What is going on with Hines?
I’ve been hearing from multiple people that Hines is letting go of a lot of employees and seems to be losing key business. From what I’m seeing and hearing, it feels like more than just a routine restructuring—it seems like the firm might be facing serious challenges.
This is surprising given their reputation, but the scale of the layoffs and the tone from people inside suggest something bigger might be going on. Are they in financial trouble? Losing major clients? Has leadership changed direction?
Would appreciate any insights from people closer to the situation. And honestly—given everything going on—would you still consider it a good firm to join right now?
I mean they're traditionally a trophy office player. It shouldn't be a surprise that they're struggling.
Traditionally yes, but they're way more diversified now. Their latest Houston development is stabilized.
Meh. In Europe they mostly do everything but offices
Hines is doing fine and still an amazing brand to work for. On the development side they used to be little fiefdoms across the world that each worked on their own stuff but from what I’ve heard management wants to make the firm more cohesive and give it a more institutional feel. Also their PE business is doing fine and has a ton of dry powder.
A number of people I know have left the firm in recent years because of economic conditions. At a shop like Hines when you become senior you end up taking a deal cradle to grave which takes years. A number of senior guys finished up deals after 2020 and haven’t been able to identify what’s next so they’ll either retire or move onto new things. Not exclusive to Hines btw. The economic slump has provided motivation for senior people all across the industry to move or strike it out on their own.
The firms probably hurting from reduced fees on the development side but they’ll be fine.
How are they changing their structure in regards to each city? I always liked their model but it’s hard to grow a national platform when one office exclusively does retail in a region but go 6 hours north & the team only does office. How are they making it more cohesive?
Development has slowed nationally. They make money from development fee income. Doesn’t surprise me to hear about this. Most developers are having problems right now.
Their restructure c2018 fucked them up. They became fees orientated rather than focusing on dela success. This meant doing a lot of risky big ticket deals with a primary focus on fee generation. A lot of those deals went bad as they were underwritten poorly and some of the senior leadership are/were completely out of their depth. Theyre now losing a shit tonne of money and relationships being soured with capital partners
Source - worked there for 3 years
Underwritten poorly? Or just didnt foresee COVID, inflation, et cetera?
Underwritten poorly
No model becomes reality, so please elaborate.
Do you genuinely not understand the difference between a deal being underwritten poorly from its onset and the natural budget evolutions between a deal’s conception through execution?
If I’m hand making pasta and add a bit too much flour by accident, I’m going to need to fix my egg ratio. Not the end of the world—just takes some critical thinking skills and finesse.
If I’m hand making pasta and my dog jumps on the counter, swallows half of the dough in one bite, and then takes a steaming shit on the remaining half, it’s a bit more complicated. Probably won’t be fixable.
No model becomes reality, but the quality of its ingredients or inputs can make a huge difference in how salvageable it is when things inevitably change.
The famous Buffet quote hits a little different if you excuse everyone for not knowing the tide was going to go out.
You think I'm crazy to accept a director role there right now? This region has pipeline and has been historically capitalized with internal funds so is presenting a bullish story. I'm well aware of the ongoing third generation leadership shift (guessing it's not a positive) and the reorg that happened last year which has sent talent fleeing. I guess I'm hoping maybe this particular region / business unit will be insular enough from the corporate bs and we actually still get deals done, and maybe the brand is still worth it despite the place changing for the worst in the last five years.
Same guy just different title. If it’s well capitalised you should be fine. Very region dependant and there’s some regions that are shooting the lights out. Just make sure the leadership of the region is solid and the project you’re walking into isn’t tanking (aka find out why the guy you’re replacing left)
“And honestly—given everything going on—would you still consider it a good firm to join right now?”
Are you anything more than an analyst or associate? Because if not, how the firm performs doesn’t really matter to you as long as they can still make payroll. You aren’t sniffing promote, lost or outsized, either way.
Nice thx
You responded to the wrong comment, moron.
Maybe worry less about Hines and more about Marcus & Millichap
I completely agree. Arguably you learn a hell of a lot more when things are going badly as opposed to everything being rosy.
Anecdotally - Hines has been relatively active on West Coast with Multi Acqs. 4 deals in the last year and will likely do well on them
Turns out that this "Hines" shop is still pretty decent!
Hines has definitely taken a hit. Not sure why they went cheap on their last couple of analyst classes but it’s resulted in sub par talent. A lot of their home grown talent has jumped ship too. They need a culture makeover for sure
I wouldn’t put the blame on the analysts
I wasn't blaming them I just observed that as a indicator they aren't getting the best talent like they used to.
I don’t think they went cheap on their analyst. Hines pays slightly above market comps for juniors
What position
What office
How much
Their IM business is humming which is a segment that is extremely high margin which is likely supporting segments (development in particular) that are struggling in current environment.
You can't execute on reputation alone, they need high quality folks w experience on the ground. That is lacking in certain cases.
The Atlanta shop is notoriously underwhelming for such a productive region. They’ll do a cool deal like the heavy timber office building every now and then, but the real killers left over a decade ago to start their own thing.
Ooh a heavy timber office building that best case breaks even.. wonder why the killers left.
Don’t know the full details but heard that the Atlanta office did pretty good on Fenton
I worked with them very closely when I was in rx on a big CRE port that featured some government properties. Those auctions went horrifically, non-gov went well.
