HURST, TX-In a complex packaging of deals, Kite Realty Group Trust has acquired nearly 170,000 sf of fully leased, class A retail space in Tarrant County. Industry sources confirm the takeovers of Market Street Village and Pipeline Pointe cost more than $30 million to secure.
"It made sense for them to buy both," says Howard Fuerst, senior associate in Dallas for Marcus & Millichap Real Estate Investment Brokerage Co., who represented Falcon Realty Advisors in the sale of the12,255-sf Pipeline Pointe, which was used to sweeten the dealmaking so Burk Collins & Co. Inc. could sell the 149,000-sf Market Street Village to the Indianapolis-based Kite. The bundling gave Kite a 14.15-acre hard corner with freeway frontage and a popular regional mall as its neighbor.
John Zikos, partner with Venture Commercial Real Estate LLC of Dallas tells GlobeSt.com that Kite bested two others in the off-market play for Market Street Village after another contract fell out for the redeveloped Kmart site. Zikos orchestrated simultaneous closings for Burk Collins to acquire the fee title for Market Street Village, a redevelopment completed under a leasehold agreement; buy Pipeline Pointe; and then sell it all to Kite. "Having all closings take place simultaneously was very difficult," says Zikos, who's invested three years into the redevelopment, lease-up and sale of Market Street Village at 1405 W. Pipeline Rd.
"It made it a better package for Kite," explains Harold Whitten, vice president of operations for Burk Collins. He says the firm didn't plan to immediately sell the redeveloped Kmart, which reopened last spring as Market Street Village, but "the market's right for it." As part of the deal with Kite, Burk Collins will build a 7,000-sf, single-tenant structure on one of three outparcels. The expansion, slated to deliver in the summer, has been preleased to a salon operator.
"It's a good time to be selling leased assets," says Tim Hughes, principal of the Dallas-based Falcon Realty Advisors, who realized the full $4.74-million ask or roughly $384 per sf from the sale of the one-year-old, four-tenant Pipeline Pointe at 1497 W. Pipeline Rd. "I wish I had 10 more like it."
Falcon's sales team included Stephen Maulden, a Dallas associate for Marcus & Millichap. Burk Collins had Marcus & Millichap associates Jason Vitorino and Levy as its negotiators in the Pipeline Pointe transaction.
Kite tapped its revolving credit line and used net proceeds from the $21.3-million sale of the 100,000-sf Mid-America Clinical Labs in Indianapolis to acquire the Tarrant County shopping centers. Under the terms of that sale, Kite will manage the medical property for one year. In keeping with its MO, Kite took over leasing and management of the shopping centers.
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