$465M Loan On Greenway Plaza Defaults, ‘Nowhere Close To Being Resolved’
The joint venture that owns Greenway Plaza, a 4.5M SF office complex in Houston, is no longer able to perform under the forbearance agreement it reached last year after its $465M loan reached maturity default, according to Trepp.
Goldman Sachs is the lender of the $465M commercial mortgage-backed securities loan to the venture between CPP Investments, Nuveen Real Estate and Silverpeak Real Estate Partners. Parkway Property Investments, which owned 51% of the joint venture prior to its acquisition by Canadian Pension Plan Investment Board in 2017, manages the properties.
Greenway Plaza consists of 11 Class-A office buildings, public dining and retail space, and multiple standalone parking garages. The plaza is in a central area of Houston bordered by River Oaks to the north and West University Place to the south.
The borrower’s refinancing efforts were unsuccessful when the loan matured in May 2022, and the loan was transferred to special servicing in July 2022, according to special servicer comments Trepp provided to Bisnow. The loan was ultimately granted forbearance, providing the borrower extra time to seek refinancing and incentivize a full payoff.
The loan has been paid through June 2023, but the forbearance agreement expired July 6, according to the Trepp report. The borrower “recently indicated that it will not perform under that agreement or continue funding any capex or leasing costs absent a restructure,” according to the comments dated June 27.
The special servicer said it rejected that proposal, issued a default notice, filed receivership pleadings and is awaiting the court’s scheduling of a hearing.
The comments indicate that the property's occupancy is 65%, down from 70%, according to Trepp.
The complex's largest tenant is Occidental Petroleum, which made up 27% of base rent as of a 2017 Asset Securitization Report. In June 2020, Occidental extended its 972K SF lease until 2031. The company has leased at Greenway Plaza since 1987.
Invesco Investment Management is the second-largest tenant, according to the Asset Securitization Report, accounting for another 9.2% of base rent.
“All in all, not an encouraging set of comments which was in line with the tenor from last month,” a TreppWire News Flash said Tuesday. “At the time, the borrower stated it would not be able to perform under the forbearance agreement that ended last week. We noted then that the loan was nowhere close to being resolved. That appears to still be the case this month.”
The fixed-rate loan had a five-year term during which only interest was paid, according to the Asset Securitization Report.
Parkway declined to comment beyond saying it is not part of the receivership process.
CORRECTION, JULY 13, 2:59 P.M. CT: A previous version of this story incorrectly identified the ownership group of Greenway Plaza. The article has been updated.
