DESPITE THE ECONOMIC HAILSTORM of recent months, office development giant Hines has emerged relatively unscathed. And for good reason. Since the early 1990s, Hines' firmly established offensive and defensive corporate policies have stood the Houston-based company in good stead through difficult market conditions. With 33.6 million sq. ft. of office space developed in 2001, Hines finished first in NREI's 2002 ranking of the Top 25 Office Developers.

“Most of the policies that we've implemented were started back in the early 1990s when development stopped,” says Hasty Johnson, executive vice president and CFO. “That time period had a big effect on what we're doing today. So even since Sept. 11, we really haven't changed very much.”

Johnson attributes much of the firm's economic stability to its commitment to geographic diversification, especially international expansion. Founded in 1957 by Gerald D. Hines, the company originally concentrated on local real estate in Houston, but began diversifying across the U.S. in the mid-1980s. When the real estate downturn hit in the early 1990s, Hines began looking for global investment opportunities.

Now, in the past year alone, Johnson estimates that nearly 50% of the firm's growth has been outside of the United States — primarily in Europe. And Hines isn't working on simple projects, either. “I call it the masochistic approach to real estate,” Johnson jokes. “The more complicated and difficult the project is, the better we do.”

Case in point: Hines' largest project currently under development is not in the U.S. The firm has partnered with two French companies to build the 8.75 million sq. ft., mixed-use Renault Project in central Paris over the next nine years. The site, just southwest of the city's center, will incorporate offices, residential complexes, retail facilities and museums. Groundbreaking on the $300 million project is scheduled for fall 2003.

Along with international expansion, Hines also increased its third-party development business beginning in the mid-1990s. Currently, the firm's largest third-party development in the U.S. is the $500 million redevelopment of the 5.5 million sq. ft. Renaissance Center, the world headquarters for General Motors, in Detroit. In addition, Hines recently completed the headquarters building for Morgan Stanley in midtown Manhattan, and worked with Lehman Brothers to renovate the new building when Lehman bought it from Morgan Stanley.

Third-party development has proved to be a sizeable portion of Hines' portfolio. While the company has taken on several high-profile third-party projects, including the Renaissance Center, it significantly curtailed new development over the past year.

In 1999, Hines started the development of 7 million sq. ft. of space, compared with 1.7 million sq. ft. in 2001. The drop in third-party development was slightly less dramatic. Hines started 6.1 million sq. ft. of third-party development in 1999, and 2 million sq. ft. in 2001.

Hines also has learned a few lessons on cutting its losses over the past year. “Clearly, Sept. 11 confirmed that we went into recession in the United States,” says Johnson. “One of the things we've learned is if we are about to start a development but don't have a tremendous amount of money in it, we will cancel it and go ahead and take our loss. And we cancelled several developments after Sept. 11,” including properties in San Francisco, Denver and Washington, D.C.

As 2002 unfolds, Hines is taking a wait-and-see approach to the economy and the accompanying development decisions. “We're just being very careful in the United States right now,” Johnson says. “To me, it's a very confusing market.”

Top 25 Office Developers

The Top 25 Office Developers survey is based on totals provided by participating companies. Developers were asked to record their volume of activity for the calendar year, and were ranked accordingly. Results include completed development and new construction as of Dec. 31, 2001, and are given in square feet.

  1. Hines
    2800 Post Oak Blvd., Houston, TX 77056-6118
    Phone: (713) 621-8000
    Fax: (713) 966-2053
    Web site: www.hines.com
    Officers: Jeffrey C. Hines, President; Gerald D. Hines, Chairman; Hastings Johnson, Exec. VP/CFO
    Total Office Space Developed or Under Construction: 33.6 million sq. ft.

  2. Transwestern Commercial Services
    150 N. Wacker Dr., Suite 800, Chicago, IL 60606
    Phone: (312) 499-1900
    Fax: (312) 499-1904
    E-mail: sara_o'donnell@transwestern.net
    Web site: www.transwestern.net
    Officers: Robert D. Duncan, Chairman; Steven D. Bandolik, President/CEO
    Total Office Space Developed or Under Construction: 25.2 million sq. ft.

  3. Opus Group
    10350 Bren Rd. W., Minnetonka, MN 55343
    Phone: (952) 656-4444
    Fax: (952) 656-4750
    E-mail: carol.quam@opuscorp.com
    Web site: www.opuscorp.com
    Officers: Gerald Rauenhorst, Founding Chairman; Keith Bednarowski, Chairman; Mark Rauenhorst, President/CEO
    Total Office Space Developed or Under Construction: 11 million sq. ft.

  4. Lincoln Property Co.
    500 N. Akard, Suite 3300, Dallas, TX 75201
    Phone: (214) 740-3300
    Fax: (214) 740-3441
    Web site: www.lincolnproperty.com
    Officers: Mack Pogue, Chairman; Tim Byrne, President/CEO, Residential Division; Bill Duvall, President/CEO, Commercial Division
    Total Office Space Developed or Under Construction: 6.3 million sq. ft.

