Troubled investor Pacific Oak Strategic Opportunity REIT could lose control of a pair of suburban Dallas office buildings, as it faces a $500 million wall of debt maturities on its portfolio this year .
The landlord, formerly known as KBS Strategic Opportunity REIT, faces foreclosure on Palisades Central I & II, at 2425 and 2435 North Central Expressway, according to Roddy’s Foreclosure Listing Service. The properties are scheduled to be sold at a foreclosure auction on March 3.
The Los Angeles-based real estate investment trust allegedly defaulted on the $39 million loan tied to the properties. NexBank provided the mortgage in 2018. The 10-story, 188,000-square-foot Palisades Central I was last appraised at $17.25 million for tax purposes; the 16-story, 241,000-square-foot Palisades Central II was last valued at $27.75 million, appraisal records show.
The buildings are within the 54-acre Palisades master-planned development in the Dallas suburb of Richardson, which is about 15 miles north of Downtown Dallas. They were built in 1981 and 1984, respectively.
The REIT hired Robert A. Stanger & Co., a financial advisory firm, to “explore the availability of strategic alternatives,” as it struggles to stay afloat, Bisnow reported in November.
Pacific Oak said in a June 2025 Securities and Exchange Commission report that it had $512.8 million in debt coming due on its portfolio within the year. Most of the debt is held by investors in the Israeli bond market, a source of cheap capital Pacific Oak has dipped into for a decade.
Meanwhile, Pacific Oak has been rushing to sell off its 2.8 million-square-foot office portfolio to pay its debts. The REIT said in an Oct. 30 filing that it plans to list 16 properties, including the 32-story, 930,000-square-foot office building at 110 William Street in Manhattan. It stabilized the building by restructuring its debt and securing a 640,000-square-foot lease after defaulting on the $349 million loan tied to the property in 2022.
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