Monday, March 23, 2009
Dallas' Elm Place high-rise posted for foreclosure
One of downtown Dallas' largest office skyscrapers is scheduled for foreclosure.
Elm Place's listing may signal a coming wave in commercial property foreclosures, analysts say. The 52-story Elm Place tower at 1401 Elm St. has been posted for forced sale by lenders who are owed more than $22 million for the office building and other downtown properties.
Built in 1965 as the First National Bank tower, the 1.3 million-square-foot skyscraper was once the tallest west of the Mississippi River.
But in recent years, the dark gray glass and white marble building has been largely vacant as tenants have opted for new office locations.
An official with Peloton Real Estate Partners, which leases the building, said Friday that he was aware of the possible foreclosure, set for the first week in April, but could provide no further information
Bank of America, which for years housed some back office operations in the lower floors of the building, signed leases last year to consolidate those operations in other buildings.
Elm Place and the nearby 10-story 1025 Elm Building – also posted for foreclosure – are owned by real estate partnerships that have had the buildings since the early 1990s. The partnerships are 1025 Elm Holdings and Elm Street Portfolio LP.
Downtown office leasing agents say that they aren't surprised that Elm Place is facing foreclosure.
"Because of its age, this just unfortunately isn't the class of buildings we are seeing a lot of tenants go for," said Phil Puckett of CB Richard Ellis Inc.
The pending foreclosure of Elm Place is the highest-profile commercial mortgage default in North Texas in more than a decade.
"This is the biggest one I've seen in the Dallas area in a long time," said George Roddy, president of Addison-based Foreclosure Listing Service.
In 2008, commercial property foreclosure postings in the Dallas-Fort Worth area were up 30 percent but remained relatively low compared with high volumes seen here in the late 1980s and early 1990s.
Analysts have warned, however, that commercial building foreclosures are likely to soar this year because of the credit crunch and worsening economic conditions.
When Elm Place opened 44 years ago, it was hailed as an icon for Dallas' growing skyline.
Designed by noted Dallas architect George Dahl, the $35 million tower was clad in more than eight acres of dark gray glass and white marble imported from Greece. There was an observation deck on the 50th floor, a 300-seat auditorium and a "roof garden" on top of the eight-story base of the tower.
By STEVE BROWN / The Dallas Morning News