  5. Carter & Associates/ONCOR International
    1275 Peachtree St. N.E., Atlanta, GA 30309
    Phone: (404) 888-3000
    Fax: (404) 888-3006
    Web site: www.carterusa.com
    Officers: Billy Mitchell, Chairman/CEO; Tom Senkbeil, President/COO
    Total Office Space Developed or Under Construction: 4.1 million sq. ft.

  6. The Alter Group
    5500 W. Howard St., Skokie, IL 60077
    Phone: (800) 637-4842
    Fax: (847) 676-4325
    E-mail: tag@altergroup.com
    Web site: www.altergroup.com
    Officers: Michael J. Alter, President; Richard Ciatto, Exec. VP, Sales; Randolph Thomas, Exec. VP, Development
    Total Office Space Developed or Under Construction: 4.0 million sq. ft.

  7. Duke Realty Corp.
    600 E. 96th St., Suite 100 Indianapolis, IN 46240
    Phone: (317) 808-6000
    Fax: (317) 808-6786
    E-mail: webmaster@dukerealty.com
    Web site: www.dukerealty.com
    Officers: Thomas Hefner, Chairman/CEO; Gary Burk, Co-COO; Denny Oklak, Co-COO
    Total Office Space Developed or Under Construction: 3.9 million sq. ft.

  8. Higgins Development Partners
    101 E. Erie, Suite 800, Chicago, IL 60611
    Phone: (312) 943-4999
    Fax: (312) 943-9768
    E-mail: farnold@higginsdevelopment.com
    Web site: www.higginsdevelopment.com
    Officers: John W. Higgins, Chairman/CEO; Jerry Pientka, President; Tom Samuels, Exec. VP
    Total Office Space Developed or Under Construction: 3.2 million sq. ft.

  9. Trammell Crow Co.
    2001 Ross Ave., Suite 3400, Dallas, TX 75201
    Phone: (214) 863-3000
    Fax: (214) 863-3138
    E-mail: lraflowitz@trammellcrow.com
    Web site: www.trammellcrow.com
    Officers: Robert E. Sulentic, Chairman/CEO; H. Pryor Blackwell, President, Development and Investment Group; William F. Concannon, President, Global Services Group
    Total Office Space Developed or Under Construction: 3 million sq. ft.

  10. Equity Office Properties Trust
    Two N. Riverside Plaza, Suite 2100 Chicago, IL 60606
    Phone: (312) 466-3300
    Fax: (312) 454-0332
    E-mail: terry.holt@equityoffice.com
    Web site: www.equityoffice.com
    Officers: Sam Zell, Chairman/President/CEO; Richard Kincaid, COO; David Helfand, CIO
    Total Office Space Developed or Under Construction: 2.4 million sq. ft.

  11. U.S. Equities Realty
    20 N. Michigan Ave. Chicago, IL 60602
    Phone: (312) 456-7000
    Fax:
    (312) 456-0056
    E-mail: info@usequities.com
    Web site: www.usequities.com
    Officers: Robert A. Wislow, Chairman/CEO; Camille P. Julmy, Vice Chairman; Nancy A. Pacher, President/COO
    Total Office Space Developed or Under Construction: 2.3 million sq. ft.

  12. CarrAmerica Realty Corp.
    1850 K St., N.W., Suite 500 Washington, D.C. 20006
    Phone: (202) 729-1700
    Fax: (202) 729-1150
    E-mail: maureen.wheeler@carramerica.com
    Web site: www.carramerica.com
    Officers: Thomas A. Carr, CEO; Philip L. Hawkins, President/COO; Stephen E. Riffee, CFO
    Total Office Space Developed Or Under Construction: 2.202 million sq. ft.

  13. The Gale Co.
    200 Campus Dr., Suite 200 Florham Park, NJ 07932
    Phone: (973) 301-9500
    Fax: (973) 301-9501
    Web site: www.thegalecompany.com
    Officers: Stan Gale, Chairman/CEO; Mark Yeager, President; Kathy Wielkopolski, CFO/COO
    Total Office Space Developed or Under Construction: 2.2 million sq. ft.

  14. Taconic Investment Partners LLC
    111 Eighth Avenue, New York, NY 10011
    Phone: (212) 220-9945
    Fax: (212) 220-9949
    Web site: www.111eighthavenue.com
    Officers: Paul E. Pariser, Principal; Charles R. Bendit, Principal; Andrew J. Nick, Principal
    Total Office Space Developed or Under Construction: 2 million sq. ft.

