Six DFW Office Assets Headed to Foreclosure Auction

Six North Texas office assets have gone into foreclosure, highlighting mounting distress in the region.

The properties, totaling nearly 1 million square feet, are slated for foreclosure auctions next month, the Dallas Business Journal reported. All of the properties are financed under the same $265 million loan and owned by LLCs tied to Mexico City-based private equity fund the Aztec Fund.

The six properties were acquired between 2015 and 2019. Bank of America, the loan’s originator, has initiated foreclosure proceedings. Evan McGuire of Griffith Jay & Michel LLP is serving as the substitute trustee.

The properties slated for foreclosure auctions are: Pinnacle Park, at 4331 Communications Drive in Dallas; the former Michaels headquarters, at 8000 Bent Branch Drive in Irving; the Intellicenter, at 3701 Regent Boulevard in Irving; Lake Vista Three, at 2780 Lake Vista Drive in Lewisville; Lake Vista Four, at 800 State Highway 121 in Lewisville; and Lakeside II, at 2900 Lake Vista Drive in Lewisville.

The combined appraised values for these sites exceed $130 million, according to tax records. The auctions are scheduled for May 7 in Dallas and Denton counties, although a resolution between the parties prior to the auction date is possible.

The impending auctions underscore the challenges facing Dallas-Fort Worth’s office market, which is still grappling with sky-high vacancies and plummeting property values amid remote-work trends and spiked interest rates.

North Texas has seen an uptick in foreclosures and other signs of distress since last year after years of poor performance in the office sector. The downtown Dallas building at 211 North Ervay Street sold for $8 million via foreclosure auction in February.

Lender Pinnacle Bank Texas recently moved to foreclose on Centerpoint, a four-building complex totaling 450,000 square feet, in Arlington. The owner, New York investor Opal Holdings, defaulted on a $40 million loan tied to the property.

—Quinn Donoghue