExxonMobil; at that time, the 1.2 million-square-foot office tower was the tallest building west of the Mississippi River at 606 feet.

Also included in the sale was a seven-story parking garage. No financial details of the transaction have been disclosed, but Shorenstein Properties chairman & CEO Douglas Shorenstein declared, “We purchased this property markedly below current replacement cost, which gives us the opportunity, once the current user vacates, to employ all our company’s core skills – in capital transaction execution, redevelopment, leasing and operations – to increase the property’s value by establishing its long-term position and further enhancing its reputation in the market.”

According to an official release, Shorenstein plans to undertake significant improvements to the property after ExxonMobil’s departure.

The Hilton Houston Westchase also experienced a recent change of owners, as Interstate Hotels & Resorts sold the 297-room hotel to Wheelock Street Capital. This is the company’s second Houston purchase and its sixth full-service hotel acquired within the past 12 months. Wheelock Street plans to renovate the 12-story, 220,254-square-foot hospitality property at 9999 Westheimer Road.

No details have been provided as to the amount for which the Hilton Houston Westchase traded, but CoStar Group Inc. reports that investment entity Capstar Westchase Partners L.P. sold the asset to Interstate Hotels in February 2007 for $50.5 million, or $170,034 per key.

Image courtesy of Obskura via Flickr