It Starts: First Mega-Foreclosure Hits Houston Office Market
by Wolf Richter
WolfStreet.com
July 22, 2016
A nasty quarter at the epicenter of the Great American Oil Bust.
Greenspoint Place, a 1.5-million-square-foot, six-building office and retail complex on 36 acres, whose occupancy plunged below 40% when Exxon Mobil moved to its new campus, was sold at a foreclosure auction on July 5. It crowned a nasty quarter in Houston’s oil-bust office market.
The complex was owned by a partnership of two giants: one of the world’s largest developers, Hines, and the General Motors Pension Fund. They’d acquired it in the 1990s. In July 2012, they’d refinanced the first mortgage of $145 million with Northwestern Mutual.
Letting the lender deal with the problems was the logical solution. In early June, Hines told the Houston Business Journal in an email:
“Considering the average occupancy rate in this depressed submarket is only about 50%, due largely to the fact the energy market is hurting, ownership of the asset will be turned over to the lender. We believe that is the best course of action for the property at this juncture.”
The Rest…HERE
