Fort Worth’s office market may have just hit bottom.
Pinnacle Bank Texas repurchased Fort Worth’s tallest building, the 40-story Burnet Plaza, at a recent foreclosure auction for a credit bid of $12.3 million, just $12.30 per square foot, less than 10 percent of the previous sale price, according to the Dallas Business Journal.
The previous owner, an affiliate of New York-based Opal Holdings, was unable to repay a $13 million loan from Pinnacle, which triggered foreclosure proceedings. An affiliate of Opal bought the 1 million-square-foot Barnett Plaza at 801 Cherry St. in 2021 for $137.5 million.
Pinnacle, which was the building’s mid-term lender, is required to assume a $68 million senior loan from UMB Bank starting in 2021.
Adding to Opal’s woes, contractors have filed 10 contractor foreclosure lawsuits totaling more than $1.6 million in the past year against the company for unpaid bills on downtown renovations.
The building has a taxable value of $104.5 million, according to the Tarrant Appraisal District. Tenants include General Motors Financial, engineering and design firm Kimley-Horn and architecture firm Huckabee.
Barnett Plaza’s staggering value decline and foreclosure sale reflect the plight of Dallas-Fort Worth’s office market, which has been hit hard since the pandemic and the rise of remote work. Historically low demand contributed to Dallas-Fort Worth’s 22 percent vacancy rate last quarter, according to Cushman & Wakefield. But downtown Fort Worth’s office vacancy rate, at 11.5 percent, is much lower than the CBDs of other Texas Triangle cities.
According to the media, Opal sued Pinnacle on April 2, alleging that the lender had forced the building into default.
Barnett Plaza isn’t the only North Texas asset Pinnacle has repurchased from Opal: Earlier this week, the bank purchased the four-building CenterPoint office complex at 600 Six Flags Drive in Arlington at auction for $30 million, or $66 per square foot.
Opal is said to have defaulted on a $40 million loan tied to the 450,000-square-foot site. The Tarrant Appraisal District values the complex at $43 million.
—Quinn Donahue
This story has been updated to include $68 million in senior notes held by UMB Bank.
