Brookfield Properties’ $470 million commercial mortgage-backed securities loan for two downtown Houston office towers has been flagged for special servicing, according to an April 16 report from Morningstar Credit. The properties involved are One Allen Center and Three Allen Center, both part of the larger Allen Center complex in Houston.
The move signals financial challenges for Brookfield as it faces the risk of default on the sizable loan. This development is notable because it highlights ongoing difficulties in Houston’s office market, where high vacancy rates and declining revenues have impacted property owners.
Barclays Capital Real Estate and Citi Real Estate Funding originated the loan in 2021 to refinance the properties. The original maturity date was set for April 2023, but Brookfield secured three one-year extensions, with the new maturity date now set at April 9. One Allen Center is a 34-story building with 960,000 square feet of office space built in 1972, while Three Allen Center stands at 50 stories and offers 1.2 million square feet of space built in 1983. Together with a third tower, they form a complex totaling over three million square feet of office space and additional retail and hotel amenities.
At underwriting, the two buildings were valued at $704 million and had an occupancy rate of about 80 percent; that figure has since dropped to approximately 76 percent by late 2025. Revenue from these properties decreased from $78 million at underwriting to $63.8 million by year-end, while expenses only saw a modest reduction.
Brookfield invested $150 million into renovations across the complex between phases completed in 2017 and again in 2021—improving amenities and green spaces as well as converting its DoubleTree hotel into what is now known as C. Baldwin.
This latest transfer to special servicing follows Brookfield’s decision last year to turn over another major property—the four-million-square-foot Houston Center—to its lender after struggling with debt obligations there as well. These developments come amid persistently high vacancy rates across Houston’s older office buildings; recent data show vacancy remains elevated at around twenty-seven percent.
