RED Development JV Secures $227M Refi for Dallas Tower
A joint venture of KB Asset Management Co. Ltd. and RED Development has received a $227 million refinancing loan for The Union, a mixed-use development in Dallas’s Uptown submarket.
The two-year loan from Goldman Sachs has three one-year extension options. JLL Capital Markets arranged the financing.
The Union consists of office and retail components, which total 505,994 square feet and are 98 percent leased. The 21-story Class A office tower was completed in 2018 and features nine levels of garage parking. Tenants have access to an amenity deck with entertainment space, a tenant lounge, a fully equipped conference center and a fitness facility with locker rooms.
Salesforce, Invesco and the Dallas offices of law firm Akin Gump and accounting/advisory firm Weaver are among the property’s tenants. The project’s retail space is anchored by a Tom Thumb grocery store and the only Dallas locations for Fox Restaurant Concepts’ The Henry and North Italia.
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The location on North Field Street in Uptown offers easy access to Victory Park, the Harwood District and downtown Dallas. It also boasts connectivity via Woodall Rogers Freeway, the McKinney Avenue Trolley and the DART Rail station.
The JLL Debt Advisory team was led by Senior Managing Director Jim Curtin, Managing Director Greg Napper and Vice President Rex Cruz.
Settling down
The Dallas–Fort Worth office market continues to slowly stabilize, although leasing still lags its historic pace, “suggesting that it will take considerable time for tighter market fundamentals to return,” according to a third-quarter report from Avison Young.
One of the challenges for landlords is that most recent leases have been for smaller tenants or for those that are upgrading—but also downsizing—their spaces to adjust for hybrid work arrangements, Avison Young reports.
The Uptown submarket has seen a modest delivery total of 364,000 square feet year-to-date, though about 2.1 million square feet are currently underway. The submarket has a total availability of 26.7 percent, which is up slightly, year-over-year.
A couple of sizable recent office deals seem to span the range of ups and downs in the Dallas market.
Just last month, a joint venture of Enverra Real Estate Partners and Gulf Coast Western acquired Parkway Office Center North and South, a two-building, 230,000-square-foot distressed office campus in Dallas. The seller was Principal Financial, the asset’s former lender, which had foreclosed on the previous borrower, ORBIS Real Estate Fund I, an investment vehicle managed by APEX Pacific Partners Advisors.
Oil and gas company Gulf Coast Western is the largest tenant at the campus and has been there for more than a decade.
In contrast, back in April, a joint venture between Pacific Elm Properties and KDC secured a $290 million construction loan for Parkside Uptown, a 30-story, 500,000-square-foot office project in Dallas. Goldman Sachs Alternatives provided the four-year, floating-rate note.
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