A Texas-based investment firm has reportedly defaulted on a more than $14 million commercial loan that matured on October 1.
Uptown Tower, formerly known as Amberton Tower, was one of several distressed office properties facing the risk of default at the end of September, The Dallas Morning News reported.
Located in the heart of Dallas at 4144 North Central Expy., the 253,561-square-foot 12-story office tower has been a landmark site since it was built in 1982.
The high-rise is currently about 80% leased and includes prominent tenants such as Worth Ross Management, Hotel Brokers of America, Fiser Wealth, and Hightower Law Group. Despite being 80% leased, Houston-based property owner Whitestone Uptown Tower LLC has struggled to service its debt amid stricter lending standards from banks and skyrocketing interest rates from the Fed.
Lenders notified Whitestone in August that its commercial loan was at risk and would enter default at the start of October. Despite working to extend the maturity date and secure a new financing partner, it remains unclear if the Houston-based LLC succeeded in making the October 1 deadline.
Prior to the deadline, Whitestone explained that it was not able to “provide any assurances on whether it would be able to obtain an extension of the Uptown Loan or new financing for its Uptown Tower property.”
The Dallas Express reached out to Whitestone to find out if it had succeeded in obtaining new loan financing or an extension but did not immediately hear back at the time of publishing.
Whitestone is just one of several investors facing difficulty attaining new loan financing. In total, more than $3 billion in commercial property loans were estimated to be in distress across DFW as of August 2023, The Dallas Morning News reported.
However, large financial firms like Goldman Sachs and Cohen & Steers see the large share of distressed office buildings as an opportunity to benefit from the fallout, and they are raising capital for future real estate acquisitions.
“There are selective opportunities beginning to arise for investors that are in a position to take advantage of weakness,” said Rich Hill, senior vice president and head of real estate strategy and research at Cohen & Steers, as previously reported by The Dallas Express.
Other local properties that have recently faced loan default include the five-story office building at 6400 Legacy Dr. in Plano, as well as the 18-story office tower at 211 North Ervay St. in Downtown Dallas, The Real Deal reported.
