- What Hines and Ivanhoé Cambridge are in the market for a new loan on an office building in Houston
- Why The duo completed development of the property in 2021
- What next The financing could carry a fixed or floating rate
Hines and Ivanhoé Cambridge are looking to refinance an office tower in Houston with up to US$468m ($654m) of fresh debt, Green Street News can reveal.
The duo started making the rounds with lenders over the past few weeks, seeking a five-year mortgage on the 1.2m sq ft Texas Tower. Newmark is advising on the financing, which could carry a fixed or floating rate.
The proposed debt is being pitched at proceeds levels ranging from US$352m to US$468m, though market pros expect it to land around US$425m. The property, at 845 Texas Avenue, is around 95% leased, with a weighted average remaining lease term of nearly 13 years.
Hines and Ivanhoé teamed up to develop the 47-storey skyscraper beginning in 2018. Hines paid US$45.4m for the parcel in 2015. At the time, the property housed the offices of the Houston Chronicle newspaper, which was moving out of the city’s downtown, and used the address 801 Texas Avenue. It’s unclear whether Ivanhoé, a unit of Québec pension manager CDPQ, was part of that 2015 transaction or entered later.
The duo completed the tower at the end of 2021, financing construction with roughly US$318m of debt from New York Life Real Estate Investors. The building has a LEED-platinum designation, a rooftop garden, a fitness centre and a conference center.
As the project was wrapping up, the owners signed several large leases, including one for law firm Vinson & Elkins (212,000 sq ft) and another for Hines (155,000 sq ft), which moved its headquarters to the tower. A year ago, the partners signed Clifford Chance and Morgan Stanley to almost 100,000 sq ft in aggregate, and agreements on 500,000 sq ft total have been inked or begun in the past year.
The property is on the full block bounded by Milam, Prairie and Travis Streets and Texas Avenue, along the edge of the city’s central business district and Theater District.
The financing is one of the first large loan deals Newmark is pitching on an asset in the region since it brought aboard former Eastdil Secured managing director Clint Frease a few weeks ago. Frease is a vice chair in Dallas, where his responsibilities include a range of loan advisory services. He also has a lead position on Newmark’s data centre capital-markets team.
