DALLAS — Read this story and more North Texas business news from our partners at the Dallas Business Journal
A downtown Dallas high-rise sold for just $8 million in a foreclosure auction to its lender, which still hopes to convert the building from offices to apartments or a hotel as its previous owner intended.
The 18-story blue-paneled office building at 211 N. Ervay St. sold for $8 million in a Feb. 6 auction to an affiliate of Lehi, Utah-based real estate investment fund Thistle Creek Capital LLC, the lender for the property, according to Dallas County deed records.
Ben Peterson, a partner at Thistle Creek Capital, told Dallas Business Journal that the firm plans to continue redevelopment of the building for a new use.
"I think the best use for this building is office to some kind of apartment or hospitality conversion, which is happening a lot over the country," Peterson said, adding that Dallas is one of the top markets for such conversions in the nation, as recently shown in Yardi Matrix data reported by RentCafe.
"There's a lot of excess office commercial space, as you know, in downtown Dallas and elsewhere. So, we are interested in finding the right home for the building, for somebody who can come in and develop the project or finding the right partner and/or just looking for an outright sale."
The foreclosure involved a $13.5 million loan an entity tied to previous owner Plano-based Wolfe Investments LLC took out with Thistle Creek last April, when the former purchased the building, according to a foreclosure notice. The notice stated the maturity date of the loan had been extended to Dec. 21, 2023.
A Wolfe Investments representative declined to comment.
This was not the first time the property had been posted for potential foreclosure sale. Wolfe Investments sued Thistle Creek in Dallas County district court Sept. 1, claiming the lender did not give proper notice ahead of posting the property for the county's foreclosure sale Sept. 5. Thistle Creek took down the foreclosure notice the same day Wolfe's complaint was filed.
In December, Niraj Shah of Priya Capital LLC sued Wolfe Investments, also in Dallas County district court, after Wolfe defaulted on a $6 million short-term loan made by Shah to help Wolfe close on the purchase of 211 N. Ervay, claiming that Wolfe used the loan proceeds not to close on the Ervay property but to open a line of credit at a bank to obtain financing for the Oil & Gas Building in downtown Fort Worth, which Wolfe purchased in partnership with Bluelofts Inc. in May 2023, according to several reports.
Thistle Creek is not the only firm that sees potential in converting downtown Dallas office buildings to apartments, hotels and other uses.
Dallas-based Woods Capital recently completed construction on the 228 apartment units it added to Santander Tower. Woods Capital has also been adding residential space to its 40-story Bryan Tower, and Todd Interests is converting the upper floors of the 49-story Energy Plaza skyscraper into 294 residential units, the Dallas Morning News reported.
As of December, Wolfe Investments had planned to soon begin converting former office space into 238 apartments, but was also considering plans to later turn those residences into hotel rooms.
The office building was designed by Thomas Stanley and built in 1958 by developer Leo Corrigan. Vacant since 1995, the building reopened in 2014 as offices after millions of dollars of renovations.
