Wednesday, May 07, 2014

Maple Avenue high-rise tower sells for $170.42 Per Sqiare Foot at foreclosure auction

Jake Dean
The 1985-era tower sits near Reverchon Park near Turtle Creek, and is 56 percent occupied. It was last valued at $51.9 million, according to the Dallas Central Appraisal District. Photo: Jake Dean - Dallas Business Journal
One of Dallas' troubled high-rise office buildings -- 3500 Maple Ave. -- was bought by an undisclosed third-party buyer for $64.2 million, after it was sold on the courthouse auction block Tuesday.

The auction of the 18-story building -- which is home to Dallas-based Heritage Auctions -- brought out more than 25 bidders to the Dallas courthouse, said George Roddy Sr., president of Addison-based Foreclosure Listing Service Inc., which tracks North Texas' foreclosure listings.

"The bidding started at $54.3 million and ended at $64.2 million," Roddy told the Dallas Business Journal."It was kind of strange, the trustee gave the bidders cards to hold up, so there was enough bidders to make that happen."

Steve Smith was the trustee on the foreclosure auction. He represented the lender, Wells Fargo, in the foreclosure auction.

The lender posted the 376,710-square-foot mirrored glass high-rise building for foreclosure as quickly as possible after the previous ownership group, known as NNN 3500 Maple VF 2003 & LLC, went through the Chapter 11 bankruptcy process, Roddy told me.

The 33-investor tenant-in-common ownership group bought the property for $66.9 million in 2005, according to a 2012 article in High Rise Facilities magazine. Since the group bought the building, occupancy has dropped and the property's net operating income did not cover the monthly loan payments.

The publication said members of the ownership group had hoped the investment in the tower would help supplement their retirement. The group attempted to stave off foreclosure for as long as possible.

The 1985-era tower sits near Reverchon Park near Turtle Creek, and is 56 percent occupied. It was last valued at $51.9 million, according to the Dallas Central Appraisal District.

"The building is probably worth what they bid for it because of the low occupancy rate,"Roddy told me. "With that kind of occupancy and debt service, it would be hard to break even. It's a great building, but it will take some time to get it back up to where it needs to be."

The Turtle Creek submarket's average occupancy rate is 87 percent for Class A buildings.

Roddy did not have the buyer's name to disclose. Typically, it takes a few days for the building sale to be made public through county deed records.
Staff Writer-Dallas Business Journal