Former Jetall-Owned Building Ready For 'New Phase' With Full Vacancy

The new owner of a storied Galleria-area office building is ready to turn the page on its recent drama and legal battles and reopen it to tenants.

SLS Properties bought the I.M. Pei-designed building at 2425 W. Loop S. in a receivership sale. SLS repositioned the 285K SF building, last owned by troubled Houston real estate investor Ali Choudhri, and tapped Transwestern’s Kelli Gault, Jack Scharnberg and Doug Little to lease it.

“We have basically taken this building from the ground up,” SLS Properties founder Danny Sheena said.

When SLS got control of the building, only one elevator was working. It has now modernized and updated all the elevators, replaced the nonworking chiller system and the roof, updated lighting in the parking garage, repaired the interior floors, and ensured the building is lease-ready.

SLS rejected all existing leases through the prior owner’s bankruptcy process so it could spend time overhauling the entire building, Sheena said. It is now 100% vacant and ready for move-in.

“All the past issues, the drama, the legal issues are all behind,” Sheena said. “We are ready for a new phase of this building. Any tenant that comes in will very quickly understand that SLS takes care of their tenants, and the history of this building will not affect anything that they do.” 

The Class-B building, once the headquarters of the defunct department store parent company Stage Stores, was at the center of a yearslong legal battle involving attempted foreclosure and, later, an involuntary bankruptcy for Choudhri’s Jetall Cos.

National Bank of Kuwait, which loaned Choudhri $60.2M for the building in 2018, is a creditor in the bankruptcy case. Choudhri spent a few days behind bars in April after a federal judge found him in contempt of court for failing to file proper bankruptcy schedules and financial statements. 

Sheena said he is focused on the future of the property, which is adjacent to undeveloped land that billionaire Tilman Fertitta bought last year after scooping up the River Oaks District mixed-use development across the street. 

Fertitta's purchase offered “numerous opportunities for the district’s expansion,” a press release said at the time, though Fertitta is now serving as President Donald Trump’s ambassador to Italy.

The River Oaks District expansion is in the conceptual phase, Sheena said, but he hopes to eventually add another driveway to the building in that direction. 

“Whenever I have an office building that's contiguous to a really, really nice, high-end facility, it's a no-brainer to buy it,” he said. 

The building also neighbors The Greenleigh, a Marriott-affiliated hotel under construction in the former Hotel Derek building. 

The fully vacant building offers tenants a wide range of size needs opportunities, said Gault, a senior vice president for Transwestern. She noted that there aren’t many options for leases as large as 2425 can offer. 

The building’s 285K SF are spread among 11 floors, offering larger floor plates than usual, and there is potential for tenant signage on the building.

“This could appeal to a lot of groups that are looking citywide, and especially given its location in the heart of The Galleria, across the street from The Galleria Mall, it's got great visibility,” Gault said. 

The building also has fame due to its renowned architect, she said. Pei also designed Dallas City Hall and the Louvre Pyramid in Paris.

“Not many buildings can say that the same architect that designed the Louvre is the architect that designed this building,” Sheena said. “It's very impressive.”