HOUSTON – The oil business may be bleak and Houston’s job growth has ground to a halt. But that didn’t scare away the lenders who just backed the refinancing of the tallest tower in Texas – the 75-story Chase Tower in downtown Houston.
In what could be the biggest refi in the history of Texas real estate finance, JLL’s Tom Melody and John Ream just engineered a $450 million capitalization of Chase Tower and the adjacent 20-story Chase Center at the intersection of Texas Avenue and Travis Street. Combined, the two buildings contain 2.4 million square feet of office space. MetLife provided a fixed-rate senior mortgage while JPMorgan provided mezzanine financing for a term of 11 years.
“Locking in a senior loan at today’s low interest rate lowers the owner’s cost of capital and ensures that two of downtown Houston’s most prominent office buildings will continue to perform at a high level,” said Melody. “In addition, the long-term mezzanine debt we secured demonstrates lenders’ confidence in the market’s office sector.”
The properties are owned by Prime Asset Management, an international firm that has partnered with Hines on a number of developments. Prime Asset recently partnered with Hines to acquire the Houston Chronicle building, which is across the street from Chase Tower. The newspaper relocated its offices to a suburban location and Hines will demolish the Chronicle building and is expected develop a tower there in the next cycle.
June 19, 2016