Old office buildings in Houston continued to weigh on the city’s commercial real estate market in 2025, as investors and owners sought ways to adapt or exit underperforming properties. The largest transaction of the year was Brookfield Properties’ handover of Houston Center, a four-building complex totaling 4.6 million square feet, to its mezzanine lender. AustralianSuper and Stream Realty took control of the property after Brookfield’s efforts to modernize it failed to stem tenant losses, including departures by LyondellBasell and Norton Rose Fulbright.
Owner-occupiers played a significant role in absorbing vacant space during the year. According to Partners Real Estate, buyers who intended to use their purchased space for their own operations removed more than 2 million square feet from Houston’s office market in 2025.
The second-largest sale involved Energy Transfer acquiring the former Marathon Oil Tower at 5555 San Felipe Street from Starwood Property Trust. Starwood had previously considered converting the building into residential units but did not move forward with those plans after taking over following a loan default by M-M Properties. The tower underwent renovations completed in 2022.
Lovett Commercial purchased Lake Pointe Plaza, formerly Fluor Daniel Drive, with plans for demolition and redevelopment into a $1 billion mixed-use community called Lake Pointe Green. The project received zoning approval in the fall and could include up to 720 multifamily units.
Other notable trades included Brookhollow Central I, II & III—sold under court order due to Hertz Investment Group’s financial obligations—and Hines’ sale of 717 Texas Avenue downtown to New York Life. One City Center changed hands with plans for conversion into corporate suites and apartments after losing its main tenant several years ago.
Additional transactions saw Braun Enterprises acquiring Thirty Forty Post Oak for renovation; Jet Lending taking over Clear Lake Central following a loan default; Al Khor Holding purchasing Energy Center I in the Energy Corridor; and Apollo Global Management gaining ownership of Kirkwood Tower after another loan default.
These deals reflect ongoing challenges facing older office properties in Houston as well as emerging opportunities for owner-users and developers seeking new uses for large blocks of space.
