Dallas's struggling urban core has been dealt a severe double blow, with the foreclosure of a flagship skyscraper closely followed by a major corporate announcement to abandon the city centre.
Iconic Tower Handed Back to Lender
The immediate crisis centres on The National, a prominent 52-story tower in the heart of the city's financial district. The building's owner, developer Shawn Todd of Todd Interests, has surrendered the property to lender Starwood Capital Group, owing a staggering $230 million in loans.
Todd blamed the combination of high interest rates, the loan coming due, and plummeting downtown property values for the decision. "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 told the Dallas Morning News. He stated this was the first year in 35 years his firm had lost money.
The building, originally the First National Bank Tower from 1965, had stood empty for a decade before Todd Interests embarked on a $460 million renovation, hailed in 2019 as Texas's largest historic tax credit project. The mixed-use development, featuring apartments, hotel rooms, retail, and offices, received $100 million in tax credits.
Corporate Exodus Compounds Crisis
The foreclosure news arrived just as telecoms giant AT&T confirmed it would gradually vacate its Downtown Dallas campus, relocating to a new complex in Plano, roughly 30 minutes away, by 2028. The company, a downtown fixture since 2008, employs around 6,000 people in the area, and its departure has sparked fears for the local economy.
An AT&T spokesperson said the move followed a year of planning, citing the evolution of the company's work, but reaffirmed commitment to the Dallas-Fort Worth region. They are targeting partial occupancy in Plano in the second half of 2028.
A Downtown in Distress
Local commentators and business owners are deeply concerned about the future of downtown Dallas. The Dallas Morning News Editorial Board placed blame on City Hall, including Mayor Eric Johnson, for failing to manage public safety and quality of life issues, making the area feel "neither safe nor inviting."
Data reveals the scale of the challenge:
- Office vacancy rates in Dallas are among the highest nationally, at approximately 27%.
- The city has an estimated 3,700 homeless people.
- While some violent crime is down, police statistics show murder rates are up 9% and shoplifting has risen nearly 22%.
The Wall Street Journal reported that companies are leaving the district due to ageing office towers, a visible homeless population, and concerns over crime. The result is a stark landscape of declining property values and a growing number of vacant offices, apartments, and hotels, raising serious questions about the urban core's recovery.
