Hines’ Bay Area Bankruptcies

Hines' latest default

Houston-based Hines Interests, the international real estate developer behind numerous Houston landmarks including the Galleria, has defaulted on three San Francisco-area properties within the last couple of months. The latest default, a 500,000+ square-foot building in downtown San Francisco, was surrendered to the lender after the building’s main tenant went into bankruptcy last year.

With pockets as deep as Hines’, you have to wonder why the firm allowed three of its buildings to default? And moreover, why an enterprise as large as Hines, isn’t concerned about the damage to its reputation that three foreclosures will undoubtedly have in the mind of prospective Bay Area commercial real estate brokers?

Granted that commercial real estate values have fallen precipitously along with residential real estate valuations, but from an outsider’s stand point it still seems like it’d make more sense to sell the buildings at a loss than record three defaults.

Whatever it may not say, as a global leader in commercial real estate, Hines’ recent paring of its San Francisco portfolio does say one thing to this market watcher: So much for San Francisco’s status as a so-called ‘super star‘ city.

VIA Houston Business Journal >>

Image of 333 Bush St. courtesy of Google Maps.