HOUSTON-Levcor Inc. and CalSTRS have bought the 227,000-sf Hedwig Village as the first piece for a $350-million to $400-million portfolio. The JV plans to target the South, with a focus on Texas, for the retail-only buying spree.

LevCal LLC's first deal was leveraged with a loan of nearly $34 million to acquire the 18-acre shopping center at 9425 Katy Freeway. The JV got a 10-year, fixed-rate loan from Bank of America Corp. in Charlotte, NC to kick off the play.

According to Tom Grieco, general counsel and senior vice president for Levcor, the local firm is the manager for a JV formed last year to acquire retail properties in the South. "We plan a high concentration in the Texas market," Grieco tells GlobeSt.com, adding additional assets are under contract with the deals scheduled to close in the next several months. Des Moines-based Principal Global Investors LLC is the JV's adviser.

Developed in the late 1960s, Hedwig Village started out as a Target-anchored shopping center. Levcor, which owned and operated the center for several years as Levain Partnership III LP, totally overhauled the class A asset last year.

The 92%-occupied center is filled with national and regional tenants like Marshall's, OfficeMax, Elegant Outdoors, Pier 1 Imports, Dress Barn, Mattress Firm, Wachovia Bank and Verizon Wireless. "This is a fairly new product so there's no immediate lease expiration of note coming up," says Geoff Rice, a director with CBRE/Melody's New York office, who arranged financing for LevCal.

Rice says the BofA loan was competitively priced, speculating the package represents two-thirds of Hedwig Village's value. In today's market, comparable financings are being floated in the 6% to 7% range.