Four years after its opening, the troubled Downtown mall-office complex known as Houston Pavilions may sell for $50 to $75 million below the cost of its construction. To avoid foreclosure on a loan valued at $130.7 million, the developers turned the property over to a receiver late last year; Transwestern is now marketing the project for sale. Offices are fully occupied, but the big problem is the 59-percent-vacant retail portion of the project, says Real Estate Alert: “More than half of the retail tenants haven’t been paying full rent because the overall retail occupancy rate remains below the prescribed threshold cited in their leases. A buyer could convert about 42,000 sf of vacant retail space into offices to exploit downtown Houston’s booming office market . . . However, a conversion of all the retail space isn’t an option, because doing so would make it impossible to meet the retail occupancy threshold necessary for the existing tenants to pay full rent.” [Real Estate Alert; previously on Swamplot] Photo: Flickr user cjt3
About SwamplotSwamplot covers real estate, home design and renovation, architecture, and the landscape of Houston, Texas. Swamplot did not flood during Allison — or Ike! Honest!
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