Fort Worth’s office market may have just bottomed out.
Pinnacle Bank Texas bought back the 40-story Burnett Plaza, Fort Worth’s tallest building, for a credit bid of $12.3 million at a recent foreclosure auction, just $12.30 per square foot and less than 10 percent of its previous sale price, the Dallas Business Journal reported.
The previous owner, an affiliate of New York-based Opal Holdings, defaulted on a $13 million loan from Pinnacle, triggering foreclosure proceedings. The Opal affiliate bought the 1 million-square-foot Burnett Plaza, at 801 Cherry Street, for $137.5 million in 2021.
Pinnacle, which was a mezzanine lender on the building, will still have to shoulder a $68 million senior loan from UMB Bank from 2021.
Adding to Opal’s troubles, contractors have filed 10 mechanic’s liens totaling more than $1.6 million against the firm over the past year, alleging unpaid renovation work at the downtown site.
The building’s taxable value is $104.5 million, according to the Tarrant Appraisal District. Its tenants include General Motors Financial, engineering and design firm Kimley-Horn and architecture firm Huckabee.
Burnett Plaza’s staggering drop in value and foreclosure sale reflect the beleaguered state of Dallas-Fort Worth’s office market, which has been hammered by remote-work trends since the pandemic. Historically low demand contributed to a vacancy rate of 22 percent last quarter in DFW, according to Cushman & Wakefield. However, office vacancy in downtown Fort Worth is 11.5 percent, much lower than in the CBDs of other Texas Triangle cities.
Opal sued Pinnacle on April 2, alleging the lender pushed the building into default, the outlet reported.
Burnett Plaza isn’t the only North Texas asset that Pinnacle has taken back from Opal. Earlier this week, the bank purchased the four-building Centerpoint office complex, at 600 Six Flags Drive in Arlington, for $30 million, $66 per square foot, via auction.
Opal allegedly defaulted on a $40 million loan tied to the 450,000-square-foot property. The Tarrant Appraisal District values the complex at $43 million.
—Quinn Donoghue
This story has been updated to include the $68 million senior note held by UMB Bank.
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