Union Investment Lists Prime Uptown Dallas Office Asset

A European real estate firm is divesting from its office assets in the United States, including an Uptown Dallas building.

Texas Capital Center, the 21-story home to Texas Capital Bank’s headquarters, is up for sale as owner Union Investment pivots to grocery-anchored retail, the Dallas Business Journal reported. The asking price wasn’t disclosed.

The German firm is offloading the 485,000-square-foot building at 2000 McKinney Avenue, a highly visible high-rise overlooking Klyde Warren Park. The building, in Dallas’ most in-demand office market, is about 83 percent leased. Texas Capital Bank extended its lease by 15 years and tripled its space in 2022. The building also houses STK Steakhouse, Miriam Cocina Latina and includes amenities like a fitness center and a 1,300-car garage.

JLL’s Mike McDonald and Jonathan Napper are leading the marketing effort.

Union Investment acquired the building for $221 million ($456 per square foot) in 2016 and rebranded it after the bank’s lease extension. The firm spent $3.6 million on renovations in 2023.

The sale comes as Union Investment turns to retail and multifamily properties, sectors the firm says offer more stability and growth in the current market. Union’s head of Investment Management Americas Matt Scholl said the move reflects a “growth-oriented investment approach” and is “a timely opportunity” to reallocate capital.

Other Union-owned Texas assets include the 330,000-square-foot 5600 Granite Parkway in Plano, which it bought from Granite Properties for $163 million ($494 per square foot) in 2018. It also owns 1000 Main Street in Houston and Research Park Plaza III & IV in Austin.

Uptown has largely defied the office vacancy slump. The district has attracted financial tenants and developments, positioning it as a hub of the burgeoning Y’all Street, with Bank OZK’s move to Granite Properties’ 23Springs and the construction of Goldman Sachs’ $500 million campus at the North End, between Victory Park and the Katy Trail.

— Judah Duke