The owner of TC Energy Center, the 56-story tower with a stepped design that has become an iconic feature of Houston’s skyline, renegotiated a $252M loan to save the building from default.
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M-M Properties renegotiated its loan for the 1.3M SF tower at 700 Louisiana St., with lender Starwood Property Trust prepared to extend it for four years, the Houston Chronicle reported. The deal involved buying out a corporate pension fund, M-M’s original equity partner in the tower, and raising another $30M to modernize the building and attract tenants, M-M Properties CEO Ken Moczulski told the outlet.
The refinancing came after M-M Properties became delinquent on the building’s loan in March 2023. The loan was transferred to a special servicer at that time.
After being marketed for sale in 2022 and 2023, the building officially entered default when its $96M loan matured and was marked nonperforming, the Houston Business Journal reported. Moczulski told the HBJ at the time that M-M was in talks with the lender to recapitalize the building.
The building was completed in 1983 and was originally called the Bank of America Center. Developed by Hines, it is one of the most recognizable parts of Houston’s skyline due to its postmodern gothic architecture and dramatic gabled roofline. Hines sold the building for $370M in 2007 to a partnership that included what is now M-M Properties, the Chronicle reported.
M-M Properties refinanced the tower with Starwood 10 years later. It was renamed TC Energy Center in 2019 for the pipeline, power generation and storage company that occupies more than 300K SF. That lease expires in 2036, according to S&P Global.
The $30M raised to modernize the building will add to the more than $20M in renovations the building has had since 2017, the Chronicle reported.
“We’ve crossed the bridge to financial stability, we have enough cash flow to cover the loan and we have this $30M that allows us to aggressively pursue new tenants,” Moczulski told the Chronicle.
The building is about 68% occupied, according to the Chronicle. Starwood is aware of the iconic nature of the building and is supporting M-M Properties in boosting its occupancy, Moczulski said.
Starwood was also the lender and M-M Properties the borrower on 5555 San Felipe, which Starwood foreclosed on and took ownership of in late 2022. Starwood previously floated the idea of finding a buyer to convert the 1.2M SF office building to residential.
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