Built in 1987, the complex was 80% occupied at sale time to the investment group, led by principal Wes Walters of Wes Walters Realty Inc. in Austin. He tells GlobeSt.com that he found the property on a submarket drive-through, placed the call to the owner and then closed the deal in a start to finish of 60 days. Harwood Plaza at 8401-8454 Grapevine Highway is about 1.5 miles from the November purchase, the 40,000-sf Woodview Shopping Center at 500 Harwood Rd. in Hurst.
Walters says the North Dallas private partnership sold its last retail asset at a 10% cap. That, with the 20% vacancy, delivers the upside as he turns his in-house leasing team loose for the lease-up. The center's largest tenants are Bell Bottoms nightclub and Red Coleman's convenience store. About $100,000 has been earmarked for upgrades and tenant improvement dollars for the leasing plan, according to Walters.
Walters financed the purchase with a mini-perm five-year loan at a floating rate of prime plus 0.25%. The San Antonio branch of Bank One provided the financing.
The buying syndicate tries to close one property per quarter, Walters says, noting he hopes to buy up to another seven properties this year in Dallas-Fort Worth. The portfolio contains about 50 million sf of multi-tenant properties of all type in Austin, San Antonio, Corpus Christi and Dallas-Fort Worth. In North Texas, the investors own about 15 million sf, mostly retail. The preferred property is multi-tenant, 30,000 sf to 100,000 sf and shouldering problems that can be remedied to realize upside potential via rent growth.
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