Lowe's Cuts Through Two Years of Red Tape for Key Corner

IRVING, TX-After two years of wheeling and dealing, Lowe's Cos. Inc. has gained control of 17.7 acres at a "Main and Main" intersection with four corners of retail. Now, the Mooresville, NC-based Lowe's is ready to raze the 216,972-sf Irving Square and replace it with a 135,000-sf store and 27,000-sf garden center.

"It took a lot of time and there were a lot of moving parts to make it happen," Lou Miranda, senior vice president for United Commercial Realty/ChainLinks in Dallas, tells GlobeSt.com. The Lowe's store should be ready to open in fall 2005 at 3520 W. Airport Freeway, the southwest corner to an Irving intersection shared with a mall, Target and Auto Zone, with Lowe's chief competitor parked at the rear.

"The reason that Lowe's was willing to go through all that time and trouble is Home Depot has a store right across the street, but not as well positioned at the intersection," says Miranda, whose associate James Mason helped to broker Wal-Mart's side of a multi-phase deal.

Lowe's first move was to buy a 107,000-sf Kmart lease in spring 2003 from bankruptcy court. Then, the focus turned to Wal-Mart, which had the leasehold on an adjoining 109,972-sf former Pace Club store, which had been subleased to Hobby Lobby, Miranda says. "For the deal to happen, Hobby Lobby had to be relocated," he says, adding the store opened last month in a 61,000-sf former Winn-Dixie grocery store at the crossroads of Texas 121 and Hall Johnson Road. The final piece to the puzzle was transferring the Wal-Mart leasehold to Lowe's. Miranda confides Lowe's pact, including options, ties down the corner for 60 years.

Miranda says Lowe's gain of control over the entire shopping center required modifications to six covenants because the property had been "condo-mized" through the years. Signatures were gleaned from investors in Dallas/Fort Worth, Kansas City, MO, Los Angeles, West Palm Beach, FL as well as Discount Tire Co. Inc. of Scottsdale, AZ, and the Bentonville, AR-based Wal-Mart. A Lowe's construction crew has just started to raze Irving Square so the site can be scraped and redeveloped.

To go full circle, the multiple transactions were more costly than the usual Lowe's buy and build tactical move. "They view it as an infill location so it's more costly than a typical suburban deal at the end of the day," Miranda says, adding the all-in cost isn't readily calculable.