Downtown Dallas Office Skyscraper Faces Significant Tenant Downsizing

A major tenant downsizing at a downtown Dallas skyscraper has put the building on a creditors' watchlist.New York-based marketing and communications giant Omnicom Group is a major tenant in the 36-story Harwood Center office tower at Bryan and Harwood streets downtown.The company has occupied more than 300,000 square feet in the high-rise.But a new lease deal with Omnicom will reduce its footprint in the tower by almost 40 percent, according to debt analysts at Trepp LLC."The Omnicom Group is the top tenant with 46.3 percent of the space on a lease that ends in late 2019," Trepp analysts write in a new report. "The latest watchlist notes reveal that Omnicom has renewed its lease until September 2030 but has reduced its footprint by about 130,000 square feet."The new leasing arrangement will represent about 18 percent of the building's square footage."Omnicom has previously had about 1,500 people working in the Harwood Street tower.While the $88 million loan on Harwood Center isn't in arrears, it's common for creditors to red flag a property when a major tenant decides not to renew its lease or significantly downsize operations.A similar credit alert was issued about downtown's Bryan Tower last year when its largest tenant healthcare firm Baylor Scott & White disclosed plans to relocate its operations there.Built in 1982 and owned by a New York investment firm, the Harwood Center tower is also home to engineering giant Jacob's international headquarters.The building owner just added an almost 500-space parking garage to serve tenants in Harwood Center.Omnicom had told the landlord it would leave the building altogether unless additional parking was constructed.  Continue reading...