Gerald Hines, the billionaire Texan property developer who built the Lipstick Building in Manhattan and skyscrapers that transformed Houston’s skyline in the 1970s and 1980s, has died. He was 95.
He died Sunday, according to his firm’s website.
His company, closely held Hines, helped develop Goldman Sachs Group Inc.’s Jersey City tower and Salesforce Tower in San Francisco, the city’s tallest building, which it sold to Boston Properties.
The company oversaw more than $133 billion in property and asset management holdings at the end of 2019, including properties in more than 200 cities across two dozen countries. Hines and his family have amassed a net worth of about $2 billion, according to the Bloomberg Billionaires Index.
“His firm will always be among the top 10 real-estate companies in the world as far as I’m concerned,” said John Guess, president of Houston-based Guess Group Inc., a real-estate services company. “They’re well respected and a safe haven for a lot of institutional investors.”
Engineering Background
Gerald D. Hines was born Aug. 15, 1925, in Gary, Indiana. He graduated from Purdue University in 1948 with a bachelor’s degree in mechanical engineering. Later that year, he moved to Houston to work at Texas Engineering Co., where he designed air conditioning systems. In the 1950s, while still a partner there, Hines built a 5,000 square-foot building for his neighbor. By 1957 the sideline had enough business to allow him to leave his job and set up as a full-time developer.
His big break came in 1966. Holding a set of bronze door handles, Hines walked into a meeting with Shell Oil Co. executives. Dropping them on the boardroom table, he proposed a 50-story tower his upstart firm was planning in Houston and vowed the entire development would be built to the same quality as the pristine fittings, according to “The Offshore Imperative,” Tyler Priest’s 2007 book about Shell.
Big Break
The pitch worked. Shell signed on as the anchor tenant for the young developer’s first skyscraper and ended up relocating its U.S. headquarters to the site from New York. The coup gave Hines the credibility and cachet to rebuild Houston’s skyline, completing the trapezoidal headquarters of Pennzoil Co. in 1975 and the 75-floor Texas Commerce Tower in 1982 that became the city’s tallest building.
The company became known for using the world’s top architects to construct eye-catching structures. Hines exported this approach nationally and then globally, completing New York’s oval Lipstick Building in 1986, Mexico City’s Del Bosque office complex in 1997 and Barcelona’s Diagonal Mar shopping center in 2001.
“We look for outstanding designs and ways to differentiate our product,” Hines said at a talk at Harvard University in 2012. “When you want the best tenant at the highest price, he wants the best product.”
Hines sought to minimize the firm’s exposure to any single project or market. After the oil bust of the 1970s, he increasingly found partners who took equity stakes in his projects, protecting his company’s balance sheet from the whipsaws of the real estate market.
Heavyweight Partners
His son Jeffrey took over as president in 1990 and led the way in attracting institutional capital to the real-estate sector. Today, Hines increasingly resembles a private equity firm, deploying the funds of its limited partners, who include the California Public Employees’ Retirement System and the Abu Dhabi Investment Authority. A large proportion of its business is now focused on earning fees from investing and managing third-party properties rather than relying on the large-scale developments typified by its hustling founder in its early projects.
Hines had two children, Jeff and Jennifer, with his first wife, Dorothy Schwarz. His second wife, artist Barbara Fritzsche, had two children Serena and Trevor.
This article was provided by Bloomberg News.
