A 442K SF, 19-story office building in Houston’s Galleria area may be foreclosed upon following the loss of its only tenant, oil, gas and chemicals company Bechtel Energy.
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The $80M debt on 3000 Post Oak Blvd. matured March 1, and the special servicer is pursuing “all remedies and potential workout options,” including a potential foreclosure sale, the Houston Business Journal reported. The loan was transferred to special servicing last year.
Bechtell had occupied 99% of 3000 Post Oak Blvd. for four decades before downsizing in a move to CityWestPlace in Westchase. The new lease is for 205K SF, less than half of the 440K SF it formerly occupied.
Bechtel signed its new lease in 2022, and its lease at 3000 Post Oak expired in July 2024. The owner, tied to Connecticut-based Five Miles Capital Partners and AIP Asset Management, expected to default on payments upon Bechtel’s lease expiration, according to special servicer commentary.
The building’s owner had been making interest-only payments since 2020, the HBJ reported. Ownership also explored converting the property for another use but failed to find an equity partner.
The three pieces of debt totaling $80M were issued by JPMorgan Chase in 2020, according to The Real Deal.
Korea-based AIP Asset Management lists Bechtel Tower in its online portfolio, making it the only U.S.-based building in the list.
The property was also carrying $20M worth of mezzanine debt, Morningstar Credit data shows. 3000 Post Oak Blvd. was purchased with a $98M loan in 2014, the same year it was last renovated, according to TRD.
It was originally constructed in 1979. Harris Central Appraisal District valued the building at $72.6M last year.
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