A landmark office tower in downtown Houston is up for grabs, and finding a buyer could be tough given its financial troubles.
The 1.3 million-square-foot TC Energy Center at 700 Louisiana Street has been listed for $285 million, the Houston Business Journal reported. The owner, Houston-based M-M Properties, has hired JLL to market the building, along with the nearby Alley Theatre Center parking garage.
The property is in default, despite recent renovations and a long-term lease from its anchor tenant. As of March, the building had the largest delinquent loan in the country with a balance of $96 million, the outlet reported, citing a report from S&P Global. The loan was transferred to a special servicer in March.
M-M Properties spent $22 million to renovate the site in recent years, adding an 8,000-square-foot restaurant, 10,000 square feet of creative office space, a tenant lounge, conference center and coffee bar.
Previously called the Bank of America Center, the building underwent a name change in 2019 to honor its anchor tenant, Canada-based TC Energy Corporation, which occupies 24 percent of the space and has a lease that runs through February 2036. The building has an occupancy rate of 70 percent; the city average is 74 percent. Tenants include law firm Mayer Brown and accounting firm Calvetti Ferguson.
TC Energy Center, known for its striking red granite façade and stair-step gothic architecture, was developed by Hines in 1983 and later acquired by a joint venture of M-M Properties and an affiliate of the General Electric Pension Trust. The 56-story tower has an assessed value of over $308 million, according to the Harris Central Appraisal District.
Plus, M-M is looking to offload the property at a time when the city’s office sector is struggling mightily, largely because of the remote work movement, high interest rates and a tight lending climate. Office leasing in Houston fell 53 percent in the third quarter, and vacancies are at an all-time high. Distress is also mounting in Houston, with nearly $6 billion of CMBS loans set to mature by the end of next year.
—Quinn Donoghue
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