Old office buildings continued to weigh on Houston’s commercial real estate market in 2025, as investors and developers sought new strategies to manage underused properties. According to data from Cushman & Wakefield, several large-scale office trades took place throughout the year, reflecting broader trends of distressed sales and redevelopment plans.
The largest transaction involved Houston Center, a four-building complex totaling 4.6 million square feet at 1221 & 1301 McKinney Street and 909 Fannin Street. Brookfield Properties handed over the property to its mezzanine lender in April after years of tenant losses, including major departures by LyondellBasell and Norton Rose Fulbright. The new owners are a joint venture between AustralianSuper and Stream Realty.
Owner-occupiers played a significant role in absorbing vacant space. Partners Real Estate reported that these buyers took more than 2 million square feet off the market in 2025.
Energy Transfer, a Dallas-based energy company, purchased the former Marathon Oil Tower at 5555 San Felipe Street from Starwood Property Trust. Starwood had previously considered converting the building for residential use but did not proceed with those plans after acquiring it following a loan default by M-M Properties.
Lovett Commercial acquired Lake Pointe Plaza at 1 Fluor Daniel Drive with intentions to redevelop the nearly 1.2 million-square-foot campus into a $1 billion mixed-use community called Lake Pointe Green. The local zoning commission approved plans for up to 720 multifamily units on the site.
Brookhollow Central I, II & III was sold under distress circumstances following an order from a British Virgin Islands court requiring Hertz Investment Group to liquidate assets to pay Israeli bondholders. Dominus Commercial and Meneses Holdings purchased the three-building complex for $58.4 million.
Other notable transactions included Hines selling its downtown office building at 717 Texas Avenue to New York Life; Chicago-based developer 3L Real Estate buying One City Center with plans for conversion into corporate suites and apartments; Braun Enterprises acquiring Thirty Forty Post Oak for renovation; Jet Lending taking control of Clear Lake Central after JMK5 Holdings defaulted on its loan; Al Khor Holding purchasing Energy Center I in the Energy Corridor; and Apollo Global Management gaining ownership of Kirkwood Tower following another loan default.
These transactions illustrate ongoing challenges facing Houston’s office sector as owners respond to changing demand and economic pressures.
