Tallest building in Texas city sells for astonishingly low price
- Burnett Plaza was purchased in a foreclosure auction for $12.3million
- The block-like complex stands at 567ft tall in Fort Worth, Texas
- The 40-story building was sold three years ago for more than $137.5million
The tallest building in Fort Worth, Texas has sold for a mammoth price drop.
Burnett Plaza was purchased in a foreclosure auction for $12.3million just three years after it was sold for more than $137.5million.
The 40-story building was bought by Pinnacle Bank Texas during the auction at the Tarrant County courthouse on Tuesday.
According to public records, Pinnacle claimed that the building's previous owner, Burnett Cherry Street LLC, an affiliate of New York-based Opal Holdings LLC, failed to pay a $13million loan that was used to purchase the tower in 2021.
This is the latest in the country's commercial real estate ticking time bomb problem as office buildings across the country remain empty or sell at drastically low prices.
Burnett Plaza was purchased in a foreclosure auction for $12.3million just three years after it was sold for more than $137.5million
The 40-story building was bought by Pinnacle Bank Texas during the auction at the Tarrant County courthouse on Tuesday (pictured, its foyer)
Ronny Korb, the charter president of Pinnacle Bank Texas
The mammoth building, built in 1983, is also considered the largest commercial office and retail space with over one million square-feet, according to its website.
The block-like building located at 801 Cherry Street, sits near a public urban park and is 567ft tall.
Dallas Business Journal reported that the complex was recently appraised at $104.5million by Tarrant Appraisal District.
General Motor Financial, Kimley-Horn and Associates, Huckabee and Freese and Nichols are among some of the tenants inside the building.
Contractors filed 10 mechanic's liens that totaled more than $1.6million against Opal Holdings LLC that alleged unpaid renovation work at the site, Dallas Business Journal reported.
According to documents, one of the liens totaled to about $1million and was filed by Tyrant Construction Services for renovations to the 19th-floor bathroom and two suites.
Contractors filed 10 mechanic's liens that totaled more than $1.6million against Opal Holdings LLC that alleged unpaid renovation work at the site
Alongside California, New York, Florida, Texas and New Jersey also saw an increase in commercial foreclosures in March. (pictured: A building in Midtown, Manhattan with a 'For Rent' sign on it)
A staggering 19.6 percent of US office spaces is unoccupied- the emptiest they've been in the last 40 years
On April 2, Opal sued Pinnacle and alleged that the lender forced the building into default.
Pinnacle Bank Texas is run by Charter President Ronny Korb who has been an officer at the bank since 1999, according to the website.
The bank itself is family-owned and operated with 29 locations across the Lone Star state and 167 locations in eight other states.
Last quarter, vacancy in the building was at 22 percent, as vacancy in the Downtown Fort Worth area was hit at just 11.5 percent, according to The Real Deal.
Commercial and office real estate has hung on by a thread as foreclosures have ramped up across the US as soaring interest rates and the slow return of workers to office spaces have started to take their toll.
Alongside Texas, California, New York, Florida and New Jersey have also seen an increase in commercial foreclosures.
In March, there were around 625 commercial real estate foreclosures- up six percent compared to February and up 117 percent from the same time in 2023, according to latest figures from real estate data provider ATTOM.
187 properties faced foreclosure in California in March, which was an all time high for the state.
Shorenstein, a real estate investment management company, recently put the 62-story Aon Center in Los Angeles on the market for $153.5million, down from the $269million it paid 10 years ago.
Shorenstein, a real estate investment management company, recently put the 62-storey Aon Center in Los Angeles on the market for $153.5 million
Blackstone paid more than $600 million for the 26-storey landmark (left) in 2014
An empty office building is seen in San Francisco as the Bay Area reached a record 34 percent in vacancy rates
In January, the world's largest private equity fund, Blackstone, put its landmark New York City building on the market for a quarter of what it originally paid.
Blackstone paid around $600million for the 26-storey tower at 1740 Broadway in 2014 and has since offered it to anyone willing to pay the $150million left on the mortgage.
Small and regional banks are the biggest source of credit for the commercial real estate market, holding about 80 percent of the sector's outstanding debt.
'I think this is an existential moment,' said RXR real estate boss Scott Rechler.
'This post-COVID world of higher interest rates, the changing nature of how people work and live, we're not going back to where we were, and it's going to be turbulent.'
A staggering 19.6 percent of US office spaces are unoccupied - the emptiest they've been in the last 40 years.
The record slightly passed the highest record which was recorded at 19.3 percent in 1986 and 1991. The lowest percentage of vacant offices happened in 1976 at approximately six percent.
In October, Microsoft joined the Bay Area's 'tech-xodus' - advertising up to 49,000 square feet of their offices for sublet
An empty office building is pictured in the Bay Area, where San Francisco has hit a record high of 27.1million square feet of vacant space
Following the surge in unoccupied office buildings in the 80s and 90s came a surge in overbuilding as cheap land, specifically in the south, has continued to struggle in cities such as San Antonio, Dallas and Austin, Texas.
In 1991, cities such as Fort Lauderdale and Palm Beach in Florida and New Orleans were the three leading cities in the US to face vacancies.
At the time, banks were known to finance proposed spaces even if there were no tenants to fill the buildings. Developer Bruce Eichner said that the nearly one million square- foot Manhattan office building he built in the 1980s was '100 percent empty.'
In October, Microsoft joined the Bay Area's 'tech-xodus' - advertising up to 49,000 square feet of their offices for sublet as the city continues to spiral into a 'doom loop.'
Meta and LinkedIn also sublet their office spaces in the city as vacancy rates hit a record high of 34 percent in September as shops were driven out of the downtown area by heightened crime.
