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Heron Lakes, a 313K SF office park in Houston, was the country’s second-largest new delinquent loan in January, according to Trepp. Built in 2001, the seven-building park at 7804-7908 North Sam Houston Parkway West missed a $50.3M loan note.
The CMBS loan was transferred to special servicing in December due to the borrower filing for bankruptcy. Mohammad Nasr, who was listed as the borrower, is a part of L REIT Ltd., the firm which filed for bankruptcy in conjunction with Beltway 7 Properties.
Nasr is a Houston architect best known for designing the iconic Heritage Plaza, a 1.8M SF office building at 111 Bagby St., according to Real Estate Direct. He also developed Heron Lakes on a 14.4-acre parcel. It cost about $73M.
The special servicer, Midland Loan Services, found that the borrower secured a second mortgage for $11M, in addition to the first mortgage at $52M. The second loan was secured for personal debts of the borrower, according to Trepp's loan notes. The borrower did not have the lender’s consent to place a lien on the property.
Tenants at Heron Lakes include Intergraph, Surge Operating, Art Institution, Surge Expansion and Caldwell Watson Real Estate Group. Occupancy was 83% at the end of June, per Real Estate Direct.
The financial security of office product in Houston remains a concern for investors due to citywide oversupply and high vacancy. Last month, Trepp identified the five largest office loans in special servicing, including Two Westlake Park at $90.8M and Three Westlake Park at $80M.
CORRECTION, FEB. 28, 9:45 A.M. CT: A previous version of this story did not properly identify Mohammad Nasr's relationship to the bankruptcy. Nasr did not personally file bankruptcy but his company, L REIT Ltd., did.
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