After sitting vacant for nearly a decade, hopes for revitalizing one of Houston's tallest and oldest office towers are fizzling out with the developer's plan to offload the building.
An affiliate of CMI Developers has listed 800 Bell, the more than 1.3 million-square-foot skyscraper that has been sitting empty since Exxon Mobil relocated from the downtown tower in 2015. Texas-based brokerage Lumicre has been brought on to help market the building since it was put up for sale earlier this month.
The listing lands about two years after the New York-based investment firm that has a track record of historic redevelopments and conversions acquired the property with plans to overhaul it into housing. CMI closed the deal with seller Shorenstein Properties in late 2022 for an undisclosed amount, according to CoStar data, fueling optimism that the new ownership would be the long-awaited catalyst both for the tower as well as the downtown area.
It isn't clear how far the developer got in its pursuit of a residential conversion. Neither CMI nor Lumicre immediately responded to CoStar News' requests for comment about the decision to sell the former Exxon building. Marketing materials describe 800 Bell as an "iconic skyscraper" that has been a longstanding fixture for the Houston skyline — even if it is barren.
"Designed for versatility, this building is ideal for use as a corporate or secondary headquarters," according to marketing materials. However, if a potential bidder is interested in picking up where CMI left off, the tower also has "the potential for conversion to alternative uses."
Languished plans
The move to offload the 46-story building is the latest update for the Houston high-rise dating back to Shorenstein's own $50 million acquisition in 2013.
The San Francisco-based developer purchased the tower as part of a sale-leaseback agreement with Exxon as the energy giant was in the middle of its own real estate disposition spree. Exxon continued to fill the entirety of the building until 2015 when it relocated employees to its new 385-acre corporate-owned campus in north Houston.
Shorenstein had originally planned to start a major revamp of the tower once Exxon moved out. Houston's office market at the time was booming thanks to a surge in demand among energy companies. However, plummeting oil prices in 2015 triggered a spike in vacancies as companies quickly shed office space and complicated efforts to overhaul the Exxon tower.
After more than seven years of failing to land a tenant, Shorenstein's redevelopment plans never reached fruition, and the property was ultimately sold.
Demand across Houston's office market has stabilized in recent years but is still facing pandemic-induced challenges. At nearly 19.5%, the city has the second-highest vacancy rate in the country behind only San Francisco, according to CoStar data, and the leases that are getting signed average about 10% smaller than in the years leading up to 2020.
With tenants holding much of the power, demand for space has been concentrated on the pool of high-quality buildings stocked with desirable amenities and located in mixed-use environments, attributes for which the Exxon tower has struggled to compete.
Even with the property being listed for sale, Lumicre is still actively marketing it for a prospective tenant, leaning more on the building's history and adaptability rather than features where it may come up short.
The tower is "a canvas ready for transformation [and] features contemporary architecture and flexible floor plans, ideal for creating a personalized environment," according to brokerage materials. "Once the grandest building west of the Mississippi River, it invites you to be a part of its living narrative and seize the opportunity to make this iconic address your own."