The National, a 52-story mixed-use skyscraper in Dallas’ central business district, will go into foreclosure, the building’s owner Shawn Todd told The Dallas Morning News.
In an exclusive interview, Todd told The News that he owes roughly $230 million to lender Starwood Capital Group. Starwood is expected to file the foreclosure Friday. His firm, Todd Interests, will not contest the foreclosure. The lender will take the property next month.
Todd cited the current interest rate environment and downtown property values as reasons for handing the property over to the lender. Occupancy in the apartments had fallen below 80%, he said.
Todd added the negotiations were cordial.
“With our debt balance, the interest rate environment and property values downtown… We don’t see a path to us recouping our remaining equity,” he said. “We’ve been committed to downtown. We’ve been committed for 20 years. In 35 years, our firm has never lost money — this is the first year that it’s happened.”
D-FW Real Estate News
Todd and his firm invested roughly $460 million into a redo of the former First National Bank Tower.
Fountain Place building (left) is seen from the the bar and pool deck areas of The National, a 52-story Elm Street building, which has been renovated into a mixed-use project with hotel rooms, apartments, retail and offices in the old First National Bank Tower in downtown Dallas. (Tom Fox/The Dallas Morning News)
Tom Fox / Staff Photographer
The mid-century skyscraper sat empty for a decade before it underwent one of the largest urban restoration projects in the country, and the largest ever in Dallas. The 1.5 million-square-foot office tower became a combination of apartments, hotel rooms, retail and office.
Todd touted the deal in 2019 as the “largest historic tax credit deal in Texas.”
The developers got $100 million in historic tax credits and $50 million in Dallas tax increment financing that made the project viable.
Todd told The News he’s paid back over $150 million on the deal to Stonehenge Capital and AHP, Warren Buffett’s tax-credit group.
Todd Interests refinanced with lender Starwood three years ago, but conversations with the lender weren’t enough to save it from foreclosure.
Major investor Moriah Real Estate and Todd got back 90% of their investment when the loan was refinanced. Much of that money was reinvested in the property in hopes that things would change, Todd said.
“The values aren’t there. That’s the main reason,” he said. “The loan is due, and we’re not going to continue to pay.”
A residential lounge is pictured in The National, a 52-story Elm Street building which has been renovated into a mixed-use project with hotel rooms, apartments, retail and offices in the old First National Bank Tower in downtown Dallas. (Tom Fox/The Dallas Morning News)
Tom Fox / Staff Photographer
Opened in 1965, the tower at 1401 Elm St. was designed by noted Dallas architects George Dahl and Thomas Stanley. When it closed in 2010 as office occupancy declined, it was the largest vacant building in North Texas.
It was the last of the city’s great skyscrapers to be repurposed, according to previous News reporting.
The foreclosure comes after Todd and his firm sold its entire share of the East Quarter to partner J.P. Morgan Asset Management for an undisclosed sum.
Started in 2018, the 20-acre redevelopment on the eastern edge of downtown has been developed by Todd and his sons — CEO Philip Todd and partner Patrick Todd. His firm repurposed and redeveloped historic properties along Cesar Chavez Boulevard as well as Commerce and Jackson streets.
His firm also built the 20-story 300 S. Pearl tower as part of the redevelopment.
Todd Interests is one of the city’s most successful development firms. In addition to The National, the firm was behind the $300 million renovation and rebranding of Dallas’ Energy Plaza into The Sinclair.
With AT&T leaving, can ‘Y’all Street’ save downtown Dallas? Not on its own
City leaders touted Y’all Street as the future of Dallas’ urban core. The reality is more complicated.
Harwood District’s tallest tower refinanced for $161 million and other real estate news
These are the latest sales, leases and deals in North Texas.
The reckoning: Downtown Dallas must wrestle with future after AT&T exodus
Complaints over crime, parking and aging buildings have major employers leaving and property owners wondering what can be done to reverse the trend.