A Canada-based property investor has handed over a Richardson office campus to lenders.
An affiliate of Vancouver-based City Office REIT Inc. had owned the two-building 190 Office Center on Bush Turnpike since 2015. The office complex built in 2001 and 2008 has more than 300,000 square feet in three-story buildings.
The almost $39 million loan on the property was recently transferred to a special servicer. This week, a receiver was appointed to assume possession of the property, which was financed with mortgage-backed securities represented by a Morgan Stanley Bank of America Merrill Lynch Trust.
City Office REIT “consented to the appointment of a receiver to assume possession and control of 190 Office Center as a result of an event of default,” according to a filing with the Securities and Exchange Commission.
The Telecom Corridor office campus would up in loan default after it lost tenants and vacancies in the buildings rose. Galen College of Nursing is opening a new educational facility in one of the buildings.
The buildings are on the south side of Bush Turnpike, north of the University of Texas at Dallas campus.
City Office REIT officers had planned for the loss of the Richardson properties.
“With respect to the potential disposition of our 190 Office Center property that I mentioned on our last conference call, we continue to explore all of our options and are in discussions with the lender,” CFO Tony Maretic said during the company’s recent conference call with securities analysts and shareholders. “We have non-recourse property level debt on the property, which is advantageous to us.
“In the event that we were to dispose of the property to the lender, we expect there would be an immediate positive impact on our financial position.”
City Office REIT still owns two other Dallas office buildings – the 2525 McKinnon building in Uptown and The Terraces in Preston Center in North Dallas.
The 190 Office Center likely won’t be the last Dallas-Fort Worth office property to wind up in the hands of lenders. Demand for office space has declined since the pandemic. And building owners face challenges with extending current loans or refinancing their properties due to soaring interest rates.
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May 18, 2023 at 06:18AM
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Richardson office campus goes to lenders after default - The Dallas Morning News
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