Harwood Sells 4 Buildings, Secures $100M Construction Loan Amid Financial Issues

TPG purchased four buildings in the Harwood District and plans to lend $100M to the developer behind the Uptown Dallas neighborhood to construct a new office tower. 

The loan should allow Harwood International to finally start work on Harwood 15, a 340K SF building that was originally announced in 2023. Work on the $120M office tower at 3008 N. Harwood St. was expected to start in early 2025 and wrap up in June 2027, the Dallas Business Journal reported.  

A series of foreclosure proceedings this year has raised questions about Harwood’s financial stability.

The property sales to TPG were needed to raise capital for new construction, as the recent foreclosures have negatively impacted Harwood’s credit reputation, according to Steve Triolet, senior vice president of research and market forecasting at Partners.

“They're circling the wagons,” Triolet told the DBJ. “They're trying to do everything they can to get enough capital to go forward with Harwood 15.”

Harwood didn’t immediately respond to Bisnow’s request for comment on the transactions.

The developer's first office project, the 105K SF Harwood No. 1, is scheduled to go to auction Tuesday. Harwood borrowed more than $37M from First United Bank for the building at 2651 N. Harwood St. in 2020, according to The Real Deal. It was built in 1984 for Rolex and was just over 54% leased in April.

Earlier this year, the developer lost Harwood No. 4 after allegedly defaulting on an $80M mortgage, and it nearly lost a separate office building to foreclosure. 

Spear Street Capital took over the 221K SF Harwood No. 4 in early April with a $73M credit bid. 

The 25-story St. Ann Court office building at 2501 N. Harwood St. was slated to be auctioned in early January. However, Harwood agreed to a last-minute deal with Life Co. to recapitalize the property and repay its $138M mortgage.

Then in May, Harwood announced that it would work with longtime adviser Newmark to recapitalize its office portfolio to move forward with the next phase of development in its 30-acre master-planned community.

“With the opening of the Goldman Sachs project in 2027 and the establishment of the Texas Stock Exchange, we are confident in the continued growth of the Harwood District, which we view as the 'Capital Corridor' within Y’all Street,” Harwood International co-President Alexis Barbier-Mueller said in a statement at the time.

The Harwood 15 construction loan from TPG is backed by several Harwood International assets, the DBJ reported. 

The four Harwood District buildings sold to an affiliate of the private equity firm are:  

• The 320K SF Harwood 6 at 2501 N. Harwood St., which opened in 2009.
• The 227K SF Harwood 10 at 2950 N. Harwood St., which was completed in 2019. 
• The 178K SF Harwood 2 at 2728 N. Harwood St., which was finished in 1996.
• The 167K SF Harwood 7 at 2950 N. Harwood St., which delivered in 2015.