The U.S. Bankruptcy Court for the Eastern District of Texas has confirmed a plan of reorganization filed six months ago by Behringer Harvard Frisco Square LP, allowing the property to emerge from Chapter 11. A full discharge of the matter is expected by the end of the year.
The plan provides for full payments to all creditors. The lenders on the project, Bank of America and Regions Bank, agreed to extend their loans for a period of five years, with a two-year extenuation option, in exchange for $16.5 million in payments on the outstanding loan balance.
Located off the Dallas North Tollway at Main Street in Frisco, the 147-acre, master-planned Frisco Square includes retail, multifamily, restaurants, office, hospitality, and municipal space—including Frisco’s city hall and library.
Behringer Harvard Opportunity REIT I originally invested in Frisco Square in August 2007. The REIT plans to invest about $20 million in the project, which includes the $16.5 million in loan repayments. As a result, it will own a 100 percent stake in the project.
“We continue to believe in the strong potential of our holdings at Frisco Square,” said Michael O’Hanlon, president and CEO of Behringer Harvard Opportunity REIT I Inc., in a statement. “We’re pleased that this reorganization will provide us with the time and flexibility necessary to complete our value-creation strategies for this exceptional property.”
The REIT’s Frisco Square interests include:
• three buildings with 103,120 square feet of office space and 29,405 square feet of retail space
• two buildings with 114 multifamily units and 39,526 square feet of retail space
• one 12-screen Cinemark theatre with approximately 41,464 square feet of retail space
• entitlements for a total of 1.76 million square feet of office space, 438,000 square feet of retail, restaurant, and entertainment space; 760 multifamily units; 200,000 square feet of hospital/medical office space; and 200 hotel rooms
O’Hanlon said Behringer’s holdings at Frisco Square have performed well in recent months.
“Our multifamily units are 100 percent leased, and rents have increased significantly,” he said. “The office space is now more than 96 percent leased, and we are negotiating another lease that would boost it to approximately 98 percent leased. We also are negotiating possible leases for two popular Dallas-area restaurants.”