Midtown Houston Office Building Owner Sues To Prevent Foreclosure
Control of Central Square, a 300K SF retail and office building in Midtown Houston, hangs in the balance due to a lease clause that triggered a foreclosure attempt and a subsequent federal lawsuit, according to public records.

The 14-story building at 2100 Travis St. was scheduled to appear at this month's Harris County foreclosure auction, with its lender alleging a tenant vacating part of its lease triggered a nonmonetary loan default.
The building owner has responded with a lawsuit, temporarily stopping the foreclosure in an apparent attempt to keep long-term control of the asset.
Central Square's owner is Midtown 2100, an LLC tied to Keeley Megarity, president of Claremont Property Co. Claremont redeveloped the property, which had sat vacant for almost 15 years, after buying it in 2013.
Midtown 2100 later secured a $36M loan on Central Square in March 2022, records show. But that lender, Wilmington Trust National Association, acting as trustee of Wells Fargo Commercial Mortgage Trust, filed in December to sell the building at a Jan. 7 foreclosure auction in Harris County.
The lender allegedly cited a “critical tenant trigger event” as the reason, pointing to the city of Houston vacating part of its lease two years ago, according to court documents.
Now, Midtown 2100 has filed a lawsuit in response, arguing that it is current on its loan payments and denying there was a critical event justifying a nonmonetary default. That lawsuit, filed in Harris County on Dec. 31 and later moved to the U.S. Court for the Southern District of Texas, successfully secured a temporary restraining order to prevent the January sale, though the property could go back on the block as soon as next month.
Midtown 2100 said in its Harris County lawsuit that the city of Houston agreed to lease 44K SF on the ninth and tenth floor of Central Square for 10 years, starting in 2019. Before moving in, Houston expanded its lease by another 22K SF on the fourth floor, according to the suit.
But the city provided notice in 2022 that it would vacate that additional expansion space and moved out of it in March 2023, according to the court filing.
About 18 months later, on Sept. 6, 2024, Wilmington sent a notice of default based on the city vacating the expansion premises. Later the same month, Wilmington sent another notice, purportedly revoking Midtown’s right to receive and use rents and other revenues from the property and claiming that money now belonged to Wilmington, the lawsuit states.
Wilmington upped the ante on Dec. 9 last year, filing a foreclosure sale notice with the Harris County Clerk's Office.
In its lawsuit, Midtown 2100 claims that because Wilmington was unable to take control of Midtown’s money, “Wilmington now seeks to take the Property in violation of the Loan Agreement and Loan Documents.”
Wilmington has not filed a response to the lawsuit, according to online records. Attorneys representing both parties and building owner Megarity did not respond to Bisnow's requests for comment.
Through the contentious back and forth, the city of Houston has continued to pay rent on the vacated office space, which has a lease through 2029, most recently on Dec. 24, the petition states. The building’s website shows availability on nine of its 14 floors, including the fourth floor, but not floors nine and 10, where the city leases 44K SF. The first floor has about 8K SF of retail space available, according to the website.
Lease clauses more commonly impact the retail industry, where smaller tenants can get a discounted rent if an anchor business closes down or vacates in some cases, said Matt Bendzlowicz , vice president for Morningstar Credit Analytics, speaking broadly on lease clauses triggering foreclosures.
While he doesn’t expect this kind of office foreclosure proceeding to become a trend, Bendzlowicz said there is now greater sensitivity among landlords when a critical tenant leaves during a difficult time for the office market.
“There’s not as much of a curb appeal [worry] as retail, but it makes the whole leasing process that much more difficult when you’re showing the property or you’re trying to get somebody in it,” he said.
That sensitivity could lead a lender to take quick action in hopes of getting ahead of any potential issues, Bendzlowicz said.
“The lender is worried about the collateral, and you just don't want to sit around,” he said.
Foreclosure filings are sometimes used as negotiation tactics, and lenders dual-track other workout methods while having foreclosure paperwork initiated just in case it is needed, Bendzlowicz said.
But in this case, Houston having four years left on its lease doesn’t seem to point to a reason to immediately panic, though it’s impossible to know the private motives behind any given financial decision, he added.
Bendzlowicz said it seems this case quickly escalated from “zero to 100,” culminating in a federal lawsuit, but the court will determine whether there was a breach of contract.
A stipulation signed by U.S. District Judge Charles Eskridge on Jan. 8 states that the lender may post the property for the next foreclosure sale on Feb. 4, but it cannot proceed if an injunction is granted that extends past that date. All parties agreed to request that the court set a preliminary injunction hearing before the February date, according to the filing.