Doug Agarwal’s Capital Commercial Investments is looking to offload a Houston office building after its loan matured in February.
Cushman & Wakefield is marketing the 411,000-square-foot building at 1900 West Loop South in Houston’s Galleria submarket, according to a press release. The 21-story property developed by Hines in 1978 was renovated in 2001. Agarwal’s Austin-based firm bought the property for an undisclosed price in 2022.
“It’s an absolutely gorgeous building,” Agarwal told The Real Deal. “We look forward to partnering with someone new to fill it back up or selling it to someone who can.”
The listing doesn’t include a price, but the property was last valued for tax purposes at $28.7 million, according to appraisal district records.
Agarwal’s firm bought the property with a $40.4 million loan from Bank of America, loan documents show. In October, he secured a loan maturity extension, which provided the firm until Feb. 3 to pay back the loan. Agarwal declined to comment on whether the loan was in default. He said he would consider recapitalizing the property and holding onto it.
Cushman & Wakefield bills the listing as an “opportunity to take part in the strong flight-to-quality” but also describes the building as a “strategic value-add opportunity.”
Agarwal said the building is currently about 75 percent leased, but occupancy will drop to about 64 percent, as pegged in the listing, when an unidentified tenant moves next door. According to Cushman & Wakefield’s listing, the property historically has had an occupancy level of more than 90 percent.
“There’s no shortage of people who want to invest in Houston right now, with oil prices up,” Agarwal added.
Houston’s beleaguered office market, whose vacancy rate remains elevated at 27 percent, has an upside for investors looking to scoop up cheap properties. It’s also provided an opportunity for corporate tenants who have found it’s cheaper to buy an office building than lease one.