Chicago Buyer Takes Risk for First Dallas Deed

The ground lease, held by the McEntire family of Dallas, "scared a lot of people away," Barney McAuley, vice president and head of the Fort Worth-based Woodmont Co.'s Capital Markets Group, tells GlobeSt.com. The Dallas listing came to market in May and attracted about 10 offers. Seller Mony Real Estate of Denver based its final decision on "the best buyer for the property," he says of the 5220 Belt Line Rd. asset. "These guys were the most equipped to get it closed."

For its first buy, Rushmore has landed a retail center built in 1980-82 that's across the street from Prestonwood Mall, now a largely vacant, 1.3-million-sf telecom hotel that anchors an 88-acre, mixed-use plan under development by Irving, TX-based Archon Group. Rushmore intends to polish its new acquisition with a $3-million makeover as the first step to backfilling a two-story, 60,000-sf retail building emptied some time ago by Service Merchandise Mart.

"It's a challenge," McAuley says of the property, adding that the buyer is well versed in turnaround plays. The purchase include outparcels that hold the Flying Saucer, Steak & Ale and El Fenix. Venture Commercial in Dallas was awarded the leasing and management contract.

McAuley admits Rushmore, which has contracts out on two properties in Houston and one in San Antonio, is in the deal for the long haul due to the ground lease. He says similar strategies often drive negotiations with the landowner 10 to 15 years prior to the expiration to work out "some sort of compromise."

In addition to McAuley, Woodmont associates Peyton Millinor and Brandon Beeson negotiated the Dallas sale. The buyer secured financing from a Chicago lender to acquire Prestonwood Place, one of a handful left to sell in Mony's disposition plan.