Lenders Bid $61 Per Square Foot for Uptown Charlotte Office

A distressed Uptown Charlotte office tower is staring down a major reset as it hits the bottom of the market.

The 32-story, 587,000-square-foot tower at 400 South Tryon Street drew a lone $36 million bid at a public auction this week, far below its most recent assessed value of $115.3 million, the Charlotte Business Journal reported. The offer of $61 per square foot came from lenders Citizens Bank and Synovus Bank, which foreclosed on the property last year and submitted a credit bid under the name 400 South Tryon LP.

The offer is a stark marker of distress in a market where vacancy and rising capital costs have hammered values.

The auction will remain open for 10 business days to allow for “upset bids” from other potential buyers.

The building’s current ownership group, Los Angeles-based Oaktree Capital and Charlotte’s own Trinity Capital Advisors, bought the property for $133.5 million ($227 per square foot) in 2018 using a $93.5 million loan from Citizens.

The debt was later restructured with Synovus taking on about $30 million of the note. The tower fell into default in July 2023, after the borrower stopped making payments. Trinity co-founder Gary Chesson, who retired in 2021, is listed as the guarantor.

At the time of its auction, the building was only 23 percent occupied, with tenants including LaBella Associates and digital marketing firm Olly Olly. Whoever ends up taking over will be inheriting a property in serious need of repositioning.

Charlotte’s office market is wrestling with stubborn vacancy and falling demand, particularly for older assets like 400 South Tryon, which was built in 1975. The massive value erosion in this case could serve as another comp for similar office distress throughout the region and may drive a further repricing of older towers that haven’t secured significant lease-up or renovations.

— Judah Duke