Bivins Blog Real Estate Log Archives
Sold: Boca Bargoons Building
PLANO – A local investor, whose identity is being kept under wraps, has bought Boca Bargoons' 7,320-sf building at the edge of Plano's historic downtown.
The freestanding building at 1855 N. Central Expressway sits on a two-acre tract close to the city's DART station and just south of the Park Boulevard-Central Expressway junction. Tax records show the owner is Boca Bargoons of Texas Inc. of Duluth, Ga.
Rowan Sbaiti of Dallas-based Henry S. Miller Brokerage LLC represented the seller. Beverlee Heintges of Residential Locators represented the buyer.
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SNG Realty Buys Development Site
BURLESON, Texas – SNG Realty LP has acquired a 1.2-acre tract to develop medical office space in Tarrant County.
The two lots are part of a 200,000-sf medical office development at 300 Old FM 1187. The project calls for buildings with a minimum 6,000 sf. Dallas-based SNG Realty is planning to build an 8,000-sf structure for medical office and condominium space on its tract, according to a press release from Jim Turano of Henry S. Miller Brokerage LLC in Dallas. The seller is a local investor.
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Mohr Lands Solis Women's Health
DALLAS - Solis Women's Health has entrusted its portfolio of breast diagnostic centers to Mohr Partners Inc. The locally based real estate adviser will manage all transactions for more than 30 facilities, totaling 150,000 sf.
Eric Beichler, managing partner at Mohr, secured the account with the Dallas-based provider. Mohr's role will encompass lease administration, project management and tenant advocacy via a single point-of-contact approach in addition to advisory services.
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Trademark Revives $100 Million Project
FORT WORTH – Pulling a project from the back-burner, Trademark Property Co. is ready to forge ahead on a 5,159-sf retail building for its $100 million WestBend project. The first building is preleased to Alabama-based Zoe's Kitchen and Denver's Smashburger.
Trademark suspended work in January 2009 on a mixed-use project designed for roughly 100,000 sf of retail and office space. The revived project opens the door to fall openings for both restaurants, with Zoe's Kitchen occupying 3,029 sf of the structure along University Drive.
"We had placed the development on hold, waiting for the market to improve. We will further evaluate how things are looking before moving forward with additional construction," said Terry Montesi, chairman and CEO of the Fort Worth-based development company. The economy also scuttled a plan for a hotel.
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D/FW Commercial Market Facing
One More Year of Slugging It Out
By Connie Gore
DALLAS – With foreclosures climbing higher each month, a leading market watcher predicts it will be another 12 months before the commercial real estate marketplace reaches a stabilization point.
"We've seen the topping off of residential foreclosures, but we've not reached that point yet with commercial foreclosures," George Roddy Sr., president of a North Texas-based research firm that tracks sales and foreclosure trends from San Antonio to the farthest boundaries of Dallas/Fort Worth.
Roddy's recent research shows commercial sales did pick up in March and April, the first upward turn in one year. "Hopefully, this will be a trend that continues. There is only so long you can sit on the sidelines waiting to buy," he told the crowd at the DFW Apartment and Investment Brokers' monthly meeting at Prestonwood Country Club in North Dallas.
The source of the increased sales most likely is distress. The reality is more single-purpose entities are filing bankruptcy over a commercial property and lender-borrower renegotiations are growing more common as are short sales and loan modifications. Loan assumptions also are playing a leading role in today's market as cash-flush investors step in to save distressed owners and walk away with steeply discounted rates for their Hail Mary plays.
Commercial foreclosure postings spiked 63 percent in 2009, with 857 notices going up in Dallas, Tarrant, Collin and Denton counties. "This year, the picture has grown worse," Roddy said, adding the year-to-date total is 1,393 postings. However, only 20 percent to 25 percent of the posted properties ever reach the courthouse steps for a sale, according to Roddy.
Roddy did have one bright note for the crowd – commercial properties, by and large, are holding their values. He acknowledged there are cases of decreased property values, but it's not widespread in Dallas/Fort Worth.Roddy said the current market, residential and commercial, bodes well for the multifamily sector although rents will be suppressed for awhile due, in part, to single-family owners renting properties that they have been unable to sell.
"High foreclosures mean to me high opportunity," Roddy said. "We have been here before. It ends. It all turns at some point….The market will come back to normalcy."
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Braum's Buys Development Dirt
FRISCO, Texas – Braum's Ice Cream Stores Inc. has bought a pair of development sites in Texas and Oklahoma.
Daniel Harris, vice president of Dallas-based Henry S. Miller Brokerage LLC, has sold a one-acre pad site in Teel Crossing II at the corner of Main Street and Teel Parkway in Frisco. The Henry S. Miller-owned, grocery-anchored center and its sister total 112,000 sf.
In Pryor, Okla., Harris sold a 1/75-acre tract in Henry S. Miller's Pryor Plaza at the corner of Highway 69 and 49th Street. The center abuts a Wal-Mart Supercenter.
The sellers of record are Teel Crossing II Ltd. and Pryor Plaza Associates LP. The Oklahoma City-based buyer has more than 280 locations in Arkansas, Kansas, Missouri, Texas and its home state.
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Texas Health Resources Gaming Out
Satellite Network for Future Growth
By Connie Gore
DALLAS – Healthcare reform will create development opportunities as providers forge plans to meet demands for their services. Medical real estate development practically had ground to a standstill out of fear that facility plans wouldn't be grandfathered into the federal legislation.
"Reform so far has been about insurance reform. That's not going to change health care. What's going to change healthcare in the future is how we deliver healthcare," Jonathan W. Scholl, chief strategy officer for Dallas-based Texas Health Resources (THR), told ULI North Texas members at yesterday's luncheon meeting in the Four Seasons Resort & Club in Irving.
"Joint venture opportunities have been on hold until the reform was adopted," Scholl said. "Now there is an understanding of how to proceed with service delivery. They couldn't risk not being grandfathered."
THR is moving ahead with plans for satellite clinics on micro-campuses in an outreach initiative to local communities. The facilities are being designed to support, not compete, with big-box hospitals, Scholl explained.
Working in Texas' favor is that it's not a "certificate of need" state so providers have free rein for developing portfolios, creating stiff competition among providers. "We no longer live in a world of build it and they will come," Scholl said.
Scholl said THR has no defined parameters for the distances between satellite clinics and big-box hospitals. Locations would be predicated on types of services to avoid overlap and demographical trends, he added.
In the past five years, THR has invested $1 billion into its 16-county portfolio of 12 acute-care hospitals and seven joint-venture partnerships for diagnostic and surgery centers. Another $1.5 billion of capital expenditures is earmarked for a 10-year plan.
"Healthcare is a business," Scholl said. "And, it's a business that abounds in opportunities."
With healthcare reform now federal law, THR is focused on strengthening its infrastructure to meet future demands in North Texas, where the population is projected to double by 2050. That also means developing programs for culturally competent care since both Hispanic and Asia-Pacific populations are expected to increase 23 percent in the coming years. Similar focus is being placed on geriatric services, including more physicians to treat the aging population. By 2030, it is projected that 20 percent of the U.S. population will be at least 65 years old.
"The D/FW market will grow. Once the lenders return, we will see new development," Scholl stressed. "It's just a matter of time, credit and capital."
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Dodson Capital Buys Vacant Building
ARLINGTON – Dodson Capital LLC has acquired an 11,220-sf vacant building in downtown Arlington. The new owner plans to retool the building into restaurant and retail space.
Keegan Drake of SCM Real Estate Investment Services represented the buyer of 300 E. Abram St. The sellers, Hopp & Davis Ltd., used in-house representation to broker the sale.
Ryan Dodson, a real estate developer, grew up in Arlington. In a press release, he said he hopes to benefit from the "energy" of the University of Texas-Arlington and sports teams to his redevelopment project.
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Commercial Foreclosures Climb 63%
DALLAS – Unveiling its latest research, Foreclosure Listing Services Inc. has found a 63 percent spike year to date in commercial properties listed for courthouse sales.
"For the first five auctions of this year, foreclosure postings of commercial real estate climbed at a much steeper pace than residential postings in the D/FW area," George Roddy Sr., president of the Addison-based research firm, said in a press release.
To date this year, 1,393 commercial properties have been posted versus 857 in 2009. Dallas County accounted for 381 of the postings while Tarrant County rang up 264 postings. Denton County logged 114 and Collin County, 98.
Media reports have placed several high-profile properties on the "watch list" although their owners reportedly are locked in talks with their lenders to avert the foreclosure process.
"Although I am seeing a few class A properties posted, the vast majority of the commercial properties posted for foreclosure in today's market are either class C properties or miscellaneous commercial buildings," Roddy said.
In a breakdown of the numbers, miscellaneous commercial buildings garnered the highest number of postings – 596. Second place went to owners of raw land, 311. Notices were received by owners of 191 multifamily properties, 116 office buildings, 110 retail centers and buildings and 69 industrial structures.
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Sundance Square Earns ULI Accolade
FORT WORTH – Sundance Square has been picked as one of 10 outstanding developments in the U.S. by the Urban Land Institute.
The award for excellence, bestowed last week at ULI's spring conference in Boston, recognizes best practices for land use and development. The 35-block Sundance Square was honored for its 25-year development process, which has implemented a pedestrian-friendly design of mixed-use space to revitalize the Fort Worth CBD. There were more than 170 entries for the category.
"We are honored to receive such a prestigious award," said Johnny Campbell, president and CEO of Sundance Square. "The vision for Sundance Square has always been to create an atmosphere where people could work, live, shop, dine and be entertained seven days a week. We have worked hard to preserve the flavor of the area and offer people a premier destination for business or for play.".................................................................................
Christian Brothers Building Sells
CARROLLTON, Texas – A local developer has sold a 4,790-sf net-leased building, with Christian Brothers Automotive's name on the 15-year absolute net lease.
Underwriting the deal is a 1.5 percent annual rent hike in the initial term and five 10-year options, according to Marcus & Millichap Real Estate Investment Services. Alvin Mansour in the firm's San Diego office represented the Texas-based seller. The buyer is a limited liability company that was represented by Mike Francis in the firm's Salt Lake City office. Tim Speck regional manager in Dallas, and Chris Gomes, an investment specialist, assisted with the sale of the property at the corner of Texas 121 and West Hebron Parkway.
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Oak Hill Plans ViaWest Buy
FORT WORTH – Oak Hill Capital Partners has its eye on ViaWest Inc., the largest privately held data center and managed services company in the U.S. The portfolio contains 16 data centers in five states.
The Fort Worth-based private equity group signed a definitive agreement to acquire the company from Trinity Equity Investors, Goldman Sachs & Co. and Quilvest. ViaWest was founded in Denver in 1999 by Roy Dimoff, chairman and CEO, and Nancy Phillips, COO. The deal is slated to close before the second quarter ends.
"Over its 11-year history, ViaWest has evolved into a clear market leader," Dimoff said. "With 17 acquisitions successfully completed, combined with a strong history of organic growth, our management team is eager to transition into our second phase of growth." The company's data centers are located in Colorado, Nevada, Oregon, Utah and Texas.
Acquisition terms aren't being disclosed, but the buyer has reported that senior debt financing will be provided by Royal Bank of Canada and mezzanine financing by Barclays Structured Principal Investing Fund L.P. and Solar Capital Ltd. RBC Daniels and Cowen and Company are ViaWest's financial advisers. Winston & Strawn LLP is legal counsel for the largest shareholders of ViaWest while Hogan & Hartson LLP is ViaWest's legal counsel. Paul, Weiss, Rifkind, Wharton & Garrison LLP is legal counsel for Oak Hill Capital Partners.
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Lone Star, Lodgian Complete
$270 Million Takeover Deal
DALLAS – Lone Star Funds has made good on its plan to acquire Lodgian Inc. for $270 million, including the assumption of its debt.
The Dallas-based investment group set up LSREF Lodging Investments LLC and LSRET Lodging Merger Co. Inc. to close the deal. Lodgian's portfolio boasts 27 hotels with 5,230 rooms in 18 states. Thirteen properties are InterContinental Hotels Group brands, eight are Marriott branded and the balance is made up of nationally recognized hotel franchises.
"Not only will Lodgian benefit from Lone Star's financial strength, but also it will benefit from Lone Star's broad real estate expertise," said Daniel E. Ellis, president and CEO of the Atlanta-based Lodgian.
Hunton & Williams LLP was the buyer's legal counsel. Dana Ciraldo, previously affiliated with Hodges Ward Elliott, acted as financial adviser to Lone Star. King & Spalding LLP is legal counsel for Lodgian and Genesis Capital LLC as its financial adviser. Houlihan Lokey Howard & Zukin Financial Advisors Inc. provided the fairness opinion.
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Investor Buys Medical Office Building
FORT WORTH – SNG Realty LP of North Texas has acquired a 7,465-sf medical office building in southeast Fort Worth from a group of California investors.
The building sits on a 1.2-acre tract at 6450 Brentwood Stair Rd. According to a press release, the 13-year-old office building will be re-tenanted with medical users. Jim Turano, executive vice president of Henry S. Miller Brokerage LLC, represented the buyer. Becky Thompson of Lee & Associates DFW represented the seller.
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Bank Places Two Addison Circle on Market
DALLAS – Wells Fargo & Co. has put the 198,000-sf Two Addison Circle in North Dallas on the market. The vacant six-story building was a $23 million project developed and once owned by Phoenix-based Opus West Corp.
Wells Fargo has hired the Holliday Fenoglio Fowler LP Dallas team of Andrew S. Levy, senior managing director, and Todd W. Savage, managing director, to market the property at 15725 Dallas Parkway. The class A office building was completed last year.
"The property represents one of the highest-quality, large contiguous vacancies in the submarket and thus should be highly sought after by both users and investors looking to acquire a trophy office property at pricing levels well below replacement cost," HFF said in a press release.
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Digital Realty Trust Unveils
2010 Construction Plans
SAN FRANCISCO – Digital Realty Trust Inc. is planning to build 170,000 sf of turn-key data center space in five metro markets, including Dallas/Fort Worth.
The development roster will add 33,000 sf of the specialty space in the Dallas metro, in addition to adding space at its 2323 Bryan St. downtown tower.
Northern New Jersey is ticketed for the largest amount, 53,000 sf. The San Francisco-based REIT also will build out 34,000 sf in the London metro; 29,600 sf in Northern Virginia; and more than 22,000 sf in its homeport.
"In response to the increased demand for our Turn-Key product, we are accelerating our development plans in these key markets and expect construction to be completed by mid-year," said Michael Foust, CEO of Digital Realty Trust. "Our redevelopment program is an essential component of our growth strategy. We are also focused on optimizing space in existing operating facilities to meet local demand for highly improved datacenter space while maximizing the returns to our shareholders."
Other properties in line for expansion are 600 Federal St. in downtown Chicago; 210 N. Tucker Blvd. in St. Louis; 113 N. Meyers in Charlotte, N.C.; and the Quannapowitt Parkway property in Boston.
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JRDC Partners Buys 22,000-SF Building
GRAND PRAIRIE, Texas – JRDC Partners Inc. has acquired a two-story office building on 10.5 acres as a consolidation site for its business.
The brokerage team of brothers Peter and Drew Richardson with Henry S. Miller Brokerage LLC represented the buyer of 3340 Roy Orr Blvd. According to a press release, the buyer had been scouring the Dallas market for a consolidation site.
The 22,000-sf building, completed in 2000, was sold by GITF LP. Representing the seller was Carolyn Albert of Steve Johnson Commercial Realty in Dallas.
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D/FW Veterans Plant New Flag
FLOWER MOUND, Texas – Seeing opportunity in the current real estate cycle, the veteran leaders of Elk River Real Estate and Y Street Ventures are partnering on a new initiative, VERUS Real Estate Advisors.
Robert Korba, founder of Y Street, and John "Sparky" Pearson, Elk River's principal, are rolling out a platform for comprehensive brokerage, advisory, asset and property management services for owners and investors. Korba retired in 2008 as CEO of Sammons Enterprises and still serves as its chairman. Pearson was a founding partner in Staubach Capital Partners.
Korba will act as VERUS' chairman and Pearson as adviser. Bryan Korba is president of the new company. The team has more than 80 years of industry experience.
"We believe there is an opportunity to provide real estate asset owners with a higher level of service that is currently provided by this contracting industry," Korba said. He added that VERUS will be "the advocate" for owners by assisting them in managing balance sheets and increasing portfolio performance.
"We are not driven by the 'fee' or the 'next commission' at VERUS," Pearson pointed out. "And because we share the 'ownership perspective' of what can and should be executed by a service firm, we will always proactively approach each project as an investment, giving it the attention and focus that will ultimately enhance its value."
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Dallas Investor Buys Mustang Crossing
FORNEY, Texas – A limited liability company from Dallas has acquired the 31,220-sf Mustang Crossing from a Houston bank.
Located at 1012 US Hwy. 80, the fully leased shopping center is shadow-anchored by a Wal-Mart Supercenter and Lowe's. The 1.30-acre property was developed in 2004.
Tommy Tucker, a senior associate for Marcus & Millichap Real Estate Investment Services in Dallas, marketed the property for the bank. "This new construction, REO-lender asset has tremendous upside potential in lease up and includes a pad site for future added value," according to a press release.
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Sustainability Emerging as Business Driver
By Connie Gore
DALLAS – The commercial real estate industry is moving toward a sustainable future, albeit slowly, as green space becomes a business driver instead of a tree-hugger's paradise.
"There will be a time in the future when deconstruction will be as important to real estate as construction," said Christopher Luebkeman, one of two keynote speakers at yesterday's Sustainability Symposium hosted by the Urban Land Institute, North Texas Commercial Association of Realtors and The Real Estate Council.
Luebkeman, director of London-based Arup and a respected futurist, said there are unprecedented opportunities to prepare for 2050 when the world's population will top nine billion and resources will be severely strained. Confronting the future requires the integration of social, technological, economical, environmental and political action.
"We have a wonderful opportunity, but a huge responsibility too," Luebkeman told the 200 CRE professionals attending the symposium at Cityplace in Dallas.
As it stands, "real estate is a mess," said Michael Buckley, clinical professor at the University of Texas at Arlington and the symposium's other keynote speaker. Yet, it is an "interesting time" for geopolitics, occupier mandates and urban competitiveness, added the CRE expert, who's also director of UTA's certificate in property repositioning and turnaround strategies.
Buckley pointed out that Urban America is facing a series of seven transition waves that will impact the environment and quality of life – business consolidations and mergers, demographical shifts, capital markets fusion, evolving globalization, electronic commerce, technology wave and urban versus suburban evolving policy conflicts. Each wave of change carries sustainable connotations.
Buckley said the U.S. slowly is losing its competitive edge to emerging countries and world powers that are now focused on strengthening their economies by developing strategic clusters of mixed-use real estate as a means to build critical mass and investment interest. "Critical mass draws and retains brain power," he said. To put it into a real estate perspective, he said his research has shown cities with high cluster rates have high cap rates and vice versa.
As the world changes, demands on natural resources and land will drive innovation and proactive measures for sustainability as well as operating cost-containment initiatives, high-density development and space planning – at work and home. The General Services Administration's proactive stance is to require Energy Star-rated buildings for all office leases as of this year.
"I don't hear people talking about sustainability as a business. I hear people talking about sustainability as a cause. Sustainable processes and products will be a huge business," Buckley predicted.
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Cinemark Parking 12-Screen
Theater at Frisco Square
FRISCO, Texas – Cinemark Holdings Inc., armed with a plan for digital and 3-D, has signed a build-to-suit agreement to put a 12-screen theater in Frisco Square. A December opening has been penciled for the anchor project.
"The build-to-suit construction of a multi-screen theater has been part of our original development plans since we originally invested in Frisco Square two years ago," said Samuel A. Gillespie, COO of Dallas-based Behringer Harvard Opportunity REIT I Inc. The theater site is a half-block west of Frisco City Hall.
The North Texas-based Cinemark is planning stadium seating, online "print at home" ticketing and a self-serve concessions stand. The theater design includes a Cinemark XD: Extreme Digital Cinema auditorium.
In August 2007, Behringer Harvard's REIT I bought a stake in Frisco Square from Fairways Frisco, getting development rights to 48 of the 147 acres in the mixed-use, planned development. The REIT's land stake has 114 of the project's 396 apartments, more than 100,000 sf of office space and nearly 69,000 sf of retail space. Jim Weir of the Retail Connection in Dallas holds the Frisco Square retail leasing assignment.
Jim Leslie, Fairways Frisco's managing partner, said the developers "are fortunate" that Cinemark is coming to the town square. "We are confident that this wonderful new theater will add momentum to our efforts," he said.
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Dallas Chamber Brings In Boston
Consulting for Strategic Planning
DALLAS – The Boston Consulting Group (BCG) and the Dallas Regional Chamber will undertake a strategic planning study for the region. The assessment is slated for completion in the summer.
"Times have changed significantly since we conducted our last strategic plan and 2010 brings a new decade of challenges and opportunities, and the DRC needs a new strategic plan," said James C. Oberwetter, the chamber's president.
Thomas L. Lutz, J. Puckett and Pattabi Seshadri, all partners in BCG's Dallas office, will conduct the study. David Corrigan, chamber chairman, has established a Futures Committee with 25 key business leaders, including Peter Beck, chairman of the Beck Group, to help with the initiative.
"We have done similar work at other chambers of commerce and look forward to leveraging our expertise here as well. Through these efforts, we hope to continue to drive growth in the Dallas region," Lutz said. Oberwetter pointed out that the current vision, mission and effectiveness of the chamber will be assessed and the outcomes used to "identify a range of looking-forward options" to provide future direction. The surveys will be completed in four to six months.
"We are exceptionally pleased to have the opportunity to conduct this study in partnership with BCG, such a renowned and credible management consulting firm. We could not be more excited about the opportunities this process will bring," Oberwetter added.
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PNL Parading 1.2 Million-SF
City Place to Investor Circles
FORT WORTH – In a rare buy-in opportunity for downtown Fort Worth space, PNL Cos. has placed the 1.2 million-sf City Place on the market in a sale or joint venture scenario, including an offer to take all or part of the landmark mix.
The property, formerly RadioShack Corp.'s headquarters location, takes up four city blocks. PNL redeveloped the towers, One and Two City Place and developed City Place Center to connect the pieces and add more street-level retail space to the downtown blocks. PNL's list of buy-in options includes an offer to remain as a development partner or minority owner/operator. Marketing the properties is the Jones Lang LaSalle team of managing directors John Alvarado, Jack Crews and Evan Stone.
"The ability to purchase the components of City Place either together or separately makes this an incredibly attractive opportunity for a wide spectrum of potential investors," Alvarado said. The 18-story, 329,225-sf Two City Place represents a core/value-add office investment with strong long-term cash flow from 78 percent occupancy and only 16 percent of leases expiring before 2017. Office and multifamily investors are the most likely candidates for the vacant 19-story, 501,320-sf One City Place and 215,320-sf City Place Center.
Dallas-based PNL's vision for One City Place had focused on office, hotel or luxury residential uses. In 2007, it had plans in hand to convert the space into 176 condominiums, but the fall in the credit markets drove the project to the backburner. Also in hand are plans for City Place Center to be renovated into 106,000 sf of office and street-level retail with 402 parking spaces.
Stone pointed out that City Place has "more new development surrounding it than any comparable project in Fort Worth" and sits in a pocket eligible for New Market Tax Credits to "substantially enhance a residential conversion strategy."
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Physician Buys North Fort Worth Building
FORT WORTH – Dr. Alberto Flores has acquired a three-story office building in north Fort Worth, kicking a plan into motion to occupy part of the space and lease the balance of the 14,886 sf.
Built in 1985, the building is located at 1220 N. Main St., just north of the CBD and within blocks of the Fort Worth Stockyards. SCM Real Estate senior agent Theron Bryant represented the seller, the Robinson Family Trust of California. Tim Clark with KW Commercial Real Estate in Dallas represented the buyer.
Flores plans to use the first floor to house Clinica Guadalupe. The clinic currently is located at 309 NW 25th St. in Fort Worth.
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Tech Firm Gets HQ Building
DENTON – Technology Resource Center of America, a telephone/voice retrieval company, has scooped up an 88,000-sf office/warehouse on 16 acres to support future expansion plans and house its headquarters.
The property is located at 2600 E. University Dr., a former distribution location for Weatherol Supply Co. Dan Spika of Henry S. Miller Brokerage LLC single-handedly arranged the sale, acting as sole broker for the seller, Baker Distributing, Weatherol's parent.
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CMC Sells Cigna Pointe
PLANO – CMC Commercial Realty Group has sold the 209,089-sf Cigna Pointe in far north Dallas. Also, retail and industrial properties have changed hands in the metroplex.
The Dallas Morning News identified Cigna Pointe's buyer as Cole Real Estate Investments, a Phoenix-based investor with an appetite for retail and net-leased properties.
Cigna Pointe, a class A four-story office building at 1640 Dallas Parkway, is fully leased to Cigna Corp. under a 10-year lease with 1.5 percent rent escalations and two five-year renewal options, according to marketing pieces. The LEED-certified building, developed last year on a 13-acre tract, had been marketed for $54.56 million and a 6.75 percent cap rate.
The single-tenant, net-lease sale was brokered by Gary Carr, Russell Ingrum, Jack Fraker and Josh McArtor, all with CB Richard Ellis in Dallas. Completed in September 2009, Cigna's regional headquarters building was designed by Dallas-based Corgan Associates for the North Texas developer.
In other recent CBRE-brokered sales, a local investor bought a 17,605-sf retail building at 3606 Greenville Ave. in Dallas from the Joseph T. Matassa Family LP. Jennifer Pierson and Beth Pierson represented the seller.
Also, KAF Second Chance Treasures picked up an 18,550-sf industrial building at 7939 Heinen Dr. in Dallas from ThreeStar Properties LLC. CBRE's Michael Chiocca represented the seller.
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64,240-SF CarMax Sells in Garland
GARLAND – A national REIT has taken title to a 64,240-sf CarMax-leased building, strategically positioned within viewing distance of Interstate 635 in northeast Dallas.
MSKW Garland Investments is the seller of the 14.41-acre property at 12715 LBJ Freeway. The building was constructed in 1997.
