The owner of Fort Worth’s tallest building is accused of leaving renovation bills unpaid.
Over the past year, contractors have filed 10 mechanic’s liens totaling more than $1.6 million against an affiliate of New York-based Opal Holdings, which owns the 40-story Burnett Plaza, at 801 Cherry Street, the Dallas Business Journal reported.
The liens must be resolved for the owner to sell the property or acquire a clear title. The largest, amounting to nearly $1 million, was filed by Tarrant Construction Services for renovations of two suites and the 19th-floor bathrooms.
In addition, Tarrant Construction, JLL Group and Larry Short & Associates, another contractor, have filed lawsuits against Opal and its management entity, adding up to over $1.6 million in damages.
Opal purchased the tower for $137.5 million, under $138 per square foot, in 2021, followed by a renovation of the 1983 building. Despite upgrades, Burnett Plaza’s vacancy rate stands at 26.5 percent, according to Steve Triolet, senior vice president of research for Partners Real Estate. The average office vacancy in downtown Fort Worth is 11.5 percent. The building’s largest tenant is GM Financial, occupying more than 270,000 square feet.
Opal is also squabbling with the building’s lender, Pinnacle Bank, which provided an $83 million loan to help fund the acquisition. Opal recently sued Pinnacle, alleging attempts to force the building into default, interference with management operations and refusal to allow payments to contractors for tenant improvements.
Pinnacle has claimed multiple defaults by Opal for nonpayment and has instructed tenants to make payments directly to the bank.
The troubles at Burnett Plaza mirror broader challenges facing commercial real estate, particularly for older office properties, which have been pummeled by remote-work and flight-to-quality trends since the pandemic. Years of poor performance in the office sector has led to an uptick in foreclosures and other signs of distress since last year.
Despite these challenges, downtown Fort Worth has shown resilience, although the large number of older buildings in the city aren’t nearly as competitive as the newer ones.
“If you’re more than 20 years old, if your property hasn’t been renovated, if it doesn’t have amenities, it’s generally out of favor for most of corporate America at this point,” Triolet told the outlet.
While some landlords are exploring conversions of older buildings into apartments, not all ventures of such have succeeded. The iconic Oil and Gas building in downtown Fort Worth faced foreclosure amid developers’ plans to convert it to apartments, highlighting the complexities and financial strain of revitalizing historic structures.
—Quinn Donoghue
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