Foreclosure looks likely for a mostly empty Houston office building.
Lenders are moving forward with foreclosure proceedings on the 19-story, 441,523-square-foot tower at 3000 Post Oak Boulevard in Houston, owned by Korea-based AIP Asset Management and Stamford, Connecticut-based Five Mile Capital Partners, the Houston Business Journal reported. The building has been floundering since the departure in 2023 of its anchor tenant, the Reston, Virginia-based engineering and construction company Bechtel, which formerly occupied about 99 percent of the building.
JPMorgan Chase & Company issued an $80 million loan to the borrowers in 2020 that matured in March 2025. In the interim, the loan went to special servicing twice: in 2022, when Bechtel announced plans to leave the building, and in 2024, when the borrowers struggled to pay down the loan.
Three mortgage trusts acquired the loan in 2020, including Benchmark 2020-B18 Mortgage Trust and DBJPM 2020-C9 Mortgage Trust, the outlet reported.
The special servicer — LNR Partners, a subsidiary of Greenwich, Connecticut-based Starwood Property Trust — was assigned to the loan in September 2024, according to the publication.
Bechtel told local outlets in 2022 that it was leaving 3000 Post Oak Boulevard for a smaller lease at Orlando, Florida-based Parkway Property’s CityWestPlace campus in Houston’s Energy Corridor. Today, it occupies Building III in the complex, at 2105 CityWest Boulevard, according to its website. CityWest’s website lists Bechtel as the only tenant in the 207,000-square-foot building, which is less than half the size of Bechtel’s old office on Post Oak Boulevard. Houston-based BMC Software, Norway-based energy company Equinor and Charlotte, North Carolina-based conglomerate Honeywell also occupy the CityWest campus.
Harris County valued the property and improvements at 3000 Post Oak Boulevard at $45 million this year, according to the publication. Loan servicers appraised it at $143.9 million in 2020.
The borrower has been making interest-only payments since 2020, according to loan servicing notes. The office was built in 1979 and last renovated in 2014.
It’s not the only older office space struggling to attract tenants in Houston. The metro’s office market clocked 27 percent vacancy in the first quarter of the year, with almost half of all vacant space concentrated in a fraction of the city’s inventory, mostly older and amenity-poor buildings, according to Avison Young.
— Isaiah Mitchell
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