Downtown Houston Historic Building-Turned-Coworking Space Slated For Foreclosure Auction
After a $7.1M loan default, lenders have moved to foreclose on Houston’s historic Scanlan Building, which had been transformed in recent years to accommodate modern office demands.
RGA Reinsurance Co. filed late last month to foreclose on 405 Main St., a 76K SF building owned by a limited liability company tied to Expansive, a coworking firm formerly known as Novel Coworking. Expansive had previously marketed coworking space under its Level Office brand and still lists the building on its website.
Expansive, which has run into foreclosure trouble in other markets, declined to comment for this article, and RGA Reinsurance did not respond to a request for comment.
405 Main Level Office, the LLC tied to Expansive, defaulted on a $7.1M loan RGA issued in October 2018, according to foreclosure documents. Level Office, a Chicago-based coworking business led by founder and CEO Bill Bennett, first acquired the building years earlier, according to archived Chron reporting.
“We want to be able to offer small businesses access to all the amenities that firms like Google are offering,” Bennett said about another Houston location with a stocked bar, a high-tech coffee system and other amenities in 2015, according to Chron’s article.
The Scanlan Building's interior renovations were completed in 2016.
As of late 2020, Novel Coworking offered coworking space across five levels and had tapped Stream Realty Partners to lease up the rest of the building. It offered coworking starting at $99 and offices starting at $599, according to a flyer at the time. Other tenants include a Subway sandwich shop and Bungalow Downtown Dining, an upscale restaurant, on the ground floor.
Expansive counts 45 locations, including 41 owned properties, and 3.8M SF of workspace, according to its website. Three of its locations are in Houston.
The Scanlan Building foreclosure isn’t the first time Expansive has had a lender move to foreclose on one of its properties. Expansive defaulted on a $65.4M loan for a 193K SF Washington, D.C., office building last year. The building sold at a foreclosure auction for $21.2M, according to the Washington Business Journal.
Expansive also surrendered a 31K SF office building in Chicago’s River North neighborhood, the Real Deal reported early this year. The lender on one of Expansive’s buildings in Denver also moved to foreclose last month, Denver Business Journal reported.
The loan for 405 Main St. in Houston matured on Nov. 1, 2023, according to the foreclosure document. The building is slated to appear at Harris County's March foreclosure auction.
The Scanlan Building was the largest building in the city when completed in 1909 on the site of the first official Republic of Texas president’s house. It was named for Thomas Howe Scanlan, a mayor of Houston in the latter half of the 1800s.
Architect Daniel Burnham designed the Scanlan Building to stand 11 stories, breaking the 10-story barrier Jesse H. Jones, a local business and development mogul, had set as his personal ideal for the city, according to historical Houston meeting documents.
