Harris County has acquired a mostly empty office building in Downtown Houston, shedding light on the bottom of a market that’s facing mounting distress.
The county paid $26 million for the 20-story building at 1010 Lamar Street, which is 80 percent vacant and foreclosed on, Bisnow reported. The price comes to about $86 per square foot.
Goodwin Advisors marketed the property on behalf of the lender that foreclosed on it. The 300,000-square-foot building was previously owned by Younan Properties, which listed it for sale in 2018 after refinancing and had hoped to make somewhere around $45 million in a sale. The former owner spent $7 million on renovations and renamed it Lamar Plaza.
The acquisition also included a 490-space parking garage at 1111 Main Street, formerly home to the Sakowitz department store. Harris County aims to use Lamar Plaza to consolidate various county offices. A meeting agenda shows a budget request of $9.5 million to kickstart renovations, the outlet reported.
Harris County’s 2021 acquisition of a neighboring property, at 1111 Fannin Street, hints at a potential government administrative hub. The consolidation move aims to eliminate costly downtown leases and circumvent the financial implications of new construction.
The county estimated four years ago that it would cost $85 million to build a government building near the intersection of U.S. Highway 290 and Interstate 610.
The beleaguered state of the property is reflective of Houston’s struggling office sector. The remote-work era, compounded by high interest rates and a tight lending environment, has led to skyrocketing vacancies and an uptick in foreclosures across the city. In Downtown Houston, the office vacancy rate is at 25 percent, prompting the city to explore a tax-incentive program that could spark more office-to-residential conversions.
—Quinn Donoghue
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