CBRE Scraps Plans To Sell Marathon Oil Tower
CBRE Global Investors has scrapped plans to sell its 1.2M SF Marathon Oil office building in the Galleria area after receiving disappointing bids. It began marketing the trophy tower last fall and had hoped it would bring bids of up to $300M, but fell short by about $50M. That was the same price that CBRE had paid for it three years ago, before pouring new capital investments into it.
CBRE Global bought the Marathon Oil Tower in 2013 from Hanover Real Estate. The company pitched in $7M for upgrades to the space while Marathon Oil invested $12M. Other tenants include Aon, Baker Hughes and Duke Energy, according to Real Estate Alert.
CBRE pulled the building off the market this month and Marathon Oil has now put 81k SF on the sublease market. Its lease doesn’t expire until 2021, which puts the oil company in a bind, particularly if the worsening oil market forces it to shed jobs.
Low oil prices have taken a toll on Marathon Oil’s balance sheet. The company’s revenues have shrunk 23.34% since last year, and it reported a $2.2B loss during its quarterly earnings. To stanch the bleeding, the company will sell up to $1B of assets this year. [REA]
