Investors Recognize H-E-B’s Winning Formula
H-E-B has previously announced plans to add six more stores in Houston this year and because the grocer typically owns its stores here, very few come up for sale: one exception was Tanglewood Court.
HOUSTON—H-E-B has been in the grocery and retail business for more than 110 years and now has more than 300 stores throughout Texas and Mexico. The grocer has previously announced plans to add six more stores in Houston this year and many already developed are of two-story urban designs, GlobeSt.com learns. Because H-E-B typically owns its stores here, very few come up for sale.
One exception was Tanglewood Court, a 125,500-square-foot fully leased H-E-B-anchored shopping center in the Galleria/Uptown submarket. American Realty Advisors purchased the asset for an undisclosed price. The seller was a partnership between Fidelis Realty Partners and BayNorth Capital LLC.
Completed in 2014, the neighborhood shopping center was developed, owned and maintained by the seller, including a recent redevelopment effort. Because it features one of Houston’s top-producing H-E-B grocery stores, foot traffic is always high, GlobeSt.com learns.
Situated on a 12-acre urban in-fill site at 5895 San Felipe on the southeast corner of San Felipe and Fountain View, the center serves some of Houston’s most affluent and densely populated neighborhoods, Tanglewood, the Memorial Villages and Briargrove. Tanglewood Court’s location within the Galleria/Uptown submarket places it in the second largest of Houston’s 21 office submarkets and a daytime population of more than 200,000. The Galleria is the nation’s fourth-largest retail complex and number-one performing mall in Houston.
The three-building center is fully leased to a variety of national and regional tenants, in addition to anchor H-E-B, including Mattress Firm, La Madeleine, Memorial Hermann, SH Salon, Mercantil Commerce, French Quarter and Splendid Dental.
HFF’s investment advisory team representing the seller included senior managing directors Rusty Tamlyn and Ryan West, director John Indelli and real estate analyst Charlie Strauss. Additionally, working on behalf of the new owner, the HFF team placed the financing with a national life insurance company. HFF’s debt placement team representing the borrower consisted of senior managing director Colby Mueck and director Michael Johnson.
“As expected, the market proved to be as efficient as anybody could hope for, start to finish,” West added. “H-E-B has done an exceptional job positioning their stores in the market, and Tanglewood is a great example of that. The H-E-B grocery experience is second to none and on full display here.”
Fidelis Realty Partners’ Alan Hassenflu, Lynn Davis and Glenn Airola, all partners in the firm, represented Fidelis, which will continue to lease and manage the center post-closing, while BayNorth Capital managing director David Cronin represented BayNorth. American Realty Advisors was represented by ARA associate director Jessica Harrison.
“Tanglewood Court attracted a wide range of interest primarily from institutional pension fund investors,” Tamlyn said. “The combination of an urban in-fill location with great demographics and strong H-E-B sales led to tremendous investor interest.”