TPG, a private equity firm based in San Francisco, has become the recapitalization partner for Harwood International after acquiring five office buildings in Dallas’ Uptown district from the struggling landlord. The properties, totaling 1.2 million square feet of office space, were sold as part of a process that began last fall and was first reported by The Real Deal.
According to TPG’s announcement on January 29, the company plans to renovate several of these buildings, including Harwood No. 3, Harwood No. 6 (Saint Ann Court), and Harwood No. 7 (Frost Tower). Despite the sale, Harwood International will keep a minority stake in the portfolio.
The latest transaction included TPG’s purchase of Harwood No. 3 at 2727 North Harwood Street, which closed on December 1 according to deed records. Built in 1999, this building is anchored by law firm Jones Day with a lease for about 133,000 square feet out of its total 210,000 square feet. Jones Day had previously planned to move into the future Harwood No. 15 project but withdrew from those plans late last year.
Earlier sales involved four other properties: Harwood No. 2 at 2728 North Harwood Street; Saint Ann Court at 2501 North Harwood Street; Frost Tower at 2950 North Harwood Street; and Harwood No.10 at 2850 North Harwood Street.
These asset sales followed a period marked by foreclosures within the district that resulted in losses for Harwood International. In April, Spear Street Capital reclaimed ownership of Harwood No.4 through a $73 million credit bid after foreclosure proceedings; First United Bank took over another property—Harwood’s first development—at 2651 North Harwood Street with a $27 million credit bid before Bill Cawley’s Cawley Partners acquired it on December 30.
In January, Saint Ann Court nearly faced foreclosure but was retained by securing new capital through recapitalization.
Despite these challenges facing one major landlord, Uptown Dallas remains an exception within the larger Dallas-Fort Worth office market where vacancy rates are high overall. Uptown stands out due to its concentration of premium office properties and accounts for almost half of new regional office developments underway. This submarket also commands some of the highest rents in Dallas-Fort Worth with average gross rent reaching $62.21 per square foot as reported by Partners Real Estate.
“TPG has officially stepped up as Harwood International’s recapitalization partner after scooping up five office properties in the firm’s struggling Uptown district,” according to TPG’s release.
