Howard Hughes Corp. Obtains $127M Loan for Office Campus

CIM Group provided the financing for the Class A property.

1725 and 1735 Hughes Landing, The Woodlands, Texas
1725 and 1735 Hughes Landing. Image courtesy of CIM Group

A fund managed by CIM Group has provided a $127 million loan to The Howard Hughes Corp. to refinance a 649,406-square-foot Class A office campus at Hughes Landing in The Woodlands, Texas.

Built in 2015, 1725 and 1735 Hughes Landing are 13- and 12-story office towers, respectively. The buildings are situated within Hughes Landing, a 79-acre mixed-use development on Lake Woodlands within The Woodlands Town Center, the walkable urban core of The Woodlands, a 28,500-acre master-planned community.

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Tenants have access to a variety of amenities, including a fitness center, multiple conference facilities and an employee cafeteria, in addition to the numerous restaurants and retail stores at the adjacent Restaurant Row.

The office campus is near several major highways, including I-45 and the Grand Parkway, and 25 miles from Houston’s George Bush Intercontinental Airport.

Wide-open spaces

Houston’s office market ended the year with its first quarter of positive net absorption since the final quarter of 2019, according to a recent report from CBRE. Factors include ongoing corporate relocations to the metro, substantial population growth, major hikes in crude oil prices in 2021 and annual job growth of 2.4 percent, boosted by ongoing diversification of the metro’s economy.

All of that leads CBRE to forecast “a slow rebound going into 2022” for the office market. Still, the average office vacancy metrowide is 24.8 percent.

In The Woodlands, Class A office space is 26.5 percent vacant, with total availability at 34.1 percent, on an inventory of 5.6 million square feet. Net absorption in 2021 was a negative 206,000 square feet—and 476,000 square feet is under construction in the submarket, CBRE also reported.

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