search

The Real Deal Logo

Trending

Meet the real guy behind anonymous “StripMallGuy” X accountMeet the real guy behind anonymous “StripMallGuy” X accountJeff Sutton sells 717 Fifth Ave to Gucci for $963MJeff Sutton sells 717 Fifth Ave to Gucci for $963MBrookfield forecloses on 2,150-unit Veritas portfolio with uncontested $464M bidBrookfield forecloses on 2,150-unit Veritas portfolio with uncontested $464M bidAdam Neumann’s Flow faces cash crunch at Nashville propertiesAdam Neumann’s Flow faces cash crunch at Nashville properties
Commercial
Dallas

Foreclosure threatens DFW office buildings

Lenders scheduled foreclosures for next month

Foreclosure Threatens Three Dallas-Area Office Buildings
211 North Ervay with Wolfe Investments' Kenny Wolfe, 6400 Legacy Drive and One Hanover Park (Alto 211, Capital Commercial Investments, Madison Marquette)

Office distress has unleashed on Big D, as a trio of Dallas-area properties are on the brink of foreclosure.

Lenders have filed foreclosure notices for the 18-story office tower 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, the Dallas Morning News reported.

Red tape could envelop all of these properties next month, a sign that Dallas’ office sector is still reeling from the remote-work movement, which has been compounded by hiked interest rates and a tight lending climate in recent months. Refinancing a property is like pulling teeth in today’s market, and office landlords across the metro are in a scramble to save their assets.

The 211 North Ervay building was sold to Plano-based Wolfe Investments in April. Wolfe borrowed $13 million from a Utah lender, which has scheduled a Sept. 5 foreclosure. However, the firm secured new construction financing, with plans to convert the site into apartments — an increasingly common tactic among office landlords, despite the high costs to perform such conversions.

One Hanover Park at 16633 North Dallas Parkway in Addison is owned by a Houston-based investment group. It is buried in nearly $32 million of debt. Its lender could also foreclosure on the property next month unless a new loan is provided with more favorable terms. Surrendering the site via deed-in-lieu is another potential option to stave off foreclosure.

Sign Up for the undefined Newsletter

By signing up, you agree to TheRealDeal Terms of Use and acknowledge the data practices in our Privacy Policy.

The five-story Legacy Drive building was recently posted for a possible foreclosure sale, the outlet said. United Bank of Texas made a $15 million loan on the property in 2019. Last year, United and the owner, an Austin-based investor, agreed to a loan extension, which expired at the end of June.

Unless Dallas-Fort Worth’s office market undergoes a miraculous recovery, distress could proliferate. Halfway through 2023, roughly two dozen commercial properties in DFW backed with CMBS loans went into special servicing — a sign of a severely struggling property. Although, half of those properties were hotels.

—Quinn Donoghue 

Read more

Companies and People
Wolfe Investments
Tags
DallasDistressForeclosureRefinancingVacancies