"The property is a well-located CarMax with a triple-net lease and no owner responsibilities," said Martin B. Cohan, vice president of investments in West Lost Angeles for Marcus & Millichap Real Estate Investment Services. "There are 12 years remaining on the base term of lease and there are two 10-year options with 10 percent increases with each option." Tim Speck, first vice president and regional manager in Dallas for the Encino, Calif.-based brokerage firm, also provided representation.
The CarMax property neighbors a Wal-Mart Supercenter. Other nearby businesses are Cinemark Hollywood USA Movies 15, Denny's, Chili's Bar & Grill and two hotels.
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Aldi Site Sold
HURST - Centric Capital Partners has purchased the land under a new free-standing Aldi Food Market located at the southeast corner of Precinct Line and Harwood Road in Hurst, Texas. ALDI is a leader in the international grocery retailing industry, serving Europe, the USA and Australia. Aldi constructed the 15,560 sf building which sits on 2.373 acres of land. The property was purchased for long term investment purposes.
In 2010, Centric Capital Partners will invest in excess of $25 million, all cash, purchasing single tenant properties and ground leases in the DFW Metroplex. Sean Byrne of the Byrne Company was the broker on the transaction.
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Wachovia Deal Completed
ARLINGTON – Marcus & Millichap Real Estate Investment Services has announced the sale of Wachovia Bank Ground Lease, a 3,863-sf single-tenant net-leased property located in Arlington, Texas, according to Tim Speck, First Vice President/Regional Manager of the firm’s Dallas office.
Philip Levy, Tommy Tucker and Jason Vitorino, investment specialists in Marcus & Millichap’s Dallas office, had the exclusive listing to market the property on behalf of the seller. The buyer, a private investor, was secured and represented by Dennis J. Leslie and Adam Paulsen, investment specialists in Marcus & Millichap’s San Diego office.
Constructed in 2008, Wachovia Bank is located at 4380 West Green Oaks Boulevard with highway visibility from Interstate 20. The 20-year, corporate guaranteed, absolute net ground lease allows for zero landlord responsibility for this AA-credit tenant (S&P).
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AT&T Unveils Innovation Center Plan
DALLAS – AT&T Inc. this year plans to open at least two innovation centers in the U.S. and one abroad. The centers are aimed at development of next-generation devices, applications and equipment for mobile and wired broadband.
"We envision these AT&T Innovation Centers as a crossroads for the industry to drive new capabilities crossing networks, devices and applications," said John Donovan, chief technology officer for the Dallas-based company. "They will provide an opportunity for AT&T experts to work directly with others in the industry to develop, evaluate and perfect new apps and services as broadband networks continue to evolve in the years to come."
For now, AT&T is keeping the locations and staffing under wraps, but said in a press release that more details will be released later this year. Each center will focus on application and service development, prototyping, equipment testing and demonstration of emerging capabilities. AT&T has earmarked $18 billion to $19 billion for 2010 capital expenditures, including $2 billion of wireless network and backhaul investment.
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Sold: 4,921-SF Net-Leased Building
GRAND PRAIRIE, Texas – A private investor from Sarasota, Fla., has taken the keys to a 4,921-sf, single-tenant, net-leased property in the Great Southwest Industrial District.
Philip Levy, Jason Vitorino and Tommy Tucker in Marcus & Millichap Real Estate Investments Services' Dallas office brokered the sale of the three-year-old building at 2804 NE Green Oaks Blvd. Christian Bros. Automotive has a corporate guarantee resting on its 15-year, primary-term lease for the build-to-suit, situated on a half-acre tract. According to tax records, the seller was Houston-based Christian Bros. Grand Prairie.
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Shelbo, Pro-Build Seal
10-Acre Industrial Deal
GARLAND, Texas – Shelbo Developmental LLC of Plano, Texas, has taken title to a 42,000-sf industrial building set on 10 acres along West Miller Road.
The buyer acquired the empty warehouse at 2950 W. Miller Rd. from Pro-Build Real Estate Holdings of Dallas. Dan Spika, executive vice president of Henry S. Miller Brokerage LLC represented the buyer while Larry Leon of CB Richard Ellis handled negotiations for the local seller.
Shelbo plans to use the building to store equipment, according to a press release. The warehouse, developed in 1979, is outfitted with 2,900 sf of office space plus has direct rail access.
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Harkinson, First Industrial Ink
Sale of 60,530-SF Office Flex
CARROLLTON, Texas – Locally based Harkinson Investment Corp. has scooped up its neighbor's property in a quick-moving deal for a 60,530-sf, fully leased office flex building in the Highlands development in North Dallas.
Harkinson has bought 2532-42 Highlander Way from FR/CAL Highlander LLC, sponsored by Chicago-based First Industrial Realty Trust Inc. Harkinson's new holding is the headquarters for Fast Signs Holding Corp. and tenants Pivot Building Systems and Abstract Construction. It is positioned beside Harkinson's 45,846-sf office building, which is 88 percent leased to four tenants.
Jeff Harkinson, president of the investment firm, said the acquisition is the first, but not the last one, for 2010. He said he intends to use some "dry powder" that has accumulated from sales in recent years, including an $84.5 million portfolio pass in early 2008. "This is the second best buying opportunity of my lifetime (the best being after the commercial real estate bust in 1986)," he said in a press release. "If I've learned one thing over my investing career, it's that you need to be buying when everyone is clamoring to sell, and selling when everyone is clamoring to buy."
Harkinson has his eye on class B or better properties built in the last 10 years in class A submarkets. Also key to capturing his attention are below-replacement costs and in-place rents that are at or below market rates. He said the drawing cards were the asset's creditworthy tenant mix, with no near-term lease expirations, quality construction and below-replacement cost pricing.
Ron Hebert with the Dallas office of Marcus & Millichap Real Estate Investment Services represented Harkinson in the purchase of the 10-year-old building. Michael Lawrence in the brokerage firm's Newport Beach office and Scott Ryan, also on the Dallas team, negotiated on First Industrial's behalf. Ron Reese, managing director in Dallas for Minneapolis-based NorthMarq Capital LLC, arranged financing with Aviva Investors of North America.
Harkinson took the deed within 60 days of placing the purchase contract. "Harkinson was selected by the seller over other prospective buyers due to his outstanding reputation for honesty and integrity and his track record of never having contracted for the purchase of a property that he failed to close," Hebert said. "Certainty of closing was important to the seller."
The family-owned commercial real estate firm has been an active investor since 1991. "We did some major pruning of our portfolio during the past five years, retaining mainly those properties that were time-tested stars," Harkinson said, noting that "it's a nice feeling, with hindsight, to realize we also had good timing on the sell side."
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Broad Street Commons Getting
123,000-SF Kroger Marketplace
MANSFIELD, Texas – Kroger Co. has unveiled plans for a 123,000-sf store at Broad Street Commons. The location is the third one in Dallas/Fort Worth and fifth in the state for the Cincinnati-based grocer's new store concept.
The grocer has ticketed 55,000 sf of the new store for general home merchandise, including a Fred Meyer Jewelry store and home furnishings section featuring Ashley Furniture. Broad Street Commons is being developed by the Shops at Mansfield LLC, which was represented by Karla Smith and Jean Smith of United Commercial Realty/ChainLinks in Dallas. The Kroger Marketplace is slated to open in summer 2011 at the corner of East Broad Street and US Hwy. 360.
Broad Street Commons will include a Kroger fuel center, pad sites and 16,000 sf for small shops. It is being developed by a partnership between Jerry Crenshaw and Jim Shindler. Conifer Real Estate Inc. will oversee and manage the center.
"Mansfield is a perfect location for a Kroger Marketplace because of its demographics, growing residential population and lack of grocery competition," said Shindler, owner and president of Conifer Real Estate.
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Sold: 184,317-SF Net-Leased Industrial
DALLAS – Monmouth Real Estate Investment Corp. has acquired an 184,317-sf industrial building secured by a 10-year net lease with Carrier Corp.
The building, completed last year, is situated on a 10-acre tract at 2000 Luna Rd. in Valwood Industrial Park near the intersection of President George Bush Turnpike, Interstate 35E and LBJ Freeway. Holliday Fenoglio Fowler LP managing director Jud Clements and director Robby Rieke marketed the building for Langford Property Co. of Dallas, arranging a free-and-clear sale of the holding for the Freehold, N.J.-based buyer.
"Valwood is a favored location for HVAC companies like Carrier, primarily due to its central location and the transportation arteries that provide convenient access to all parts of the city," Clements said.
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Lone Star Places $270 Million
Buyout Offer for Lodgian
DALLAS – Showing the depth of its financial clout, Lone Star Funds and Lodgian Inc. have signed a $270-million definitive agreement for a lock, stock and barrel buyout of a 6,401-key hotel portfolio. If all goes as planned, the transaction will close during the second quarter.
Lone Star's plan, which includes debt, is to acquire Lodgian's outstanding common stock for $2.50 per share in an all-cash transaction. According to a press release, the price represents a premium of 67.2 percent over the Atlanta-based company's average closing share price in the past month and 64.3 percent of its six-month average. The acquisition price includes a debt assumption.
Lodgian's board unanimously approved the merger agreement and recommended shareholders to do the same. "We believe that Lone Star brings considerable real estate experience and financial strength to our assets, and we look forward to working with Lone Star to transition the business as smoothly as possible," said Daniel E. Ellis, Lodgian's president and CEO.
Genesis Capital LLC was Lodgian's financial adviser and Houlihan Lokey Howard & Zukin Financial Advisors Inc. provided the fairness opinion for the board of directors. King & Spalding LLP is acting as legal counsel to Lodgian and Hunton & Williams LLP is legal counsel for Lone Star. Dana Ciraldo, previously affiliated with Hodges Ward Elliott, is Lone Star's financial adviser.
"We are pleased to welcome Lodgian to the Lone Star family and look forward to working with their talented team to integrate the business into our portfolio," said Lone Star Funds' Andre Collin, senior managing director of real estate in the Americas for the Dallas-based investment group. "This is a diverse and well-managed hotel business that will complement our existing real estate assets."
Lodgian owns and manages 34 hotels in 20 states, of which 16 are Intercontinental Hotels Group brands, 12 are Marriott brands, two fly Hilton flags and four are affiliated with other nationally recognized franchisors.
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Sold: 136,751-SF FedEx Net Lease
SUNNYVALE, Texas – A New York-based investor has acquired a 136,751-sf FedEx net-leased freight facility located 10 miles from downtown Dallas. The deal closed 17 days after the end of the due diligence period.
Alvin Mansour, senior vice president and senior director of Marcus & Millichap Real Estate Investment Services, represented the seller, a developer from Washington state. The buyer's brokers, also with Marcus & Millichap, were Ben Sgambati, vice president, and Alan Cafiero, industrial specialist, both in the New Jersey office. Will Jarnagin, the licensed partner in the firm's Dallas office, also worked on the sale of the 30-acre asset at 301 Clay Rd.
"With increasing demand for large single-tenant properties backed by credit-rated corporate guarantors, the Mansour Group was able to produce more than six offers and a fully executed letter of intent within 30 days of marketing," Mansour said. He credited the quick close to a streamlined due diligence process.
The freight facility has 11,761 sf of office space, 113,720 sf of warehouse space, 9,640 sf of shop space and room to accommodate a 20,860-sf expansion. The asset also includes an 80-sf guard shack and 2,000-sf fuel island, outfitted with a 12,000-gallon, double-walled fiberglass underground storage tank with a Veeder-Root monitoring system.
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DFW International Airport Lands
In 1st Group for FTZ Rule Change
DFW INTERNATIONAL AIRPORT – The DFW Foreign Trade Zone (FTZ) has been cleared by the US Department of Commerce to operate under new and streamlined procedures to make domestic business more internationally competitive.
DFW International Airport's FTZ has become one of the first in the nation to receive the nod, which means eligible businesses can secure FTZ status in an expeditious and simplified process. The process will take less than 45 days, with the cost being nominal, versus the historic norm of more than one year to earn the commerce department's nod. Under the approval, Dallas, Tarrant, Collin, Denton, Grayson and Rockwall counties are pre-approved as eligible FTZ property.
"While the DFW Foreign Trade Zone has always been a strong contributor to the North Texas economy, with these new guidelines, we are truly 'open for business,'" said Jeff Fegan, CEO of DFW International Airport. “The approval is a strong validation of the international business climate in North Texas."
The DFW International Airport Board administers the DFW FTZ. Last year, businesses in the FTZ handled more than $2 billion of merchandise.
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Dividend Capital Buys Dallas
Duo, Changes Leasing Team
DALLAS – In back-to-back moves, Dividend Capital Total Realty Trust Inc. has acquired 324,177 sf in two class A office buildings in Dallas and selected its new leasing team for going forward.
The Denver-based REIT scooped up the 177,169-sf Park Place on Turtle Creek at 2911 Turtle Creek Blvd. in Uptown/Turtle Creek and 147,008-sf Preston Sherry Plaza at 8201 Preston Rd. in the tony Preston Center. The seller was TIAA-CREF in New York.
Guy Arnold, president of Dividend Capital, said Preston Sherry Plaza is "an opportunity" to enhance the portfolio's core office holdings while getting a foothold in one of Dallas' premier office markets. "In addition, the in-place debt provides attractive terms and does not mature until 2015, providing us the opportunity to enhance yields, control an institutional-quality building and build potential value for our shareholders," he said. The seven-story Preston Sherry Plaza's retail and office space is 89 percent occupied.
The 14-story Park Place is a 70 percent-leased building across the street from the Mansion on Turtle Creek. "This property offers a value-add opportunity in one of the highest rent submarkets in the Dallas metro area," Arnold said. "The low initial cost basis should enable us to reposition the property to attract tenants, boost occupancy and increase yields."
The REIT hired Jones Lang LaSalle senior vice presidents Jeff Eckert and James Esquivel to oversee leasing of its new Dallas deeds. "We are excited to establish this relationship in Dallas with Dividend Capital," Eckert said. "Park Place on Turtle Creek and Preston Sherry Plaza are two of the most prestigious buildings in their respective Dallas submarkets and we anticipate significant interest in these two properties."
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FEATURED PROPERTY
Shuttered Hospital Hits Auction Block
MESQUITE, Texas – The closed Dallas Regional Medical Center and five partially leased medical office buildings have been tagged for a sealed bid auction. The 196,234-sf portfolio on slightly more than 11 acres hits the block Feb. 2, with a best-and-final penciled for seven days later.
"We have made the internal decision to dispose of this property to free up capital for other hospital needs and we look forward to a quick sale and fast closing," says Pete Lawson, executive vice president of Health Management Associates. Sperry Van Ness Auctions has been hired to move the property, with David Cook, SIOR, of Dallas in charge of the sale of the complex as 3500 Interstate 30. His team includes David E. Gilmore, CCIM, John Johnson, CAI, Louis Fisher, CAI and Don Erler.
The property features more than 1,000 feet of frontage along Interstate 30 and sits seven miles east of downtown Dallas. In a press release, Cook said the holding "might be sold for near land value alone."Details are available at www.svnauctions.com. The property has been divvied into three tracts, opening the door for individual or a lock, stock and barrel sale.
Sitting on a six-acre tract, the 139,400-sf hospital was built in 1977 and paced through three renovations and additions, the last of which was in 2005.
The second tract has a pair of two-story office buildings on 3.35 acres. The 37,676-sf duo was built in 1973.
The third tract holds a trio of 6,386-sf single-story buildings on 1.75 acres. Two buildings delivered in 1970 and the third in 1977.
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Digital Realty Trust, KDC
JV on Data Center Plan
DALLAS - Digital Realty Trust Inc. is pairing with Dallas-based KDC to offer data center users a single source of contact for build-to-suit projects from the beginning of the process, through development and move-in.
"For the first time, customers have a one-stop shop for their build-to-suit datacenter projects. KDC and Digital Realty Trust together form the single provider for custom build-to-suit datacenters for enterprise customers without financing contingency risk," said Chris Crosby, senior vice president for San Francisco-based Digital Realty Trust. The initiative includes Digital Realty's financial and technical resources, according to a press release.
Crosby indicated KDC's experience in corporate build-to-suits earned Digital Realty's nod. Through its IntelliCenter program and other build-to-suit contracts, KDC has completed more than 110 build-to-suit projects nationwide in the past decade.
"This alliance is a natural complement for both companies. Digital Realty Trust is the world's leading wholesale datacenter provider and KDC sets the standard in the customized build-to-suit corporate facilities marketplace," said Steve Van Amburgh, CEO at KDC. "At a time when most companies are having difficulty obtaining financing for major construction projects, our alliance provides a simple, best-in-class process for the leasing of a custom datacenter facility."
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Dallas Restaurateurs Launch New Eatery
DALLAS - Two North Texas restaurateurs are joint venturing on a new fast-casual Asian restaurant, Bistro BabuSan, the first of which will open in the spring in MG Herring Group's Village at Fairview, a 1.1 million-sf mixed-use development in far north Dallas.
Al Bhakta, president and CEO of Genghis Grill Franchise Concepts LP, and Mark H. Brezinski, founder of Bengal Coast Restaurants LP, have created a fresh Asian fusion menu as BabuSan's market hook. Brezinski was co-founder of Pei Wei Asian Diner and then branched out on his own with Bengal Coast, a south Asian fusion restaurant in Dallas' Oak Lawn. Bhakta and the Chalak Group started as Genghis Grill franchisees and then bought the company in 2004.
"Our mutual goal is to open this first restaurant together and assess how best to co-determine its future. Our shared opinion is that there is a great future in this segment and that a broader Asian cuisine gives us a real advantage in the fast casual niche," said Bhakta, who's been instrumental in growing Genghis Grill to 41 locations.
BabuSan is a blend of Asian terms of endearment or respect for others. Brezinski, who has a decade of experience in the fast-casual segment, said his team is "poised to apply the lessons we have learned these past few years."
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Berkeley Lands $65 Million Refinance
DALLAS – Berkeley Investments Inc. has closed on a $65 million refinance of the 1.3 million-sf 1700 Pacific, a class A high rise in downtown Dallas.
The Boston-based owner had Holliday Fenoglio Fowler LP managing director Steve Heldenfels and senior managing director Whitaker Johnson aligning the fresh capital, with the deal swinging to ING Investment Management. The new loan has a five-year term and fixed-rate interest.
"1700 Pacific is a world-class, trophy office tower in Dallas' central business district that has earned a reputation as the market leader for small tenant leases," Heldenfels said of the 49-story tower. The building's larger tenants are Akin Gump Strauss Hauer and Penson Worldwide.
Berkeley Investments, owned by Jon Hamilton and the Hamilton family, acquired the tower in June 2005. The owner has since paced the tower through a renovation, adding amenities such as Starbucks, Café Solace, Elevation Fitness Club, concierge and dry cleaners. The asset features a three-level, 297-space underground parking garage and a sky bridge to the 1,439-space Elm Street Garage.
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3,784-SF Office Building Sells
NORTH RICHLAND HILLS, Texas – The Reddoch Agency has bought a 3,784-sf building from Crest Haven Properties LP.
Russell Webb, vice president with Dallas-based Stream Realty Partners LP, represented the seller of 8605 MidCities Blvd. The buyer is a Nationwide Insurance Co. agent.
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$5.6 Million Buys Three Bank Sites
FORT WORTH – A private investor from New York has put $5.64 million on the line to acquire three bank locations in North Texas. In all three cases, the 3,500-sf buildings were formerly occupied by Washington Mutual and now have Chase Bank's name as the net-lease collateral.
The just-sold properties are 6760 W. Vickery St. in Fort Worth, 12325 Lake June Road in Balch Springs and 561 W. Interstate 30 in Garland. The seller is a developer from Addison, who was represented by Alvin Mansour, senior vice president of investments and a director of Marcus & Millichap Real Estate Investment Services' Net Leased Properties Group. Tim Speck, regional manager in Dallas, assisted in the transaction.
The Fort Worth property brought slightly more than $1.65 million, with the buyer getting a tenant with a 15-year lease with three five-year options, according to a press release. The net-lease arrangement calls for 10 percent hikes in the rent every five years.
The Balch Springs location commanded more than $2.32 million. It is situated on a Wal-Mart outparcel. It too is secured with a 15-year, triple net lease with 10 percent rent bumps every five years.
The Garland site sold for more than $1.66 million. The bank neighbors Wal-Mart and is flanked by national retailers, a Kroger's grocery store and several national restaurants. Its 15-year lease has three five-year options, with 10 percent rent hikes every five years.
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NTCAR's 2010 Broker Forecast
Sheds Light on Opportunities
By Connie Gore
DALLAS – Hoping to catch a glimpse into the future, Dallas/Fort Worth brokers yesterday were out in full force to listen to experts talk about the opportunities in the market amid the harsh realities of negative absorption, rising vacancies, falling rents and increased tenant demands. The story is much the same regardless of property type.
The North Texas Commercial Association of Realtors' 2010 Broker Forecast lured more than 600 commercial brokers to the Frontiers of Flight Museum at 6911 Lemmon Ave. in Dallas. Panel moderator was Mark Fewin, senior managing director of CB Richard Ellis. On the stage were Jack Fraker, CBRE's executive vice president; Kathy Permenter, managing director of agency leasing for Grubb & Ellis Co.; Mickey Ashmore, president and CEO of United Commercial Realty/ChainLinks; and Rick Medinis, executive vice president of NAI Robert Lynn.
"There's been opportunity in this recession. The issue is knowing where the opportunities are," Ashmore said. His firm's retail clients, like their peers in other property sectors, spent last year looking for new ways to keep moving forward yet preserve capital, which for Kirkland's meant exiting malls for Target-anchored centers and Lowe's decision to sell outparcels beside its stores.
"There was opportunity because retailers suddenly started looking at ways to lower their occupancy costs," Ashmore said.
Medinis, the panel's industrial expert, provided stats to show the market's been basically flat – and that's not too bad in today's world, he said. With industrial vacancy hovering 12 percent, he said this year will be much like last year as landlords fiercely compete for tenants to keep the lights on in their buildings and their properties out of foreclosure.
Where there are brokers, there is talk about deals. Medinis didn't name names, but did say two class A owners, who previously rejected lowering rates, pocketed two leases by matching class B rates just as the tenants were poised to sign deals at other locations. And, conditions will stay volatile until 15 million sf of industrial space is absorbed, he predicted.
"The expectations of the tenants were extremely different from the expectations of the owners," Permenter said about 2009. "There was too much space chasing too few deals and it was taking forever."
The days of 50 cents off the face rent and one month of free rent are long gone, according to Permenter. Counter offers sought discounts of $3 per sf to $4 per sf plus more costly tenant improvements. "The debt-free owners were certainly the stars of the year," she said.
Permenter said she's "confident we are on the road to improvement" although corporations have "quite a few holes to fill before we see expansion." Part of the 2010 picture is the U.S. office vacancy rate, now 17.5 percent, is going to climb, she said, predicting it will peak at 18.7 percent before all is said and done.
As CBRE's All-Star of investment sales, Fraker took a direct hit from the recession, watching U.S. sales plummet 90 percent from 2007 levels. His team had 60 deals benched last year.
"It's gotten better recently, which gives me a lot of optimism," Fraker said, adding that the sidelined deals present opportunities for his team in the months ahead.
As a veteran of other recessions, Fraker said he's spent the down time "reinventing our team and becoming more efficient." And his resolution for 2010 is "be more optimistic, more positive and still hit the road…to get out there where the money is."
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1031 Exchange Buyer Buys Roanoke Corners
ROANOKE, Texas – A fully leased, two-tenant retail building has been bought by a Central Texas investor working a 1031 exchange.
The 12,650-sf Roanoke Corners at 200-04 E. Highway 114 went under contract within two weeks of hitting the market, said Tommy Tucker, investment specialist in Dallas for Marcus & Millichap Real Estate Investment Services. Sold by its Dallas-based developer, the five-year-old building is occupied by Sherwin Williams and 6 Day Dental and Orthodontics, both working through 10-year leases with rent increases at the five-year mark.
Tucker said the listing drew high interest from investors due to the assumable non-recourse loan at an interest rate and terms that were better than what is currently available in the market. The asset is positioned across the highway from a Wal-Mart Supercenter and Home Depot.
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Tarrant County's 2010 Forecast
Calls for Survival Strategies
By Connie Gore
FORT WORTH – Although Texas has shown its recessionary resilience, leading real estate experts foresee the marketplace will remain dormant or stressed at least through midyear.
During the heyday years of not so long ago, Fort Worth was a shining star, with high occupancies in all property sectors and top-of-the-market rental rates for high-end space. That's not the case today, but the reality is it's still better to be in Fort Worth than its sister city to the east or many other metropolitan cities in the U.S., according to a panel of experts at Tarrant County's annual real estate forecast.
This year's uncertainty for the commercial property sectors drew more than 600 professionals to the Fort Worth Convention Center in the downtown, an event that fittingly benefits the Fort Worth Chamber of Commerce's economic development program.
"The key to real estate deals is doing extensive due diligence," emphasized Ben D. Loughry, managing partner of Integra Realty Resources DFW LLP. The veteran cited a long-held belief that when cap rates hover 10 percent so does vacancy. "It looks like those times are returning and it could be sooner than we think," he said.
Joining Loughry on the dais were Rob Sell, partner and co-founder of Village Homes LP and V Fine Homes LP; Susan A. Halsey, partner at Jackson Walker LLP; James M. Makens, president and founder of the Makens Co.; Michael K. Berry, president of Hillwood Properties; and Todd Burnette, managing director of the Fort Worth office for Jones Lang LaSalle.
RESIDENTIAL – Sell blamed the city's slow condo sales, in part, to new lending requirements for conforming loans, which are unavailable for units in buildings with unsold inventories of less than 70 percent. It's not the development; it's the lending environment with its tightened underwriting requirements, he contended. As for what lies ahead, he predicted "it will be a strong buyer's market all year and well into 2011," forecasting an increase in interest rates by October that could motivate buyers and speed sales for willing sellers.
LEGISLATION – Halsey reported Texas legislators reconvening in 2011 will be facing a likely budget shortfall, redistricting and other issues, raising concern the focus will stymie progress on areas of key importance for the region's continued growth, particularly transportation funding for highway projects designed to alleviate congestion.
