TPG Buys Fifth Harwood District Building For Trophy Office Upgrade
With office rents in Uptown Dallas going through the roof, a San Francisco-based firm just secured a controlling interest in 1.2M SF there that it plans to elevate to trophy status.
After purchasing four buildings in Dallas’ Harwood District last year, TPG added a fifth property and plans to recapitalize the portfolio and invest "significant capital" to upgrade the existing Class-A office space, according to a press release. The recapitalization will be completed in partnership with the district’s developer, Harwood International, which will retain a minority interest as a co-investor.
“With surging demand for premium office space across the submarket, we look forward to making strategic investments to modernize each property, enhance the tenant and visitor experience, and meet the workplace needs of premier tenants across the District,” TPG partner Jacob Muller said in a statement.
The newest member of TPG’s portfolio is the 210K SF Harwood No. 3 at 2727 N. Harwood St. Law firm Jones Day anchors the building, which was constructed in 1999.
The four Harwood District buildings previously sold to TPG are:
- the 320K SF Saint Ann Court 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., completed in 1996;
- and the 167K SF Frost Tower at 2950 N. Harwood St., which was delivered in 2015.
The firm plans to immediately begin renovations at Harwood No. 3, Frost Tower, and Saint Ann Court, with improvements to the buildings’ lobbies, tenant amenities, and garden and greenscape areas.
TPG partnered with OliveMill Holdings to manage the portfolio’s office assets, while CBRE will oversee property management and leasing for the buildings. Harwood will continue to operate the retail and restaurant space within the district.
Newmark’s Bill Fishel, Chris Murphy, Chad Lavender and Alex Foshay represented Harwood in the transaction.
Asking rents at DFW trophy office buildings rose to their highest point ever in the fourth quarter at $75.48 per SF. The newest trophy buildings in Uptown helped push that number to a record high, as Cushman & Wakefield Senior Research Manager Andrew Matheny said rents at those properties can go for $100 or more per SF.
That rent growth has been fueled by DFW's development as a financial hub and the emergence of Y'all Street ahead of the planned launch of the Texas Stock Exchange this year.
Harwood previously announced it would work with longtime adviser Newmark to recapitalize its office portfolio to support the next phase of development in its 30-acre master-planned community.
However, the company also lost two of its buildings to foreclosure last year.
San Francisco-based Spear Street Capital took over the 221K SF Harwood No. 4 in early April with a $73M credit bid. And Cawley Partners bought Harwood No. 1 in December after First United Bank seized the building with a $27M credit bid the month before.
Harwood’s next project is set to be a 340K SF office building at 3008 N. Harwood St. in its namesake district. The $120M Harwood No. 15 was originally announced in 2023 with work to start last year, but it has been delayed.
