Loan Tied to Empty Houston Office Heads to Special Servicing

The commercial mortgage-backed securities loan backed by the former Houston headquarters of Spectra Energy was flagged for special servicing after the building has sat empty since 2022.

The $52.5 million loan securitized by JP Morgan was transferred to special servicing in January, ahead of the expiration of Spectra Energy’s full-building lease at the end of April, according to Morningstar Credit. Argentic Services Company is the special servicer. The reason given for the transfer was imminent monetary default.

Spectra Energy, which was acquired by Canada-based Enbridge in 2017, left the building at 5400 Westheimer Court in 2022 when Enbridge moved its operations to Energy Center Five, at 915 North Eldridge Parkway, the Dallas Business Journal reported at the time. Enbridge has continued to pay rent at the former Spectra headquarters.

Morningstar lists the borrower as PTAD Realty, and CoStar identified the entity as related to the DiMare family, which controls DiMare Fresh, a food distribution company. Harris Central Appraisal District lists the property owner as an entity affiliated with Boston-based Winthrop Realty Trust, which liquidated its assets between 2014 and 2020, Securities and Exchange Commission filings show.

PTAD Realty didn’t pay off the loan by its anticipated repayment date in October 2024, according to Morningstar. The loan matures in October 2027. PTAD Realty has since paid down $4.2 million on the loan, bringing its principal to $48.3 million.

The 614,000-square-foot office building was valued at $84.5 million when the loan was issued in 2014. It was last appraised for tax purposes at $71.7 million in 2025. It was built in 1981 and last renovated in 2004, according to Morningstar Credit.

Houston’s office market has been making a slow recovery after the pandemic. At the end of 2025, vacancy was 26.3 percent, down slightly after peaking at nearly 27 percent in 2024, according to reports from JLL.

While annual office absorption in Houston was negative last year, it’s still the highest it’s been since the pandemic, according to a fourth quarter report from JLL. Rounding out the year at negative 311,369 square feet, it far exceeded negative 4 million square feet from 2021, and has steadily increased since then.

The office market’s woes have provided an upside for opportunists like owner-operators, who are increasingly choosing to purchase buildings with low valuations rather than pay rent.