An $80 million loan backed by a Houston office building was again transferred to special servicing after the loss of a major tenant.
Engineering and construction firm Bechtel occupied 99 percent of the 440,000-square-foot office building at 3000 Post Oak Boulevard. Its exit from the building triggered the transfer, according to Morningstar Credit.
The loan first went to special servicing in 2022 when Bechtel announced plans to leave the building.
The loan was issued by JP Morgan Chase in 2020. It is set to mature next March. The building also carries $20 million of mezzanine debt.
The property is owned by an LLC with ties to Five Miles Capital Partners, which is based in Connecticut; however, it is listed as an asset on Korea-based AIP Asset Management’s website.
The owner purchased the property in 2014 with a $98 million mortgage from Metropolitan Life Insurance Company, loan documents show. That’s almost $223 per square foot.
The 19-story building was constructed in 1979 and renovated in 2014. It was valued at $72.6 million in 2024, Harris Central Appraisal District records show.
Bechtel’s lease was up in July.
The company opted to move its 1,500 Houston employees to Parkway Property’s CityWestPlace, a 35-acre campus in Houston’s Westchase District. The move cut the company’s office space in half, the Houston Business Journal reported.
Houston’s office market has struggled to rebound from the pandemic; the result is distress for the city’s older office buildings, like 3000 Post Oak.
The city’s office vacancy rate rose to 26.3 percent midway through 2024, an increase from 24.7 percent a year ago, according to Partners Real Estate.
But the success of new Class A products continues to raise office rents. Overall, average office rent in the city has risen $0.55 per square foot in the last year.
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