Oaktree Capital Faces Charlotte Office Tower Foreclosure

The legal battle over a 32-story office tower in Uptown Charlotte is heating up as lenders pursue foreclosure proceedings against the property’s owner.

The dispute centers around a $93.5 million loan from Citizens Bank and Synovus Bank to finance the 2018 acquisition of 400 South Tryon; it was purchased for $133.5 million by Oaktree Capital Group and Trinity Capital Advisors, the Charlotte Business Journal reported. The building spans 587,000 square feet, so the purchase price was $227 per square foot.

The lenders sued the ownership last month, alleging a default on the loan that occurred in July 2023. More than $90.7 million in outstanding principal and interest are due as of Nov. 4, according to the lawsuit.

The court appointed Lewis Taulbee of JLL as receiver.

The tower underwent significant renovations, including upgraded lobbies, elevators and a fitness center, prior to Oaktree’s acquisition.

The lenders argue that they have suffered “irreparable harm” due to their inability to take control of the asset. The next hearing in the case is scheduled for Jan. 9, when the court will determine whether the receivership will become permanent.

Uptown Charlotte is a major hub for development. Recent projects include the renovation of the Spectrum Center by the Charlotte Hornets, which is set to enhance fan experiences with new seats, larger suites and improved hospitality areas next year.

Additionally, a joint venture of Asana Partners and MRP Realty is spearheading an office-to-residential conversion of the former Duke Energy building. Despite challenges in the office market, the Uptown neighborhood saw a decrease in second-quarter vacancy rates due to an influx of leasing deals.

—Andrew Terrell