If you’re an office owner of a certain caliber and you’re ready to sell, there’s likely one name on your speed dial.
JLL’s four-person office investment sales team handles the lion’s share of deals in Houston.
All it took was buying up all the competition.
Courtesy of JLL
JLL’s Marty Hogan, Kevin McConn, Rick Goings and Jeff Hollinden
The team — and city — is having a huge year for office investment sales.
There has been more than $1.5B of year-to-date activity, if counting the ownership transfer of Houston Center, and another $700M is expected to hit the market by January. That’s up from $650M for all of 2024, according to JLL.
The actual percentage of office investment sales brokered by JLL Capital Markets’ Houston office investment sales team of Marty Hogan, Kevin McConn, Jeff Hollinden and Rick Goings varies.
The team said it handles 65% to 80% of institutional office sales by dollar volume in Houston annually, depending on the year, and the proportion can be swayed by huge outlier transactions. But it can be as high as 95%.
CoStar data, which encompasses a broader pool of deals, shows a smaller cut, with JLL as the listing brokerage for 21% of the 53.4M SF of offices sold in Houston since 2023, about 11.3M SF as of October.
The next highest listing brokerage, with nearly 6M SF sold, was Eastdil Secured, which has brokered big transactions like the sale of CityWestPlace. Three more brokerages sold between 2M SF and 3M SF, and all others were below 750K SF, according to CoStar.
Any way you shake it, JLL is leading by a long shot.
“If there’s 35 trades, we’ve done 30,” Hogan said. “Everybody else has done, collectively, five or 10.”
Deals brokered by the team this year include a distressed building in Downtown Houston that sold for a bargain-basement price and a vacant trophy building built in 2022 that generated 15 all-cash offers. The team has seen sales indicating particular interest from owner-users and several trades in West Houston, one of the most popular office submarkets in the country by square footage leased.
The domination stems from JLL’s 2019 acquisition of HFF, a smaller firm that was considered to have carried more influence in the debt financing arena. HFF CEO Mark Gibson became and remains CEO of JLL Capital Markets, Americas.
Prior to the merger, Hogan and Hollinden were at HFF. McConn and Goings were at JLL. Their respective teams were the leading investment sales teams in Houston, Hogan said.
“Two competitors that were the top two office investment sales teams in the city coming together,” he said. “That’s kind of how it happened. And then we’ve just been able to maintain it going forward.”
The foundation was laid long before the merger. The men credit many of their former and current leaders, including Scott Galloway and the late Jim Savage, for the culture and relationships that contribute to their success today.
But in particular, McConn had a mentor in Ruby Hubbard at JLL, and Hogan had Danny Miller at HFF. Both elder men left JLL around the time of the merger.
Bisnow/Catie Dixon
Kevin McConn and Rudy Hubbard in 2014
“They’re the only game in town,” Hubbard said, adding that didn’t just become the case in 2019. “We were doing pretty well against HFF before the merger.”
Hubbard said he left JLL to branch out beyond the office sector into things including land tract sales. Though he officially quit and established RH Interests in 2020, he said his decision was made at least a year before the merger.
Miller remembers the old rivalry a bit differently.
“When we went up against JLL, we beat them, period,” Miller said.
HFF exclusively focused on debt and equity, with debt specialists for each sector. So there is no question that JLL’s acquisition of HFF put it in the position it is in now, Miller said.
He said a lot of factors, including the pandemic, his age and not wanting to integrate into a giant global corporation, led to his decision to leave JLL. Now he is retired, living in South Carolina and a member of seven country clubs.
While huge mergers can come with clashes of egos, this team skirted any potential issues. McConn and Hogan both grew up in Houston and have been friendly competitors since grade school.
“We played Post Oak Little League baseball,” McConn said.
Good communication and collaboration were values instilled in the cultures of both JLL and HFF, starting at the top, which helped the teams jell.
The team says there is no jealousy. That isn’t the case at every brokerage, said Kelly Layne, co-head of the Houston capital markets team, adding that after seeing multiple shops merge, teams come and teams go, it’s been “truly amazing” to watch what happened with the merger of the office investment sales teams from HFF and JLL in Houston.
“It was so cohesive,” Layne said. “We’re all great friends. It could not have gone better.”
Hogan, Goings and McConn credit their success to all of the platforms and professionals at JLL’s Houston office. The office team is supported by analysts and benefits from its capital markets counterparts in industrial, retail, multifamily and debt, McConn said.
JLL did three times the amount of its nearest competitor in debt originations last year, Layne said.
“That certainly arms us with a lot of information and data that we don’t think any of our competitors have,” McConn said.
Bisnow/Catie Dixon
Marty Hogan and Danny Miller in 2014
That gives them insight into why office investment sales have surged this year.
Houston’s office market saw negative absorption in the three years leading up to 2019, then was impacted by the pandemic in 2020. Now rents are growing and fundamentals are returning since Houston office tenants started their rightsizing moves earlier, Hollinden said.
Office fell out of favor for debt and equity markets for a few years. Difficulty securing debt explains the lack of big-deal activity in 2024, Goings said.
But debt markets have opened up dramatically over the past nine months. Houston will have eight transactions north of $50M this year.
“Investors are starting to see that office is probably the best risk-adjusted return in real estate,” Goings said.
When investors survey the whole country, they like to follow population, economic and job growth, which Houston has.
“We’re just checking all the boxes right now,” Hollinden said.
The team is as busy as it has ever been and plans to stay that way.
“So not much of a restful holiday season, which is fine with us,” Hollinden said. “We’re ready to hit the ground running again next year.”