RETAIL – Makens' message for 2010 is it will be a year of rent renegotiations based on sales performances and co-tenancy at shopping centers. In a more positive vein, grocers have Tarrant County in their sights for 2010 expansion plans in the metroplex. Makens cited Aldi as an example, which is planning to park 13 stores in Tarrant County of the 40 that it has planned for North Texas.
INDUSTRIAL – Berry's take on the market is 2010 will be a year of aggression as landlords fiercely compete for tenants who are chasing newer space at lower rates and more amenities for their locations in a marketplace with double-digit industrial vacancy and 4.7 million sf in 300,000 sf or larger blocks scattered throughout Tarrant County. Higher finish-out packages and free rent are definitely in the equation. Now as before, the entire metroplex stands to gain from consolidations and relocations as companies – in state and out of state – weigh the centralization of operations. He said the challenge is to turn the tire-kickers into deals for the region.
OFFICE – Burnette sees 2010 as a throwback to 1988 when office vacancy was 19.5 percent in Fort Worth. And, he predicted that it will hit that mark once again, with vacancy peaking in the last half of the year. Right now, Fort Worth's vacancy is 15.8 percent and poised to climb as more sublease and shadow space surface in the market. Effective rents dropped 20 percent in the past year and concessions are higher. "It's going to be a tenant's market at least three to four more months," he forewarned. His words of advice for owners: "work renewals hard and early" and "make every deal at the best rate that you can."
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Encore Wire Plans 13,000-SF R&D Center
McKINNEY, Texas – Armed with a late 2010 completion date, Mycon General Contractors Inc. has been hired to build a 13,000-sf research and development center for Encore Wire Corp. The design criteria include LEED Platinum standards such as solar energy, solar water heating, recycled materials, rain water harvesting and environmentally friendly paints and coatings.
"To our knowledge, this is the first Platinum research and development center in North Texas," said Charles Myers, president of the locally based general contracting firm.PageSoutherlandPage is the project architect. A few years ago, the Austin-based firm's Dallas team also designed Encore Wire's corporate headquarters at 1411 Milwood Rd. in McKinney.
Michael J. McCoy, vice president of PageSoutherlandPage, said the publicly traded company's executive team made the decision early on to pursue LEED Platinum. "Encore Wire’s CEO, Daniel Jones made it clear when asked what level of certification they desire to pursue: 'Why would we go for second place when we can obtain a Platinum certification,'" he said in a press release.
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20,000-SF Project Under Way
FORT WORTH – Innovative Developers Inc. has started retooling of a 27,000-sf building, once occupied by Niver Western Wear. The project is slated for completion by April 1.
When the work's done, the Fort Worth Police Department will fill 20,000 sf at 1289 S. Hemphill St. The location will be used for the Neighborhood Policing District 2 and Gang Unit.
The Fort Worth-based contractor will retain the historic characteristics of the building with the interior finish-out and façade enhancements. IDI's Casey Herrell is the project manager and Gary Childress, the superintendent. Robert W. Kelly of Architect Inc. in Fort Worth created the renovation design.
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Texas Health Resources
Plans Alliance Hospital
FORT WORTH – Texas Health Resources will break ground in the fall on a hospital to service north Tarrant County, where it's just bought a tract of land near the intersection of Interstate 35 and Golden Triangle Boulevard.
If all goes as planned, the hospital will open in late 2011 along Old Denton Road, situated within the footprint of the 17,000-acre AllianceTexas. The facility will include an emergency room, outpatient and surgical services, acute-care inpatient beds and doctors' offices.
"North Tarrant County is one of the fastest growing communities in North Texas with limited health care resources to meet the needs of residents," said Barclay E. Berdan, senior executive vice president of the Arlington, Texas-based Texas Health Resources. "Growth in this market will give us the opportunity to provide better coordination of care for patients throughout Tarrant and surrounding counties as well as reach new patients."
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Hillwood Nabs 1.6 Million SF
DALLAS – Hillwood Investment Properties has added more than 1.6 million sf of industrial space to its portfolio, scooping up the Frankford Trade Center in Carrollton and two recently completed warehouses in San Bernadino, Calif.
The 659,340-sf Frankford Trade Center at 1649 W. Frankford Rd. is a vacant, class A building that's undergoing renovation. It was built in 2000, with a 30-acre deal-making location at the corner of the George Bush Turnpike and Interstate 35 and Triple Freeport tax exemption. Its former occupant was locally based Home Interiors & Gifts Inc.
In California's Inland Empire, Hillwood bought Northgate Buildings 10 and 11. The class A buildings, totaling more than one million sf, are adjacent to Hillwood's AllianceCalifornia development, formerly the Norton Air Force Base. The Northgate Buildings are part of the San Bernardino Valley Enterprise Zone. The portfolio addition pushes AllianceCalifornia to more than 8.6 million sf.
"With the challenges of the current global economy, Hillwood is focused on identifying the right investment and growth opportunities across the country," said Ross Perot Jr., chairman of Dallas-based Hillwood.
Tal Hicks, president of Hillwood Investment Properties, added that the company is "committed to making strategic decisions that not only make good business sense, but good sense for our local communities."
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Dallas Investor Buys Panther Park
By Connie Gore
PLANO, Texas – A private investor from Dallas/Fort Worth, up against four other would-be buyers, has acquired the 42,093-sf Panther Park shopping center from a local seller.
The 91 percent-leased center at 2380 E. Park Blvd. was under contract 40 days after it hit the market, according to Tommy Tucker, an investment specialist for Marcus & Millichap Real Estate Investment Services in Dallas. The all-cash close came 45 days after the winning contract was placed.
"Overall, multi-tenant shopping center sales experienced another slow year in 2009, but there was strong interest in this property, including multiple all-cash offers," Tucker said.
Built in 1983, Panther Park's tenant roster includes Domino's Pizza, Allstate Insurance, Rent-A-Center, Dollar General, Nationwide Insurance and a variety of local retail tenants. The asset is situated less than two miles from Central Expressway.
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Capital Senior Living Plans
Sale-Leaseback in Midwest
DALLAS – Capital Senior Living Corp., via an affiliated partnership, will sell five communities with 390 beds in the Midwest to Health Care REIT Inc. The terms call for the Dallas-based operator to manage the portfolio for the long term.
The seller is Midwest Portfolio Holdings LP, a joint venture in which Capital Senior Living holds an 11 percent stake. Four properties are located in Nebraska and one in Iowa. According to a press release, the portfolio's financial occupancy is 91 percent. Capital Senior Living has managed the portfolio since 2006. The sale-leaseback jump-starts a new business relationship for the operator.
"This transaction will provide immediate benefits to our shareholders," said Lawrence A. Cohen, CEO of Capital Senior Living. The operator contributed $2.7 million to Midwest I and will realize about $3 million in proceeds after the sale. Additional proceeds are possible once the JV settles post-closing costs.
The portfolio yields about $10.7 million of annual revenue and $5.1 million of Ebitdar, according to the release. The initial triple net lease expense comes to about $4 million, with annual escalations built into the pact. The lease was structured with a 15-year term and one 15-year renewal option.
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TriGate Capital Buys 319,926-SF Portfolio
By Connie Gore
DALLAS – TriGate Capital LLC, with up-close insight to the market, has acquired a three-building portfolio with 319,926 sf of office space in far north Dallas from GE Capital.
Underwriting the purchase are several below-market rental rates for leases on the cusp of rolling and a deep discount to replacement cost for the 158,564-sf Landmark at 14800 Landmark Blvd., 87,154-sf 14850 Quorum Dr. and 74,208-sf Emerald Plaza at 14900 Landmark Blvd. CB Richard Ellis' investment sales team of Gary Carr, Russell Ingrum and Eric Mackey handled the sale.
The CBRE marketing flyer focused on the portfolio's value creation opportunities, creating upside that a Dallas-based buyer would truly understand. Part of the appeal is 95,183 sf left to fill in the buildings, which recently underwent $1 million of upgrades by the Fairfield, Conn.-based seller. Occupancy was 70.3 percent at sale time.
The eight-story Landmark, developed in 1985, was 61.1 percent leased while 14850 Quorum Dr., a five-story building built in the same year, was 78.3 percent occupied. The kid sister, Emerald Plaza, built in 1986, was 80.3 percent leased.
The office buildings are within walking distance of each other, encompassing 5.1 acres in the Quorum submarket. The offering packet emphasized the building's location close to the Dallas North Tollway, the high-demand submarket and institutionally-owned and maintained history. "Construction of such well-located office buildings of comparable craftsmanship today would be cost prohibitive," the team claimed in the flyer.
TriGate is a private equity firm that manages a partnership with CalSTRS, which co-invests with TriGate Property Partners LP. The company is majority owned and controlled by Jay Henry, Jon Pettee and Jeff Yarckin.
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SW Bell Acquires Arlington Tract
ARLINGTON, Texas – Southwestern Bell Telephone Co. has bought slightly more than four acres in central Arlington from a local couple.
Peter Danna with CB Richard Ellis in Dallas represented the buyer. The sellers of 901 W. Mayfield Rd. are William and Pauline Croslin.
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$27.3 Million Deal Crosses Finish Line
DALLAS – As reported earlier this month, Healthcare Trust of America Inc. has closed on the the 52,400-sf LTAC Hospital in North Dallas. The acquisition takes the buyer's investments in Texas to more than $207 million.
The 60-bed hospital at 8050 Meadow Rd. is leased for the long term to a subsidiary of St. Louis-based RehabCare Group Inc. The Scottsdale, Ariz.-based buyer's new holding is situated midway between Presbyterian Hospital of Dallas and Medical City Dallas. The four-story hospital delivered two years ago.
"This asset is in a great position to benefit from the existing standard of high-quality healthcare provided at this hospital," said Mark D. Engstrom, HTA's executive vice president of acquisitions. "We look forward to our continued relationship with RehabCare and the physicians associated with this property."
Healthcare Trust has spent more than $339 million nationwide since January, acquiring 1.4 million sf in 25 properties. The REIT's portfolio now valued at $1.3 billion totals 157 buildings with nearly 6.6 million sf.
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Foreclosure Pressure Rises
In Many Texas CountiesADDISON, Texas – Foreclosure Listing Service Inc., taking a look at seven counties in Central and North Texas, has found foreclosure postings on commercial properties are starting to climb. Only Tarrant County showed a modest decline in the analysis.
"As I anticipated, we have begun to see the economy's impact on the commercial sector in 2009," said George Roddy Sr., president of the Addison, Texas-based firm, "and I expect postings of commercial properties to remain at this level or even higher throughout 2010."
Roddy's four-county review of the Dallas/Fort Worth metro shows notices went up on 2,431 commercial properties this year, a 27 percent spike from 2008. The total represents four percent of the region's 65,700 foreclosure notices tacked up in 2009.
In a breakdown, Roddy attributed 794 to miscellaneous buildings; 550, land tracts; 404, multifamily properties; 263, office buildings; 257, retail; and 163, industrial. Only a few class A postings were under the gun, Roddy concluded, citing class C apartment properties and office buildings with less than 50,000 sf as leading the weighted mix.
In the yearend tally, Roddy found Dallas County led the region with 1,086 notices on commercial assets, up 36 percent since 2008. Tarrant County, reflecting a two percent decline in the past year, accounted for 839 of the total. Denton County had 276 properties posted for foreclosure while Collin County had 230.
In the Austin metro, 851 notices were posted on commercial properties of the 12,000 total that went up in Travis and Williamson counties. There were 410 commercial postings in 2008.
Roddy's breakdown showed miscellaneous buildings led the commercial sector with 444 posted properties. Second place went to multifamily properties, mostly class C product, with 195 notices followed by land with 160 postings; industrial, 25; office, 19; and retail, eight.
The San Antonio metro racked up 863 commercial postings in its 16,000 total in 2009. The Bexar County review also found miscellaneous buildings was the biggest culprit, garnering 481 notices. Land tracts accounted for 158 of the commercial total; apartments, 87; retail, 66; industrial, 47; and office, 24.
"What does concern me about the Austin commercial foreclosure market is that it has had the highest gain among the major Texas metros that Foreclosure Listing Service Inc. monitors," the foreclosure analyst said. "Austin's 108 percent gain in commercial postings over the past year far out ranks San Antonio's 55 percent jump and Dallas/Fort Worth's 27 percent increase."
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Two Buildings Sell in Dallas Area
IRVING, Texas – Capital Commercial Investments Inc. of Austin has bought a 145,591-sf, class A office building in the Las Colinas Office Center from Orix Capital Markets LLC. Also, a 79,029-sf office flex building, just nine miles to the north, has changed hands.
Capital Commercial's new deed, 100 E. Royal Lane, came with leasing upside and development potential. The 68 percent-leased structure sits on 15.2 acres, with ample room for a 215,000-sf office building, 28,000-sf addition to existing building and five-level parking garage, according to the marketing brochure of CB Richard Ellis.
The existing building features a 98,571-sf, three-story office wing and 47,020-sf, two-story telecom/studio wing in plug 'n' play condition. It was developed in 1996.
The Dallas-based seller had 65,000 sf or 45 percent of the building locked into leases with terms that extend beyond 2013. The building's largest tenant is Fox Sports Net Southwest, an affiliate of Fox Entertainment Group, which occupies 34,999 sf. Its lease expires in July 2016. The CBRE team of Gary Carr, Russell Ingrum and Eric Mackey sold the building.
Carr and CBRE's Jonathan Napper also sold Gateway Business Center Building 6 at 2900 Gateway Dr. for BREOF of AIP Dallas L.P. The office flex building was developed in 1984 on a 1.1-acre tract.
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Dallas Logistics Hub Gains LEED Gold
DALLAS – The Allen Group has earned LEED Gold designations for its first two spec industrial buildings in the Dallas Logistics Hub in southern Dallas County.
The local developer picked up the certifications for the 635,040-sf cross-dock warehouse at 4800 Langdon Rd. and its 192,850-sf neighbor at 4900 Langdon Rd. The 6,000-acre park has a build-out potential of 60 million sf of mixed-use space at the crossroads of interstates 20, 45 and 35 and the proposed Loop 9."These buildings are the first steps toward the company’s goal of creating a truly green and sustainable industrial park standard," said Richard Allen, the development group's CEO.
Allen Group's project team included MYCON General Contractors, 3i Construction, LLC, GSO Architects, Bjerke Management Solutions and GGO Architects, the LEED consultant.
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Rave Cinemas' Plan Advances,
Includes $121 Million Portfolio
DALLAS – Rave Cinemas LLC has jump-started a plan to amass a 65-theater portfolio with 1,000 screens in 20 states, all to be branded as Rave Motion Pictures. It also secured operating rights to a 15-theater portfolio bought for $121 million by Entertainment Properties Trust.
In one leg of the expansion plan, Dallas-based Rave Cinemas acquired 29 theaters from National Amusements Inc. of Dedham, Mass., with rights to buy up to six more, and gained control of business operations for four properties of Boston Ventures-owned Rave Reviews Cinemas LLC (RRC). Rave Cinemas also got management rights to 21 other cinemas owned by RRC.
Rave's day-to-day business operations will be managed by RRC's former management team, which has partnered with New York-based TowerBrook Capital Partners LP, Lambert Media Group of Beverly Hills, Calif., and Charles B. Moss Jr. of New York to launch Rave and seed it with the properties of National Amusements and RRC. Moss will act as Rave's chairman and Michael Lambert as vice chairman. New York-based AGM Partners was the acquisition adviser for Rave.
"It has been a great pleasure to work with our founding partner, Boston Ventures, to build the Rave Motion Pictures brand into what it is today. We look forward to starting the next chapter in our company's history with our new partners at TowerBrook along with Michael Lambert and Charley Moss, while continuing to manage the Boston Ventures-owned theaters on their behalf," said Thomas W. Stephenson Jr., Rave's CEO.
In addition, Rave has inked a master lease with Kansas City, Mo.-based Entertainment PropertiesTrust to operate 15 theaters that it bought for $121 million. The 15-property portfolio features 231 screens, of which 24 are 3D screens and three are IMAX theaters. The buyer picked up 52,731 seats in 1.25 million sf of commercial space on 300 acres crisscrossing Connecticut, Massachusetts, New Jersey, Virginia, Kentucky, Ohio, Michigan and Iowa. Rave's master lease has a 20-year term with a quartet of five-year renewal options in a triple-net arrangement.
Entertainment Properties Trust used proceeds from a $191 million sale of stock. "This transaction fulfills the primary indicated use of proceeds outlined at the time of our November equity offering," said David Brain, president and CEO of the investment group. "Completing this transaction fortifies both our expected results for next year and our long-term position in an industry that continues to demonstrate excellent performance."
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Transcend Equity Sowing
$100 Million Green Seed
By Connie Gore
DALLAS - Transcend Equity Development Corp., flexing its muscle in the energy efficiency sector, is courting investors with a new fund to raise at least $100 million of equity to retrofit commercial real estate assets in the U.S.
J. Stephen Gossett, president of the Dallas-based company, said the emerging energy efficiency market is a "green" opportunity now being sized up by institutional investors, many of who are sitting on the sidelines with capital to deploy. If Gossett reaches the fund's goal, Transcend Equity, with leverage, will have $300 million to invest into large-scale energy renovations for commercial real estate.
The fund is a change in strategy for the eight-year-old Transcend Equity. Its M.O. has been to game out energy efficiency strategies for existing buildings and then retrofit the space at no cost to the owner in exchange for their historical energy costs at the retooled property.
Gossett credits the shift in strategy for his Mesa program to President Barack Obama's green initiatives, including innovative calls to action such as the Property Assessment Clean Energy (PACE) bond proposal and growing sentiment for managed energy service agreements.
Gossett said PACE has an upside and downside in that assessing a special tax on a property to cover energy efficiency upgrades through a long-term payback isn't looked upon favorably by lenders because they are forced into a subordinate position to the bond. However, PACE's upside is the tax would almost pay for itself through energy savings, according to Gossett, one of the nation's leading experts in energy efficiency strategies for existing buildings.
Gossett said the U.S. Department of Energy has received a $2 billion allocation that could be PACE's saving grace, creating a backstop with a federal loan guarantee. "It could be an enabling process that makes the system actually work," he said," and encourage lenders to participate."
Gossett said the DoE allocation has caught institutional investors' eyes. He expects his talks will lead to the Transcend fund's launch in 2010, with $25 million of initial equity to seed a $75 million project pipeline. And then, grow it from there.
"The market has changed dramatically. There is a rush of pent-up capital to invest in green projects, particularly energy efficiency," Gossett said. "The energy efficiency market is just starting to balloon and there's nowhere near enough product to satisfy the equity demand."
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Texas Land & Cattle Building
Sells to Central Texas Investor
ARLINGTON, Texas – A limited liability company from San Antonio is holding the deed to a 7,918-sf single-tenant building occupied by Texas Land & Cattle, which has three years left on its primary lease.
The building at 2009 E. Copeland Rd. sits at the epicenter of the city's Entertainment District, a neighbor to Six Flags Over Texas, Hurricane Harbor, The Ballpark at Arlington and the Dallas Cowboys' Stadium. Philip Levy and Jason Vitorino, investment specialists in Marcus & Millichap Real Estate Investment Services' Dallas office, represented the seller, a limited liability company from San Jose, Calif. Chad J. Knibbe and Marla Rhodes in the brokerage firm's San Antonio office represented the buyer.
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Dallas, Houston Make Chase's List
DALLAS – Chase Bank will boost its homeownership centers to 51, planting its first ones in Dallas and Houston by the end of March.
The Big D's first center will open in 12750 Merit Dr. as part of a 24-unit rollout in the U.S. by the New York-based institution. Houston's center will open at 11550 Fuqua St.
The Chase Bank centers are dedicated to loan workouts. "Our first 27 centers have proven to very effective in reaching families who are facing financial hardship and have fallen behind on their mortgages. So, we are adding more locations," said Charlie Scharf, head of the bank's retail financial services.
Chase's other new markets with the initiative will put centers in Cleveland, Seattle and Boca Raton and Fort Lauderdale in Florida. The other 18 centers will be placed in existing markets, with California getting seven more to bump its total to 16. Florida will have 11 centers with the expansion.
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Going Once, Going Twice, Sold
By Connie Gore
DALLAS – Henry S. Miller Brokerage LLC and CRE Auction Group last night paraded 28 properties in North Texas before a standing room-only crowd of investors in the region's first auction of commercial properties since the late 1980s.
The final count of sold assets is pending seller confirmation. Auction prices ranged from $270,000 for a 2,815-sf office shell at 3008 E. Hebron Parkway in Carrollton to $9.9 million for 55.3 acres at the junction of Texas 114, Dove Road and White Chapel Boulevard, right across the freeway from Houston-based Hines Interests' 285-acre Carillon, a proposed development of residential, retail, office and hospitality space.
"Our effort is to reintroduce the auction process. The Internet has made this a whole new world….with purchasers from all over the world," Robert Grunnah, president of Henry S. Miller's land division, said in opening remarks at Prestonwood Country Club in North Dallas.
CRE's auctioneer was Doak Lambert of Coppell. CRE president Bill Vaughan has aligned more than 100 years of commercial and auction experience for the new company based in Southlake, which is acting as a third-party provider for the Dallas-based brokerage firm.
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Transwestern, RREEF Reach
Final Leg of 7.9 Million-SF Plan
By Connie Gore
DALLAS –Staying on track with the plan, Transwestern Dallas and RREEF Real Estate will complete the transition of property management duties for 7.9 million sf of office and industrial properties in North Texas and Oklahoma before the year ends. It's the final move for a RREEF decision last fall to divvy 117 million sf between Transwestern and CB Richard Ellis Group Inc.
"In many cases, we incorporated RREEF personnel into our teams," confirmed Jack Eimer, Transwestern's Central region president. "One of the things that made it work for RREEF was that our corporate cultures are very, very similar. And it made it very easy for Transwestern to bring the RREEF folks into our shop."
Transwestern started 2009 with 22 million sf of property management assignments; it's ending the year with 38 million sf. "During these down times, quality property management gets valued more than in the boom times. As such, good property management companies have grown," Eimer said.
The majority of properties in Dallas and Oklahoma City portfolio previously were managed directly by RREEF, which held fast to asset management duties. Christy Means, Transwestern's senior vice president, will oversee the portfolio. High-profile properties in Dallas include Valwood Park Centreport, 5950 Sherry Lane, Coppell Business Center, 4040 North Central Expressway and the Embassy.
Last September, RREEF awarded 70 million sf to Los Angeles-based CBRE and 47 million to Houston-headquartered Transwestern. CBRE's share primarily was located in northern California, the Pacific Northwest, the Northeast, Midwest and Southeast. Transwestern picked up properties in the Mid-Atlantic, southern California, Southwest and Southeast.
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Brinker Banks $19 Million
From Chili's Midwest Sale
DALLAS – Brinker International Inc. has sold 21 Chili's Grill &Bar restaurants in Kansas, Missouri and Nebraska to Muy Mucho Group LP for $19 million. The buyer also agreed to launch five to 10 new eateries within its territory, inking a franchise and development pact as part of the deal.
At the end of Brinker's first quarter 2010, 40 percent of its restaurants were being operated by domestic and international franchisees.
"The extensive industry experience and expertise held by the Muy Mucho team will ensure their success as they begin operations leadership and further brand development for Chili's in this region," said Don Reyburn, vice president of franchise development for Dallas-based Brinker International.
Muy Mucho, also headquartered in Dallas, is led by Mark Menking, a restaurant industry veteran and former president for the la Madeline® Bakery & Cafe restaurant brand; and Jeff Jones, a 24-year Chili's and Brinker veteran who will serve as the company's COO....................................................................................
AllianceTexas Turns 20
FORT WORTH – The 17,000-acre AllianceTexas, celebrating its 20th anniversary today, has made a $36.4 billion economic impact on North Texas. The mixed-use employment and residential center has generated more than $730 million in property taxes since its inception.
AllianceTexas, a vision of Ross Perot Jr., now houses 229 companies in 31.2 million sf. Its record-breaking impact created 28,000 jobs for the region. Mike Berry, president of Perot's Hillwood Properties, credited former political leaders like Bob Bolen and Jim Wright with making "the bold decision" to invest in the development.
"AllianceTexas also is only about 40% developed so it's equally important now that additional investment is made in critical transportation infrastructure that will allow the development to continue to grow, create jobs and fulfill the intentions that these leaders had when they made the initial public investment two decades ago," Berry said in a press release.
To date, $7.2 billion has been invested in AllianceTexas, of which $6.8 billion was private capital. Public sector funding accounted for 5.4% of the investment, with contributions from city of Fort Worth, state of Texas and Federal Aviation Administration, according to an economic report by Dallas-based Insight Research.
"Over the past year at AllianceTexas, new jobs were created, companies were added and property taxes paid increased despite the challenging economic times that we’ve experienced,” Berry said. Nearly 800 jobs were created this year in construction and permanent development.
Despite 20 years of development, the indisputable anchor is Fort Worth Alliance Airport, which opened Dec. 14, 1989 as the world's first industrial airport and a magnet for air cargo and aerospace manufacturing facilities. The years brought the addition of the BNSF Intermodal Facility and a FedEx sorting hub, laying the foundation for an inland port logistics hub.
AllianceTexas spans three cities – Fort Worth, Haslet, Roanoke and Westlake – in Denton and Tarrant counties. It also encompasses the Northwest and Keller independent school districts.
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Coming Soon: D/FW Commercial Auction
DALLAS – With just four days to go, Henry S. Miller Brokerage LLC and CRE Auction Group have lined up 27 commercial properties for their first auction in Dallas/Fort Worth.
The auction docket includes all property types and commercial land, including entitled acreage. Registration begins at 3 p.m. Tuesday, with the gavel set to slam at 4 p.m. in Prestonwood Country Club at 15909 Preston Rd. in North Dallas. To view properties or register, go to www.creauctiongroup.com.
Among the featured properties is the 50,254-sf Lakeside Village, a five-building shopping center set on four acres at the corner of Central Expressway and Walnut Hill Lane. The 92 percent-leased center has 765 feet of freeway frontage.Also up for grabs is a 56,525, single-tenant, net-leased office building at 1421 W. Mockingbird Lane and 157,330-sf vacant warehouse at 6913 Camp Bowie Blvd. in Fort Worth.
The largest land listing is 617 acres of entitled land for a mixed-use, master-planned development in Kaufman County's Forney. The Irish Ridge development fronts US Hwy. 80. In nearby Terrell, the docket features 607.8 acres of commercial land, also along US Hwy. 80. In Denton County, 550 acres along US Hwy. 380 West are up for grabs.
