"If we'd left it open without any kind of bid, we would have gotten a lot more offers," acknowledges Jim Batjer, senior managing director with Holliday Fenoglio Fowler LP's Dallas office. Batjer, who had the marketing assignment with HFF senior managing director Barry Brown, tells GlobeSt.com the Hill Country Galleria was one of the most active deals he's seen in 15 years.

"This is a quality asset and Austin is one of the most dynamic markets in the country," Batjer tells GlobeSt.com. "This deal could not have come online at the worst time."

The project, developed by Opus West and partners, opened in 2007, right when the economy was melting down. Batjer says between 2004 and 2006, the west Austin housing market was expanding at a rapid clip, prompting Opus West to launch construction on its high-end retail and office Galleria.

But when the market melted down, "the residential growth stopped," Batjer comments. "This is in a high-income zip code in the Austin area, but the density is the issue." Once the economy rebounds and population and housing fills in, Hill Country Galleria will start to succeed once more, Batjer adds.

However, the Chicago-based buyer paid cash for the 55% asset and will likely hold it all-cash for the next two or three years until things turn around. "The current NOI wasn't something that could get underwritten by a lender," Batjer explains. "There isn't enough cash flow there to warrant any kind of debt."

Hill County Galleria isn't going to be the only high-end mixed-use asset that is going through such issues. Batjer believes that Hill Country Galleria will be the start of a trend taking place during the next couple of years that sees similar, newer retail and mixed-use assets being rolled out to market because they aren't hitting the pro-forma rents that were in the development budgets and, as a result, aren't self-sustaining.

"There are a number of assets out there suffering from the same issues this one is," he explains. "They're suburban, in green-belt areas where growth was headed, but never got there, so leasing stalled out."