A chronically distressed downtown tower took another hit: its appraisal dropped 20 percent in the last year.
Harwood Center, the 36-story tower at 1999 Bryan Street, is now valued at $51.2 million — just 41 percent of its 2014 valuation of $124 million, according to Morningstar Credit. That’s a 21 percent haircut from its most recent appraisal early last year.
The updated number pegs the 734,000-square-foot tower as worth less than $70 per square foot.
The $90 million CMBS loan behind the property was transferred to special servicing in 2020 for “imminent monetary default.” Owner Fortis Property Group faced foreclosure on the property in 2021; Harwood Center has been owned by its lender ever since.
The property was 51 percent occupied in November, according to the loan’s special servicer.
Harwood Center was built in 1982, and Fortis bought it in 2006. The firm started upgrading the property in 2011, to the tune of $10 million.
About 25 percent of Dallas’ office space sat vacant at the end of the third quarter, Partners Real Estate reported. The city’s central business district is faring worse, at 32 percent vacancy.
The bifurcation of the market is to blame. Newly built space with abundant amenities is hard to come by, while aging offices struggle to attract tenants and some even become obsolete. The trend maps onto submarkets, where companies are ditching their downtown digs for flashy offices in more popular submarkets like Uptown.
In the most recent example, insurance brokerage Lockton Companies inked a deal to occupy 100,000 square feet at Victory Commons One, a 15-story office tower at 2601 Victory Avenue developed by Ross Perot Jr.’s Hillwood Urban in 2022. Lockton is exiting Pacific Elm Properties’ 2100 Ross Avenue in the Arts District.
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