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Sold: Asian Trade District Land
DALLAS – A 2.12-acre tract at a key intersection in the Asian Trade District of North Dallas has been sold to Texas Forest Properties Inc. for retail development.
The new owner has scooped up 2630 Royal Lane, a hard corner at its junction with Denton Drive, beside Mama's Daughters Diner and a Bank of Texas branch. The site presently holds a drive-through ATM location and provides extra parking for the bank.
Jim Turano, executive vice president of locally based Henry S. Miller Brokerage LLC, represented the seller, Bank of Texas. Bobby Rollings of RBR Properties Inc. of Addison, Texas, represented the buyer.
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Downtown Dallas Keeps
Oncor's HQ, 265,061 SF
DALLAS – Oncor will keep its headquarters in Downtown Dallas, buying a 265,061-sf class B office building as its new address. The CBD relocation will begin before midyear 2010.
Oncor will uproot its 500 employees at 1601 Bryan St. and move them to AEP Dallas Center at 1616 Woodall Rodgers Freeway. In a press release, Oncor said the new location got its nod due to its proximity to the new Woodall Rodgers Park, which its new location overlooks. Joel Pustmueller and Chuck Sellers with Peloton Real Estate Partners in Dallas have been marketing the eight-story AEP Dallas Center for its owner of record, Dallas Woodall PPTY LLC. Lawrence Gardner of OMS Strategic Advisors brokered Oncor's side of the deal.
"We're looking forward to the move," said Bob Shapard, Oncor's chairman and CEO. "This is a wonderful time to be in the CBD, with the construction of the new Woodall Rodgers Park, the growth of the Arts District and the other improvements taking place in downtown. We're excited to be a part of that growth. And we're excited to have a building to call our own."
City leaders interpreted Oncor's decision as reward for the investment that they've made in the Downtown and Arts District. "As a pillar of the Dallas community, Oncor's lasting commitment to Downtown is proven once again with their decision to remain Downtown," said John Crawford, president and CEO of Downtown Dallas, citing its standing as the largest employment center in North Texas. "Oncor's decision, particularly with the reasons cited, is proof of the lasting value of a Downtown address."
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EBS Buys 554 Self-Storage Units
PLANO, Texas – Equity Based Services Inc. (EBS) has acquired the 554-unit Advantage Self Storage in far north Dallas, reeling in its 64th property for the portfolio and 24th in Texas.
The San Diego-based investment group's new class A deed is 3900 McDermott Rd. The property is being rebranded to American Mini Storage. Angelo Tomasello, president of Locke Acquisition Group LLC in Dallas, sourced the deal for EBS.
Eric Kaplan, COO of All American Property Management Inc., touted the purchase as the first one for a new acquisition model funded by a pool of private client investors, EBS Income Fund III and a loan assumption. "In the next 12 months EBS expects to double its acquisition volume with high-quality, cash-flowing properties like Advantage Storage of Plano," Kaplan added.
In a press release, EBS reported the acquisition was mortgaged at a 72 percent loan-to-value ratio. Bank of America financed the deal in a non-recourse facility at a 5.6 percent fixed-rate interest with two years of interest-only payments and a 30-year amortization.
"The debt that EBS assumed for this property simply doesn't exist in the current lending markets," said Troy Downing, EBS fund manager. "The ability to assume such a strong loan was definitely a bonus with this deal."
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REIT Puts Up $27.3 Million
For 60-Bed LTAC Hospital
DALLAS – Healthcare Trust of America Inc. plans to pick up the deed to the 60-bed LTAC Hospital, signing a $27.3 million option on the North Dallas property.
The 53,000-sf hospital at 8050 Meadow Rd. is situated midway between Presbyterian Hospital of Dallas and Medical City Dallas. The hospital is leased for the long-term to Dallas LPACH LLC, a subsidiary of St. Louis-based RehabCare Group Inc. The four-story building was developed two years ago by a partnership of local physicians and Gulf States Health Services.Last July, RehabCare entered into a joint venture to acquire part of the assets of Gulf States LTAC of Dallas. RehabCare took an 80 percent stake and the physicians got the balance, according to published reports.
"This particular medical submarket provides both solid real estate fundamentals and proximity to two large, prominent hospitals in the heart of North Dallas' medical center," said Mark D. Engstrom, executive vice president of acquisitions for the Scottsdale, Ariz.-based REIT. "Hospital proximity and a solid, experienced operator are essential to sustaining volumes for these types of facilities."
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Uptown's Idle Rich Pub Changes Hands
DALLAS – A local partnership has sold one of Uptown's most prominent draws, a 5021-sf single-tenant building branded as the Idle Rich Pub.
The structure at 2614 McKinney Ave. was built in 1985, opening as Dowd's and then being dubbed the Idle Rich Pub in September 2004 by native Dubliners Feargal McKinney, Ellen Keenan and Peter Kenny who earned their restaurateur stripes in Dallas. Philip Levy and Jason Vitorino, investment specialists in Dallas for Marcus & Millichap Real Estate Investment Services, represented the seller. The buyer's name is being kept under wraps by a confidentiality pact. The building is situated in a class A, high barrier-to-entry location in Uptown.
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12,900-SF Cancer Center
Undergoing Retooling
ARLINGTON, Texas – Arlington Cancer Center is in the midst of a 12,900-sf renovation to get all operations under one roof.
Brad Rupay of Innovative Developers Inc. in Fort Worth is overseeing design and engineering for the office at 906 W. Randol Mill Rd. This month, Arlington Cancer Center's infusion center will be incorporated into the retooled space. Also relocating from within the West Randol Mill complex is the pharmacy, which is now located on the second floor. Stem cell research facilities, the IT/data center, additional support and business offices will be shuffled to the renovated space as it comes on line.
Casey Herrell is IDI's project manager for Arlington Cancer Center. Karen Kroh of Kroh & Associates was the space planner and Larry L. Blackmon Inc. provided engineering services.
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Forest Park Medical Expanding
DALLAS – Forest Park Realty Partners III has scooped up another 3.9 acres from Westmount Realty Capital to expand the Forest Park Medical Center in North Dallas.
The medical group's new tract fronts Interstate 75/North Central Expressway and abuts a 6.9-acre tract bought in August. The 66,000-sf first phase of Forest Park Medical Center opened in May at Westmount Health Campus.
In 2006, Westmount Realty bought 27 acres for the campus, situated west of Medical City and Presbyterian hospitals. There are 5.5 acres left in the bank. "This purchase indicates Forest Park Realty's enthusiasm for this enviable location and the growing success of the project already built on the campus," said Cliff Booth, president of the locally based Westmount Realty.
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Bradford Plans 2010 Change
DALLAS – Bradford Commercial Real Estate Services, now in its 20th year, has undergone a retooling for 2010 in an initiative to exchange its old image for one that's fresh and brand new.
"While clients and competitors are conserving cash, we are spending our dollars to rebrand and refocus the firm. There are those veterans who still view us as having a developer model," said Kevin J. Santaularia, president and CEO of the locally based firm. "We're clearly in the services business." 
Bradford's 25 brokers average 500 transactions per year, exceeding five million sf. Just this year, Bradford added four million sf of office, industrial and retail assignments, taking its property management portfolio to 20 million sf in Dallas/Fort Worth.
Santaularia said 2009's slow economy provided the opportunity to shape Bradford's strategy for the future and inevitable market recovery. The image makeover includes a new logo, property signs and expanded marketing support, with the office sector in Bradford's sights as a growth area.
"Everything we've done has been to get ready for 2010," said Sharon Friedberg, senior vice president, who teamed with Santaularia and managing partner Susan Singer to lead the rebranding initiative.
Santaularia has brought Bradford through the recession without lay-offs or exits by professionals and has held fast to long-time field offices in Dallas' Northeast and Stemmons corridors, the Mid-Cities and Fort Worth. He inherited much of his staff when he acquired the company in 2000 from Vantage Cos., a developer of predominately industrial space. Santaularia said the rebranding goal is the final step in the transition from a development past to Bradford's standing today as a services company.
"When we come out of this recession, we will have a clear direction and platform to take advantage of market opportunities," Santaularia added. "The industry has passed through the eye of the hurricane in 2009 and 2010 will be challenging as we move through the correction. There's still a lot of damage to repair, but recovery is in sight."
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21,000-SF Warehouse Sells
DALLAS – West Dixon Holdings LLC has bought a 21,000-sf office/warehouse on a one-acre tract near a prime intersection.
Dan Spika of Henry S. Miller Brokerage LLC represented the buyer of 2425 Arbuckle Court, which is near the junction of Stemmons Freeway and Walnut Hill Lane. Seller B.J. Elkins was represented by Nathan Denton of Lee & Associates DFW.
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Behringer Harvard Teams
With UrbanAmerica
DALLAS - Behringer Harvard Investment Management, formed about one year ago, is putting its infrastructure to work in a new partnership, UrbanAmerica Advisors LLC.
The Dallas-based company is investing in New York-based UrbanAmerica to create a partnership that plays off each other's strengths in the marketplace. The companies have more than $10 billion of assets under management and more than 400 employees.
Richmond S. McCoy, president and CEO of UrbanAmerica since its launch in 1998, will lead the new partnership. As head of UrbanAmerica, he has raised $520 million of equity and invested in more than $2 billion of assets in the past eight years. McCoy, a 25-year veteran, is vice chairman of the Real Estate Executive Council.
"Behringer Harvard’s established infrastructure – and its management’s long-standing relationships in previous institutional platforms – will help us accommodate growth more rapidly and enable us to pursue larger advisory assignments in new arenas of the real estate industry," McCoy said in a press release.
Robert M. Behringer, CEO of the investment company, said the partnership will open doors to increase business in the domestic institutional market while providing "synergies that will enhance the global presence we’re building."
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Innovative Developers Creates
Working Gift for Wesleyan
FORT WORTH – Innovative Developers Inc. will donates services to develop a proposal to renovate the historic Dillow House for Texas Wesleyan University.
Dillow House, a city landmark, is across the street from the university's campus near the intersection of Vaughn and Collard streets. The university wants to restore the 97-year-old empty dwelling to its original grandeur and explore redevelopment options, including its partial use as an incubator center for the business school. Also being eyed is meeting space for alumni and the community.
"IDI is especially proud of our relationship with Texas Wesleyan University. We are fortunate to be in a position to offer this gift and are looking forward to a revitalization of the Dillow House to its previously grand stature," said Glen W. Hahn, IDI president and CEO. "We are a small business too and applaud Wesleyan's desire to use the property as a business incubation center." He said the goal is to complete the project in the coming year.
"The Dillow House long has been an honored spot on the campus of Texas Wesleyan, with a long history of use and enjoyment by many members of the Wesleyan community. IDI's gift of spearheading the renovation of this historic, revered house means new life on the campus not only for current and future students, but to many, many alumni who have fond memories of time spent in the house," said Hal Jeffcoat, president of Texas Wesleyan.
According to archived history, local grocer Samuel Selkirk Dillow bought the lot in 1908 to build a home for his family. He lived in the house until his death in 1931.
Dillow's daughter, Audrey, is a Wesleyan graduate and teacher. She gave the house to the university in 1979, three years before her death.
Dillow House was renovated in 1982 and used by the alumni association for events and in the 1990s made it the organization's headquarters following another renovation.
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Seaport Interests Buys Valwood Building
CARROLLTON, Texas – Seaport Interests has acquired a 219,780-sf office/warehouse from a locally based limited liability company, making the close with a $6.88 million loan from Wells Fargo.
The multi-tenant building is situated on 11 acres at 1000 W. Crosby Rd. in Valwood Industrial Park. John Stewart, vice president in NorthMarq Capital's Dallas regional office, arranged the financing for Seaport's owner Sean Porter.
The 74 percent loan-to-value package carries a three-year term and 25-year amortization, according to NorthMarq's press release. "There is not an easy deal in this market, however, the borrower and the lender both hung on to make a great deal happen in the long run," said Stewart.
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Goff, Barclays Grab Crescent
FORT WORTH – In a joint venture move, Barclays Capital and Goff Capital Inc. have wrested control of 17 million sf in 36 office buildings, resort residential developments, luxury hotels and Canyon Ranch, all sold in 2007 to Morgan Stanley Real Estate Funding II.
John C. Goff is moving back into the driver's seat of a portfolio as chairman and CEO of Crescent Real Estate Holdings LLC. The Fort Worth executive was vice chairman and CEO of Crescent Real Estate Equities LP from its IPO launch in 1994 until the 2007 sale.
"The quality of Crescent's portfolio is strong and I look forward to partnering with the Crescent and Barclays Capital teams to manage the company through the current cycle and ensure that we are well positioned for the market recovery," Goff said.
Goff, who formed Goff Capital in 1998, bought a 123,000-sf class A office building at 550 Bailey St. after his Crescent exit. The asset was the former headquarters of Bombay Co. Goff Capital today has more than $5 billion of assets under management.
"Given his extensive knowledge of the Crescent portfolio, John is well suited to manage the company going forward," said Haejin Baek, managing director and head of Barclay's commercial real estate capital markets.
The Crescent portfolio has major concentrations in Dallas, Houston, Denver and Las Vegas. The office portfolio's crown jewel is the Crescent, a mixed-use landmark in Dallas' Uptown. Also included in the takeover is Trammell Crow Center and Fountain Place, both downtown properties. The high-profile Dallas trio is held in a joint venture with a subsidiary of JPMorgan Chase & Co. The resort residential properties are located in Scottsdale, Vail Valley and Lake Tahoe.
In a press release, Barclays said it gained control of the portfolio after a Morgan Stanley unit was unable to meet debt payments on the properties. Morgan Stanley paid $6.5 billion for the portfolio.
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Ashford Gets $145 Million,
Erases Maturing 2010 Debt
DALLAS – Ashford Hospitality Trust Inc. will head into the new year with its books cleared of maturing debt for 2010 and progress on its 2011 loans, thanks to a brand-new $145 million loan.
The Dallas-based REIT secured the fresh non-recourse funding from Prudential Mortgage Capital Co. of Parsippany, N.J., and Greenwich, Conn.-based Wheelock Street Capital LLC. The loan has a six-year shelf life, with Prudential holding the A-piece. The combined interest rate is 12.26 percent.
Ashford's collateral is the Embassy Suites Crystal City in Virginia, Embassy Suites Orlando Airport in Florida, Embassy Suites Santa Clara in California, Embassy Suites Portland in Oregon and the Hilton Costa Mesa, also a California deed.
Ashford's financial maneuvers retired a $75 million loan due next year and a $65.2 million note, secured by five assets, that was poised to roll in 2011. Ashford also earmarked $4 million for capital improvements with a two-year window for the drawdown. Hodges Ward Elliott represented Ashford in the transaction, which resulted in eliminating all debt against the Hilton Auburn Hills in Michigan and Hilton Rye Town in New York.
In other recent news, Ashford completed the sale of the Westin Westminster mezzanine loan, which was defeased by the original borrower two years ago as part of a refinancing. Ashford's total proceeds were $13.6 million before closing costs. The loan, set to mature Sept. 1, 2011, had an $11 million balance.
The Westin Westminster loan sale was orchestrated through a securities auction made possible by the release of a portfolio of government agency securities, which acted as the defeased loan collateral, according to Ashford.
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Three Sales Close in Dallas/Fort Worth
DALLAS - Brokers from CB Richard Ellis and SCM Real Estate Services have sold industrial, retail and office properties in the metroplex.
Taking title to the largest building is Cedar Springs Investments LLC, which acquired a 157,000-sf asset at 6300 Cedar Springs Rd. in Dallas. Dave Anderson of CBRE represented the seller, Qualex Inc.
In Fort Worth, CBRE's Jennifer Pierson and Beth Pierson sold a 32,822-sf shopping center at 7620 McCart Ave. The seller is JPMCC 2005-CIBC 13 McCart Ave. LLC and the buyer was a private investor.
In Arlington, SCM senior broker Beaux Riley sold a 4,425-sf office building at 2005 E. Lamar Blvd. to Hinckley Properties LLC. The seller was Gridiron Row Ltd. The Governor's Row campus, tucked into the city's entertainment district, has five buildings still on the market.
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Invesco-Inland JV Gets $22.6 Million Loan
DALLAS – With a loan maturity due this month, Invesco Real Estate and Inland Western Retail Real Estate Trust Inc. have secured $22.6 million in a replacement play, with the 148,806-sf Lincoln Park in North Dallas as the collateral.
Holliday Fenoglio Fowler LP's managing director Kevin MacKenzie and senior managing director Trey Morsbach arranged the financing for the joint venture borrowers. The new debt carries a five-year term and fixed-rate interest, according to the dealmakers.
The 98 percent-leased Lincoln Park is located at the corner of West Northwest Highway and North Central Expressway, directly across the street from NorthPark Mall and at the gateway of affluent neighborhoods. Delivered in 1998, the tenant roster includes Tom Thumb, the Cheesecake Factory, Container Store and Barnes & Noble.
"The loan request attracted a wide variety of interest from lenders providing aggressive financing proposals due to the strength of the tenant line-up, the location, the sales performance and the class A sponsorship," MacKenzie said.
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Atlanta Investor Takes Fielder Terrace
ARLINGTON, Texas – The 32,450-sf Fielder Terrace in Central Arlington has been sold to a private investor from Atlanta. The shopping center's occupancy was 92 percent at sale time.
Marcus & Millichap Real Estate Investment Services in Dallas sold the holding at 1300 W. Arkansas Lane for a private investor from Carrollton, Texas. More than 20,000 vehicles per day pass the shopping center, situated on the southwest corner of Arkansas Lane and Medlin Drive.
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ULI-PwC Forecast Sheds
Light on Survival Tips
By Connie Gore
DALLAS – With 2010 right around the corner, commercial and residential real estate owners, developers and investors recognize there are more hard times ahead before their industry rights itself from the recession.
Bearing the harsh reality of the real estate sector, Charles DiRocco, the Washington, D.C.-based real estate research director for PricewaterhouseCoopers LLP, said the coming year is ripe for buying opportunities, but it will take cash and caution to ferret out deals with sustainable economics.
DiRocco was yesterday's keynote speaker for the unveiling of Emerging Trends in Real Estate, a joint publication of PwC and the Urban Land Institute.The ULI North Texas program included Bill Darling, president and co-founder of Darling Homes in Dallas; Stephen C. Hanson, senior executive vice president of Texas Health Resources, also North Texas based; and David G. Wallace, CEO of Wallace Bajjali Development Partners LP of Houston.
"Default and foreclosures will continue to surge as we go forward," DiRocco said at the ULI luncheon at the Omni Mandalay Hotel at Las Colinas in Irving. "There's really no more time to extend and pretend as we move forward." Values are down 40 percent to 50 percent. He expects the real estate sector will hit bottom sometime in 2010, with the caveat being the region and property.
DiRocco said housing is poised to lead the nation for the recovery, with Texas at its side. The survey findings, representing 900 respondents, put the Texas metros among the nation's most promising markets for the present and future.
"Texas has done actually really well compared to everyone else," DiRocco said, citing its business-friendly reputation and fundamentals for areas like unemployment that are lower than the national average. Dallas/Fort Worth's strength lies in its international airport, creating a global gateway as a plus in investors' eyes, he added.
DiRocco's best investment tips, based on survey responses, are deal in cash; don't rush to buy; focus on quality and be selective; target global cities, cash flow and yield; invest in public REITs; provide refinancing capital; consider distressed debt; and implement asset management strategies. "Real estate is cyclical," he emphasized. "Keep that in mind and take advantage of it and the great opportunities.
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Redevelopment Plan Brewing
For Fort Worth Public Market
FORT WORTH – Considered one of the city's most endangered historic properties, the Fort Worth Public Market will undergo evaluation for potential redevelopment.
Bowen Properties has hired local firm, Innovative Developers Inc., for a phase I study of the 79-year-old building at 1400 Henderson St. IDI's mission is to come up with a redevelopment concept, including marketing opportunities and the cost. As part of the project, IDI has retained Michael Bennett and James Toal of Gideon Toal in Fort Worth for the study's planning and design components.
The Fort Worth Public Market is listed on historic registries of Texas and the nation. "We saw an opportunity and approached the owners with our ideas and our 40 years of success in Fort Worth. They liked what they heard," said Glen Hahn, IDI president and CEO.
The site holds a 19,000-sf main building and 15,000-sf adjacent annex, situated at the southwestern edge of downtown and the gateway of the medical district. Nina Petty, vice president of strategic real estate services for IDI, said options include the team is eyeing single-use strategies as a headquarters location, general office, retail or medical.
The Spanish Colonial Revival-style Fort Worth Market was designed by B. Gaylord Noftsger. The owner is the estate of the late R.C. Bowen, a Fort Worth transportation pioneer, which has owned by property since 1944.
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Sold: 3,500-SF MOB in Watters Creek
ALLEN, Texas – KRG-Barklay has sold the first of three office buildings in Watters Creek Professional Park to a local doctor.
The 3,500-sf medical office building at 614 Watters Rd. was bought by Dr. Jacqueline Le, who's getting a location close to the Watters Creek retail project and the affluent single-family developments of Montgomery Farms, Twin Creeks and Suncreek.
The developer's land is entitled for two more buildings, each 3,000 sf. Matt Anding, senior vice president of Henry S. Miller Brokerage, represents the Dallas developer.
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Hillwood, Kroger Sign Anchor
Deal for Heritage Marketplace
By Connie Gore
FORT WORTH – With the deal now signed, Hillwood and Kroger Co. have unveiled plans to develop a 123,000-sf Kroger Marketplace as the anchor to a 20-acre development beside Alliance Town Center. Site work will get under way by the first of the year.
Mark Miller, vice president of retail development for locally based Hillwood Properties, said the Cincinnati, Ohio-based Kroger will own its 12-acre site and store in Heritage Marketplace. The balance of the land will be divvied into three pad sites and 30,000 sf of inline shops. The development site is located at the southwest corner of Heritage Trace Parkway and Riverside Drive, a gateway to the 3,500 single-family homes in the Hillwood-developed Heritage community.
Miller said negotiations with Kroger have taken about two years to complete. The closest traditional grocery store to the development site is at least one mile away. "The residents have been clamoring for this for a long time," he stressed.
It will be the first Kroger Marketplace in Tarrant County. Kroger recently has opened two Marketplaces in Greater Houston and has one under construction in Frisco, a far north Dallas suburb.
"The residential growth at Heritage and the other nearby communities, as well as the employment growth at Alliance, make Alliance Town Center the ideal location for the first of our new Kroger Marketplace concept stores in Tarrant County," said Gary Huddleston, Kroger's director of consumer affairs.
Kroger Marketplace is being touted as a "one-stop shopping solution," a marriage of its Signature format and a "store-within-store" lineup featuring a Fred Meyer jewelry store and home-furnishing section with an Ashley Furniture Co.-branded line. Other Marketplace amenities are a fuel center, wine shop and gourmet and chef-prepared food line, Nature's Market with all-natural and organic products and drive-through pharmacy.
Miller said Hillwood is soloing on Heritage Marketplace, unlike the 300-acre Alliance Town Center, a joint venture project with Fort Worth-based Trademark Property Co. The three-year-old Alliance Town Center is a 20-store mix of national anchors and junior anchors representing more than 600,000 sf of retail. Miller said Heritage Marketplace will be filled with basic services and additional restaurants for the regional retail corridor.
Coming soon to Alliance Town Center is Rooms To Go, BJ's Restaurant and Brewhouse, Freebirds World Burrito and Kirkland's. The development's recent openings include a 168,446-sf center owned by Dallas-based Sam Moon Trading Co. At build-out, Alliance Town Center will boast more than two million sf of retail, office, residential and entertainment space.
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72,263-SF Comerica Bank
Building Changes Hands
By Connie Gore
DALLAS – With seven offers on the table, a local partnership has sold the 72,263-sf Comerica Bank Building in northeast Dallas to a private investor who outmaneuvered the competition with his track record for a quick closing.
The six-story building at 6510 Abrams Rd. is 55 percent leased to upwards of 35 tenants with Comerica Bank on the ground floor. "It was a strong buyer with a good closing history and short terms," said Patrick Giles, an investment specialist for Marcus & Millichap Real Estate Investment Services in Dallas. He and colleague Craig Lewin negotiated the sale for the 17-year owner of the class B office building, developed in 1980 on a 2.7-acre tract near North Central Expressway, Loop 12 and LBJ Freeway.
Giles said the deed was passed free and clear of debt in less than 30 days, adding the new owner's upside is tied to rents as well as lease-up. "When you have a half-full building and low rents in a depressed market, there is plenty of room for growth," he said.
"In a time when lots of deals are not getting done, it does take working the deal hard," Lewin stressed. "If you work it hard enough, deals are getting done."
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OK Buyer Takes TX Bank Building
DALLAS – A private investor from Norman, Okla., had acquired a 4,282-sf building in a net-lease deal with Chase Bank as the sole tenant.
The 1.1-acre property at 15202 Montfort Dr. was sold by a partnership from Staten Island, NY.
Philip Levy and Jason Vitorino with Marcus & Millichap Real Estate Investment Services in Dallas represented the seller of the three-year-old bank building.
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359,172-SF Heritage Square's
Distressed Sale Sign of Times
By Connie Gore
FARMERS BRANCH, Texas – Signaling one of the first distressed sales of institutional-quality real estate in Dallas/Fort Worth, KeyBank as special servicer and a North Texas receiver have sold the 359,172-sf Heritage Square to Silver Tree Partners. The listing drew 20 offers and went through two best-and-finals before a winner was declared.
The Heritage Square footprint consists of a 10-story, 186,880-sf building at 5001 LBJ Freeway and 11-story, 172,292-sf structure at 4835 LBJ Freeway. Occupancy was 70 percent at sale time.
Due to Texas confidentiality laws, the sales price isn't being disclosed, but it did "match what we had expected in terms of pricing," said John Alvarado, managing director with Jones Lang LaSalle's Dallas team. He teamed with managing directors Jack Crews and Evan Stone to sell the class B plus complex for Cleveland-based KeyBank and receiver David Hardin of Granbury.
