Interra Buys 600 KSF Houston Landmark Through Foreclosure
Interra Capital Group has purchased The Esperson Buildings, two historic office buildings in downtown Houston totaling 600,000 square feet. The company made the acquisition by foreclosure through a note purchased from Metropolitan Life Insurance Co.
Interra paid $12 million as the highest bidder of the foreclosure sale, Harris County public records show. The seller was Contrarian Capital Management, which owned the iconic pair of buildings since 2012, according to CommercialEdge. The original note totaled $52.8 million and was issued in 2018, then amended in 2022 and reduced to a $41 million loan.
The process was led by Cameron Management, which will continue to act as the Property and Facilities Management team at the asset for a designated period.
A Houston landmark
The office complex includes on two office buildings completed in 1925 and 1941, respectively, both designed in the Italian Renaissance and Art-Deco architectural styles. The façade of the complex features terracotta details, cornices and columns, while offering a mix of office and commercial spaces.
The Niels Esperson Building rises 32 stories, while The Mellie Esperson Building was constructed as an annex that rises 19 stories. Notable interior features include move-in ready coworking spaces, 14 passenger elevators, 31,500-square-foot floor plates, 586 vehicle parking spots and 12,609 square feet of first floor retail space.
Amenities at The Esperson Buildings include a conference center, on-site property management, a food court with multiple restaurant options, healthcare, beaty and spa options, 24-hour security and visitor valet parking services. Notable tenants Amegy Bank, Cameron Management, Impact Hub Houston, The Cannon, MV2 Insurance Solutions, Kerrco Inc. and Sarita Energy Resources, according to CommercialEdge.
The Esperson Buildings are close to downtown Houston and allow easy connectivity in the area, with multiple bus and light rail stops nearby, while being 10 miles from Southeast Houston, 11 miles from William P. Hobby Airport and within 20 miles of George Bush International Airport.
Office investment activity in Houston
Office loan defaults and delinquencies are on the rise in 2024, with $1.87 billion in recently delinquent notes as of June, a recent CommercialeEdge report shows. The office sector’s delinquency rate reached 7.5 percent, marking a 4.5 percent increase in comparison with the same period last year.
Even with discount office purchases on the rise, Houston’s office investment volume remains steady, with office assets changing hands for a total of $451 million year-to-date through June. The amount pushes Houston among the top 10 leaders in office investment in the U.S., while ranking third among Southern markets, after Dallas-Fort Worth’s $510 million and Washington, D.C.’s 1.3 billion.
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