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Dallas Design District Portfolio
$41,975,000 Recapitalization Financing
Dallas, TX | January 2022
Thorofare Capital has funded a $41,975,000 intermediate-term, floating rate whole loan for the recapitalization, renovation and lease-up of the Dallas Design District Portfolio. The properties consist of 162,804 SF of creative office, makerspace, and flex/office buildings across 13 assets totaling 17 properties and 356 parking spaces.
Upon assembling this unique portfolio from 2019-20, the sponsor converted, repositioned and re-developed numerous buildings with plans to complete the business plan within the first two years of the loan term. This financing enabled the sponsor to repay its original construction debt and right-size the budget for tenant improvements, leasing commissions and carry costs through stabilization.
Dallas Design District is not only considered a higher end retail market due to its concentration of luxury furniture and design showrooms, but also has become an accepted and gentrifying submarket to live and work. It can be compared to Fulton Market in Chicago, Wynwood District in Miami, or the Arts District in Los Angeles due to its proximity to Downtown and unique existing building stock. As a result, developers have targeted submarket to build new multifamily, office, and hotels (Virgin Hotel). As an example, approximately 2,600 multifamily residential units have been completed since 2009, and another ±600 is currently under construction or in the planning stages.
The interest-only, high-structured loan carries an initial term of three years and two performance-based extension options, as well as future-funding towards CapEx, TI/LCs and offers max flexibility for prepayment.
The sponsor is a Texas-based private investment firm focused on value-add investment and development that owns over 1.9 million square feet throughout Texas.