$80M Loan On Post Oak Office Building Moves To Special Servicing
The loan on a 442K SF Houston office building is in special servicing following the departure of its only tenant, oil, gas and chemicals company Bechtel Energy, according to Morningstar Credit.
Bechtel signed a lease in 2022 to downsize and move to CityWestPlace in Westchase. Its lease at 3000 Post Oak Blvd., a 19-story office building just south of The Galleria, expired in July, according to Morningstar.
Bechtel had occupied 99% of 3000 Post Oak Blvd. for four decades before that. The company hosted a grand opening in March for its new office at Building 3 in CityWestPlace, which is about 205K SF, less than half of the 440K SF it occupied at 3000 Post Oak Blvd.
The late August transfer to special servicing wasn’t unexpected, Morningstar said. The loan was added to a special servicer watchlist last year, the Houston Business Journal reported.
The three pieces of debt totaling $80M were issued by JPMorgan Chase in 2020, according to The Real Deal. The debt is scheduled to mature in March 2025.
Ownership of the building is tied to Connecticut-based Five Miles Capital Partners and Korea-based AIP Asset Management, according to the HBJ and TRD. The property was also carrying $20M worth of mezzanine debt, Morningstar data shows.
Cushman & Wakefield told the Houston Chronicle in 2022 that it planned to renovate the building as the new headquarters for another major tenant and said it was already seeing inquiries. But it seems those plans didn't pan out.
The building owner has retained architecture firms to assist in evaluating future options for the building, but it expects to default on loan payments due to Bechtel’s departure, according to servicer commentary.
3000 Post Oak Blvd. was purchased with a $98M loan in 2014, the same year it was renovated, according to TRD. It was originally constructed in 1979. Harris Central Appraisal District valued the building at $72.6M this year.