The prop managers who managed the gov props were all let go, maybe that’s it. This port has a few properties very very close to the pentagon and a few other critical sites so the valuations were pretty boilerplate.
It did end up being another valuation fight tho.
LPs on a lot deals are screwed. Hines got their fees. No chance on the promote.
Makes sense why many of the heavy hitters have either left or moved to other companies. It also explains why the shift toward a private equity model is happening, rather than focusing solely on real estate development.
For what it's worth, my comment was market-specific, not Hines-specific. It's still one of those firms where, if you get an offer, you take it.
They’re working with McKinsey who is advising them on a firmwide reorganization.
Lol because that worked out so well the last time
“Guys, going forward we think you need to increase revenues and decrease expenses.”
'Have you heard about this new thing data centers? You should build them, all of them, cheaper than anyone else but offer tenants like the very best terms.'
The thing you have to understand about Hines is that it was built more on a franchise model, where people in the 80s and 90s left the Houston office, and started offices in different cities and countries, and then paid a share of their income back to Houston. The discrepancies among regions is because some regions had good leaders and some not so much.
The struggle since the mid 2000s has been a battle to pull control and operations back from these independent fiefdoms into a centrally run firm, because they couldn’t scale up without doing so.
The restructuring in the late 2010s was a push for more fund based business, over one offs sourced by the local offices.
The recent layoffs were a final consolidation of the separate us regions into one top down managed us organization.
hence to removal of tommy criag
He was also nearing 70 years old…
At a certain point you have to step aside and let the next generation take over.
That actually has been a problem Hines for a long time, senior leaders never leave so there isn’t room for people to move up. Less of a problem now, but 10 years ago every senior leaders was someone who joined Hines in the 70s and had been there 40 plus years.
Hub and spoke model operators / developers centralizing operations to the mothership is a popular play call right now.
The belief is that the shift creates margin and shifts the balance of power back to the C-Suite, which is true for the most part.
The issue is attrition and neglecting the folks that got the company to where it is.
Problem is, HQ doesn't care - they've got the data, know-how, and local track records to build out higher-margin verticals (IM) with far less overhead (namely salaries) while limiting participants in the promote pool (more money for less people).
American form capitalism at its best but in my opinion its not always the right strategic move. Bigger is not always better for real estate platforms.
Alienating local leaders, as it seems Hines has done, in an effort to produce more consistent, reoccurring revenue streams, is a strategy I simply don't agree with.
Yes, I am biased - no I don't care what the numbers suggest - taking appropriate risk and understanding local landscapes will always yield the most dollars for operators/developers, even it if doesn't always translate to company valuation.
Layoffs haven’t been for producers in local offices, more for back office roles.
A lot people left on their own, because their ongoing deals are so underwater they have 0 chance of promote on active deals, might as well start over somewhere else
I will confirm that Hines is not an organization that you will want to work at or partner with from mutliple touchpoints. The senior executive (from the executive team to the senior managing directors of the regional teams) of the firm have self promoted themselves (to higher levels and more compensation) at the expense of the balance of the organization. There was a reorganization two years ago to shift Hines from a development, hub and spoke model to a centralized investment management firm. They fired 20% of the back of house staff to catalyze the change with the idea of more compensation for investment teams and direct lines of communication with leadership. However, the restructure was executed poorly without any clearer lines and comp that only grew 10% from analyst to managing director, which is already at a severe discount to other investment management platforms and some developers. The South regional team lost 14 out of 25 of their strongest investment staff in the last year and a half from analyst to managing director. What's remained are the more senior individuals who have not been able to execute/find pipeline/grow the regional platform. Hines still operates under a P&L that senior managing directors control. Many of the regions, including the South, were underinvested by their leaders in the last cycle, which has only left less resources and thus less pipeline so it's turned into a death spiral (less resources to grow pipeline then less developement and acquisition revenue so less resources and then less development and acquisition revenue so on and so forth). The investment management portion of Hines has not been able to raise any significant LP capital to invest alongside the regional teams so the situation continued to expand. Hines is a blatantly unprofessional organization at best and incredibly toxic at worst with LPs and other GPs taking notice. The once strong reputation has started to wear off and will continue to diverge. A lof of the remaining MDs are resting on their laurels and/or are completely void of intelligence and empathy.
As an anecdote, I have heard that a managing director yelled and accosted his junior development team member because the breakfast that was ordered for a contractor meeting had too many melons and not enough berries..... If that doesn't exemplify the issues at Hines, I don't know what does.
Late to the party here but this is a phenomenal assessment. I formally worked at Hines and the lack of HR presence (at least in the Midwest) was horrific. Folks were often encouraged to take grievances to the VPs who would sweep them under the rug. There was a GM who had gone through something like 4 rounds of staff and the firm continued to shift folks around from buildings to support him and hope that it would stick rather than investigate. From a business standpoint they were poor at putting standardized processes in place which causes a very siloed system and mass confusion when moving from one property to the next. I am not at all surprised that they are fairing poorly.
I think they'll be okay...maybe they'll close fewer deals over the next few years and they may lose a few people, but there will always be people who want to work there given the name, and always new deals to be had. A few big name fund LPs are still partnering with them BTW. I've seen it first hand.
given the name... what name? LOL
everyone i knew in NYC has left or got laid off.
Same here and I knew a lot
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