Lenders have initiated the foreclosure process on a financially troubled office tower in Dallas.
Houston-based Pillarstone Capital REIT said in a Securities and Exchange Commission filing in August that it had defaulted on the $16.5M loan for Uptown Tower at 4144 North Central Expressway.
The loan, which had $14.4M outstanding, was scheduled to mature Oct. 1, and the company said in its SEC filing that it doubted its ability to refinance. A special servicer took over the note in June.
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Mortgage holders have appointed a trustee to undertake foreclosure, according to county records obtained by The Dallas Morning News.
Uptown Tower, formerly known as Amberton Tower, was built in 1982 and renovated in 1994, according to Trepp. It was 56% occupied as of the end of March, per the SEC filing. County records show it is valued at $27.68M.
Whitestone REIT is the guarantor on the loan and is a limited partner in Pillarstone. The former is actively trying to exit the partnership amid a pair of ongoing legal battles.
In a statement emailed to Bisnow, Whitestone said an existing court order prohibits Pillarstone from relinquishing control of Uptown Tower. Pillarstone didn't immediately respond to Bisnow’s request for comment.
Uptown Tower is one of several Dallas properties in financial straits as rising interest rates put a growing number of owners underwater on their loans.
Three other DFW office buildings could be repossessed, and a lender that holds millions of dollars in debt on a portfolio of hotel properties in Houston and Dallas has also moved to foreclose.
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