Several investors are flocking to a distressed office building in Uptown Dallas in hopes of snagging it a sweet discount.
Three offers are on the table for Uptown Tower, a 12-story office property, at 4144 North Central Expressway, that entered bankruptcy and was foreclosed on last year, the Dallas Morning News reported.
The owner, a Houston-based real estate investment trust, defaulted on a more than $14 million that matured Oct. 1. The lender, Morgan Stanley Mortgage Capital Holdings, financed the 253,000-square-foot building with a $16.5 million loan in 2013.
The building’s future was discussed at a hearing earlier this week in U.S. Bankruptcy Court for the Northern District of Texas, including purchase offers, a swap of listing brokers, the addition of special counsel and approval to retain a mediator for a fee, the outlet said.
A $26 million bid by Dallas-based Dogwood Commercial was the highest offer, slightly lower than the property’s appraised value of $27.6 million. The other two entities that inquired have not been disclosed.
The Uptown Tower landlord also wants to switch the listing agent from Marcus & Millichap to Dallas-based Weitzman, which received conditional approval. Judge Michelle V. Larson thought switching brokerages was infeasible, calling it “an alligator pit I don’t want to jump in” since the court previously approved a six-month agreement with Marcus & Millichap, the outlet reported.
Concerns were raised during the hearing regarding potential double fees and the strategic direction for marketing the property. Marcus & Millichap would take a 3 percent commission of the sale price, while Weitzman’s commission would be 2 percent.
Marketing Uptown Tower as an office building would be preferred over exploring residential conversion opportunities, citing recent leasing momentum, said Joyce W. Lindauer, the owner’s attorney.
The building is just 57.7 percent leased, but a law firm that’s in talks to lease an entire floor could boost its occupancy considerably. Opportunities for renewed leases, lease extensions and new leases for Radford & Associates and Westside Contracting Group were also on the docket.
—Quinn Donoghue