  15. WP Commercial LLC
    26 Main St., Chatham, NJ 07928
    Phone: (973) 701-2200
    Fax: (973) 701-1115
    Web site: www.wpcommercial.com
    Officers: Richard Previdi, President/CEO; Mark Schaevitz, COO; Steve Jennings, Director of Leasing
    Total Office Space Developed or Under Construction: 2 million sq. ft.

  16. Orix Real Estate Equities Inc.
    100 N. Riverside Plaza, Suite 1400 Chicago, IL 60606
    Phone: (312) 669-6400
    Fax: (312) 669-6464
    Web site: www.orixre.com
    Officers: James H. Purinton, President/CEO; Michael McCullough, Sr. Exec. VP, Dev. & Const.; Jeffrey Plack, Exec. VP/Chief Administrative Officer
    Total Office Space Developed or Under Construction: 1.9 million sq. ft.

  17. Stiles Corp.
    300 S.E. Second St., Ft. Lauderdale, FL 33301
    Phone: (954) 627-9377
    Fax: (954) 627-9305
    E-mail: pr@stiles.com
    Web site: www.stiles.com
    Officers: Terry Stiles, CEO/Chairman; Doug Eagon, President, Stiles Corp.; Tom Kates, President, Stiles Realty Co.
    Total Office Space Developed or Under Construction: 1.8 million sq. ft.

  18. Mack-Cali Realty Corp.
    11 Commerce Dr., Cranford, NJ 07016
    Phone: (908) 272-8000
    Fax: (908) 272-6755
    E-mail: investorrelations@mack-cali.com
    Web site: www.mack-cali.com
    Officers: Mitchell E. Hersh, CEO; Timothy M. Jones, President; Barry Lefkowitz, Exec. VP/CFO
    Total Office Space Developed or Under Construction: 1.61 million sq. ft.

  19. Koll Development Co.
    8411 Preston Road, Dallas, TX 75225
    Phone: (214) 696-1700
    Fax: (214) 373-3108
    Web site: www.kolldevco.com
    Officers: Steven VanAmburgh, CEO; Tobin Grove, Exec. VP; Murray Newton, Exec.VP
    Total Office Space Developed Or Under Construction: 1.6 million sq. ft.

  20. Liberty Property Trust
    65 Valley Stream Pkwy., Malvern, PA 19355
    Phone: (610) 648-1700
    Fax: (610) 644-4129
    E-mail: jleonard@libertyproperty.com
    Web site: www.libertyproperty.com
    Officers: Willard G. Rouse III, Chairman/CEO; William P. Hankowsky, President/CIO; Robert E. Fenza, Exec. VP/COO
    Total Office Space Developed or Under Construction: 1.5 million sq. ft.

  21. Clarion Partners
    335 Madison Ave., 7th Floor New York, NY 10017
    Phone: (212) 883-2500
    Fax: (212) 883-2700
    Web site: www.clarionp.com
    Officers: Stephen Furnary, Managing Director/Chairman; Frank Sullivan, Managing Director; Charles Gressman, Managing Director
    Total Office Space Developed or Under Construction: 1.47 million sq. ft.

  22. Patrinely Group LLC
    1980 Post Oak Blvd., Suite 1600 Houston, TX 77056
    Phone: (713) 840-2700
    Fax: (713) 840-2705
    E-mail: cmd@patrinely.com
    Web site: www.patrinelygroup.com
    Officers: C. Dean Patrinely, Managing Principal; Leonard J. O'Donnell, Principal; Michael E. Nicholls, Principal
    Total Office Space Developed or Under Construction: 1.45 million sq. ft.

  23. McShane Corp.
    9550 W. Higgins Rd., Suite 200 Rosemont, IL 60018
    Phone: (847) 292-4300
    Fax: (847) 292-4313
    Web site: www.mcshane.com
    Officers: Hunter Barrier, President; Robert G. Byron, CIO; James E. McGill, Exec. VP
    Total Office Space Developed or Under Construction: 1.42 million sq. ft.

  24. Forest City Enterprises Inc.
    1100 Terminal Tower, Cleveland, OH 44113
    Phone: (216) 621-6060
    Fax: (216) 263-6208
    E-mail: tom_kmiecik@FCEINC.com
    Web site: www.FCEINC.com
    Officers: Albert Ratner, Co-Chairman; Samuel H. Miller, Co-Chairman/Treasurer; Charles A. Ratner, President/CEO
    Total Office Space Developed Or Under Construction: 1.4 million sq. ft.

  25. Brookfield Properties Limited
    BCE Place, Bay Wellington Tower, 181 Bay St., Suite 4300 Toronto, Canada M5J 2T3
    Phone: (416) 369-2300
    Fax: (416) 369-2301
    Web site: www.brookfieldproperties.com
    Officers: David Arthur, President/CEO; Philip Mostowich, Sr. VP, Eastern Office; Thomas Farley, Sr. VP, Western Office
    Total Office Space Developed or Under Construction: 1.33 million sq. ft.