The fate of a distressed Dallas office tower is becoming clearer as lenders take steps to foreclose on the property.
Mortgage holders on the 253,000-square-foot building at 4144 North Central Expressway, formerly known as Amberton Tower, have appointed a trustee to begin the foreclosure process, the Dallas Morning News reported.
The landlord, Whitestone Uptown Tower LLC, defaulted on a loan of more than $14 million, which matured Oct. 1. The owner, Pillarstone Capital REIT, had “been working to extend the maturity date and to find new financing for the Uptown Tower property,” according to a Securities and Exchange Commission filing. But it appears that the firm failed to renegotiate a more favorable deal.
The 12-story office building, constructed in 1982, houses tenants like Fiser Wealth, Worth Ross Management, Hotel Brokers of America and Hightower Law Group. It has an occupancy rate of 80 percent and is performing slightly better than the Dallas-Fort Worth average of roughly 75 percent, according to Connect CRE data. A small sublease space is currently being marketed for $20 per square foot.
The building is just east of Central Expressway, five blocks from the Katy Trail and near the Uptown subdistrict. It’s a five-minute drive from Klyde Warren Park, where new office construction is nabbing big leases from banks and law firms seeking to rightsize to amenity-filled destinations.
The troubled state of 4144 North Central is the latest sign of office distress in DFW. The region’s office sector, akin to most major U.S. markets, has been pummeled by the pandemic-fueled remote work era. This year, increased interest rates have compounded the issue, along with wary lenders making it tough to secure funds for purchases, refinancing and necessary renovations.
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Over $3 billion commercial property loans in DFW appear to be in distress, the outlet reported. Three North Texas office buildings were recently threatened by foreclosure, and more foreclosure proceedings could ripple through the region as loan maturities come due.
—Quinn Donoghue