DALLAS-Henry S. Miller Cos. of Dallas has leveraged itself for a second year of change, taking over Dallas' Stonehill Realty Capital Group and striking an alliance with an out-of-state partner for developments outside Texas.

In a $70-million package, 33 shopping centers or 650,000 sf–maybe more–will roll out in the next three years under a merchant build partnership with Steve Walker of WM&K Development Co. of Hot Springs, AR. The centers are in various development stages in Oklahoma, Mississippi, Arkansas and Louisiana, but clearly represent the firm's first development foray outside Texas. The firm is looking to neighbor Wal-Mart with all projects.

On the Dallas front, Henry S. Miller Cos. has merged Stonehill with its capital markets division, with owner James C. Brownlow becoming head of a newly formed Real Estate investment Banking Group. The entity will operate in concert with the Henry S. Miller Capital Markets division, headed by managing director Mark Baldwin. Other changes put J. Stephen Harris in as president of Henry S. Miller Investments Co., a post vacated by Vance C. Miller who remains at the top as chairman and CEO. Harris was executive vice president and CFO. Stepping in as CFO is Robert DuBois, formerly vice president, secretary and treasurer.

Sam Kartalis, president of Henry S. Miller Commercial, says Brownlow brings not only experience but “excellent relationships with major life insurance companies, pension fund advisors, major Wall Street investment firms and private equity sources.” And, the client list is a surefire well to tap for the retail development program being headed by Harris and Vaughn Miller, the retail division president.

Thirty to 50 centers in and out of the state could be built under the merchant build plan. All are neighborhood variety and most will have grocery anchors. A prime example is a just-closed 15-acre buy that will bring a 150,000-sf Tom Thumb-anchored grocery to the Dallas suburb of Frisco, confides Vance C. Miller. The center will break ground in the fall at the intersection of FM 720 and Peel Parkway and should deliver at the end of 2003.

“We think there's a huge opportunity for pent-up retail demand,” Vaughn Miller tells GlobeSt.com. He says the numbers change daily, but at last count 10 centers are under construction and 23 have just come to market. None, as yet, are under contract although a dozen have brokers “trading papers,” he discloses. The properties are prime candidates for 1031 exchanges, a good avenue for the newly formed real estate banking investment group. Vaughn Miller says the two, though capable of standing on their own merit, perfectly complement each other.

Under the merchant build plan, Wal-Mart stores in smaller towns with populations of about 30,000 are being viewed the key to opportunity. “It's a niche development,” explains Vaughn Miller, “and it's markets that not a lot of developers want to mess with.” Some will be sold and some will be held under the strategy at play today.

Vance Miller says the “aggressive” retail development plan is funded in part from last year's sale of the residential brokerage and finance operations in Texas and Colorado. Cendant paid about $60 million for the operations.

Instant Insights /

Henry S. Miller Cos. Expands Investment, Development Divisions

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