Private equity firm TPG has acquired another office tower in the Harwood district — its fifth property within the 30-acre area.
The firm outlined big plans for its new holdings in a news release Thursday. The announcement provided additional context surrounding Dallas developer Harwood International, its namesake district and its recent financial struggles.
The firm has now lost direct control over seven office towers since early last year.
TPG said Thursday it will recapitalize the five-building portfolio that covers 1.2 million square feet of office space in partnership with the district’s developer, Dallas-based Harwood International.
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Harwood has retained a minority interest as a co-investor in the portfolio. TPG plans to invest $50 million in the properties.
The firm, which maintains dual headquarters in San Francisco and Fort Worth, declined to say how much it spent to acquire the five towers.
“The centrally located district has long been a world-class destination for working, living, and experiencing Dallas,” Jacob Muller, Partner at TPG, said in a statement. “With surging demand for premium office space across the submarket, we look forward to making strategic investments to modernize each property, enhance the tenant and visitor experience, and meet the workplace needs of premier tenants across the District.”
The Dallas Morning News previously reported that TPG acquired four towers from the Dallas developer — Harwood No. 2 (2728 N. Harwood), Harwood No. 10 (2850 N. Harwood), Frost Tower/Harwood No. 7 (2950 N. Harwood), and Saint Ann Court/Harwood No. 6 (2501 N. Harwood).
Deeds show Harwood-affiliated LLCs sold the properties to TPG-affiliated groups in September and October.
TPG’s newest acquisition in the district is Harwood No. 3 (2727 N. Harwood). A county deed recording the transaction was filed Dec. 1.
TPG’s investment in the five towers includes upgrading greenspaces, building infrastructure and common spaces, adding bespoke tenant clubhouses, fitness centers, and food and beverage offerings.
The five-building portfolio will become Class AA status following the redos. The work will begin this year and continue through 2027 and beyond.
Under the arrangement, TPG has partnered with Dallas’ OliveMill Holdings, to help oversee operations of the office assets. CBRE will handle property management and leasing. Harwood will continue to operate retail and restaurant destinations throughout the district.
Global architecture firm Perkins & Will has been retained to oversee interior upgrades, and Dallas-based Studio Outside will lead exterior and landscape enhancements.
“With TPG’s investment, the Portfolio is well-positioned to capitalize on momentum across the metroplex and expand the District’s ability to deliver a thriving, interconnected community where businesses and individuals flourish,” Alexis Barbier-Mueller, Co-President of Harwood International, said in a statement.
Harwood was represented by Newmark executive vice chairman Bill Fishel, vice chairman Chris Murphy, president of North America capital markets Chad Lavender and executive vice chairman Alex Foshay in the deal.
Harwood tapped Newmark to secure equity and debt partners last May. The goal was to recapitalize its office portfolio and the next phase of development within the Harwood District.
TPG provided Harwood with a $100 million loan last year. The Dallas developer used its delayed Harwood No. 15, land held by Harwood No. 16 LLC., sports bar Happiest Hour, and a handful of parcels near North Akard Street owned by the firm as collateral for the loan.
TPG is not the only firm to snap up towers in the district.
Harwood No. 4 was sold to Spear Street Capital in April, after the Dallas developer defaulted on another loan. The San Francisco-based firm has plans for multimillion-dollar upgrades at the property.
Harwood also lost Harwood No. 1 to foreclosure. Dallas-based Cawley Partners purchased the nearly 106,000-square-foot office structure formerly known at the Rolex building.
The firm plans to spend $10 million in finish outs and upgrades, said CEO Bill Cawley.
The Harwood District currently covers 19 city blocks and includes more than 3 million square feet of class AA office, residential and retail space.
The Dallas developer previously said the area will continue to grow, eventually covering 8.1 million square feet of office, retail, hotel and residential development.
Harwood International was founded in 1988. Gabriel Barbier-Mueller is the firm’s founder and CEO.
It’s unclear what’s next for the developer. The firm has not provided updates on the delayed Harwood No. 15 or any future developments.
A Harwood spokesperson did not immediately respond to questions regarding the project.
“Given its location and tenant roster, I’m startled by how much unraveling the Harwood District has gone through in such a short amount of time,” said Steve Triolet, senior vice president of research and market forecasting at Partners Real Estate.