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25-story office building at 1 Riverway Drive in Uptown Houston, owned by Unilev, has narrowly escaped foreclosure despite multiple filings. A substitute trustee has filed foreclosure notices with the Harris County Clerk seven times since April 2022, but the sale has yet to occur. Ongoing negotiations suggest a possible loan workout that could stabilize the building's financial situation.

    The 482,000-square-foot building faced financial difficulties in summer 2022 when its $80 million loan, issued in 2015, was transferred to special servicing due to imminent default. The remaining balance is $69 million. A law firm that leased 11% of the space moved out in January, and Unilev failed to make a debt payment to lender Deutsche Bank subsidiary German American Capital.

    Recent comments from the special servicer, LNR Securities Holdings, indicate that loan renegotiation terms are in the final stages. If successful, Unilev could avoid losing the building to foreclosure. It's not uncommon for foreclosures and workouts to be negotiated simultaneously, according to Morningstar Credit vice president Matt Bendzlowicz.

    Houston's office market hit a low point since 2016 in the third quarter, with net absorption falling to negative 773,000 square feet, according to CBRE.