Alvarado credited the asset's high number of offers to the ability to tap seller financing and "attractive pricing relative to peak pricing of two years ago." The sales heyday of not so long ago would have generated $120 per sf for the holding, he said. What he can confirm is today's pricing definitely was below-replacement cost.
Capstar Commercial Real Estate Services of Dallas will continue to lease and manage the buildings for the Addison, Texas-based buyer. The buildings delivered in 1975 and 1987 on a 12-acre tract west of the Galleria Mall and close to the junction of LBJ Freeway and the Dallas North Tollway.
Alvarado said Heritage Square hit the market about four months ago. The 20 offers were pared to five and then to three for the second best-and-final round, with the buyer outbidding its competition to win the deed. "This is one of the first distressed sales of an institutional-quality property in Dallas," he said, adding that more are on the way.
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49 Acres Change Hands
DALLAS – A local church has acquired 49 acres to develop a Templo Betania Evangelistic Center, part of the Assembly of God denomination.
Jerry Averyt, senior vice president of Henry S. Miller Brokerage LLC, represented the buyer of the 700 W. Wheatland Rd. acreage. Bill Reese of Reese Commercial Realty in Dallas represented the seller, Southwest Hampton Oaks LLC.
The church is now located at 210 E. Jefferson Blvd. in Oak Cliff. Construction details for the new building are being firmed up.
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Deloitte Digs Into 750,000-SF Project
WESTLAKE, Texas – Deloitte LLP yesterday broke ground on a 750,000-sf project on 107 acres in North Texas. The learning and leadership development facility will open in 2011.
Deloitte University will be a centralized training destination for professionals company-wide. "Deloitte University will deliver leading-edge learning at critical moments in each person's career, from new hires to partners, principals and directors," said Barry Salzberg, CEO of New York-based Deloitte LLP. "It will be a powerful catalyst for career-long learning at a setting designed to promote both the personal and professional growth of our people."
The campus will feature 35 classrooms, conference space, 800 on-site guest rooms, dining and social venues and recreational areas, including running trails and a fitness center.
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Dallas City Council Blesses
DowntownDallas Park Pact
DALLAS – DowntownDallas has gotten city council's blessing on an agreement with the parks and recreation department to take over management and programming authority for seven CBD parks.
The agreement includes the new Main Street Garden, a full city block at 1902 Main St. Other downtown parks affected by the agreement are Pegasus Plaza, Carpenter Plaza, Ferris Plaza, Celebration of Life Park and the proposed Belo Garden and Pacific Plaza.
"The development of greenspace is critical as we continue to build a multi-dimensional urban core for residents, employees and visitors of downtown," said John F. Crawford, president and CEO of DowntownDallas. "It is critical that we not only build these parks, but ensure their activation with programming and management, which is why DowntownDallas stepped up to the plate with this public-private partnership."
In 2007, DowntownDallas pledged $1.25 million for the development and renovation of five parks in the downtown. Main Street Garden took more than five years to bring to fruition.
Under the agreement, the organization will provide supplemental landscaping; enhanced litter removal; increased security through the Downtown Safety Patrol; and installation of four security cameras overlooking the grounds. It also will be responsible for permitting Main Street Garden for special events, beginning in January, and other activities. The park and recreation department will perform standard park maintenance during its regular operating hours.
Main Street Garden's ribbon will be cut Nov. 13, with the following Friday dedicated to to the City Lights holiday spectacular. The Nov. 20 light-up night will feature the annual lighting of Neiman Marcus and the debut of a 60-foot holiday tree at Main Street Garden. The event begins at 6:30 p.m. Nov. 21 is the first Music in the Park, featuring Jonathan Tyler and the Northern Nights. The free public event will be held from 3 p.m. to 7 p.m.
To provide private support for Main Street Garden's ongoing maintenance, Mark Noble with Colliers International and Kent Eastman with Capital One Bank are co-chairing a special committee. Other members are Charlie Morris, David Glasscock and Hunter Blanks of Colliers International; Don Dowell, Comerica Bank Tower; David Corrigan, Corrigan Investments; Jim Truitt, Forest City Enterprises; Keith Nix, The Nix Company; and Cynthia Hall, University of North Texas System.
Founding sponsors of Main Street Garden are Capital One Bank, Comerica Bank Tower, Excitement Technologies Group, Mercantile Place, University of North Texas System and Weber Shandwick.
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User Grabs 21,390-SF Medical Office
CARROLLTON, Texas – Seizing the chance to buy entitled medical space, a user has claimed a 21,390-sf office building in North Dallas. The plan is to convert the 68 percent-vacant Josey Lane Medical Office into an oncology clinic and surgery center.
Ron Hebert and Will Balthrope in the Dallas office of Marcus & Millichap Real Estate Investment Services sold the one-story building, positioned on 1.9 acres at 4352 N. Josey Lane, for a court-ordered receivership. As part of the plan, the building's lone tenant, MedicalEdge Inc., was bought out of its short-term lease, according to a press release.
Hebert said the lender's marching orders called for a quick close, the highest offer most likely to succeed and back-up offers waiting in the wings. "This allowed us to push the top offer to shorten his closing time and increase his price," he said, adding the start to finish cycled in about two months and drew five offers. "The four back up offers were not needed It sold to the first buyer who put the property under contract."
Hebert couldn't discuss the sale price of the nearly empty building, which is adjacent to Baylor Medical Center in north Carrollton. Word on the street is it commanded well over $120 per sf.
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96 Percent-Leased MOB Changes Hands
DALLAS – A California investor has bought the 58,497-sf La Sierra Medical Office, a 96 percent-leased, class B building along North Central Expressway in North Dallas.
Based on the Dallas Central Appraisal District, the seller was Miranda Partners LP from Carrollton, TX. Patrick Giles and Craig Lewin, investment specialists for Marcus & Millichap Real Estate Investment Services in Dallas, represented the seller. Cyrus Raofpur of Trans-Atlas Realty in Dallas represented the buyer of the 26-year-old building, set on slightly more than one acre at 5445 La Sierra Dr. Key to the sale is a location in a densely packed office corridor with a steady occupancy rate, according to the brokers.
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Luxury Condo Component
Debuts at Omni Fort Worth
FORT WORTH – In a landmark ribbon-cutting ceremony, the Omni Fort Worth Hotel has unveiled its luxury condominiums of 1301 Throckmorton, the new home for celebrity owners such as Mr. and Mrs. Nolan Ryan and Mr. and Mrs. Robert Rowling, owner of TRT Holdings and parent company of Omni Hotels.
The residential move-ins will begin in the coming weeks. Owners are considered permanent guests of the 614-room Omni Fort Worth Hotel, with in-resident dining available 24/7 and access to an Omni chef for catered events. The condominium owners' amenity package includes the 16th floor club lounge, fitness center and rooftop pool and garden while hotel offerings include in-room spa treatments, housekeeping, valet and concierge services.
The 89 condo units were designed by local architect, Faulkner Design Group. Units start at $600,000 and top off at $2.65 million, with marketing by William Trew Real Estate Services of Fort Worth. The residential units, ranging from 1,800 sf to roughly 5,000 sf, rise 18 floors above the 15-story hotel.
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SoCal Fund Buys Addison II
ADDISON, Texas – Luzzatto Real Estate Value Fund I LP, with $4.45 million of backing from a five-year loan, has closed on the 181,946-sf Addison II, a class B flex building beside Addison Airport in far North Dallas.
The buyer of 4550 Excel Parkway financed the deal with capital from Aetna Health & Life Insurance Co. Luzzatto's closed-end fund is targeting distressed real estate in the Southwest, with a hard focus on Southern California and Texas, according to a press release. Addison II, built in 1996, was 60 percent leased at sale time.
Brandon Chavoya, associate director in Dallas for Holliday Fenoglio Fowler LP, arranged the financing, getting a 6.75 percent fixed-rate interest for the Santa Monica, Calif.-based buyer. The seller was SPH IH II LP of Dallas.
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Behringer Harvard Forms Retail JV
DALLAS – Behringer Harvard has expanded its investment reach to Germany, forming a retail joint venture with Rahlfs Immobilien GmbH.
The Dallas-based investment company's initial investment funds six retail properties in the Hannover region of northern Germany, but is expandable over the life of the five-year program. According to a press release, three of the six centers already are built. The other three are build-to-suit plans, which are under construction and slated for completion within one year.
Behringer Harvard German Retail LP's portfolio is anchored by discount grocer retailers, such as Leigh Richmond's Netto, Edeka's NP and the REWE Group's Penny Markets. The anchor roster also includes Rossman, a supplier of health and beauty products, and discount apparel retailers Ernsting's family and KiK.
"This partnership with Rahlfs enables us to participate in German retail development with a group that has local-market expertise as well as decades of success with this real estate product type," said Michael Cohen, senior vice president for Behringer Harvard and head of the company's international investment platform. "This venture also allows us to leverage our local partner's established relationships with the top retailers in Germany."
Rahlfs has been a family-owned construction company since 1905, subsequently expanding into real estate investments and asset management services. Under the terms of the pact with its new equity backer, Rahlfs will manage construction of the projects in the pipeline in addition to retaining leasing and management rights to the entire portfolio.
Discount retailing accounts for 40 percent of retail sales in Germany. Behringer Harvard pointed out in its release that developers and retailers face significant barriers to entry due to zoning and planning regulations despite a hefty consumer appetite for new and state-of-the-art retail space, which Rahlfs had underway before the agreement was inked.
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Texas Masonic Center Back on Track
ARLINGTON, Texas – Liberty Mutual Surety has selected AUI Contractors to complete construction on a five-story, 55,000-sf residential and office project on the campus of the Texas Masonic Retirement Center.
About 40 percent of the construction is done on the addition to the campus at 1501 W. Division St. The development consists of 12 two-bedroom duplex units, offices, physical therapy area, nursing center and garage. The Fort Worth-based general contractor is slated to complete work in summer 2010.
The project originally was slated to deliver last May, but was sidelined due to contractor issues. Liberty Mutual Surety took over the development, jumping into a search and selection process for a new general contractor. "This project is more challenging than it appears - we are glad to see that a top notch company like AUI has stepped in to finish it up," said Tom McCarty, vice president of LBL Architects in Arlington, which designed the development for the Masons.
The Texas Masonic Retirement Center, built in 1911 on a 100-acre tract, is owned and operated by the Grand Royal Arch Chapter of Texas. "It takes a tremendous amount of time to pick up the pieces and get a project like this going again," said Kirby Rudisill, administrator of the retirement center.
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United Supermarkets Planning
200,000-SF Project at Alliance
ROANOKE, Texas – United Supermarkets LLC has bought 15 acres to build a 200,000-sf distribution center. Site work begins in mid-November, with delivery planned for Sept. 1, 2010.
Exel, the chain's logistics company, will develop, operate and man the distribution center as it does at United's other distribution center in Lubbock, Texas. The Tarrant County center will be built along Freedom Drive in AllianceTexas' global logistics hub, bringing 75 jobs to the region.
"We have provisions in place for future expansion of the new facility if necessitated by company growth," said Robert Taylor, vice president of logistics for Lubbock-based United Supermarkets. He said the Lubbock distribution hub has been operating at maximum capacity for awhile. The 50-store chain has a presence in 30 markets in north and west Texas, of which six stores are located in Dallas/Fort Worth.
The grocer's brands are United Supermarkets, Market Street and Amigos United. Taylor said all of the chain's frozen food, 90 percent of produce and 75 percent of dry grocery inventory will pass through the DFW center."It's a testament to the infrastructure and the advantages of Alliance, that United chose the development for its second distribution center, the first outside its home base of Lubbock and the first in North Texas," said Tony Crème, vice president of Hillwood Properties, the developer of the Alliance, citing cooperation from the city of Roanoke and Denton County.
Dan Cook of Cushman & Wakefield of Texas Inc. represented the 93-year-old United Supermarkets. Crème represented Hillwood.
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Nuclear Logistics Buys 203,822-SF
Building for Consolidation Plan
FORT WORTH – Nuclear Logistics Inc. will roll four sites into one, sealing the decision with the acquisition of a 203,822-sf office/warehouse in Riverbend Tech Center in northeast Fort Worth.
The company is planning a December move-in to 7410 Pebble Dr., Fort Worth from a quartet of nearby locations, totaling 65,000 sf. "After an extensive search, Pebble Drive was selected because of its proximity to Nuclear Logistics' employee base," said Todd Lambeth, senior vice president and managing partner of the Bradford Cos., who represented the buyer. "The stand-alone building provides for future growth and has an outstanding corporate image."
Lambeth, who was the deal's sole broker, approached Klabzuba Oil & Gas Inc. of Fort Worth about selling the 13-year-old building to Nuclear Logistics, which had been searching nearly three years for a consolidation site. The 7.8-acre tract is located at the corner of South Loop 820 and Texas 12, a gateway to the 97-acre Riverbend Business Park.
"It really worked because we had a good buyer and a good seller who worked well together," Lambeth said.
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A&S Buys 116,651-SF Building
FARMERS BRANCH, Texas – A&S Spring Valley Holdings has bought a 116,651-sf office/warehouse from Jim Pattison Development US Inc.
The Dallas-based seller has owned the 35-year-old building on five acres at 4501 Spring Valley Rd. in October 2001, according to Dallas Central Appraisal District. Steve Berger, David Easterling, and Sarah Carter of CB Richard Ellis represented the seller.
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Grandbridge Shores Up Texas Territory
DALLAS – Grandbridge Real Estate Capital LLC has grabbed its second Texas company in less than one year, shoring up beachheads to guarantee a presence in the state's top four metros.
As previously reported by the Dallas Morning News, Stuart Wernick's Quantum First Capital is flying the new flag of the wholly owned subsidiary of Winston-Salem, NC-based BB&T Corp. In late 2008, Grandbridge acquired Live Oak Capital, founded in 2000 by one of real estate's top financiers, John Fenoglio.
"We're enthusiastic about bringing QFC's experienced multifamily production team onboard," said Grandbridge president and COO David A. Roberts. "Stuart and his associates make an outstanding addition to our company and illustrate the high quality talent that the Grandbridge business model continues to attract."
Wernick and his Dallas-based team have completed about $5 billion in debt and equity transactions during Quantum First Capital's 11-year history. "The various sources of capital that Grandbridge brings us, from agency lending to the BB&T Real Estate Funding product, will enable us to better service our clients’ needs in today's challenging commercial real estate financing market," Wernick said.
Wernick, named senior vice president, will manage Grandbridge's new loan origination office. The Charlotte, NC-headquartered Grandbridge has about a servicing portfolio of nearly $24.6 billion, representing about 100 capital providers.
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Net-Leased Retail Deed Changes Hands
ARLINGTON, Texas - A private investor from Van Nuys, Calif., has bought a 9,014-sf retail building in central Arlington.
Nick Simpson, an investment specialist with Encino, Calif.-based Marcus & Millichap Real Estate Investment Services, represented the buyer of the 1.1-acre property at 1811 E. Mayfield Rd., which is net leased to Dollar General. Drew Isaac and Scott Wayne with Marcus & Millichap in Denver represented the seller, a limited liability company from Danbury, Conn. Tim Speck, first vice president and regional manager in Dallas, also provided representation.
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Tarrant County Projects Nab
Honors for AUI Contractors
FORT WORTH- AUI Contractors LP has won three excellence in construction awards from TEXO, the largest commercial construction association in the state with 1,900 members. Among the winners is Arlington's Levitt Pavilion and Founders Park project.
The Arlington outdoor green and pavilion is an open radial design by Fort Worth-based Gideon Toal Architects and constructed by AUI. TEXO accorded its top honor in the "other construction" category for developments from $2 million to $100 million to Levitt Pavilion and Founders Park, which also won the 2009 Public Works project of the year in the $2 million to $10 million category of the APWA Texas chapter.
AUI's other award winners were Hurst Fire Station 2, which won the $5 million to $10 million category. The $5 million station was designed by Wiginton Hooker Jeffry Architects of Dallas. Also, the Ethan Allen store in Southlake won the pre-engineered building category. The building was designed by DMS Architects Inc. of Fort Worth.
"We are very proud of the recent announcement that AUI has been selected to receive three Excellence in Construction awards from TEXO," said Glenn Strother, vice president of the Fort Worth-based general contracting company. "To submit projects in three categories and win all three demonstrates the great commitment of our team to consistently deliver projects that exceed the expectations of both our clients and our industry peers."
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New Plan Brewing for 21,875-SF Bank
FOREST HILL, Texas – In a Texas two-step move, a local investor has claimed a 21,875-sf Chase Bank building with 10 drive-through lanes and carved out part of the space in a condo flip to the city.
Texas Stockyards Llano Ltd. acquired the 3.8-acre property at 3217 California Parkway along Interstate 20 from BREOF BNK2 Texas LP, an affiliate led by New York-based Brookfield Asset Management LP. Theron Bryant, a senior agent of SCM Real Estate Services in Arlington, TX, represented the buyer and Bryan Graham, senior associate with CB Richard Ellis Group Inc.'s Dallas team, negotiated the buy side.
Bryant said the seller acquired several bank properties in the metroplex as part of a portfolio purchase. "This one didn't fit into their portfolio so we negotiated a contract for the property," he said.
Bryant said he was researching the property at city offices when he learned that officials were looking to expand their building. He immediately offered the 10,600-sf empty portion of the building as an alternative. To bring the deal to fruition, Bryant and the local investor structured a condo association as part of the transaction with the city. The pickup from Brookfield and the resale to the city happened simultaneously, according to Bryant.
JPMorgan Chase will continue to occupy 11,275 sf of the structure, which is now undergoing interior and exterior upgrades. The city offices will be ready for occupancy in January. The plan includes earmarking some drive-through lanes for water department customers.
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Henry S. Miller, CRE Auction
Ready Stage for D/FW Sales
By Connie Gore
DALLAS – Seizing the opportunities in the auction arena, Henry S. Miller Brokerage LLC and CRE Auction Group will start producing live commercial real estate auctions in Dallas/Fort Worth.
Henry S. Miller's brokers will provide due diligence and property selection for Southlake, Texas-based CRE Auction Group. The first auction is set for Dec. 15 at 4 p.m. in Prestonwood Country Club at 15909 Preston Rd. To date, 11 properties have been placed on the auction docket and 31 are being evaluated for inclusion, according to Robert Grunnah, president of the investments division for Dallas-based Henry S. Miller Brokerage.
Grunnah said the roster is being developed with "properties that will be successful" at auction. "We won't accept properties for auction unless the reserve is achievable," he stressed. "The auction process will take a great step toward establishing values."
Grunnah pointed out that 25 percent of CMBS debt has yet to move to foreclosure, opening the door for a long run of forced sales. Add in mortgages coming due that are held local and regional banks and life insurance companies and it's highly likely that auctions are here to stay for awhile, he said. "They don't want to foreclose, but they also don't want to be forced to liquidate for cash and the traditional sales methods will not work," he emphasized.
In the past 18 months, sales transactions are down 80 percent. "It's time to start moving properties," Grunnah said.
As the partners take to the field, Grunnah acknowledged there has been more interest from buyers than sellers. "There is so much money sitting on the sidelines," he said.
CRE Auction Group's president Bill Vaughan presented the partnership idea several months ago to Henry S. Miller Brokerage, which had an established track record with auctions of Resolution Corporation Trust properties during the 1980s crash. Through their corporate synergies, the partners plan to provide investment-grade due diligence packages prior to the auction day.
Grunnah said the auctions will be "cash" venues. The docket will be weighted with commercial land plays. "Will these be attractive investment sites? Absolutely," he said.
The immediate plan calls for auctions every quarter. "The regularity depends on the success of the first," Grunnah said. Each auction will have a minimum of 10 commercial properties.
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$5 Million Donation Seeds
Dallas CityDesign Studio
DALLAS – The Trinity Trust Foundation and City of Dallas have received $5 million from Deedie and Rusty Rose, of which $2 million will be applied to set up the Dallas CityDesign Studio.
The Dallas CityDesign Studio is starting with five years of funding for three full-time positions. The Trinity Trust will cover costs until the 2014-15 fiscal year and then the city steps up to cover the full operating cost. The studio is a collaborative to advise, plan and consult with public and private entities about urban design and 21st century growth. Initiatives will include the $2.5 billion Trinity River Corridor, excluding the levees.
"I believe in the Trinity River Project and how it's going to change our city," Deedie Rose said. "I'm excited to imagine what's ahead and we all realize that it's imperative that Dallas plans now for the very best design, to bring thoughtful and imaginative planning to our neighborhoods."
Dallas Mayor Tom Leppert categorized the gift as "a true catalyst" that would make Dallas "even more appealing" for business, residential and environmental marketing.
Dallas CityDesign Studio will be housed in city hall, with the office location to be decided within the next month. Larry Beasley, an internationally acclaimed urban planner in Vancouver, is the studio's special adviser. Brent Brown, AIA LEED AP, is the studio's director. David Whitley, a city employee, is associate director. The studio will work with the city's strategic planning and construction department.
Just last month, the Trinity Trust and city received a $10 million anonymous donation in honor of Mary McDermott Cook to convert the Continental Avenue Bridge into green space and landscaped pedestrian walkway.
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Sally Beauty Expands
With $61 Million Buy
DENTON, Texas – Sally Beauty Holdings Inc. has acquired Schoeneman Beauty Supply Inc. of Pottsville, Pa., for $61 million, getting 43 supply stores in four northeastern states and links to the Washington, D.C. metro area.
The Denton-based buyer's subsidiary, Beauty Systems Group LLC, is the buyer of record and an old hand at growing through strategic acquisitions. Schoeneman has more than 500 employees, including more than 100 direct sales consultants. Its team is on track to generate $86 million to $89 million for fiscal 2009, according to a press release.
Gary Winterhalter, CEO of Denton-based Sally Beauty Holdings, described the deal as "a natural addition" to the Beauty Systems Group. "We utilized some of our available cash to fund the acquisition, but still have ample liquidity to grow organically and pay down debt," he said, citing the recent repayment of $20 million on a term loan.
Schoeneman's beauty supply stores are located in Pennsylvania, southern New Jersey, northern Delaware and West Virginia. The sales force's territory also extends to Maryland, the nation's capital and Northern Virginia.
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Westmount Leading in LEED
DALLAS - Counter to the assumption that attaining LEED certification requires an enormous capital expense, Dallas-based Westmount Realty Capital, LLC recently earned Silver Certification for the Leadership in Energy and Environmental Design (LEED) Green Building Rating System for core and shell for an existing office building. The certification for LEEDs-CS (core and shell) was presented by the Green Building Certification Institute (GBCI) for Riverside Commons Building No. 2 in Irving, Texas.
The certification was achieved for a minimal, additional expense over the approximately $2 million of an already planned building remodel.
The LEED-CS certification is the first of its kind in the Dallas area adding Riverside Commons to the list of less than 300 certified LEED for Existing Buildings projects, according to USGBC figures.
Westmount was in the process of seeking the LEED certification when the property sold, receiving notification of the building’s certification after its sale.
In January 2009, an entity affiliated with Research in Motion - maker of the BlackBerry mobile communications device - purchased Riverside Commons, the 460,297-sf, six-building office campus in Las Colinas. RIM was a major tenant in the complex since February 2007 leasing about one-third of the office complex for its U.S. headquarters.
“We signed a tenant for one-third of Building 2. To help fill the remaining two-thirds of the building, we moved forward on refurbishing it,” said Steve Kanoff, Westmount’s executive vice president and partner. “We already had that capital expense planned, so we thought it would be good to explore what it would cost to achieve LEED certification.”
“Not only was it the right thing to do, but we also believed it would give us a competitive leasing edge with other space in the marketplace,” Kanoff said.
As it turned out, the cost of the work that needed to be done versus the cost of getting LEED certification was minimal.
“We busted a common myth that building to LEED certification would be too costly,” Kanoff said. “It is a common misconception that it is economically infeasible. The belief is that it is harder to achieve that certification in a cost efficient manner, but we proved that was not the case.”
Because the building was constructed in the mid-1980s with single pane glass, it was going to be difficult to achieve any LEED certification without mitigating the glass-related energy loss, Kanoff said. Testing energy models with the single plane glass led Westmount and its architect – Dallas-based Corgan Associates – to the initial conclusion that the only way to obtain those required energy savings would be to install a more expensive heating and air conditioning system.
The solution to that challenge – use of a window film – came from an idea Kanoff presented to the architecture team.
“The answer was a window film we could apply to all the windows which achieved the same sort of effect of double pane or thermal pane glass. So, for $60,000 worth of window film we got the desired effects,” Kanoff said.
With the window film, Westmount was able to use a less expensive heating and air conditioning system to achieve the energy savings.
“I think we did the right thing,” he said. “There was very little premium associated with it, too. If you’re not LEED compliant, you are eliminating a large pool of potential tenants since an ever-increasing number of companies have a ‘green mandate’ when searching for office space,” Kanoff said. “Tenants have an infinite number of choices for office space in Dallas and we wanted to distinguish our property from the competition.”
As far as pursuing the LEED certification after selling the property, Kanoff said, another benefit to Westmount was that the application for Riverside also educated him and his company on the LEED certification process.
"We’re much better off having the institutional knowledge and applying that to future projects,” Kanoff said. “Retrofitting an existing building leaves much less of a carbon impact than new construction, too. This is about as green as you can get. Even the interior demolition was done under the LEED specifications.”
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Rocky Mountain High:
2,000 Acres Yields 26 Colo. Home Sites
DALLAS--Dallas-based national real estate developer Jackson-Shaw announced the unveiling of Wilder on the Taylor, an exclusive 2,000-acre shared heritage ranch and recreation preserve near Crested Butte, Colorado. The development offers 15 premium homestead sites located on the famous Taylor River, providing private access to 2 miles of exceptional fly-fishing waters that surpass Gold Medal standards. Jackson-Shaw plans to develop a total of 26 home sites at Wilder on the Taylor.
“Wilder on the Taylor is part of a new movement in real estate development that balances a demand for high-end, recreational homes with the desire to preserve the legacy and the land of the American West,” said Ron Welborn, vice president of Jackson-Shaw. “After more than two years of careful planning and meticulous attention to design, we are pleased to offer this special property as the gateway to the classic Colorado lifestyle.”
The development is surrounded by more than 2 million acres of National Forest land and is situated around a 1900s working cattle ranch. Landowners will also have access to three miles of meandering meadow fishing streams and six ponds scattered throughout Wilder on the Taylor.
