A troubled office building in Dallas will soon be in the hands of a lender.
A December foreclosure has been scheduled for the 12-story, 253,000-square-foot Uptown Tower at 4144 North Central Expressway, after the landlord, a Houston-based real estate investment trust, defaulted on a loan of more than $14 million that matured Oct. 1, the Dallas Morning News reported.
In 2013, Morgan Stanley Mortgage Capital Holdings issued a $16.45 million loan on the property. And while the building’s owner had “been working to extend the maturity date and to find new financing for the Uptown Tower property,” the debt has remained in default since August. The lender is scheduled to take back the property on Dec. 5.
The building, formerly known as Amberton Tower, was constructed in 1982 and is 80 percent leased. The Dallas-Fort Worth office occupancy average is roughly 75 percent, according to Connect CRE data. The building’s tenants include Fiser Wealth, Worth Ross Management, Hotel Brokers of America and Hightower Law Group.
Even for properties with relatively strong occupancy rates, like Uptown Tower, rising interest rates and a tight lending climate are creating a slew of financial challenges. Office landlords in DFW are still grappling with remote-work trends, which sent many office markets across the nation into a downward spiral in 2020.
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Foreclosure threatens DFW office buildings
After years of poor performance in the office sector, distress is starting to permeate the region. Over $3 billion in commercial property loans are estimated to be in distress in DFW, the outlet reported. North Texas has roughly 70 million square feet of vacant office space, including subleases.
Three DFW office buildings were threatened by foreclosure in September — the 18-story building at 211 North Ervay in downtown Dallas, the eight-story One Hanover Park building in Addison and the 6400 Legacy building in Plano’s Legacy business park.
—Quinn Donoghue