Galleria-Area Office Building Heads To Foreclosure Auction
A lender is moving to foreclose on a Houston office building that is home to the Texas commercial real estate firm that acquired the property two decades ago.
Starwood Mortgage Capital filed a foreclosure sale notice on Jan. 10 for 5858 Westheimer Road, a 130K SF, eight-story Class-B office building owned by TCP Realty Services, according to Harris County online records.
TCP acquired the Galleria-area property, dubbed the Spectrum Office Building in its portfolio, in 2003. It is the site of TCP’s Houston office, though TCP also has an office in Dallas, according to its website.
Starwood is moving to foreclose after TCP defaulted on a $13.5M loan issued in August 2013, the foreclosure document states. The building is set to be sold at the county foreclosure auction on Feb. 6.
LNR Partners is acting as a special servicer on the loan for 5858 Westheimer, according to the foreclosure document.
TCP Realty Services did not respond to requests for comment. Starwood directed an inquiry to Starwood Property Trust, which also did not respond to requests for comment.
Tenants in the building include a design-build firm, a law firm, a periodontist and a power company, according to an online search of the address.
The Harris Central Appraisal District valued the building at $12M as of January 2023, up from $11.3M a year earlier.
The Spectrum Building wouldn't be the first Houston-area property Starwood has moved to foreclose on in recent years.
In 2022, Starwood Property Trust foreclosed on and took ownership of Houston’s Marathon Oil Tower, previously owned by M-M Properties. Starwood CEO Barry Sternlicht told analysts in November 2022 that there was an opportunity to convert the 1.2M SF, 41-story building to residential or sell it.
Another large foreclosure happened in Houston's office market in October last year, when lender Pacific Life Insurance took ownership of Four Westlake Park, a 588K SF building in the Energy Corridor.
Houston’s office delinquency rate is 13.38% with about $555M of CMBS debt considered delinquent, a Savills fourth quarter 2023 office report states.
