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Posted Feb 6, 2024, 5:33 PM
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FYHA
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Join Date: Oct 2007
Location: Houston - Wichita, KS
Posts: 3,152
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HOUSTON | Three Westlake Park | 260 FT | 19 FLOORS (REDEVELOPMENT)
Height figure from CTBUH
Image from LoopNet
Once part of BP's Westlake Park campus in the Energy Corridor, the building has been vacant since ConocoPhillips moved to their new HQ a mile east of this site in 2019. While other properties in the area found success in landing relocations, this particular building struggled and was sold at a sizeable loss in 2022.
Per Bisnow
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Office Building That Housed Energy Giants Sells At Massive Loss
February 14, 2022
Lane Gillespie,
Bisnow Houston
Three Westlake Park, which once housed BP Corp. and Conoco Phillips, has sold at a $67.4M loss after sitting vacant through the pandemic.
The 420K SF office at 550 Westlake Park was built in 1983, and has been empty since 2019, when ConocoPhillips' lease expired and it completed its move to a new headquarters facility a few miles away. BP, which occupied more than 40% of the property when it was securitized, vacated in 2015.
Facing imminent default, Three Westlake Park was transferred to special servicing in October 2018 and became real estate owned in July 2019, according to Fitch Ratings, which downgraded the property last year, citing "further certainty of losses" of an estimated 10.1% to 18.6%.
According to the Harris County appraiser, the building had been owned by Goldman Sachs Mortgage Securities Trust with Miami-based LNR Partners acting as special servicer. No immediate sales information was available, although TreppWire reported resolution proceeds on the property's loan ended at $20.6M, according to TreppWire, lower than its $25.2M appraised value.
The property was valued as high as $121.2M in 2014. By 2018, it was listed as one of the largest properties in Houston under special servicing, Bisnow reported previously.
The asset had an outstanding balance of $76.3M as of January, according to TreppWire. With liquidation expenses of $11.7M, CMBS investors were left with losses exceeding $67.4M.
It was an expected loss, according to TreppWire commentary. In 2017, Kroll Bond Rating Agency had eyed a $27M loss for the property, with its loan being $80M at the time. But the oil slump worsened its predicament, as vacant and underperforming office properties are typical for energy downturns. The coronavirus pandemic added yet another drag, one the property struggled to get out from under.
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Later that year John Quinlan, a local investor, purchased this tower at auction and sold it last year to form a JV with DeBartolo Development. This is similar to what occurred with Elev8 - the former 1801 Smith Street, which is nearing the end of its conversion to residential.
https://www.houstonchronicle.com/bus...t-18638222.php
Quote:
Former BP, ConocoPhillips office tower transforming into apartments in Houston's Energy Corridor
By Marissa Luck,
Staff writer
Feb 6, 2024
Developers have started to transform a former ConocoPhillips and BP office tower in Houston’s Energy Corridor into a 311-unit apartment building, adding to a growing trend of office to residential conversions taking place across the country.
Florida firm DeBartolo Development is teaming up with local investor John Quinlan to convert Three Westlake, a 19-story office tower known as 550 Westlake Park Boulevard. Quinlan bought the vacant tower in 2022 at an online auction for $21 million and in 2023 sold the tower to a joint venture he struck between his firm and DeBartolo.
Work on the project began late last year, and crews were demolishing parts of the interior this month, a spokesperson for DeBartolo said.
When complete, the apartments are expected to have finishes and amenities similar to those in a residential high-rise in downtown Houston. There will be coworking spaces, a gameroom, a yoga and fitness center, a bike storage room, plus a rooftop pool with grills and cabanas, said Edward Kobel, president of DeBartolo.
“It will feel like a combination of a luxury hotel and a luxury condominium,” Kobel said. “There will be cool amenities like you’d have in a high-rise downtown, but for the rent prices of a low-rise building. It’s an incredible value proposition.”
Proposed rents would be a few cents per square foot above the average for Class A apartments in the Energy Corridor, Kobel said.
Construction would likely take about 18 months, wrapping up likely by late 2025, said Eddie A. Mastalerz, principal at ARC3 Architecture, the architect on the project.
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Renderings from the article...
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Parts of the glass would be replaced and elements of the concrete would be stained to give the 1980s-era office tower a more modern and residential look as part of DeBartolo Development's conversion of 550 Westlake Park into an apartment community.
ARC3 Architecture
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Work has started on converting a 19-story office tower in the Energy Corridor into an upscale apartment community.
ARC3 Architecture
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A rooftop pool and club house is planned at future apartment community at 550 Westlake Park.
ARC3 Architecture
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Work has started on converting a 19-story office tower in the Energy Corridor into an upscale apartment community.
ARC3 Architecture
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The fitness center and yoga room would overlook a detention pond outside.
ARC3 Architecture
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