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Commercial
Houston

Distressed Houston tower listed for $285M 

TC Energy Center had largest delinquent balance in nation, $96M as of March

700 Louisiana Street (Jim Porter from Houston, usa, CC BY 2.0 via Wikimedia Commons, Getty)
700 Louisiana Street (Jim Porter from Houston, usa, CC BY 2.0 via Wikimedia Commons, Getty)

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.

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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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JLLM-M Properties
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DistressListingOffice Tower