GlobeSt.com EXCLUSIVE: $7M Plan Laid Out for Dark Kmart

The Burk Collins & Co. development at the junction of Loop 820 and Pipeline Road in Hurst will be 100% pre-leased to four national retailers by the time construction starts, John Zikos, senior vice president of Dallas-based Venture Commercial Real Estate LLC, predicts for GlobeSt.com. Three letters of intent are out for execution and one is a done deal. Circuit City will undertake a 33,862-sf reverse build-to-suit that knocks off a corner of the structure, but ultimately expands the total size to 128,000 sf. The plan calls for renaming Arcadia Plaza to probably Market Street Village, he says.

Zikos says the leases awaiting execution are by nationals looking to fill 22,200 sf, 32,096 sf and 39,588 sf. Meanwhile, talks have begun with several restaurateurs and other traditional pad users to develop the acreage. The entire project is marked to deliver in October or November.

"It was a very complicated transaction. The nature of the deal required it to be just a bit tighter to hit the ground running," Zikos says of the pre-leasing level. Pegging the project at $7 million, he started packaging the plan after Kmart went dark in spring 2003.

Initially, he set out to sublease the site for several retail clients looking for big box space in the high-traffic, high-sales corridor of Simon Property Co.'s 600,000-sf North East Mall. He subsequently changed the strategy and took the redevelopment plan to Burk Collins of Hurst, a seasoned redeveloper with credits that include Precinct Village, Irving Market Center and North Hills Village.

Zikos' deal has Bering Associates as the fee-holder and Hurst Realty Corp., a single-asset entity of Triester, as the leaseholder to a long-term agreement with several options to extend for the big box and ground leases for the land. Bank of Texas provided construction financing. Claudia Hutchinson of Moody Rambin Interests represented Circuit City in the reverse build-to-suit agreement.