A downtown Dallas office tower along the DART rail line is primed for redevelopment, or that's the sales pitch from brokers marketing the property for an online auction.
Transwestern executives are marketing Harwood Center, a 36-story, 734,443-square-foot office tower at 1999 Bryan St., for the property's owners. Initial bids are due by late Wednesday. Selling properties through an auction is a way to execute a sale with some certainty, according to real estate professionals with knowledge of the process.
The tower is less than 50% occupied and sits on a Dallas Area Rapid Transit light rail line called the St. Paul Station. The office building's largest tenant is Jacobs, followed distantly by a U.S. government office, according to CoStar data. It serves as the global headquarters of Jacobs, a Fortune 500 company that handles massive infrastructure projects.
Jacobs moved its headquarters to downtown Dallas from California in 2016. The company did not immediately respond to an interview request from CoStar News seeking comment on the property from a tenant's perspective.
The office tower built in 1983 is primed for redevelopment, Transwestern executives said in the online offering. There are "multiple redevelopment opportunities" with the property's current zoning and shallow floorplate layout offering an investor the "potential to convert the existing structure to residential or hospitality" or even "re-envision it for a large corporate user," according to the marketing materials.
Transwestern's Mike Hardage, Stephen Simon and Steve Pumper are representing the owner in selling the tower. The brokers are working alongside RI Marketplace in the auction offering. Transwestern didn't immediately respond to requests for comment from CoStar News about the deal.
The auction comes amid ongoing challenges in downtown Dallas. The city's central business district is filled with aging office towers and skyscrapers with a vacancy rate of 26.8%, according to CoStar data.
At least one development group is seeking more than $100 million of city incentives for a proposed redevelopment of Bank of America Plaza, the city's tallest skyscraper in downtown.
The aging properties in downtown Dallas also have a lack of adequate parking, with many towers only offering one parking space for every 1,000 square feet of office space. Harwood Center offers a parking ratio of 1.77 spaces per 1,000 square feet of office space — a lower ratio than what's found in the suburbs with three parking spaces per 1,000 square feet often being the baseline measurement used by companies.
Creighton Stark, president and principal of the office division of Weitzman, said Harwood Center is a "beautiful, high-profile building" but is in the center of downtown Dallas, which has struggled so much over his career, with elevated vacancy and rents that never seem to move.
Stark is not involved with the deal but has decades of experience as an office investment executive in the Dallas-Fort Worth region.
"It's a tough market, but it could be an owner-occupied building for a big company looking to relocate to North Texas or for an investor that wants to do something special," Stark said.