Greenway Plaza Could Get New Life After $465M Default As Receiver Steps In
A court-appointed receiver has selected new management and leasing agents for Greenway Plaza in an apparent effort to market the 10-building, primarily office campus whose owners defaulted on the property this past summer.
Cushman & Wakefield will lease and Lincoln Property Co. will manage Greenway Plaza, a distressed multi-use Houston campus with 4.5M SF of office space. The property is home to several large Houston firms, including Occidental Petroleum and Invesco Investment Management.
“Greenway Plaza’s significance as a cornerstone of the Houston office market cannot be overstated,” Charlie Giammalva, executive vice president of Lincoln Property Co., said in a press release.
Special servicer comments indicate that the receiver — Trigild, according to Cushman & Wakefield — is marketing the property for sale.
The joint venture owners of the complex, CPP Investments, Nuveen Real Estate and Silverpeak Real Estate Partners, defaulted when their $465M CMBS loan issued by Goldman Sachs matured last year. Trigild became involved after the borrowers said they couldn't keep up with loan forbearance payments this summer.
Trigild didn't respond to an emailed request for comment.
The loan was transferred to a special servicer in July 2022, according to special servicer comments Trepp provided to Bisnow. Before the forbearance agreement’s expiration in July, the joint venture indicated it wouldn't be able to continue funding any capital expenses or leasing costs absent a restructure.
A consensual receivership order was entered by the court in August, and the real estate will be marketed for sale, the comments say. The complex’s value dropped 60% this year, from over $1B to $425M, lower than the value of the loan, The Real Deal reported.
The property was previously managed by Parkway Property Investments, which owned 51% of the joint venture prior to its acquisition by the Canadian Pension Plan Investment Board in 2017.
“As the property manager for this iconic project, Lincoln will bring a highly experienced team of professionals that has worked on large, complex assignments like this one, with a focus on delivering efficiency, elevated maintenance and unmatched tenant experience,” Giammalva said in the release.
Greenway Plaza properties include 10 office buildings ranging from 209K SF to 912K SF, a 97K SF food court and dining hall, an 89K SF Lifetime gym, spa and café, and ground-level retail.
The campus was originally developed by the late Kenneth Schnitzer of Century Development. Its occupancy is hovering around 66%, according to special servicer comments.
“Greenway Plaza ownership has done a tremendous job enhancing the project over the years to meet the needs of today’s corporate user,” Cushman & Wakefield Executive Managing Director Michael Anderson said in a news release. “We plan to carry the torch and maintain the high standard that has been set, and we’re already seeing excellent leasing activity at the complex.”
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 rented at Greenway Plaza since 1987.
Other significant tenants include Invesco Investment Management, Camden Property Trust, Boardwalk Pipeline, Crowe, Magnolia Oil & Gas and Stephens Insurance.
Campus amenities include Primrose School for childcare, retail banking, coworking concepts, a dry cleaner, a florist and hair salon, commercial printing and graphics, green space, event space and a conference center, according to Cushman & Wakefield. A 388-room Doubletree by Hilton hotel with meeting and banquet facilities is part of the complex.
