Bank Of America Plaza Buyer Bets On Robust RTO, Says Now Is The Time To Buy Class-A Office

One of the prospective owners of the tallest tower in Dallas is confident that a significant return to office is in the cards.

PegasusAblon founding partner Mike Ablon calls now “a generational time” to buy Class-A office product in walkable areas. And he's putting his money where his mouth is, snapping up the 1.85M SF Bank of America Plaza along with Mike Hoque of Hoque Global in a deal announced this September.

While the deal for the 72-story building and the four blocks surrounding it won’t be final until early next year, Ablon said the property is a touchstone for the city’s population, serving as the cultural middle of Downtown Dallas.

“Population density drives culture, drives commerce, drives mercantile, and drives evolution and growth,” Ablon said during ULI Dallas-Fort Worth's Emerging Trends 2025 event Thursday in Dallas. “People want to be together.”

Ablon also has a major prediction: “Everybody's going to be back in the office.”

Big corporations like Merrill Lynch, State Farm, Goldman Sachs and JPMorgan Chase have moved to DFW because it is where the employees are, he said, adding that in-migration has effectively become the Metroplex’s biggest industry, which will drive demand for top-tier office product with walkability in the future.

Now is the time to strike, Ablon said.

“​​If you get Class-A-plus at a radically decreased valuation right now because of debt equity that's compressing it below its true net asset value, you can make a great buy,” he said. “[But] there's not a lot of them.”

Dallas-based developers and investors Ablon and Hoque plan to undertake a $350M redevelopment of the property that will include the addition of a 300-room luxury hotel and streetscape improvements to the associated city blocks. The property will be 50% leased when the deal closes, Ablon said.

While the price of debt and equity increasing and decreasing are cyclical shifts that he pays attention to, Ablon said he more closely follows secular shifts. His instincts have not been 100% accurate, he said, but 15 years ago, he pounced when prices of Class-A office product along the Dallas North Tollway were dropping.

“I went chasing and tried to buy — not a building in Preston Center — I tried to buy Preston Center, all of it,” Ablon said. “I wanted to have the greatest collection of ugly little buildings in Dallas because I thought the world was changing.” 

The Preston Center submarket had among the highest office rents in the Metroplex as of Q3, according to Cresa.

Ablon also has his sights set on growth outside the city proper.

As the population grew in DFW’s suburbs, Dallas morphed from being the hub of business in the region to outer cities becoming significant users of office space with the growth of mixed-use developments. With a similar square footage to the central business district, the Legacy Business Park in Plano has developed as a major business hub that is changing where people live.

“We've been growing north so much, pretty soon we’re going to have to colonize Oklahoma and bring it into the fold,” Ablon joked. “We're seeing that we want it all. We want the suburban growth and we want the urban growth.”

Going forward, Ablon said he believes developers are going to focus on middle- to high-end development across asset classes and across the region since those are the only products that will see the rent growth needed to make them profitable. Everything else simply won’t get built, he said.

“What is the impact of all this?” Ablon said. “More top-end, less bottom-end and a hell of a squeeze in the middle. It's not great, but I think that's what happens.”