First-Time Buyer Picks Up 36,000-SF Plaza

The local buyer, KMSH Investments LP, crossed the finish line in a back-up play after one contract fell out for the 100 E. Little York Rd. shopping center, Paul Gardner, investment associate with Marcus & Millichap's local office, tells GlobeSt.com. He says the holding's been under contract since February, but four months were spent in securing an innocent landowner's certificate from the Texas Commission of Environmental Quality to absolve lender and new owner of any liabilities arising from contaminants on a neighboring property. "The thresholds were so low that a certificate almost wasn't needed," he says of a problem discovered during the due diligence process. The seller, like the buyer, is a local private investor.

Gardner says the deal closed with a five-year loan from the Plano, TX-based First International Bank's local office. The floating-rate financing, with a 70% loan-to-value ratio, kicks in at 5.5%. The buyer sold a business and used the gain to meet the equity, he says.

Yorkline Plaza is one of many shopping centers flanking both sides of East Little York Road. The center's anchor is Tradition Party Hall, which has more than 20,000 sf locked in for the long term. Gardner says the special events rental facility, popular for weddings and quinceaneras, is "booked for a solid two years."

Gardner says the new owner is planning to renovate the asset, eyeing upside in buying a retail property with below-market rents, now averaging $8 per sf, and a high occupancy in a strong retail corridor. Yorkline Plaza cornered 10 offers when it hit the market in October 2003.