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Rick's Cabaret Puts Dibs
On Fort Worth Club
FORT WORTH – Houston-based Rick's Cabaret International Inc. is poised to acquire the 17,000-sf Cabaret North for $2.3 million in north Tarrant County.
The stock buy-out is coming with an option to acquire the two-story club's five-acre site at 5316 Superior Parkway for an extra $2.4 million. Rick's has a 19-month window to exercise the option.
If the deal is completed, Rick's Cabaret International will own four clubs in Dallas/Fort Worth. "It's a first class establishment and we expect that it will show strong growth as we imprint the Rick’s brand of hospitality, service and entertainment," said Eric Langan, president and CEO of Rick's Cabaret. He said the purchase is projected to add $2.5 million to $3 million of annual revenues to the company till.
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Arlington's Commercial Promise
Extends Beyond New Landmark
By Connie Gore
ARLINGTON, Texas – The $1.1 billion Dallas Cowboys Stadium's historic entrance into the international limelight is creating infinite commercial real estate opportunities for existing and new development as North Texas brokers learned during in a behind-the-scenes look at Arlington's potential inside and outside its new crown jewel.
Mayor Robert Cluck, echoing the words of Cowboys' owner Jerry Jones, emphasized to the North Texas Commercial Association of Realtors that "this stadium is a tool to help your business grow … and to help you find leads."
The numbers are now rolling in support Arlington's decision to underwrite the stadium project by outmaneuvering the competition with a $325 million buy-in to the development deal. The opening game against the Giants sold 5,550 room nights to break June's record-setting 4,000 room nights when George Strait christened the venue as its opening act. Paul McCartney performed between the record-breaking hotel bookings and still to come are Bono and U2 in October and the rest of the Dallas Cowboys' season.
Trey Yelverton, deputy city manager, disclosed that property values have increased more than $500 million for 80 percent of the trade area and sales tax revenue rose 2.2 percent, a telling fact since most areas in the region have incurred steep losses due to cutbacks in consumer spending. To put the impact into perspective, the Dallas Cowboys Stadium replaced $40 million of vintage properties and opened the development door all across the city.
"We have an economic engine, a gold mine here that this community can celebrate for the next century," said Bill Lively, president of the Super Bowl XLV host committee. In March 2010, the committee and city will roll out a one-year marketing campaign to hype the 2011 Super Bowl and the week of events that will lead up to the playoff game. He said a preliminary economic impact study has shown billions of dollars will be generated just from sales tax revenue, hotel taxes and sales of mixed beverages.
Surrounding the stadium grounds are hundreds of acres primed for development in the Entertainment District, which already sports 2,100 acres of developed attractions and shopping. But, Arlington's hopes for prosperity aren't solely resting on the revenue-generating stadium and its Entertainment District neighbors. The 2,300-acre Virdian in North Arlington one day will hold 5,000 residential units and 1.2 million sf of mixed-use commercial space in a $1.5 billion build-out plan by Huffines Communities. The marketing center initially will open in the Dallas-based company's headquarters office in Preston Center and then go on site when a construction start is in sight.
Downtown Arlington's renaissance is based on building up its eclectic mix of "mom and pop"-type shops and restaurants surrounding the University of Texas at Arlington, which is expanding its campus in a bid to attain academic gold by becoming North Texas' first Tier 1 university. Eyes also are on Tierra Verde, a 1,600-acre tract at the junction of Interstate 20 and U.S. Hwy. 287 in the southwest sector. The Tierra Verde vision calls for a village-concept with trails, neighborhoods and businesses anchored by the Tierra Verde Golf Club, the first municipal-owned Audubon-sanctioned course in the U.S.
"That's our next frontier," said Yelverton, who earlier pointed out that the Dallas Cowboys Stadium is big, but all of Arlington's promise "is not all under one roof."Despite its full development docket, Arlington does have needs: more class A office space and convention-class hotel rooms. Part of that need could be fulfilled on a 20- to 30-acre tract at the junction of Collins Boulevard and Interstate 30 that the Texas Department of Transportation has put up for sale to the highest bidder.
"Arlington as a brand is very developable…worldwide," said Gary Walker, president of locally based SCM Real Estate Services and co-host for the NTCAR-sponsored day. "We have lots of opportunities outside the stadium."
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Sewell Celebrates LEED Gold
FORT WORTH – Sewell Automotive Cos. has become the first Lexus dealership in the U.S. to earn LEED Gold certification. The building is one of roughly 20 in North Texas to have achieved the ranking.
"By pursuing LEED certification with future new construction and building remodels, we aim to help conserve energy and North Texas' environment, as well as provide our customers and employees a better environment in which to carry out business," said Carl Sewell, chairman of the Dallas-based dealership group, which has 10 dealerships in Dallas, Fort Worth, Grapevine, North Houston, Plano and San Antonio. The company sells Cadillac, Hummer, Infiniti, GMC, Lexus, Pontiac, Saab and Buick.
The 5,600-sf building at 5100 Bryant Irvin Rd. was designed so that 90 percent of all routinely occupied space has natural lighting and a direct line of sight to the outdoors. Other green features are a storm water control system with a cistern for recycling rainwater; water-efficient landscaping; optimized energy efficiency of its HVAC system; low-VOC carpets, paints, adhesives and sealants; in-house recycling; an air monitoring system; and preferential parking for fuel-efficient vehicles.
Sewell also plans to purchase green energy certificates to help offset its electricity use. The certificates' cost covers production of wind-generated electricity equal to 70 percent of the building's energy consumption.
"Not only is improving the environmental impact of your buildings the right thing to do, but there are solid business incentives to make it worthwhile," said Ken Clayton, Sewell's in-house LEED AP and facilities manager. "Green design, over the life of a building, reduces your operating costs and creates better work spaces for your employees."
Turner Construction Co. of Dallas was Sewell's general contractor and LEED adviser. The dealer was accorded the LEED Gold certification for his new building earlier this summer, but delayed marking the milestone event until yesterday.
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Distributor Buys 6,663-SF Building
CARROLLTON, Texas – M.A.N.S. Distributors Inc. has bought a 6,663-sf office/warehouse in North Dallas. Brian Pafford, vice president and managing partner of Bradford Cos., represented the buyer of 3120 Kellway Circle. Matt Hurlbut of Transwestern Dallas represented the seller.
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IDI Starts Medical Office Project
BURLESON, Texas – Innovative Developers Inc. will begin work on a 6,000-sf building for a local practitioner in the Burleson/Joshua area, who is getting in on the ground floor of a three-building medical office development in Tarrant County.
Dr. Greg Hoffman's new office will abut the under-construction, 38,800-sf Burleson Hometown Healthcare facility at 100 Wilshire Blvd., which is being developed by Texas Health Resources. Dak Hatfield of Innovative Developers Inc. in Fort Worth coordinated the project. Eric Robinson, also with IDI, is the construction manager.
Internet research shows the eight-acre development also calls for a 4,400-sf medical office building and an ambulatory surgical center. Burleson Hometown Healthcare is slated to deliver in December on the northwest corner of the Wilshire-Lakewood Drive intersection.
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558-Unit Self-Storage Asset Sells
ROCKWALL, Texas – Getting its 23rd deed in Texas, Equity Based Services Inc. (EBS) has bought a 90 percent-leased self-storage complex with 558 units from North Texas-based Advantage Storage.
The class A self-storage complex, totaling 68,075 sf, has 247 climate-controlled units and 311 regular units, parked at the corner of Justin Road and South Goliad Street. "The quality of the build-out, the location, local demographics, and the strong existing debt on this project are all indications of a strong performer," said Stephen Kaplan, CEO for San Diego-based EBS.
The buyer assumed a 10-year, non-recourse loan, with six years remaining on the term. The debt has a 5.32 percent fixed rate and 30-year amortization.
EBS will re-brand the property at 660 Justin Rd. as American Mini Storage. It will be managed by All American Property Management Inc., a wholly owned subsidiary of EBS, which owns 63 self-storage properties in 11 states.
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Digital Realty Trust Buys
797,000-SF Tech Park
By Connie Gore
RICHARDSON, Texas – Digital Realty Trust Inc. has staked its claim as North Texas' largest datacenter provider with the 60 percent buy-in of the former Collins Technology Park. The 797,000-sf, seven-building class A prize immediately was re-branded to set the stage for a redevelopment.
Dallas County tax records show that a limited liability company from Charlotte, N.C., has owned the 69-acre park and private substation since November 1992, with the last deed rolling into the portfolio in May 2000. The new majority owner also has gained several developable land sites with the deal.
Digital Realty Trust Datacenter Park's buildings range from 15,000 sf to a 249,657-sf design at 905 Security Row. The former Alcaltel campus, now practically empty today, also has a 248,782-sf building at 1400 N. Bowser Rd.; 152,507-sf building at 1225 Alma Rd.; 113,658-sf structure at 900 Quality Way; and 106,795-sf building at 1232 Alma Rd. The park's redevelopment first surfaced three years ago, a proposal by Fobare Commercial and Skyrise Properties, according to Internet research.
"By entering into this joint venture, we've added substantial additional inventory to satisfy our customers' ongoing demand for Turn-Key Datacenter®, Powered Base Building® and build-to-suit space in a market where we are essentially fully leased at our existing sites," said Scott Peterson, senior vice president of acquisitions for the San Francisco-based buyer.
Chris Kenney, Digital Realty's vice president of acquisitions, said the team's been working with its new partner "off and on" for 18 months, resulting in the JV transaction in North Texas.Digital Realty Trust will redevelop the property in phases. The first phase will divvy the 106,795-sf building into six turn-key datacenter pods, each boasting about 10,000 sf of raised-floor space and 1125kW of critical load. The first pods are penciled for delivery in early 2010. Market demand will determine the pace of subsequent work.
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JLL Team Probes Three R's:
Recession, Risk, Rebound
By Connie Gore
DALLAS – Playing on the presence of his powerhouse teams in Dallas/Fort Worth, Jones Lang LaSalle's premier quarterback Roger Staubach yesterday put the events of the past year into perspective, showcasing the unity and depth of expertise that his merger has wrought.
"I've always believed adversity reveals genius and prosperity conceals it," said Staubach, who was setting the stage for the firm's debut on the fall circuit of market events. More than 300 professionals were on hand for the inaugural session at Staubach's headquarters building in North Dallas' prestigious Preston Center submarket, long-time hallowed office ground with occupancy numbers that lead the region in good times and bad.
One year ago, the world was teetering on the brink of a global "financial Armageddon," said Rebecca Patterson, global head of foreign exchange and commodities for J.P. Morgan, who assured the crowd that a rebound is in play. "The world is feeling better today, but that doesn't mean there still isn't risk."
Patterson talked about the risks of today and the future, a "wall of cash" waiting to be placed and a changing inventory cycle that now has demand outstripping supply. From an economic standpoint, the U.S. is positioned to grow, due in large part to the 80 percent of unspent stimulus money. The amount of growth remains an unknown, but she said it's unlikely the gross domestic product will peak about the 4 percent mark.
Patterson said the burden of a $9 trillion national deficit, excluding healthcare reform, can't be ignored. "But if we do nothing, we'll not get foreign investors to buy our bonds," she said. "Doing nothing is not an option."
Regardless of market sector, JLL's leaders in North Texas acknowledge it's a tenant's market and those conditions most likely will prevail throughout 2010. Among the talking points is one month of free rent for every two years of term on renewals and as much as one year of free space for long-term leases.
The outlook for the next year or so, continued declines in effective rent and the plethora of options in the market are motivation enough to do deals now and not delay. The office market's effective rents are down 12 percent in Dallas and 15 percent to 20 percent in Fort Worth. "Any deal you see today will be better than what you'll see in six to 12 months," said Jim Yoder, JLL's managing director of office leasing.
Terry Darrow, managing director of industrial for the firm, cited a handful of recently signed large deals, ranging from 268,000 for SpeedFX to one million sf for Whirlpool Corp. "We are making deals. The rates are bloody," he said, "but we're making deals."
Dallas' durability will prevail, aided by its central positioning in the U.S. as a prime relocation market by national companies looking to shave costs through consolidation and downsizing."We've been through recessions before. This one really isn't any different even though it feels like it is today," Jack Crews, managing director of investment sales, reminded the audience.
Crews did say sales velocity will pick up in 2010 and 2011 although the rest of this year will be sluggish. "I have faith we'll create the velocity again to help us pull out," he said. "There is positive that comes out of every recession period when expansion comes and Dallas will be the leader for the real estate industry."
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$185 Million Perot Museum
Design Unveiled in Dallas
DALLAS – The $185 million design of the Perot Museum of Nature & Science at Victory Park in Dallas was debuted yesterday by Pritzer Prize Laureate Thom Mayne and museum leaders. Ground is slated to break this fall, with the grand opening expected by early 2013.
To date, nearly $125 million has been raised for the 180,000-sf, 14-story museum, an anchor attraction promising to boost foot traffic in Victory Park and renew the 70-acre redevelopment's revenue-generating base. Mayne and his architectural firm, Morphosis, are the master architects. Dallas-based Talley Associates has partnered as landscape architect for the 4.7-acre tract.
The building mass is conceived as a large cube floating over the landscaped base. The one-acre roof will feature rock and native drought-resistant grasses reflective of Texas' indigenous landscape. Inside, five floors will be dedicated public space with 10 exhibition galleries, including a children's museum, glass-enclosed lobby, education wing, gallery for traveling exhibitions and multi-media digital cinema with 300 seats. About 80 percent of the structure will be open to the public.
"The new museum at Victory Park will create a distinct identity for the Museum, enhance its prominence and enrich Dallas' evolving cultural fabric," Mayne said. "It's been designed to engage a broad audience, invigorate young minds, and inspire wonder and curiosity in the daily lives of its visitors."
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Leppert: Dallas Reaping
Rewards of Investments
By Connie Gore
DALLAS – The city of Dallas is steamrolling through the end of this decade with a series of construction projects, bringing some deliveries and some groundbreakings as many parts of the nation linger in a holding pattern for development.
Long-funded projects, such as the convention center hotel, have been far from easy to achieve, Dallas Mayor Tom Leppert reminded the record-breaking crowd of more than 400 business leaders who attended the Dallas Regional Chamber's annual luncheon at the Sheraton Dallas in the downtown. "We have succeeded in each of the key areas. We've pulled together and moved forward," he said. "Even in this time of economic uncertainty, I am more optimistic than ever before….the state of this city is strong."
Leppert honed his development skills in Turner Construction Co.'s ranks, coming into the mayor's office with the ability to seed and harvest public-private partnerships that are now coming to fruition. The $500 million, 23-story convention center hotel broke ground yesterday, overcoming a divisive public gridlock despite Dallas' status as the only major metro in the U.S. to be without a hospitality convention anchor. Next week will bring the construction start of the $100 million Margaret Hunt Hill Bridge, a critical component of the Trinity River project, and next month will bring ribbon-cuttings on the $354 million A&T Performing Arts Center and the Wyly Theater.
"This region feels like an economic island. Some regions feel the best is behind them," Leppert said. "Here in Dallas, the best is ahead."
Leppert said, as mayor, he would have been happy to win one corporate headquarters relocation. He got that in AT&T Inc.'s move from San Antonio after it bought SBC Communications Inc. In two weeks, Tenet Healthcare Corp. moves its headquarters to the downtown from the suburbs. And, the story is set to continue as Leppert, the chamber and others work to coax a Fortune 500 company from the East Coast and a large financial company from California to Dallas. To keep the momentum going, the Dallas chamber is putting iPhones, with an app from the mayor, into the hands of 400 CEOs nationwide in a bid to lure more to the city.
Leppert admitted that his agenda has been aggressive. "To some it was probably too aggressive. To me, it was an agenda that reflected the possibilities of this great city," he said, citing teamwork with underwriting the progress on the plethora of initiatives.
But, Leppert stressed the opportunities arising from the investments can't be taken for granted. "We must provide a stable, economic environment and we can't do it with raising taxes," he said, alluding to his latest battle – a $1.9 billion city budget.
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11,120-SF Building Sells in Great Southwest
By Connie Gore
GRAND PRAIRIE, Texas – PPG Real Estate Partners has just sold the second of two buildings in a recently completed, 18-acre industrial park near the junction of East Trinity Boulevard and Texas 161 in the Great Southwest Industrial District.
The park, named for its owner, consists of a 150,000-sf structure that's used for the developer's envelope printing business, a 55,000-sf building that was sold last year and three 11,120-sf buildings, of which one was just sold to an unidentified Tarrant County company. The buyer of the one-acre project at 401 E. Trinity Blvd. plans to use it as a headquarters location. Two of the three smaller buildings delivered last March.
Pete Richardson, senior vice president of Dallas-based Henry S. Miller Brokerage LLC, said another 11,120-sf building is fully leased and the third is on the market for sale or lease at $125 per sf or $10 per sf net. Richardson, who partners with his brother Drew, said PPG Real Estate Partners is planning to hold the fully leased 11,120-sf building and its 150,000-sf printing facility as investments, eyeing the future upside from a location with Texas 161 visibility.
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Oak Hill Closes $1 Billion Fund
FORT WORTH – Oak Hill Advisors LP, an investment vehicle for Robert M. Bass, has closed OHA Strategic Credit Fund, a $1.12 billion corporate credit distressed fund targeting loans, bonds and other investments.
The fund was formed in March 2008 and began investing the following October. "My partners and I are excited about the opportunities available in the distressed market and we are grateful for the favorable response from our investors," said Glenn August, the president and senior partner of Oak Hill Advisors, which maintains offices in New York City, London and Fort Worth.
According to Oak Hill's press release, the fund's initial target was $750 million, but investment interest has resulted in more than $3 billion being raised in the past 18 months for investment in distressed and performing assets in North American and European markets. The backers are domestic and international investors, including corporate and public pension plans, endowments, insurance companies and family offices.
"For nearly 20 years, our team has worked hard to build confidence among our investors and establish a track record of success, which has allowed us to raise this capital during challenging market conditions," August added. Oak Hill Advisors' strategic relationships include iStar Financial Inc. in addition to Bass.
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Joule Hotel Affiliate Buys Five CBD Buildings
DALLAS – Westmount Realty Capital LLC has sold five buildings in downtown Dallas to an affiliate of the Joule Hotel.
The buildings, totaling 89,249 sf, surround the Joule Hotel and Charlie Palmer Restaurant, with four of the five fronting Commerce Street. The fifth property is an eight-story, 47,724-sf building at 1604 Main St., situated between the Joule Hotel and Neiman Marcus. Westmount bought the eight-story building, constructed in 1914, in 1996 from Neiman Marcus. The other buildings were acquired between 1995 and 2005.
Buyer of record, 1600 Main Street Holdings L.P., also acquired an 11,450-sf former restaurant at 1417-19 Commerce St., developed in 1932; an 8,400-sf building, also a closed restaurant, at 1503 Commerce St.; a 6,675-sf office building at 1505 Commerce St., built in 1900; and a 15,000-sf office and retail structure at 1511 Commerce St., built in 1928.In 2003 and 2006, Westmount sold Joule Hotel its site at 1530 Main St. and Charlie Palmer Restaurant its 1524 Main St. location.
"As a believer that well chosen, downtown Dallas properties held great investment prospects," said Cliff Booth, CEO of the Dallas-based Westmount, adding Westmount had considered redeveloping the block. "With the strong interest expressed by the buyer, the extension of the development time frame caused by current market conditions and the price we negotiated with the purchaser, we are very pleased with this transaction," he said.
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Local Trust Buys Two Industrial Buildings
PLANO, Texas - A local family trust has bought a two-building industrial portfolio, totaling 22,000 sf, in far North Dallas.
Burns & Park Painting sold buildings at 2712 and 2710 Rigsbee Dr. to the Wendell P. and Carol N. Keith family trust. Mark Hull and Mike Herzstein of Henry S. Miller Brokerage LLC represented the seller in the trade. Randy Baird of Baird Fitzgerald in Dallas negotiated for the buyer.
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Trademark Opens $50 Million Fund
FORT WORTH – Trademark Property Co., taking its cue from the marketplace, has launched its first investment fund as part of a restructuring of its business model and executive team. Trademark Anchor Realty Fund I will be seeded with a $50 million capital raise.
A Trademark press release lays the change on the doorstep of the downturn of development nationwide, much like a move in April when the Fort Worth-based developer launched Trademark Property Services as a vehicle to pick up third-party management contracts to fuel revenue. The new division, Trademark Investments, will be led by Tommy Miller, chief investment officer, and Bill Morris, chief acquisition officer.
Trademark's fund will target retail, mixed-use and urban infill properties, following in its parent's shoes. If all goes as planned, the fund's first portfolio piece could be in hand by January 2010.
"Our Anchor Fund will provide pursuit and co-investment capital for $500 million to $600 million of acquisitions over the next two to three years," Miller said.
As part of the executive moves, Trademark hired Daniel Upton as senior vice president of asset management to lead the property services' division. He spent the past nine years as regional vice president for Chicago-based General Growth Properties Inc.
"The addition of Daniel Upton to the Trademark team indicates our commitment to having one of the top asset management groups in the industry," said Terry Montesi, Trademark's founding partner. "His expertise and background will strengthen our position as we compete in an operations-focused market."
Trademark, started in 1991, has invested in or developed more than 30 retail, land and mixed-use properties, valued at more than $1 billion. The 67-employee firm currently is completing a $50 million renovation of La Palmera mall in Corpus Christi. Also, lease-ups are underway in Houston, Fort Worth, Allen, all in Texas, and Flowood, Miss.
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Sold: 6,000-SF Office Building
BEDFORD, Texas – Modern Contractors Inc. has bought a 6,000-sf office building from a local investment group.
Russell Webb of Dallas-based Stream Realty Partners L.P. in Dallas represented the buyer of 2008 Plaza Dr. John Paul West and Brandon Rutledge with Magellan Commercial Realty Inc. of Irving, represented the local seller.
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Arp Becomes Encore's President,
Gets $250 Million Fund Oversight
By Connie Gore
DALLAS – One of the region's most popular executives, Donna Arp, has been named president of Encore Enterprises Inc. as she takes the reins to a third fund with up to $250 million of buying capacity for commercial real estate.
Encore, marking its 10th year in investment circles, is "the silent giant," Arp said, adding she first met the team in 2004 when, as CEO and president of Realty Capital Partners, she placed equity in an Encore investment. "Everything they promised, they did. The return to our investors was very, very powerful."
Encore Opportunity Fund II was formed as a co-investment platform with Encore Enterprises Inc. and its subsidiaries. The Dallas-based fund is chasing assets of all types in all major U.S. markets, with a particular eye on multifamily, hospitality and retail investments, according to Arp. She said deals upward of $1 million are candidates for the acquisition strategy, which is closely tracking distressed properties on its radar screen. She said the plan calls for 50 percent to 60 percent leverage.
"Our goal is to be national and provide equity for projects all over the U.S.," Arp said. As president, her desk now holds several letters of intent for the fund and a couple contracts for properties to lead off the portfolio. The first transaction could close in November, she said, confiding only that it's a multifamily asset.
Encore Opportunity Fund II is the investment group's third fund, one of which was a specialty fund. In June, the $150 million Encore Opportunity Fund I was closed. The new fund has a $150 million target with a "green shoe" option, meaning that it can be expanded to $250 million. "We are poised to acquire and invest," Arp stressed, noting that $235 million has been raised to date for equity placements.
Arp spent the past year working on a private fund for Craig Hall, who has been hailed for decades as one of Texas' most entrepreneurial investors. Prior to joining Realty Capital Partners, she was mayor of Colleyville, where it's based. She is a graduate of the Harvard Business School OPM Management and Finance, with an emphasis in real estate finance plus she holds bachelor and master's degrees from Midwestern University.
"Donna Arp is a proven real estate investment veteran and we are pleased to have a professional of her caliber lead the newly created Encore Capital," said Patrick Barber, president and CEO of Encore Enterprises. "We have established a strong performance track record over the last decade and Donna will play an important role in helping us meet our high expectations for the next decade."
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DFW Airport Board Jump-Starts
$2 Billion Overhaul of Terminals
DFW INTERNATIONAL AIRPORT – Setting the stage to upgrade four terminals, the DFW International Airport's board of directors has authorized a $20.75 million expenditure for Dallas-based URS Corp. to begin preliminary design work. Early projections place the renovation cost at $1.5 billion to $2 billion, with work tentatively slated to get underway in early 2011.
The board plans to fund the project with bond sales, cash on hand and other sources. Areas earmarked for renovation are ticketing, security and concessions. The project, which will include mechanical and telecommunications upgrades, is being touted as one of the most significant construction projects planned for the next decade in North Texas. The renovation program, part of the airport's master plan, includes upgrades that will accommodate regional rail service from Dallas and Fort Worth.
"While they have served us very well, our four original terminals are 35 years old now and their internal systems need replacement," said Jeff Fegan, the airport board's CEO. He added that the work is essential for the airport's future so it can remain "highly attractive to customers and cost-effective for airlines well into the 21st century."
The board plans to begin work right after Super Bowl XLV at the Dallas Cowboys' stadium in Arlington. The timetable calls for Terminal A to be first out of the chute, with completion planned for 2014. Work on the remaining three terminals will be finished by the end of 2017. The construction phase requires one-third of each terminal to be shut down at a time.
Concessions will be clustered in villages, electing to mimic the layout at DFW's four-year-old International Terminal D. "We certainly know that International Terminal D works extremely well," Fegan said. "We hope to apply what we have learned with International Terminal D to the other terminals so every passenger who visits DFW will want to come back here time and again."
DFW International Airport is the world's third busiest with nearly 1,750 daily flights. Each year, 57 million passengers pass through its gates.
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46,998-SF Haverty's Store Changes Hands
LEWISVILLE, Texas – A private investor from Boca Raton, Fla., has sold a 46,998-sf box on three acres for $3 million. The just-sold property, adjacent to Vista Ridge Mall, is the long-time location of Haverty's Furniture.
Gill Warner, Rod Pickney and Chad Byerly of Tulsa-based Stan Johnson Co. represented the seller of 598 E. FM 3040. Barry Wolfe, a vice president in the Miami office of Marcus & Millichap Real Estate Investment Services represented the unidentified buyer. Denton County tax records show the building was constructed in 1990.
