GlobeSt.com EXCLUSIVE: $120M Plus of Class A Retail Up for Sale

The well-known local infill properties are Addison Walk at 5000 Belt Line Rd. in Addison; Creekwalk Village at 801 W. 15th St. in Plano; Village at Preston Hollow at 4343-4347 W. Northwest Highway in North Dallas; and Highlands of Flower Mound along Long Prairie Road in Flower Mound, a one-year-old power center that hit a 100% occupancy homerun before it delivered. Direct Development partners Syd Hurley and David Watson thought long and hard before bringing the class A package to market, but today's top prices for retail and their black book of upcoming projects drove the decision to sell, Chris Cozby, principal for Dallas-based Trammell Crow Co.'s investment sales team, tells GlobeSt.com.

"They are all niche properties, well leased in high-income neighborhoods," Cozby says, pegging the resale value at $120 million to $125 million. "This is a portfolio that when they put it together they didn't envision selling it." The centers are owned by separate partnerships, with Direct Development as the general partner across the board. Direct Development assembled the package in the last three years.

Cozby says the end of July is the offering deadline in a quick-turning play that could trigger closings within 45 days. With metroplex retail commanding near record-high prices, Cozby's expecting a minimum of 30 solid offers for a no-minimum ask package. As with any portfolio sale, the properties can be cherry-picked, but Cozby's pre-marketing prediction is it's more likely to pass to one buyer. The one caveat is each partnership gets to cast a vote. "They're going to sell it to the guy who makes the best offer per asset," he says. The TCC sales team also includes senior vice presidents Jack Crews and Linda Simpson.

The 82,816-sf Addison Walk, built in 1980, has just come off a renovation. The 95%-occupied property has national and local leases averaging seven to 10 years with less than 5% of the pacts rolling in the next two years, Cozby says. Assessed at more than $10 million, it's positioned on roughly seven acres at the southwest quadrant of Belt Line Road and the Dallas North Tollway.

The 181,032-sf Creekwalk Village is a 10-year-old asset with a 97% occupancy in a national and regional lineup with 8% of the leases rolling in 2005, none in 2006 and 10% in 2007, according to Cozby. Terms generally run seven to 10 years. The 13.3-acre asset--at the northwest corner of 15th Street and North Central Expressway in Collin County--is assessed at nearly $16.6 million.

Village at Preston Hollow is a 47,518-sf center with a 93% occupancy, soon to be 100%, Cozby says. Positioned at the northwest corner of West Northwest Highway and Midway Road, the 20-year-old retail space, abutting an Albertsons-owned grocery, also was renovated this year. Leases, on the average, have five to eight year terms--names like Starbucks, Honey Baked Hams, La Madeleine and Blockbuster--and rolls of 5% to 9% through the end of 2006.

The package's crown jewel is the Highlands of Flower Mound, 169,217 sf of national names in new construction adjacent to a 174,000-sf Super Target. The groundswell for the center when construction began shocked even the developer, Hurley previously told GlobeSt.com. The 100%-leased asset has no lease roll until 2008, Cozby says of a property boasting names like World Market, Pier 1, Linens 'n Things and Party City. Positioned in a high-barrier to entry suburban market in Denton County, the 14.6-acre holding at the junction of FM 2499 and 407 is assessed at $15.8 million.

"I don't think we'll see a better retail portfolio in Dallas this year or that we've seen a better portfolio in the two years previous or will see a better one two years from now," Cozby says. "It's four niche properties in four niche communities with income levels just off the charts." In a three-mile trade area, Addison Walk's average annual household income is $94,000; Creekwalk Village, $89,000; Preston Hollow, $108,500; and Highlands of Flower Mound, $127,500.