Houston bills itself as one of the youngest, fastest-growing and most diverse populations anywhere in the world. Despite that great burst of vibrancy, some businesses struggle. Those struggles can happen for a variety of reasons, even in a state that registers as the fourth largest in the nation with nearly three million residents.
The Total Lender Solutions (TLS) team keeps an eye on local real estate markets across Texas to help commercial lenders prepare for trends that may impact their investments. Using PropertyRadar®, we studied the commercial foreclosures in Houston (entering March 2024) and found some interesting numbers and trends that lenders should be aware of.
Houston Commercial Foreclosures by the Numbers
Houston is a good city for commercial real estate investment, with a fast-growing population and diverse array of industries. Lenders can gain valuable insights on Houston’s commercial real estate marketing by looking at the city’s current index of foreclosures.
Here’s what you should know:
- Entering March 2024, there were 103 commercial foreclosures in Houston / Harris County.
- Most of the commercial foreclosures were in Downtown Houston.
- There was a range of commercial foreclosures that included retail spaces, office buildings, vacant lots, warehouses, and more.
In most cases, the foreclosed properties were office buildings and retail spaces.
Office Building Foreclosures in Houston
Most of the commercial foreclosures in Houston were office buildings.
“This follows a nationwide trend that we’re seeing in commercial real estate,” says Randy Newman, founder and CEO of Total Lender Solutions. “Since the COVID-19 pandemic, there’s been less demand for office space because many companies have shifted to remote work. Downtown areas have suffered the most, but you also see these properties struggling in suburban areas.”
For example, there’s an office building in Westwood that’s short about $3 million on its loan, while an office complex in Katy entered foreclosure short $2 million.
Although the Houston suburbs are rapidly growing, this apparently hasn’t changed the outlook for the city’s office buildings.
Retail Foreclosures in Houston
Retail properties also made up a significant portion of the commercial foreclosures in Houston.
Sometimes, these commercial foreclosures happen in areas that are least-expected. For example, there’s a property in Market Square that entered foreclosure short $1.3 million on its loan. This property contains a trendy restaurant in a bustling part of town.
“Location doesn’t always guarantee success,” says Newman. “Lenders should look at the area in general beyond the specific property. While it’s novel that a business believes it can turn around a subsection of a community, if the community has a history or recent downtrend of failing business, it may not make for a good commercial property loan.”
Looking for a Commercial Foreclosure Firm in Houston?
When a commercial property enters foreclosure, lenders should immediately contact a commercial foreclosure firm. These companies can help lenders plan and execute a foreclosure strategy that protects their investment as much as possible. Everything from foreclosure processing to UCC sales are handled by the firm.
Total Lender Solutions can assist lenders who are dealing with a commercial foreclosure in Houston. Our legal team has decades of experience acquiring strong foreclosure outcomes and we’re fluent in Texas real estate law.
Contact us and learn more about our services.
