Harwood loses ownership of seventh office tower in its district within a year.

Private equity firm TPG has expanded its portfolio with the acquisition of an additional office tower in Dallas’s Harwood district, marking its fifth property within this vibrant 30-acre area. The firm announced its strategic intentions for these holdings in a press release on Thursday, detailing comprehensive plans for revitalization amidst the background of financial challenges faced by the district’s developer, Harwood International.

Since early last year, Harwood International has lost direct control over seven office towers, a reflection of the shifting dynamics within the local real estate market. TPG’s recent acquisition allows it to recapitalize on a five-building portfolio, encompassing approximately 1.2 million square feet of office space, in collaboration with Harwood International. As part of this new partnership, TPG plans to invest million into upgrading and modernizing these properties.

The firm, which operates dual headquarters in San Francisco and Fort Worth, has not disclosed the total expenditure for acquiring the five office towers. However, the investment aligns with TPG’s goal of enhancing the workplace environment amid rising demand for premium office space in the area. This sentiment was expressed in a statement by Jacob Muller, a partner at TPG, who indicated the firm’s commitment to elevating tenant experiences and meeting the demands of prospective tenants in the district.

The newly acquired property, Harwood No. 3 (2727 N. Harwood), was part of a broader transaction where Harwood-affiliated LLCs sold the mentioned properties to TPG-affiliated groups in late 2023. TPG’s initiatives will include substantial improvements to greenspaces, infrastructure, and the creation of shared common spaces. These upgrades aim to transform the five-building portfolio into a Class AA status facility, with project timelines extending to 2027 and beyond.

In this venture, TPG has engaged Dallas’s OliveMill Holdings to oversee the operational aspects of the office assets, while CBRE will assume responsibility for property management and leasing. Harwood International will retain control over retail and restaurant operations in the district. Additionally, renowned architectural firm Perkins & Will has been tapped for interior design upgrades, with local firm Studio Outside managing exterior and landscape improvements.

Despite the turbulence experienced by Harwood International, the district remains optimistic, with plans for further expansion that envision a future comprising 8.1 million square feet of mixed-use developments. As TPG and Harwood chart a new course for this noteworthy district, analysts are closely watching its evolution amid the ongoing challenges in the commercial real estate sector. The Harwood District, covering 19 city blocks, is poised to evolve further as it adapts to the demands of modern businesses and urban living.