- The National, a flagship Dallas mixed-use tower, is heading to foreclosure.
- Starwood Capital will take ownership after Todd Interests’ $460M redevelopment effort.
- High interest rates, low occupancy, and declining downtown values triggered the default.
- This is the first project loss in 35 years for Todd Interests.
Major Dallas Asset Changes Hands
The Real Deal reports that The National, a 52-story mixed-use property and downtown Dallas landmark, will be foreclosed upon by Starwood Capital Group. Owner Todd Interests cited unsustainable debt, high interest costs, and sub-80% apartment occupancy as key reasons for not contesting the foreclosure.
Historic Redevelopment Unwinds
Todd Interests invested $460M to convert the former First National Bank Tower into a mixed-use destination with apartments, a hotel, office space, and retail. The 1.5 million-square-foot project at 1401 Elm Street became the largest urban restoration in Dallas history. It also marked the biggest historic tax credit project in Texas. Public incentives included $100M in historic credits and $50M in tax increment financing.
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Why It Matters
Todd Interests repaid over $150M to tax credit investors and refinanced with Starwood three years ago. However, downtown property values did not recover as expected. The foreclosure highlights the pressure on large, mixed-use assets in urban cores. High interest rates and weak leasing demand continue to weigh on performance. The situation also reflects a broader rise in distress across the commercial sector, as foreclosures have surged amid shifting fundamentals. Todd Interests also recently sold its East Quarter stake to J.P. Morgan Asset Management, as downtown Dallas adapts to a shifting commercial landscape.
What’s Next
Starwood Capital Group will assume control of The National, likely reassessing strategy and operations for the property. Market observers are watching closely as the Dallas mixed-use sector adapts to new economic realities.
