DALLAS-A trio of power players is ready to execute the exit strategy for pieces of a Service Merchandise Co. Inc. portfolio bought out of bankruptcy nearly three years ago for $232 million. Up for grabs are 42 properties in 21 states, all redeveloped sites with long-term national tenants as the drawing cards.

The offering, valued at roughly $200 million, is coming from the camp of Cleveland-based Developers Diversified Realty Inc., Klaff Realty LP of Chicago and the Philadelphia-headquartered Lubert-Adler Real Estate Funds. The freestanding structures, ranging from 24,875 sf in Las Vegas to 122,832 sf in Louisville, KY, were part of a 227-property, 31-state package that the trio pulled from the ashes of the Brentwood, TN-based retailer's bankruptcy.

Jim Batjer, managing director in Dallas for Holliday Fenoglio Fowler LP, tells GlobeSt.com that 30 buildings are fee simple, a half dozen are ground leased and another six have leasehold interests. The near 2.1-million-sf package of practically fully leased space will hit the market next week although it did have a sneak preview at ICSC in May.

"We'll sell them individually or two, 10 or 42," says Batjer, who's teaming with HFF managing director Barry Brown and director Adam Howells to hawk the portfolio. Batjer says the bell will ring on the call for offers in 30 days, setting up a closing in the fourth quarter. "In terms of geography and the number of assets, it's certainly one of the largest portfolios out there that's actually being marketed," he says. Whether metro or tertiary cities, the buildings are mall periphery or sit at the "retail pulse" of their respective communities.

Batjer says deep-pocketed private and institutional investors already have inquired about multiple pieces of the offering, which has been divvied into regional portfolios. But, the private investor category still stands a chance. "These are perfect deals for private investors with 1031 exchange funds," he says, citing $5 million to $7 million as the likely striking range for a single-asset takedown. On average, the structures, built since 1980, are 50,000 sf and leased to nationals like Office Depot, PetsMart, Michaels, Best Buy and Bed, Bath & Beyond.

There are two pools of four properties apiece that are cross-collateralized, but the others are up free and clear of debt, according to Batjer. The Southeast package contains 16 properties; Southwest, 12; Northeast, nine; and Midwest, five.

"They bought them from bankruptcy, re-tenanted them and now it's time to move them out. They're executing their exit strategy," Batjer says. "It's a pretty unique portfolio. You don't see portfolios like this out in the market."