Iconic Houston skyscraper saved from default after owners renegotiate $252M loan

The owner of one of Houston’s most recognizable skyscrapers has renogotiated a $252 million loan tied to the tower that had been on the verge of default. At a time of ongoing upheaval in the office market, the deal between M-M Properties and lender Starwood Property Trust offers a more certain future for the 56-story TC Energy Center at 700 Louisiana. As part of the process, M-M Properties bought out its original equity partner in the tower, a corporate pension fund, said Ken Moczulski, CEO of M-M Properties. Additionally, M-M Properties raised another $30 million to modernize the building and enhance efforts to attract additional tenants. This would be on top of more than $20 million in renovations the building has undergone since 2017.

“We’ve crossed the bridge to financial stability, we have enough cash flow to cover the loan and we have this $30 million that allows us to aggressively pursue new tenants,” Moczulski said. The tower, clad in rose-colored granite and topped with a tiered, gable roof, has been a feature of Houston’s skyline since Hines developed it in 1983. Hines sold the tower in 2007 for $370 million to an earlier iteration of M-M Properties and General Electric Pension Trust. A decade later, M-M Properties refinanced the tower with Starwood, according to Harris County deed records. The tower was marketed for sale in 2022 through early 2023, but it was taken off the market when M-M Properties couldn’t find the right buyer, Moczulski said. The building’s loan went into special servicing in September, he said. A special servicer is a liaison between a borrower and lender who attempts to renegotiate a loan that is at risk of default.