Dealmaker: JLL Secures $450M to Recapitalize Houston Office Towers

JLL, Chicago, secured $450 million to recapitalize Chase Tower and Chase Center, two Class A downtown Houston office properties.

MetLife, New York, provided JLL’s international investor client a fixed-rate senior mortgage while JPMorgan, New York, provided mezzanine financing with an 11-year term.

JLL Executive Managing Director Tom Melody and Senior Vice President John Ream led the debt-placement team.

“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,” Melody said. “In addition, the long-term mezzanine debt we secured demonstrates lenders’ confidence in the market’s office sector.”

Melody noted that the mezzanine loan carries a floating interest rate for the first year and then converts to a fixed rate for the following 10 years.

The 75-story Chase Tower–Houston’s tallest building–and the 20-story Chase Center total 2.4 million square feet. An underground pedestrian tunnel connects the buildings. Chase Tower includes office and retail space and a sky lobby observation deck while Chase Center includes office and retail space.

In Marin County, Calif.’s North Bay submarket, JLL secured $45.1 million for Jamestown L.P. to acquire Larkspur Landing Office Park, a three-building campus.

JLL Managing Director John Manning, Executive Vice President Alex Witt and Senior Vice President Pavan Malhotra secured the loan from JP Morgan, New York. A JLL investment sales team including Managing Directors Michel Seifer and Rob Hielscher sold the asset on behalf of Equity Office Properties, Chicago.

“Vacancy rates continue to drop across the Bay Area and we’ve seen a significant uptick in investment activity across Marin County,” Manning said. “Lenders were drawn to a Class A office park with a diverse tenant base and proximity to amenities including the Marin Country Mart.”

The three buildings total 199,000 square feet directly across from the Larkspur Landing ferry terminal.