Harwood International’s financial unraveling has claimed another piece of its Dallas empire — and this time, it’s the one that started it all.
First United Bank, based in Oklahoma, received ownership of Harwood No. 1, the Dallas developer’s first office development, after a foreclosure auction last week, the Dallas Morning News reported.Â
The seven-story, 106,000-square-foot building at 2651 North Harwood Street sold for $27.2 million, or $257 per square foot.
The property, built in 1984 for watchmaker Rolex, marked the genesis of what would become the 19-block Harwood District in Uptown.Â
First United provided Harwood with a $37.45 million loan ($353 per square foot) in 2020 and moved to foreclose after the developer defaulted, according to county records.
Harwood No. 1 is only 54 percent leased, sources previously told The Real Deal.
The deal makes Harwood No. 1 the second property the developer has lost to foreclosure this year and the third sent to foreclosure. In April, San Francisco-based Spear Street Capital acquired Harwood No. 4 after a similar default, with plans for multimillion-dollar renovations.Â
Harwood saved Saint Ann Court from foreclosure with a recap deal earlier this year.Â
Another Harwood parcel, at 2840 Bookhout Street, also tied to a First United loan, narrowly avoided the same fate this week. An affiliate, HIC Development XV, filed a temporary restraining order Monday to block its scheduled foreclosure, and both sides reached an agreement to postpone the sale.
Harwood, led by Swiss-born developer Gabriel Barbier-Mueller, is under pressure from mounting debt and sluggish office demand.Â
Since late summer, the firm has sold off four of its signature towers — Harwood Nos. 2, 6, 7 and 10 — to TPG, the Fort Worth- and San Francisco-based private equity firm, in transactions totaling roughly 900,000 square feet. TPG also extended a $100 million loan tied to Harwood’s broader holdings, including the delayed 23-story Harwood No. 15 project.
Harwood tapped Newmark to line up new equity and debt partners as it tries to stabilize its 19-block district, which spans more than 3 million square feet of office, residential and retail space. The long-term vision calls for more than 8 million square feet of mixed-use development.
— Eric Weilbacher
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