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Two Industrial Buildings Sell in Denton
DENTON, Texas – Jim/Heritage L.P. has acquired an 11-year-old industrial asset on 1.6 acres from the estate of a long-time local family.
The just-sold holding at 3412 Schulyer Rd. consists of 10,000-sf and 6,000-sf office/warehouses. The buildings are situated off Interstate 35, just north of University Drive.
Dan Spika, executive vice president for Henry S. Miller Brokerage LLC in Dallas represented the buyer. Don Frazier with Frazier Commercial Real Estate Services in Denton negotiated on behalf of the seller.
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Dallas' Genghis Grill Staking Out Phoenix Metro
DALLAS – Dallas-based Genghis Grill has signed a six-store development deal with Carroll Family Asian Stir Fry for metropolitan Phoenix. The first store will open by year's end.
Leading the new franchisee group is Chris Carroll, CEO and president. The Dallas restaurateur also leads Spring Creek Restaurants Ltd., a 35-restaurant portfolio in Dallas/Fort Worth. The locations are branded as Spring Creek Barbeque, Shady Oak Barbeque & Grill, Spring Creek Catering Co. and Mexican Inn Cafes.
The 11-year-old Genghis Grill is planning to open 20 locations in 2009 in the Southwest, south central U.S., Midwest and Southeast. The 37-unit chain's footprint now covers 12 states, earning a spot as the second-largest Mongolian concept in its category. "In a few months, we will be the largest," Al Bhakta, CEO of Genghis Grill Franchise Concepts L.P., vowed in a press release. It also is planning expansions in 10 states, including Texas, to boost its total to 42 restaurants before this year ends and 50 by the end of 2010.
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Well-Known Contrarian Predicts
More Economic Trauma Coming
By Connie Gore
DALLAS – Whether residential or commercial real estate, America needs only to look at its history and trend lines to understand what has happened to its economy and when the hard times might end.
Bolstered by her on-target warning bells three years ago, Danielle DiMartino, an analyst for the Federal Reserve Bank of Dallas, cautioned a crowd yesterday to be wary of this week's positive housing news. "2010 promises to be at least as bad as 2009 in terms of foreclosures," said DiMartino, a former financial columnist for the Dallas Morning News who is known for her contrarian views. "History holds the key to the future."
The views she expressed are hers and not that of the Federal Reserve, DiMartino emphasized to the record-setting crowd at the monthly meeting of the Dallas Apartment and Investment Brokers' breakfast at Prestonwood Country Club in North Dallas.
One in five homeowners in Dallas has mortgage debt that exceeds the value of their home while the same is true for 25 percent nationwide, said DiMartino, whose calculations show two more significant foreclosure periods and adjustable-rate mortgage resets coming in late 2010-11 and again in 2012. In three years, she said $120 billion of jumbo adjustable rate mortgage resets will hit.DiMartino said the number of homeowners "under water" could climb to 50 percent if Deustche Bank's recent prediction comes true that home prices will fall another 15 percent.
Current statistics show nine out of 10 home sales are distressed properties."There's no American Dream that ends in foreclosure," DiMartino stressed. "Mark to mark accounting was a disservice to the ability of the economy to find its footing and the ability of the market to find clearing prices."
DiMartino said government steps, such as cash for clunkers and the $8,000 tax credit for first-time homebuyers, have mitigated the "snowball effect," but also have created an "extend and pretend" scenario. "I believe increased foreclosures hold the key to the future," she said, citing recent signs of stabilization in high foreclosure-markets like Phoenix and Florida as validation of her perspective.
Until a few weeks ago, DiMartino was focused on the residential market. As she now digs into the commercial market, she's discovered only 10 percent of the owners have completed a refinance this year. That puts 90 percent of commercial owners "in a holding pattern. The situation in commercial real estate is so precarious. The commercial real estate problem is real because it lives in our regional banks and it is a bigger problem in Texas than the rest of the country," she said.
"Commercial property has a bigger upside down problem than residential."Among DiMartino's keys to recovery is getting consumers to spend without stimulus backing and yet not living beyond their means. The consumer reprogramming is particularly critical since the nation has hit its first period of wage deflation since the end of World War II and household bankruptcies rose 36 percent this year, topping 711,200 filings.
"Maybe our grandfathers were right. I'm not suggesting a cash-only society, but balance – a healthy trend line of responsible growth," DiMartino said. "Maybe if we can find that nirvana, we will get peace in our lives."
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Woodall Rodgers Park
Ready to Break Ground
DALLAS – The Real Estate Council, readying the stage for a landmark groundbreaking, will host a breakfast Sept. 14, featuring a keynote speaker with an insider's insight about the impact of Chicago's award-winning Millennium Park.
The TREC event will be held in the Fairmont Hotel at 1717 N. Akard St. in downtown Dallas. Registration begins at 7:30 a.m. for the 8 a.m. program. Featured speaker is Tony Jones, chancellor of the School of the Art Institute of Chicago, who will discuss Millennium Park's art, entertainment and economic outcomes along with a behind-the-scenes view of the architects, artists, landscapers, planners and philanthropists who contributed to the project. The Woodall Rodgers Park Foundation will hold a press conference and ceremony honoring donors immediately after the breakfast.
Millennium Park attracts four million visitors annually and "has become a powerful economic engine for Chicago," said Michelle Corson, TREC president. The purpose of the keynote address is "to learn how Dallas can use the Woodall Rodgers Park as a catalyst for even more regeneration downtown," she added in the press release.
The 5.2-acre Woodall Rodgers Park is designed to be an urban landscaped, pedestrian deck over the freeway, with aesthetic and revenue-generating amenities that link downtown and the arts district at St. Paul and Pearl streets. The vision was launched in 2004 with $1.5 million in seed money from TREC and has raised nearly $80 million to date. The public-private partnership has yielded $20 million in bond funds from the city of Dallas, $20 million in state and federal transportation funds and $20 million in private donations. In March, the park was earmarked for $16.7 million of stimulus funding.
Fund-raising is continuing, with naming rights as an extra incentive. Additional capital will be applied to funding amenities, operations and programming. Woodall Rodgers Park will include a restaurant, performance pavilion, jogging trails, a dog park, children's playground, water sculpture and outdoor game area.
Bjerke Management Solutions is managing design and construction. The Office of James Burnett and Jacobs Engineering Group Inc. headline the design team."Woodall Rodgers Park is one of TREC's most significant achievements and one of the most incredible economic development initiatives in Dallas history," said Michele Wheeler, chairman of TREC. "This investment has spurred an estimated $100 million project, a public-private partnership between the City of Dallas, Texas Department of Transportation, North Central Texas Council of Governments and local business leaders."
Jody Grant is board chairman and Linda Owens is president of the Woodall Rodgers Foundation, which has its office in the Dallas Center for Architecture at 1909 Woodall Rodgers Freeway. Board members are Leo Corrigan, Ed Fjordbak, Sheila Grant, John Muse, Rob Walters and John Zogg.
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UPDATE
Behringer Harvard Backing
Actus-Army's Hotel Plan
DALLAS – Behringer Harvard will supply up to $25 million to Nashville-based Actus Lend Lease LLC partnership to privatize and overhaul hotel properties on 10 U.S. Army bases in eight states. As reported two days ago in the National Gazette, Actus-Army partnership will flag all hotels with InterContinental Hotel brands.
Behringer Harvard Opportunity REIT II Inc. is backing the plan with a mezzanine loan. Samuel A. Gillespie, COO of the Dallas-based Behringer Harvard's REIT II, labeled the deal as "win-win" for both sides that will result in "highly attractive cash returns." The borrower of record is Rest Easy LLC, according to the REIT's SEC filing.
The lodging facilities, with more than 3,200 rooms, in the initial transfer are located in Fort Rucker, Ala.; Fort Leavenworth and Fort Riley in Kansas; Fort Polk, La.; Fort Sill, Okla.; Fort Hood and Fort Sam Houston in Texas; Yuma Proving Ground, Ariz.; Fort Myer, Va.; and Fort Shafter / Tripler Army Medical Center in Hawaii.
The REIT reported to the SEC that the loan is subordinate to a $35 million senior credit facility from Bank of America, but is senior to a $21.5 million loan from Lend Lease (U.S.) Capital Inc., an affiliate of the borrower.Behringer Harvard advanced $12.8 million of its backing at the loan closing, noting in its filing that future advances are limited to monthly payouts. The junior loan's interest is 18 percent annually. The loan matures Sept. 1, 2016. Actus agreed to interest-only monthly payments at 10 percent annual interest, beginning Oct. 1 and ending Sept. 1, 2011. Actus' payments then roll to a two-year lock box agreement and then finish in the last three years at the minimum payment and accrued and unpaid interest and principal.
"The program also will ultimately include construction of new hotels that will begin to address the chronic lodging undersupply at our Army installations," said Richard K. Frank, senior vice president of hotel investments for Behringer Harvard.
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EastGroup Beefs Up Dallas Portfolio
DALLAS – EastGroup Properties Inc. has marked its second acquisition this year, buying 227,000 sf in three buildings in northwest Dallas for $6.7 million.
The Jackson, Miss.-based buyer, with a penchant for space concentration, bought a package right at the heart of its largest asset block in Dallas – the Stemmons Freeway. EastGroup's new warehouses are 87 percent leased to six tenants.
The buyer's first move was to re-brand the buildings to Interstate Distribution Center V, VI and VII. EastGroup's Interstate I, II, III and IV are located along King William Drive, North Stemmons Freeway and Manana Drive, a 372,000-sf block that's 92 percent occupied.
According to EastGroup's press release, the portfolio additions will generate an annualized yield of 9.2 percent based on the current occupancy. The warehouses were built between 1979 and 1981.
"The acquisition of Interstates V, VI and VII allows EastGroup to expand in an attractive in-fill submarket where we have a successful existing base of assets," said David H. Hoster II, president and CEO. "It increases our cluster of business distribution properties there to over 800,000 square feet in 10 buildings."
EastGroup, like its peers, has been mostly sitting on the sidelines during the capital markets' regrouping. In late May, the investment group acquired the 142,430-sf Arville Distribution Center at 5530 Arville St. in Las Vegas for $11.05 million.
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Forest Park Realty Partners
Acquire Expansion Site
DALLAS – Westmount Realty Capital LLC has parted with nearly seven of 27 acres that have been mapped out for medical office development in North Dallas. The sale opens the door for Forest Park Medical Center to expand.
Forest Park Realty Partners III of Dallas also pocketed a purchase option for another 3.8 acres of the Westmount Health Campus. Forest Park Medical Center's first phase is a 66,000-sf specialty hospital, which delivered last March.
Dallas-based Westmount Realty's land is situated at the northeast quadrant of North Central Expressway and Forest Lane."Medically-oriented development remains one of the most active sectors in real estate. With Westmount Health Campus occupying such an enviable tract of land, buyers are attracted to its location near other medical facilities and accessibility to major roadways which provide high visibility," said Cliff Booth, Westmount president.
Westmount acquired the development dirt in 2006. It's down to seven acres due, in large part, to its freeway accessibility and visibility. It also sits 400 feet from the Forest Lane DART rail station and is just west of Medical City Hospital.
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LaSalle Group Expanding
Autumn Leaves Portfolio
DENTON, Texas – LaSalle Group Inc. has broken ground on a 38-unit Alzheimer's and memory care community in the City of Denton. The project is slated for delivery in February 2010.
The LaSalle project at 2505 Brinker Rd. is the developer's eighth assisted-living community in North Texas. Its grand opening is penciled for March 2010.
"Despite these difficult economic times, we have been fortunate to see only continued success and growth, enabling us to stay focused on our goal of expanding the Autumn Leaves brand and providing quality care to aging adults," said Mitchell Warren, president of Chicago-based LaSalle Group. "Our partners and investors alike recognize the increasing need for these types of services catered to the senior population, especially as Alzheimer's continues to grow at a rapid pace." The official groundbreaking will be Friday.
The Autumn Leaves of Denton will house 50 residents. It is being constructed by Lake Superior Contracting. Constant Care Management Co. will oversee the day-to-day operations as it does for all LaSalle facilities. In North Texas, LaSalle has assisted-living developments in Arlington, Carrollton, Flower Mound, Fossil Creek, Grapevine, McKinney and Richardson/North Garland.
LaSalle will open an Autumn Leaves in Fort Worth in early 2010. Its Houston inroad will be in mid-2010.
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U.S. Reps Addressing Dallas Chamber
DALLAS – Four U.S. congressional members will discuss legislation and issues that could impact North Texas at the Dallas Regional Chamber's meeting this week.
Thursday's luncheon will be held from noon to 1:15 p.m. in the Sheraton Dallas at 400 N. Olive St. On the dais will be Rep. Ralph M. Hall (4th District), Joe Barton (6th District), Pete Sessions (32nd District) and Congresswoman Eddie Bernice Johnson (30th District).
Sponsors of the event are Research In Motion, TXU Energy, Fidelity Investments, Baylor Health Care System, Hunt Consolidated Inc., Hunt Oil Co., Reliant Energy, Texas Health Resources and Together Rx Access.
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FEATURED PROPERTY
654 Gulf-Front Acres Up for Grabs
By Connie Gore
SOUTH PADRE ISLAND, Texas – Grubb & Ellis Co. and SPI Coastal Properties are courting mixed-use developers for a 654-acre tract with a beach-to-bay footprint along the Gulf of Mexico. Tagged at $27.6 million, the listing represents one of, if not the, largest tracts available on Texas' leading coastal playground.
Kit Corbin, executive vice president in Grubb & Ellis' San Antonio office, said the listing has attracted a number of offers, including two groups from Mexico. "As we begin to climb out of this recession, we are seeing a lot of prospects crop up," he said. "With the activity we have, we'll probably have this in escrow in 60 days."
However, there is no deadline hanging overhead. "It's a conventional marketing effort. The goal is to get this done as quickly as we can," said Corbin, who's teaming with SPI Coastal's Mary Phillip. "The sellers would like to get it sold." The seller is a Cleveland-based lender, Cameron Acquisitions.
The 654-acre tract has 1.5 miles of beachfront on the Gulf of Mexico and 1.5 miles on Laguna Madre Bay. "It's a very unique property," Corbin stressed. "It's one the only large tract opportunities for a mixed-use development as you go north from the heart of the island." Adding to the appeal is the city's utility lines are fast approaching the tract's gateway along Highway 100.
Corbin pointed out that the land is protected by a natural high-dune barrier. It's also been pinpointed for two of the six connection points for a second bridge from the mainland to the island. Other geographical advantages include two miles from South Padre Island Convention Center and seven miles from Queen Isabella Causeway. Photos are available at www.southpadresands.com.
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Foreclosures: U.S. Stats Rise,
Texas Fares Better Than Most
By Connie Gore
DALLAS – As Americans take stock of the state of their country, the foreclosure rate is continuing to climb across the nation, with one in every 355 housing units receiving a foreclosure notice last month. The Texas perspective isn't nearly as bleak as some states, but it's still pushing well above its historical norms.
Rolling out foreclosure updates yesterday were Texas expert George Roddy Sr., president of Foreclosure Listing Service Inc. of Carrollton, and Irvine, Calif.-based RealtyTrac. Roddy's monthly foreclosure reports in Dallas/Fort Worth, Austin and San Antonio are indicators of current activity in county courthouses. RealtyTrac's July report reflects default notices, scheduled auctions and bank repossessions nationwide, also relying on data collection at the county level.
"July marks the third time in the last five months where we've seen a new record set for foreclosure activity," said James J. Saccacio, RealtyTrac CEO. "Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we're seeing significant growth in both the initial notices of default and in the bank repossessions."
Texas is ranked 25th on RealtyTrac's July overview, which showed foreclosures were up 16.64 percent in the past year. The Top 10 states for foreclosure activity in descending order are Nevada, California, Arizona, Florida, Utah, Idaho, Georgia, Illinois, Colorado and Utah. RealtyTrac's team logged 360,149 foreclosures in July, up seven percent in one month and 32 percent higher than July 2008.
With the September auctions fast approaching in Texas, Roddy's new research shows three of the four counties – Tarrant, Collin and Denton – in North Texas once again are at record-high foreclosure levels while the San Antonio metro has experienced a decline since the second quarter ended.
In Roddy's preliminary report for the September sale, Dallas, Tarrant, Collin and Denton counties have pushed above 5,000 after a one-month respite when their total dropped roughly 300 postings below the benchmark. However, five of the past six months have generated more than 5,000 postings metroplex-wide. The posting tallies show at least 15,000 homes were on county auction blocks for two consecutive quarters and more than 45,000 year to date.
In Bexar County, 11,645 postings were tacked up on properties since January. There are 1,150 properties listed for the Sept. 1 auction, a two percent drop since the August sale. "Bexar County foreclosure posting activity for the third quarter has eased off compared to last quarter, but still remained 39 percent higher than for the same quarter last year," Roddy pointed out. Despite the slight improvement, it's still the third consecutive quarter that Bexar County has passed the 3,000 posting mark.
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742,000-SF Crossroads Mall Sells
To San Antonio, Houston Group
By Connie Gore
SAN ANTONIO – A retail investment group, with ties to San Antonio and Houston, has banked the deed to the 742,000-sf Crossroads Mall in an all-cash deal with an affiliate of Trammell Crow Co.
The 36.5-acre asset, once ticketed for redevelopment, will be kept intact, with the new owners' focus on re-tenanting and rebranding to reposition the 60%-leased mall, said Rusty Tamlyn, senior managing director in Houston for Holliday Fenoglio L.P. Situated at 4522 Fredericksburg Rd. in the northwest submarket, the 48-year-old mall's anchor tenants are Burlington, Coat Factory, Hobby Lobby, Stein Mart and Jo-Ann Fabrics. Tamlyn said the long-range plan could result in a conversion to a Hispanic retail mall.
Tamlyn and HFF senior managing director Doug Hazelbaker in Dallas brought Crossroads Mall to market last fall, with a Los Angeles-based investment group winning the best and final in a no minimum-ask scenario. Tamlyn said the financial markets stalled the closing, with the contract being dropped in March. A second marketing reeled in seven new offers for the Dallas-based seller.
An attached Super Target, boasting one the region's strongest sales volumes, was not part of the sale. The class B-minus mall does have some open pad sites that the new owner can tap for upside, according to Tamlyn. "Basically, it's break even right now from a cash-flow standpoint," he said.
Tamlyn can't discuss the financials, but categorized the sale as meeting the market, which has been experiencing a rash of retail and hospitality sales nationwide. "The biggest price drops have been in those two areas," the senior managing director explained of the recent uptick.
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Brokaw, Victory Office Leasing
Transition to Cousin Properties
By Connie Gore
DALLAS – In a smooth Texas two-step move, Cousins Properties Inc. has hired award-winning broker Bill Brokaw for its team and cordoned off a place to plant its flag in Victory with the 180,000-sf class A office assignment that came with him.
Brokaw, marking his 15th year in the business, has joined as a vice president after a four-year run leasing the glass-and-steel high-rises in Victory Plaza for locally based Hillwood Development Corp. The Uptown development's new majority owner, UST Joint Venture L.P., a privately owned partnership of German investors, is keeping Brokaw in place to lease Victory Plaza East at 3030 Olive St. and Victory Plaza West at 3090 Olive St. Hillwood retained Victory's management rights when the German partnership assumed majority interest earlier this summer.
"It was absolutely a great opportunity to have the capacity to take Victory with me," Brokaw said. "It made a lot of sense and it's a very seamless transition. We're thrilled to be able to continue to work with that project."
Brokaw is partnering with Cousins' senior vice president Mark Dickenson on the Victory assignment and a several other class A office buildings in the metroplex, including the 1.39 million-sf Towers of Williams Square at 5215 N. O'Connor Blvd. in the Las Colinas Urban Center, part of the portfolio of New York City-based TIAA-CREF.
Brokaw has been instrumental in driving Victory's office component to 90 percent occupancy. He's racked up numerous accolades with a career of closings for 2.5 million sf of class A office leases and four years of high-profile deals in Victory – the newest of which are best commercial real estate broker in 2009 and one of 17 rising Thirtysomethings in 2008 in the Big D.
Brokaw was, in fact, groomed in the Uptown and Downtown office markets during an eight-year stint with the now-defunct Trizec Properties Inc., a Chicago-based powerhouse sold for $9 billion to Brookfield Properties Corp. of Toronto and New York's Blackstone Group in October 2006 at the height of the merger and acquisition frenzy. His early years were spent as a property financial manager for Lincoln Property Co. of Dallas.
"Hillwood has phenomenal people and is a wonderful organization," Brokaw stressed, "but I am really excited about my future endeavors and the opportunities that Cousins has to offer."
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North Texas' Retail Occupancy
Falling Despite Scattered Gains
ADDISON, Texas – The North Texas retail market, still struggling daily for sales, has lost occupancy points market-wide, but there are glimmers of hope with 14 of 47 submarkets showing some traction during the second quarter.
George Roddy Sr., president of Roddy Information Services and DFWRealSmart.com, found five of the region's submarkets showed gains of 6 percent or more. On the flip side of the quarterly market analysis, Roddy's research team found occupancy had fallen to 83.68 percent in the metroplex, down 1.7 percent in the past year. "This is the lowest level that I have seen in this real estate cycle," he said.
Roddy placed the blame on developers' shoulders for delivering nearly 22 million sf of multi-tenant retail space in the past 4.5 years, of which 4.3 million has come on line since the beginning of 2008. To reflect the loss, he pointed out that occupancy was 89.58 percent in first quarter 2005. Retail space, though, continues to be absorbed in the marketplace despite the recession and retailers' performances. Since third quarter 2008, 2.6 million sf was absorbed. "This, however, was the lowest performance in annualized net absorption in four years," the market expert added, citing a three-year consecutive average of three million to 3.3 million sf per year.
Roddy said the leasing rebounded slightly in the second quarter, with net absorption registering 281,500 sf. In the first quarter, absorption flat lined, falling 1.3 million into the red or its "largest outflow of retail center space in seven years," he said. One year ago, absorption took a 275,000-sf hit.
In terms of the best and worst of submarkets, Benbrook's occupancy spiked 35 percent to lead the list of gainers while North Richland Hills fell to minus 12 percent. Also showing marked gains were Northwest Tarrant County, up 7 percent to 74.46 percent occupancy; Northwest Dallas, gaining 6 percent to end the quarter at 89.47 percent; and East Fort Worth and Duncanville/Cedar Hill, climbing 6 percent for occupancies of 85.88 percent and 83.79 percent, respectively.
Besides North Richland Hills, the biggest losers were Mid-Cities/Arlington, down 10 percent to 68.62 percent occupancy; Southwest Dallas and South Garland, also down 10 percent, to end the quarter at 76.03 percent and 72.98 percent, respectively; and East Plano, down nine percent to 79.06 percent.
The highest occupancy was logged in North Dallas, maintaining 96.65 percent, with Greenville Avenue ringing up 91.88 percent for a one percent uptick; South Fort Worth holding steady at 90.49 percent; Denton, also up one percent to 90.33 percent; and South Dallas, falling six percent, but still able to beat the 90 percent mark by just a shade.
"On the flip side, the lowest retail center occupancy level was 63.27% in the Dallas CBD," Roddy said. Also at the bottom of the list were Mid-Cities/Arlington, South Garland, North Richland Hills and Northwest Tarrant County.
Looking at quoted rent, Roddy said the second quarter ended at $16.92 per sf, up two cents from the first quarter yet down eight cents since the end of 2008. The average quoted rate is 1.7 percent higher than it was one year ago.
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W.P. Carey Readies New Plan
To Refill 282,000-SF Office
By Connie Gore
RICHARDSON, Texas – In a sign of the times, W.P. Carey & Co. LLC is mapping out a multi-tenant strategy for Nortel Networks Corp.'s former headquarters and operations hub in Galatyn Park. A Jones Lang LaSalle team will be at the helm of the initiative to refill the 282,000 sf of empty class A space.
Even Nortel's sublease tenant, Credit Solutions, has left the building at 2370 N. Performance Dr. The empty structure, though, "leaves us with opportunity," said Shannon Brown, a vice president with Jones Lang LaSalle in Dallas. She and senior vice president Sandie Matejek have won the keys to the assignment.
Brown said an architect will be selected within 30 days to redesign the lobby for multi-tenant use. In addition, the owner and leasing team are planning to take part, if not all, of the seven floors back to shell space. The JLL team is approaching the assignment with an 18- to 24-month lease-up strategy for an owner with a heavily weighted portfolio of single-tenant buildings. Details for the multi-tenant makeover, including the quoted rate, have yet to be firmed up, according to Brown. "We want to maximize space, but we want to make it a multi-tenant-friendly building," she emphasized.
With 40,285-sf floor plates to work with, Brown said they will focus on tenants seeking at least 20,000 sf. "The interest has already been surprising," she admitted.The office building, completed in 2001, has 846 parking spaces and sits one block from Galatyn Park's DART light-rail station. Close by is Eismann Center Theatre, Collin Creek Mall, numerous restaurants and retail shops.According to JLL research, there are 10 blocks of contiguous class A and B space with more than 100,000 sf in the Richardson submarket. But, the veteran JLL team has hit the ground running to win its share of the deals in the market.
"There are some big deals floating around up north. There's definitely some demand," Brown said. "We are putting out feelers. Richardson has really diversified itself and we're looking at any and all users."
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Laurex Realty Joins KW Commercial
By Connie Gore
PLANO, Texas – With the ink now dried on the deal, Laurex Realty Advisors has started its re-branding as KW Commercial.
Alex Johnson, CCIM, and founder of the seven-year-old firm has joined the KW Commercial network, getting a national platform and inroad to REO business and taking on the challenge of building a critical mass of commercial brokers for KW's Frisco Market Center. Johnson said he has another independent brokerage firm, with a property management division for multifamily assets, interested in raising a KW Commercial flag in North Texas.
Johnson said KW Commercial has earmarked 4,000 sf of its 22,000-sf building at 4783 Preston Rd. in Frisco for the new group. Keller Williams has 220 residential agents in its Frisco Market Center, all of whom will be driving commercial deals his way.Johnson said other KW Commercial affiliates say the marriage with Keller Williams' residential teams have proven to be a real blessing in today's deal-strapped world. "There are more referrals than any one broker can handle," he said.
