Starwood Sells Houston Marathon Oil Tower After Foreclosure

The Uptown Houston office tower formerly known as Marathon Oil Tower has changed hands once again.

Energy Transfer, a Dallas-based midstream energy giant, acquired the 41-story building at 5555 San Felipe Street, the Houston Business Journal reported, citing Harris County property records. The price wasn’t reported.

Florida-based Starwood Property Trust, which took control of the property in 2022 after previous owner M-M Properties defaulted on an $88 million loan, was the seller. Starwood had been exploring options for the property, including a possible residential conversion, but nothing materialized.

The 1.2 million-square-foot tower, built in 1983 as the headquarters for Marathon Oil, underwent a $15 million renovation completed in 2022. Houston-based M-M Properties, which acquired the building in 2018 in a joint venture with Boston-based Baupost Group, oversaw the upgrades, adding amenity floors, a fitness center, redesigned lobby and art installations.

Partners Real Estate previously estimated that only 1.8 percent of Houston office space was suited for residential conversion.

Neither Energy Transfer, Starwood, nor Stream Realty Partners, which manages the building, responded to requests for comment.

Marathon Oil vacated the building in 2021, relocating to 990 Town and Country Boulevard, at CityCentre.

The building sits in the West Loop/Galleria submarket, where office vacancy is 27.7 percent, above Houston’s overall average of 24.2 percent. But the area recorded the city’s highest office absorption in the first quarter, at 339,000 square feet, per CBRE. The broader Houston market posted negative absorption of 231,900 square feet during the same period.

—Rachel Stone