The tallest skyscraper in Dallas could get a $350 million overhaul if a real estate deal goes through as planned to two longtime North Texas property investors.
Hoque Global CEO Mike Hoque and PegasusAblon founding partner Mike Ablon have placed Bank of America Plaza, a 72-story, 1.8 million-square-foot skyscraper at 901 Main St., as well as neighboring blocks, in downtown Dallas under contract for an undisclosed sum, Ablon told CoStar News. The potential ownership group plans to purchase the tower from Chicago-based Metropolis Investment Holdings, representing the ownership group on behalf of the family of the late German billionaire Hugo Mann.
The deal, which could close next year, is expected to bring a proposed $350 million redevelopment project transforming the office tower into a mixed-use destination with a 300-room luxury hotel and multiple restaurants.
The potential redevelopment would be "transformational" to downtown Dallas, helping build out what is now a surface-level parking lot adjacent to the skyscraper and offer more hotel rooms to bring visitors to the city, said Jennifer Scripps, president and CEO of Downtown Dallas Inc., an advocacy group for downtown Dallas.
"This will drive more foot traffic in Dallas and bring more hotel rooms to support the convention center," Scripps told CoStar News. "This also helps keep that iconic office space competitive and offers companies places to entertain clients and be out with their teams."
The decision to transform the skyscraper, pending its acquisition, comes at a time when office space has been upended in major U.S. markets, and downtown Dallas has been undergoing its own shift as companies such as Goldman Sachs and Bank of America trade in their downtown Dallas offices for major hubs in nearby Uptown Dallas.
Goldman Sachs is building a massive campus near the American Airlines Center, and Bank of America recently signed a big lease in Uptown Dallas for its new Dallas office — with plans to exit it namesake tower.
This isn't the first time Metropolis has sought to sell Bank of America Plaza in the last five years, with a potential suitor having backed out of a deal just prior to the onset of the pandemic. The seller has owned Bank of America Plaza for decades, with the skyscraper last trading hands for $325 million in December 1998, according to CoStar data.
Texas is a nondisclosure state, with county tax appraisals helping set the tone for the value of a property. Dallas County appraisers last valued Bank of America Plaza for nearly $130 million, according to county records. This valuation has taken a big hit since Metropolis has represented the ownership group, with its valuation being more than $261.5 million in 1999, according to property records.
In adding a hotel component to the skyscraper, it could bring much-needed life to the aging 1980s tower with more than 600,000 square feet of office space available for lease. The skyscraper sits within a half-mile of the Kay Bailey Hutchison Convention Center that is undergoing a $3.7 billion overhaul of its own in hope of luring new convention business to Dallas.
By adding new hotel rooms within walking distance of the convention center, a new ownership group could help create a more vibrant experience in downtown Dallas. The city's downtown has an office vacancy rate surpassing 27%, according to CoStar data.
"Redeveloping Bank of America Plaza would rank among the most ambitious redevelopment projects in Dallas-Fort Worth’s history," said Bill Kitchens, CoStar's director of market analytics tracking the region's office space. "This project would further rightsize the office space market in a submarket that has carried a chronically high vacancy rate since the 1980s."