As an added perk, Johnson said the KW Commercial affiliation will enable him to get involved in REO business. "You have to have a national platform to do that," he stressed.
Keller Williams formed KW Commercial in February, packaging the play with an alliance with CCIM. "Part of the reason I joined is the commitment of KW Commercial to CCIM," Johnson emphasized, "and it's a clear, viable way of maintaining your business and lowering your cost."
The Austin-based KW Commercial now has a base of 600 commercial brokers nationwide, including CCIM president Mac McClure who also signed final papers for the affiliation in recent weeks, according to Johnson. "It's a great platform," Johnson said, citing the firm's "entrepreneurial spirit" and a support structure that eases the back-office burden as head of a self-owned real estate company.
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Corgan Gets Sixth Floor Museum Job
DALLAS – Corgan Associates Inc. is designing a reading room for the Sixth Floor Museum at Dealey Plaza and gaming out renovations plans for the former administrative offices at the landmark Texas School Book Depository. The reading room is slated to open in November.
The renovated space will provide greater access for the public to the museum's 35,000-item collection of President John F. Kennedy and events surrounding his assassination. The West End's historic museum draws more than 325,000 visitors annually.
Corgan is redesigning space on the first floor of the Dallas County Administration Building at 411 Elm St. for the reading room. The collections/library staff will be providing access to a collection of nearly 5,000 volumes, 1,000 videos, more than 700 video-recorded interviews and public programs and some 2,000 historic magazines and journals.
"As we approach the 50th anniversary of President Kennedy's assassination, the museum has renewed its responsibility to make its considerable resources available to students, educators and researchers," says Nicola Longford, the museum's executive director. "The Reading Room presents an excellent opportunity to showcase and expand our collections."
The project includes a media room, which will be in a renovated portion of meeting space at the Depository. The room will be shared with Dallas County employees.
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North Texas Industrial Vacancy
At Highest Level Since 1992
DALLAS - The North Texas industrial marketplace has reached its highest vacancy level since 1992 due to three million sf of new space and 304,807 sf of negative absorption at the end of the second quarter.
Grubb & Ellis Co., taking the pulse of the industrial market, pegged vacancy at 11.8 percent, a spike of 50 basis points. There is 78 million sf of direct and sublease space ready to lease, an increase of 16 million sf since last year at this time. Vacancy in general industrial space stood at 4.8 percent while warehouse and distribution was 14 percent and R&D/flex registered 11.8 percent.
Nine of the region's 13 submarkets showed absorption levels in the red. The DFW Airport submarket recorded the largest gain, 439,324 sf.Grubb & Ellis researchers found sublease space, now eight million sf, is at its highest level in five years. It was 500,000 sf in Q2 2008.
In the past year, developers delivered 15.5 million sf. The glimmer of sunshine amid the grim numbers is a slowdown to 1.9 million under construction and year-to-date net absorption of 1.1 million sf. In Q2 2008, there was 12 million sf working out of the ground.
With the pressure on the market, the average rent fell 17 cents to $4.22 per sf, triple net. Investment sales too have felt the crunch, with only 24 properties trading at more than $2.5 million. The Santa Ana, Calif.-based brokerage house puts current trades at $49 per sf with cap rates averaging 7 percent on a trailing 12-month basis.
"Opportunity remains with build-to-suit projects for developers to carve out new niches in the market by targeting specific users with unique space requirements," the research team said. "Nonexistent debt financing, decreased pricing and growing financial distress have set the stage for opportunistic buyers looking to snatch well position assets at significant discounts."
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Investment Group's Backing
Lets Ferguson Relocate
By Connie Gore
FORT WORTH – In a complicated maneuver, a Henry S. Miller Brokerage LLC team has found a relocation site for Ferguson Enterprises Inc. in North Fort Worth after convincing an investment group to acquire the only asset in the submarket that lived up to the tenant's criteria.
"We couldn't find anything to lease in the area," said Jim Hazard, vice president of the Dallas brokerage firm. "We had the tenant first, then the building and then found the investors to buy the building." Hazard and associates Brett Heinen and Todd Hawpe invested eight to 10 months into the relocation project, eventually opening the door to 13201 Harmon Rd. for the Newport News, Va.-based plumbing wholesaler and distributor, which plans to use the site for its regional headquarters.
Ferguson plans to move in 30 to 60 days from 212 Lipscomb St. to the 14,000-sf building on five acres. The new location, secured with a long-term lease, was bought by a Fort Worth investment group from Best Texas Plumbing, which has consolidated its team at 4204 Garland Rd. in Haltom City.Hazard said Ferguson needed a small building set on at least three acres.
"Finding a small building with acreages isn't the easiest," he said, noting the storage yard was the most critical piece of the site criteria. Construction is now under way to gravel 3.5 of the new site's five acres and make significant upgrades to the building's interior, which is being outfitted with a 4,000-sf office. The existing structure also offers 1,500 sf of auxiliary space and grade-level loading.
Hazard said the buyer brought substantial cash to the deal and placed debt on the balance. "They're in a position to borrow, but it wasn't easy," he said, citing the constraints of the capital markets. "The investment group worked very hard to get this done. Ferguson worked very hard to get this done. Everyone had the same goal."
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Winstead Starts Leasing,
Asset Management Team
DALLAS – Law firm Winstead has formed a leasing and asset management group, seeding the launch with 15 attorneys from multi-disciplinary practice areas in Dallas, Houston, Austin and Fort Worth.
Attorney Greg Zimmerman is chairing the new group. The team's members are skilled in transactions for office, retail, industrial and mixed-use properties for landlords, tenants and brokers/managers. " This experience includes not only traditional space and ground lease transactions, but also more sophisticated work such as build-to-suits, multi-use developments, special use lease transactions, as well as restructures of any such transactions," Zimmerman said.
The group is targeting businesses that need or want to reduce costs through downsizing or lease modifications.
Zimmerman said the group provides the ability to speed up response time and minimize costs. In addition, Winstead has set up an alternative pricing structure for the initiative.
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RMC MedStone Buys Austin Medical Center
DALLAS – RMC MedStone has acquired controlling interest in the 9,100-sf Stonegate Surgery Center in southwest Austin from its founding physicians.
Stonegate Surgery Center, now undergoing an expansion, was developed in 2006 at 2501 W. William Cannon Dr. by a pair of pain management specialists, Drs. Robert Wills and Matthew McCarty. Additional physicians were added in 2008. The single-story building will have five operating rooms when the construction's done this year in addition to more office space, seven pre-operative stations and 11 recovery stations.
RMC MedStone, owned by Dallas-based RM Crowe, has a portfolio of surgery centers and hospitals in Texas, California and Iowa. "We have secured and combined the largest line of working capital in the history of the company," said Chris Matthews, president of Dallas-based real estate company RM Crowe. "We are looking to acquire medical-related assets throughout the country with a history of performance, and Stonegate Surgery Center meets that criteria and will continue to be very successful with its superior location and additional services offered once the expansion is complete."
RMC MedStone's other Texas holding is the River Oaks Surgical Center at 4120 Southwest Freeway in Houston. In Modesto, Calif., the investment group owns the Stanislaus Surgical Hospital at 1421 Oakdale Rd., Coffee Road Surgery Center at 1335 Coffee Rd. and Precision Imaging at 1809 Tully Rd. The portfolio includes Terrace Park Professional Center at 4500 Utica Ridge Rd. on the campus of Trinity Regional Health Systems in Bettendorf, Iowa.
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Grubb & Ellis Gets Overlook's Keys
By Connie Gore
IRVING, Texas – In a quiet key-turning, SMA Equities has put the 95,510-sf, class A Overlook into the hands of a Grubb & Ellis Co. team.
Being new to the property, Chris Wright, Grubb & Ellis' senior vice president, and Sean Dalton, senior associate, are just now sizing up the possibilities for the three-story building near the corner of O'Connor Road and Texas 114. "We feel like there's a real value-add opportunity with the building," Wright said. "We're already seeing really nice activity on the property and we're really bullish about the opportunity."
The 70 percent-leased Overlook has minimal lease rollover for the next two years, according to Wright. The largest tenant is Darling International Inc., which fills 26,800 sf with its headquarters team.Wright said the assignment came with spec suites in place, but more could be added once the full review is complete. Quotes range from $17 per sf to $20 per sf, plus electric, with offices overlooking the TPC Four Seasons Las Colinas golf course commanding the highest rates.
The Grubb & Ellis team also leases SMA's Parkway Tower, an 81,000-sf office building at 8445 Freeport Pkwy in Irving. The New York City private equity firm is "strong, stable and long-term owners," Wright stresses. "That's definitely hard to find right now. They're definitely few and far between."
Wright and Dalton are in the process of preparing a suggested "to do" list for the owner to ready the Overlook for a lease-up campaign. Brokers' specials aren't on the table, as yet. "We have a very entrepreneurial owner. If we need to get aggressive to make a deal, it's something we'd take into consideration," Wright emphasized.
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North Texas Retail Market
Holding Its Own in 2009
DALLAS – In a just-released midyear report, the Weitzman Group's research team has found retail occupancy fell to 87 percent, down 0.6 percent from yearend 2008. Despite the slight falter, the market is holding its own amid a growing number of high-profile store closings and new projects coming on line.
"For the remainder of 2009 and into 2010, the D/FW retail market should remain relative balanced," concluded the Weitzman team, "thanks to demand-based new projects and a timely slowdown in new construction, combined with an economy that outperforms the national average."Developers are on track to add 2.9 million sf, the smallest amount this decade, to the 172 million sf of multi-tenant centers with 25,000 sf or more. Last year, the region picked up 4.9 million sf. Dallas-based Weitzman said the major new projects are "all well anchored" and in areas of proven retail traffic and high residential density.
Circuit City and Linens 'n Things closed all local stores, darkening nearly 30 dark stores or 600,000 sf in the metroplex. "Fortunately, the retail vacancies in D/FW are being backfilled, just at a slower pace than in previous years prior to the economic slump," Weitzman researchers said in the report. On the bright side, the total accounts for less than one percent of the marketplace, the team pointed out.
The team attributes the D/FW's retail market stability to the area's economy is slowing, but is still "healthier" than the national average due to a growing population. A U.S. Census Bureau report showed Fort Worth and McKinney were among the 10 fastest growing cities in the in nation in 2008.
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Investor Buying 14-Restaurant
Portfolio in Dallas/Fort Worth
DALLAS – Locally based Tribox LLC has picked up $12 million from Scottsdale, Ariz.-based GE Capital, Franchise Finance, to buy 14 Jack in the Box units in North Texas and refinance some existing debt. The borrower owns seven Jack in the Box locations in Dallas/Fort Worth.
The transaction signals the start of a new business relationship between borrower and lender. “Our relationship with GE Capital will help us extend our reach within the Jack in the Box franchise and connect with additional customers in Dallas,” said Chris Aslam, a Tribox partner, citing the lender's "longstanding dedication to the restaurant business and commitment to helping franchisors and franchisees grow and prosper.”
Tribox partner Javed Aslam bought his first Jack in the Box more than 20 years ago, adding six more through the years and forming the firm with his son, Chris, and one other business partner in the metroplex. The San Diego-based Jack in the Box Inc. has more than 2,180 corporate- and franchise-owned locations in 18 states.
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Sold: Two Retail Ground Leases
DALLAS – Unidentified net-lease investors have bought a Sweet Tomatoes ground lease in North Dallas and a newly developed McDonald's tract in Laredo.
The 1.68-acre tract at 15225 Montfort Dr. holds a 7,720-sf building developed in 2007. According to Dallas Central Appraisal District, the seller was WXIII PWM Real Estate LP of San Diego. Philip Levy and Jason Vitorino, investment specialists in Marcus & Millichap Real Estate Investment Services’ Dallas office, represented the seller of the Prestonwood Town Center asset.
In another ground lease sale in Texas, a limited liability company has bought a 37,897-sf tract with a 4,000-sf building leased to McDonald's at 2311 NE Bob Bullock Loop in Laredo. The building delivered earlier this year. James Bell with Marcus & Millichap in Houston represented the development partnership, which had the holding on the market for $1.3 million.
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D/FW Commercial Notices Climbing
DALLAS – A just-released report by Foreclosure Listing Services Inc. shows commercial property owners are faring better than residential, but the dark side of the news is the number of postings most likely will continue to climb.
George Roddy Sr., president of the Carrollton, Texas-based firm, pointed out commercial postings primarily are hitting lower-quality properties with less than 100,000 sf. From January through July, 1,245 notices were placed on commercial doors versus 1,116 for the first seven foreclosure auctions in 2008.
To put the commercial sector's total into perspective, 37,000 foreclosure postings were placed against residential and commercial properties so far this year in Dallas/Fort Worth. By Roddy's calculations, residential postings climbed 20 percent and commercial, 12 percent.
Since the year started, office buildings and retail centers accounted for 11 percent and 13 percent, respectively, of the total postings. The research reflects a 109 percent spike for office buildings and 108 percent jump for retail properties in the past year. "Postings among retail properties will probably worsen over the remainder of this year," Roddy said.
Postings tapered from 2008 until now for apartment buildings and miscellaneous commercial buildings, dropping 5 percent and 24 percent respectively. However, apartment foreclosures account for 17 percent of the total commercial properties and miscellaneous, 30 percent. Industrial properties, with 8 percent of the grand total, marked a 17 percent increase in notices since July 2008 and land foreclosures, representing 20 percent of the total, are 55 percent higher than last year.
"Speculative land buyers have been left stranded by the economic downturn and are struggling to pay for debt services," Roddy said in a press release. "With very little lending going on for new construction and many proposed projects on indefinite hold, land owners who bought undeveloped land hoping to flip the property as an investment or develop the property have been left in a bind."
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TCN Worldwide Adds Chicago Firm
DALLAS – TCN Worldwide has added Entre Commercial Realty LLC of Schaumburg, Ill., to its network.
The organization's newcomer is a full-service industrial real estate firm servicing the Greater Chicago marketplace. "Entre Commercial Realty/TCN Worldwide is a recognized leader within the Chicago marketplace and a perfect example of the type of strong independent firm we attract to TCN Worldwide," said H. Ross Ford of Dallas-based TCN Worldwide.
Entre Commercial was co-founded by Dan Jones and Daniel Benassi. "This new partnership with TCN Worldwide will provide our organization with the ability to offer clients an expanded array of services on a local, national and international basis," Jones said.
TCN Worldwide is a consortium of independent commercial real estate firms. Its members are responsible for more than 80 million sf of managed properties and $20.7 billion of annual transactions.
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Bandera, Dallas Cowboys Make
400,000-SF Hail Mary Play
By Connie Gore
IRVING, Texas – Scoring a goal for a turnaround play, Bandera Ventures and Dallas Cowboys Merchandising Ltd. have just broken ground on a 400,000-sf project to rebound from a sudden delay in the spring.
The building is going up on 20 acres in International Commerce Park on ground-leased land at DFW International Airport. Just a few months ago, Dallas-based developer Bandera Ventures Ltd. had project bids in hand and was awaiting permits when airport officials said infrastructure for the original site wasn't going to be ready in time for June 1 start. To regroup, the developer had the building redesigned to suit a new site on airport-leased land along Regent Boulevard and placed a bet on future visibility from Texas 121 when a flyover project is done.
"This was a challenge," said Tom Leiser, a Bandera Ventures' partner. "The economy is making every deal a challenge right now."
Leiser explained the original site had enough room to double the warehouse's size down the road. He said the new site at 2500 Regent Blvd. doesn't have that capability, but pointed out there are acres of undeveloped land right across the street if needed.
The building will house the merchandising group's headquarters, production and distribution of the full line of Dallas Cowboys' retail inventory. Move-in is penciled for February 2010.
The project is the Dallas Cowboys' merchandising group's third expansion in 12 years in Irving. The division includes Pro Shop and Blue Star Graphics & Design, all now housed in a 47,000-sf building at 4251 John Carpenter Freeway, which is group owned. The 450-employee division also leases 30,000 sf at 14800 FAA Rd. in CentrePort Business Park and a 103,845-sf warehouse at 1011 Royal Lane, another ground-up project on airport land and one that jump-started the relationship with Bandera Ventures.
"At the time, they thought they'd never need that much space," Leiser said at yesterday's groundbreaking. "And, here we are five and a half years later building 400,000 sf for them."
Jerry Jones Jr., who was later joined by Dallas Cowboy DeMarcus Ware, credited the fans' support for the series of expansions. "Our fans are very special. There are no other fans like them in NFL sports," he said. The inventory is the owner's way of making fans "feel like they're touching the team and getting as much authenticity as possible," he added.
International Commerce Park's Foreign Trade Zone status helped to sell the new site. "It's a great location, a great project," said Jeff Fagan, CEO of DFW Airport. "We're very excited to have Dallas Cowboys Merchandising here on the airport. Bandera Ventures has brought us some great tenants through the years."
Halff Associates Inc. of Dallas is the project architect. Burton Construction Co. of Sugar Land, Texas is the general contractor. American Bank of Texas provided construction financing.
Bandera Ventures was founded in 2003 by Leiser, Chuck Anderson and Pryor Blackwell, a trio of former Trammell Crow Co. senior development executives. Since the launch, they've completed 44 projects, many repeat clients. "Our tenants are our fans and happily, they keep coming back," Leiser said. "We stick to the Golden Rule and treat our tenants as we would want to be treated."
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Local Industrial Investors
Reclaiming Deal Muscle
By Connie Gore
DALLAS – Local buyers, long sidelined by out-of-state investors with higher bids, have cruised to the top of industrial brokers' preferred courtship lists for properties in the $20 million and under category in Dallas/Fort Worth.
"This is kind of what they've been waiting on for awhile," said Scott Ryan, senior associate for Marcus & Millichap Real Estate Investment Services in Dallas. "Sellers are more realistic on pricing because they have to sell a good project to float another project." He added that more locals are being courted because they offer a surety of close for a variety of reasons, market knowledge for one.
"Our bread-and-butter business was bringing in out-of-state capital for four years, which we're seeing decrease dramatically," Ryan said.
Transactions remain slow across the board so there are no easy trends to predict, Ryan emphasized. But, he's noticed particular interest in Brookhollow and Valwood submarkets, mostly from buyers who intend to occupy the premises on a single-tenant basis. As a result, he said the underlying driver for landing a contract these days is more the deal's dynamics than submarket performance.
Whether it's buying or leasing, Ryan said the highest demand has been in the 20,000-sf to 40,000-sf range for the industrial sector. "It's your broadest audience," he stressed. Buyers, local or otherwise, have been leaning toward assets of 20,000 sf to 100,000 sf in the $500,000 to $4 million range, with re-trading almost always part of the equation.
Warehouses are predicted to be the favored product type for 2009's past, present and future months. Denver-based ProLogis, sticking to a recapitalization plan, has put three million sf of class A warehouse space in North Texas on the market as part of a portfolio transaction.
Ryan, citing CoStar statistics, said industrial vacancy has climbed to 11.2 percent in the 624 million-sf inventory of North Texas. In Marcus & Millichap's latest industrial report, researchers found 11.5 million sf will be added to the inventory this year. A record-setting 2008 brought 19.4 million sf of deliveries.
With double-digit vacancy and tilt-walls still going up, the brokerage firm's researchers said owners will be agreeing to "aggressive rent modifications to keep tenants." By year's end, the quoted rate is projected to be $3.72 per while the effective rate will sink to $3.34 per sf, resulting in drops of 5.8 percent and 7 percent, respectively.
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Alliance Town Center's Shops
Raising Sales Bars for Chains
FORT WORTH – With Alliance Town Center's shops ringing up strong sales, Hillwood and Trademark Property Co. are toasting the traction that their 20 retailers in the 600,000-sf development have made in light of the recession and retail sector's overall sluggishness.
In the past month, Kincaid's Hamburgers and Sam Moon Trading Co. have opened doors and the project's JCPenney store, which opened in October 2006, won its second Chairman's Award to signal its success in the budding Interstate 35 W retail corridor in north Fort Worth. Alliance Town Center is situated between North Tarrant and Heritage Trace parkways.
The 168,446-sf Sam Moon Center is the Dallas-based chain's fourth in the state and first in Tarrant County. The sales were the highest of all previous store openings, said Daniel Moon, vice president and general counsel of Sam Moon.
Kincaid’s Hamburgers marked its fifth launch with one of the most successful grand openings in its 40-year history.
The joint venture's future plans include a grocery-anchored center and a "town center" component with specialty retail interspersed with office, hotel and residential space. At build-out, the 300-acre Alliance Town Center will top two million sf in a mix of uses, including entertainment and the HCA medical campus.
Alliance Town Center, with miles of interstate frontage, is part of the 17,000-acre AllianceTexas encompassing the cities of Fort Worth, Roanoke, Haslet and Westlake in Tarrant and Denton counties. AllianceTexas houses more than 200 companies in 29 million sf, 7,200 single-family homes, Monterra Village apartments and corporate campuses and golf courses.
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Cobalt REIT Buys 1.7 Million SF
IRVING, Texas – Cobalt Capital Partners LP has added the 1.7 million-sf Shawnee Ridge industrial part to Cobalt Industrial REIT II portfolio, getting a nine-building block in a 587-acre park in Atlanta's I-85 Northeast submarket.
The REIT's new possession is 82 percent leased to 16 tenants. The class A light-industrial buildings were developed between 1990 and 1997. The acquisition takes Cobalt's stake in Atlanta to 6.6 million sf, making it the largest concentration in its 14 markets.
"The Shawnee Ridge acquisition enabled us to significantly expand our presence in Atlanta, a market that we believe will respond very quickly as the general economy recovers over time," says Lewis D. Friedland, managing partner of the Irving, Texas-based REIT. "We were also pleased to have simultaneously closed an attractively priced five-year fixed rate acquisition mortgage for approximately 60% of our investment cost."
Shawnee Ridge is fully built out. The park contains 44 buildings, totaling 5.9 million sf. CB Richard Ellis executive vice presidents Chris Riley and Frank Fallon and senior associate Brian Budnick represented the seller, SAR at Shawnee Ridge LLC.
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8,600-SF Building Changes Hands
FORT WORTH – Superior Fuels and Lubricants has bought an 8,600-sf building for its headquarters.
The distributor's new operations base is a two-acre property at 3312-20 Dooling St. They currently operate at 3200 N. Sylvania Ave. Todd Hawpe of Henry S. Miller Brokerage LLC represented the seller, RLM Real Estate of Fort Worth, and the buyer.
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Encore Raises $150 Million,
Chasing More for CRE Buys
By Connie Gore
DALLAS – Laying the groundwork for an all-out buying spree, Encore Enterprises Inc. has just finished the capital drive for a $150 million opportunity fund and jump-started another one equal in size.
The Dallas-based investment group plans to deploy the equity pools, using a low-leverage strategy, on hospitality, retail and multifamily acquisitions mostly in the Southeast and its homeport, said Lawrence S. Jones, Encore's managing director. Encore Opportunity Fund I LP launched in January and closed in the past week.
Jones said the investment equity is coming from all U.S. investors. The first fund's sweet spot are deals in the $50 million to $80 million range, with the flexibility to take on larger acquisitions with co-investment opportunities. The targeted acquisitions are limited-service hotels, preferably Marriott and Hilton brands, multifamily assets and grocery-anchored shopping centers in the 80,000-sf to 100,000-sf range.
"Our expectations are to get it placed within 12 months if not sooner," Jones said. "We see some pretty exciting opportunities over the next 12 to 18 months. We're pretty excited to have some dry powder to work with."
Encore's headquarters was relocated about three years ago from Gulfport, Miss., to Dallas. The team currently is developing two hotels is Mobile, Ala., and two multifamily complexes in Gulfport, all of which are candidates for the opportunity funds, Jones explained. Meanwhile, there are deals cooking in North Texas, where Encore already owns the 80-room Fairfield Inn & Suites at 2050 Texas 121 N. in Grapevine.
Encore's chairman is Dr. Bharat H. Sangani and its president and CEO is Patrick J. Barber. Encore's principals founded the firm 12 years ago after years of working together on business deals."Opportunity Fund I represents the first of a series of Encore private equity funds we have planned," Barber said, adding Encore Opportunity Fund II is a co-investment offering that complements Fund I.
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North, Central Texas Face
Record Foreclosure Sales
By Connie Gore
DALLAS – Residential foreclosures are continuing to climb in Central Texas and heading north to Dallas/Fort Worth's sprawling four-county metro. All but one county posted record highs for July 7 auctions on courthouse steps.
Bastrop County's 86 postings fell just shy of its record number while its larger peers shot well above their previous marks, according to the latest data from Foreclosure Listing Service Inc. And across the board, the eight surveyed counties all logged record highs in a year-to-date analysis.
Regardless of region, George Roddy Sr., president of the Carrollton, Texas-based company, said the activity is "devastating" to property owners and families, but for an investor "this is one of the best times in history to be buying real estate."
What Roddy has noticed in recent months is an upsurge in previously posted properties slated for the July 7 auction. It could be due to workouts or the lifting of moratoriums or the volumes of delinquent loans to process, he concluded. Dallas County led the eight counties on Roddy's list, accounting for 2,579 of this month's 6,072 postings. In Tarrant County, 2,015 owners are facing foreclosure while Collin and Denton counties have 834 and 644, respectively. In Central Texas, Travis County has 782 foreclosure sales coming up in July. Williamson County has 452 homes on its docket and Hays County, 143.
"Despite the troubled economy, I see investors each month that are ready, willing and able to buy properties," Roddy said. Sometimes, they move into place before the auction in direct deals with property owners; sometimes, it's a bid at the foreclosure auction; and other times, it's after the asset is in the hands of the lender, he said.
In the four North Texas counties, Roddy said the posting volume for the July sale is possibly the highest number on record. For the past 10 months, postings exceeded 4,000 per month and 5,000 for the past four months. "Now for the first time in this foreclosure cycle and most likely the first time on record, D/FW home postings have skyrocketed above the 6,000 mark," he said.
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Farmers Sells
Arlington Building
Farmers Insurance has sold
a two-story building in Arlington
to a private investment group. The new owners plan to convert the former insurance claims office into a medical training and lab facility for the School For Allied Health Professionals.
Gary Walker and Renee Guy-Efimoff, CEO & brokerage associate at SCM Real Estate Services, headed negotiations for the landlord. Robert Fischer with Fischer & Sanger represented the buyer.
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