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HOUSTON-A Dallas-based company has obtained $8.8 million to pay off a seven-year-old acquisition loan on the 129,732-sf 1900 St. James Place Office Building in the Galleria submarket. The 33-year-old building, which has a checkered history including foreclosure, currently is 61% leased.

St. James Associates LP bought the class B office building on 3.1 acres in 1999, three years after its second foreclosure sale. “This new loan was fixed rate with less interest rate than the bank loan they’d had to buy the building,” David Aaronson with Live Oak Capital Ltd. in Houston, tells GlobeSt.com. The non-recourse, permanent loan has an interest rate in the mid-6% range. American National Insurance Co. of Galveston provided the loan, with Live Oak getting the servicing role.

Aaronson says the original note had a variable rate. “It was cheap when they’d closed, but interest rates had increased above the fixed rates,” he explains.

Aaronson declined to comment on the loan’s specifics, but he acknowledges the lender had been flexible in its structuring as well the pre-payment schedule. “We had some interest and several offers on this,” he says. “Though the income wasn’t there, lenders are looking favorably on Houston.”

Aaronson says the eight-story building is controlled by a master lease. Rockwell Management Corp. in Houston oversees the asset. The current roster includes Barrett Burke Wilson Castle, Petris Technology Inc., Suzanne Bruce & Associates and Gebbia Holding Co.

Despite its strong location, 1900 St. James Place Building has had a checkered history, with Washington National Insurance Co. buying it twice from foreclosure auctions in 1988 and 1996. The building was renovated in 1998 and then sold a year later to the current owner.

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