Howard Hughes secures $130 million in financing for Houston-area office tower

Howard Hughes Holdings Inc. secured $130 million to refinance 9950 Woodloch Forest Drive, a 601,000-square-foot Class A office building in The Woodlands, Texas.

The non-recourse note has a term of five years and amortizes on a 30-year schedule, bearing a fixed rate interest of 7.07 percent. Wells Fargo and Argentic Real Estate Finance originated the loan, public records show.

This refinancing represents 24% of the company’s 2025 maturities, while simultaneously addressing Howard Hughes’ largest debt maturity over the next two years. Bank of America issued the previous $137 million loan in 2020.

The company acquired the asset from Occidental Petroleum Corp. in 2019, as part of a $565 million portfolio deal. Following the purchase, Howard Hughes moved its headquarters to 9950 Woodloch Forest Drive from Dallas.

READ ALSO : Office debt – The underwater mountain

Howard Hughes Chief Financial Officer Carlos Olea said in prepared remarks that the office building was empty when it was acquired but is currently 98 percent leased. Other tenants at the property include McKesson Specialty Health and Lancium Technologies Corp., among others.

An office skyscraper near Houston

The skyscraper at 9950 Woodloch Forest Drive stands 31 stories tall and is part of the Woodlands Towers on the Waterway office campus. The tower built in 2014 has approximately 28,400 rentable square feet of floor slabs, floor-to-ceiling glass windows and column-free interiors.

Amenities include an indoor sports court, lobby café and custom artwork, as well as a 33,000 square foot rooftop terrace, to name a few. The property has received LEED Silver, Energy Star and BOMA 360 certifications.

Interstate 95 is less than a mile from 9950 Woodlock Forest Drive, while downtown Houston is approximately 30 miles away. The Woodlands Mall, a shopping center with 160 stores, is within walking distance.

The high office vacancy rate in Houston

In April, Greater Houston’s office vacancy rate stood at 23.6%, up 30 basis points year-over-year but down 70 basis points year-to-date, according to a recent report from CommercialEdge. Over the same period, the national office vacancy rate climbed 160 basis points to 18.3 percent.

The metro area had the highest vacancy rate in the Southwest in April, followed by Austin (22.4%) and Dallas (21.1%), according to the same report.