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Houston

Choudhri defaults on $18M loan for Post Oak office complex

JLL marketing non-performing loan attached to Class B property, which is about 84 percent vacant, as a redevelopment opportunity

Choudhri Defaults On $18.6M Office Loan
Jetall Companies’ Ali Choudhri and Veritex Community Bank's C. Malcolm Holland, with JLL brokers Sean Ryan, Tom Hall and Kyle Kaminski and 50 Briar Hollow Lane in Houston (LinkedIn, JLL, Veritex Bank, Jetall Companies)

Ali Choudhri is in the throes of an ownership conflict as a defaulted loan comes up for sale. 

An LLC linked to Choudhri, the CEO of Jetall Capital, defaulted on the loan at 50 Briar Hollow Lane, a Class B office asset in Post Oak. The property’s two buildings span over 195,000 square feet, and its value was recently appraised at $22 million. 

JLL’s Sean Ryan, Tom Hall and Kyle Kaminski are marketing the property’s $18.6 million loan. The loan amount comes to almost $113 per square foot.

Veritex Community Bank, formerly Green Bank, issued a $20 million loan in December 2013 to the former owner of the property, local businessman George M. Lee. A Choudhri-linked entity, BDFI LLC, acquired that loan, which had about $18 million outstanding, in March 2018 and then acquired the property through foreclosure, according to court documents.

A series of payment defaults led up to the loan’s eventual maturity default in September 2022. After its maturity, the property was put up for foreclosure auction in October. Choudhri acquired it during the foreclosure sale via another one of his LLCs,  Galleria West Loop Investments, according to property records.

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The motivation behind a lender’s decision to sell off the loan — in lieu of foreclosure — is usually a desire to evade ownership of the distressed property. Typically, an individual or entity will buy the defaulted loan at a discounted price, initiate foreclosure and take ownership. 

The property was built in 1978 and renovated in 1999. The aging infrastructure of Houston’s office sector has become a looming concern as leasing momentum is favoring newer, higher-quality properties. 

As of June 2023, it was only 16 percent occupied, and one of the buildings was fully vacant. Positioned equidistant from Houston’s Galleria and River Oaks neighborhoods, it is being marketed as a potential multifamily redevelopment. 

Choudhri is currently battling Canadian lender Romspen over the ownership of another Inner Loop office building, at 1001 West Loop South, the former Xerox building, where Jetall Companies is headquartered. 

Romspen attempted to foreclose the property on February 6 due to a default on a $21 million loan, but the Choudhri-linked entity that owns the property filed for bankruptcy that same day halting the foreclosure. Now, Choudhri is disputing Romspen’s claim on the property, citing an invalid transfer of liens and property title. 

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Jetall CompaniesJLLVeritex Community BankAli Choudhri
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