MediStar adds $135M student-housing foreclosure to troubles

Foreclosure is looming over a student-housing high-rise in Houston. 

The 19-story Life Tower, developed for the Texas A&M University system, is set to be sold at a Harris County foreclosure auction Tuesday, after developer MediStar Corporation defaulted on $135.8 million in construction financing, the Houston Chronicle reported. Its two loans, obtained from CIM Group in 2021, totaled $76.5 million and $59.3 million. 

CIM Group is slated to sell the 714-bed Life Tower building, at 6919 Main Street, and an adjacent parking garage in the auction. 

The building is part of the mixed-use Texas A&M Innovation Plaza, between Main and Fannin streets. The campus comprises three towers: the Life Tower for student housing, the 18-story EnMed Tower for Texas A&M’s engineering-medicine program, and the 30-story Horizon Tower, which includes life sciences facilities, restaurants, retail and parking.

The foreclosure is not expected to impact the university or its students, due to a 2020 ground lease with Houston-based MediStar in which Texas A&M retained ownership of the land. 

MediStar is facing an unrelated lawsuit from BCEGI, a Chinese investment firm and subsidiary of Beijing Construction Engineering Group. 

The lawsuit stems from a 2017 joint venture to purchase a 20-acre development site near the Texas Medical Center. BCEGI has accused MediStar of attempting to sell the land without its consent, leading to the lawsuit and a temporary injunction blocking the sale.

The conflict intensified when City Choice, a Houston homebuilder, attempted to renegotiate the terms of a $22.5 million deal for the property, citing problems discovered during an inspection. 

Despite BCEGI’s objections and attempts to cancel the deal, MediStar and City Choice pursued the sale, prompting BCEGI to seek court intervention. The court’s injunction temporarily halted the transaction, but the case was subsequently moved to federal court. 

— Andrew Terrell

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