Most of the summer has been spent waiting for the 235,000-sf Inwood Village sale to close as Rreef met demand head-on with a no-minimum ask for an unencumbered piece of prime real estate, bought in September 1996 for $33 million from Trammell Crow Equity Partners Fund II. The unencumbered status was one of the main hooks for the number of deep-pocketed buyers lining up for the 88%-leased, class A asset, Barry Brown, senior director for Holliday Fenoglio Fowler LP, tells GlobeSt.com.

"It was a very close race and we had to make a decision," Brown says. The winner was determined by "certainty to close" and "reputation" as well as having one of the top offers on the table. The sale definitely is one of the region's Top 3 for 2003 and "the most active retail play that we've had in several years," he adds.

As is always the case, L&B is protecting the institutional investor's identity. Bernadetta Mussell, L&B's acquisitions officer, did say the capital is domestic and the institutional buyer is the same one that two years ago acquired a 92,000-sf office building in Allen, 25 miles north of Dallas, from Trammell Crow Co. With Texas' standing as a non-disclosure state and the institution's low-profile requirement, the most she can say about the selling price is that it fell between $50 million and $55 million. According to the Dallas Central Appraisal District, the 67-shop retail village at 5300 W. Lovers Lane is assessed at $39.8 million.

Mussell says L&B is interviewing third-party companies to manage and lease the buyer's second asset in the region. The upside plan hinges on filling the vacant space. There is no immediate plan for a rehab, she says, but "there may come a time when owner and management decide to make some upgrades." She stresses the irreplaceable infill location at a prominent corner was the motivation to buy more so than any in-place repositioning strategy for Dallas' first open-air center, developed in 1949 by the Caruth family.

As for the reason to sell, Rreef was "taking advantage of market timing and dynamics," Brown says. The reality is Texas retail has been getting top dollar for some time regardless of the state of the US economy. Inwood Village, predicted to be a top draw, cornered more offers than Brown and HFF's Jim Batjer, also a senior director, thought it would, with bidding becoming "fierce" between local players for the Dallas prize and out-of-state buyers who were more likely eyeing the promise of a larger sale down the road. Had a local buyer won, "we might not see that asset trade again," Batjer says.

In a press release, Dan Plumlee, L&B's president, said "an acquisition like this doesn't come along very often....It is a rare opportunity to find a fully developed landmark lifestyle center on a prominent infill corner location with a well-known national retailers and unique specialty shops, not to mention that it is adjacent to the most affluent neighborhoods in the Dallas/Fort Worth area."

HFF's senior director Joseph N. Hevey arranged financing with PPM America, the Chicago-based financing arm for Jackson National Life. The buyer obtained a seven-year loan at a sub-4.5% interest rate for a "moderately levered transaction," Hevey tells GlobeSt.com.

George Roddy Sr., president of DFW Real Smart, says neighborhood centers in the Oak Lawn/Park Cities submarket were getting an average of $33.70 per sf at the second quarter close. "The pro is that it's a huge draw and has a lot to draw from," Roddy says. "It's the only game in town for that part of town." The submarket has rates as high as $35 per sf.

"L&B has some very creative ideas" about the property, Batjer says, noting lease rates exceed $40 per sf for comparable product in certain upscale neighborhoods and Inwood Village has the same potential. As for the lease roll, "it's stable in the near term," he assesses.

The Inwood Theater, one of the Dallas' oldest, anchors the center at the southeast corner of Lovers Lane and Inwood Road. Other tenants are Greenhouse Spa and Salon, Turtletique, Bookstop, Gap/Gap Kids, Mary Nash, Barry Bricken and Byzantine.

Instant Insights /

235,000-SF Dallas Retail Prize Spikes Winning Bid to $50M Plus

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