Add an Uptown Dallas office tower to the growing number of distressed office properties in the area, despite several companies relocating to Uptown, as it has emerged as a hotbed for development and real estate investment.
The more than $14 million loan on the 253,000-square-foot Uptown Tower at 4144 North Central Expressway matured Oct. 1, the Dallas Morning News reported. The landlord, an LLC with the same address as Houston-based REIT, was informed by lenders in August that the mortgage is in default.
The loan on the property was transferred to special servicing in June, a sign of serious financial troubles and potential foreclosure, according to reports from Morningstar Credit
In a Securities and Exchange Commission filing, the owner had “been working to extend the maturity date and to find new financing for the Uptown Tower property” but wasn’t sure “that it will be able to obtain an extension of the Uptown Loan or new financing for its Uptown Tower property,” Dallas Morning News reported.
It’s unclear if the investor was ultimately able to renegotiate terms of the loan or receive an extension in the nick of time, as the Dallas Morning News article was published Sept. 29. Thus, the foreclosure process could begin soon if the landlord was unable to to save its asset.
The 12-story Uptown Tower is 80-percent leased. Its tenants include Fiser Wealth, Worth Ross Management and Hotel Brokers of America and Hightower Law Group. The building was acquired in 2013.
The troubled state of 4144 North Central Expressway is the latest example of office distress in the Dallas area. Increased interest rates and a tight lending climate have exacerbated stubborn remote-work trends, which have plagued the office sector since the pandemic.
As of June, about 7.6 million square feet of sublease space was available across Dallas, and nearly 47 million square feet was vacant. And foreclosures were scheduled for three Dallas-Fort Worth office properties last month.
Correction: A previous version of this story incorrectly identified the property owner.
—Quinn Donoghue
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