Knighthead Funding LLC has provided Quadrant Investment Properties with $26.9 million in short-term first mortgage debt to acquire a portfolio of 12 office/industrial/flex buildings located in Dallas, TX.

Quadrant, a Dallas based real estate investment firm plans to convert the obsolete industrial properties to both single and multi-tenant creative office buildings.  The properties within the portfolio total approximately 152,000 square feet and range in size from 4,000 to 21,000 square feet.

Knighthead’s financing allowed the Quadrant, which acquired the assets in three separate transactions, to assemble the portfolio under a single ownership structure.  A portion of the loan proceeds will be used for CAPEX costs, tenant improvements and leasing commissions associated with the conversion and stabilization of the assets.   

All 12 of the assets are located within the Dallas Design District, a former industrial submarket in downtown Dallas, that has evolved into a vibrant live-work-play pocket community with high-end restaurants, shopping, art galleries and a growing inventory of luxury apartment homes. Approximately 2,000 apartment and residential units are planned or in progress. This transformation, combined with its central location at the base of the Dallas North Tollway and Interstate 35, has created significant demand for office product, particularly for brand conscious tenants that want a boutique experience.

“The combination of a prime location, coupled with strong sponsorship should enable these assets to perform well within the market once the renovations are complete,” said Knighthead Vice President Henry Boeckmann. “Our financing will allow Quadrant to capitalize on the continuing evolution and growth of the Design District.”

Chad Cook, founder of Quadrant, adds “The Design District is a unique opportunity in the Dallas market that required a lender who understood our business plan and could be flexible enough to accommodate our structure.  Henry and the team at Knighthead have proven to be great partners from acquisition through execution.”

“Texas continues to see significant population growth and companies continue to relocate and/or open office,” added Jonathan Daniel, Principal at Knighthead Funding. “From a real estate fundamental perspective, we will continue to expand our lending activities in major metropolitan areas throughout Texas.”