$40M Plus Bags 373,347 SF of Class A Retail

LEWISVILLE, TX-In a rebound from dropped contracts and a re-marketing, the San Francisco-based Rreef North America has sold the 373,347-sf Vista Ridge Village to PO'B Montgomery & Co. and Guggenheim Real Estate Investors. Sources say the class A piece of retail has brought "north of $40 million."

The going-forward plan will be to undertake a renovation in "one to two years" and hold the 29.9-acre corner at the Interstate 35-Round Grove Road junction for the long haul, Phil Montgomery, president of Dallas-based PO'B Montgomery, tells GlobeSt.com. "It's the dominant corner," he continues, "and the trade area has matured so all the competing centers are already there. This center should capitalize on that."

Montgomery says the deal's upside is pure value-add--fill the 10% vacancy, renovate and hold as sales volumes' build with time. The asset sits across the street from Chicago-based General Growth Properties Inc.'s Vista Ridge Mall.

"We think there's opportunity to strengthen tenancy and so some remodeling and updating," Montgomery says. All lease rolls for this year have been put to bed, he adds. The power center has an all-national line-up, which includes Barnes & Noble, Linens 'N Things, Office Max, Old Navy, Marshall's and a Cinemark Theater.

Vista Ridge Village is the third time that the local firm has been the adviser for a Chicago-based Guggenheim acquisition. The other purchases were in Denver and Colorado Springs.

The Holliday Fenoglio Fowler LP team of senior managing directors Jim Batjer and Barry Brown and managing director Adam Howells put Vista Ridge Village on the market 15 months ago. Batjer says a would-be buyer dropped out after Party City vacated 8,850 sf and then a back-up offer fell out when Big Lots emptied an 18,000-sf box. He says the decision was made to pull the listing and wait for the center to regain traction. The upshot was a re-marketing about four months ago, producing "six to eight offers," he says, crediting the submarket's strength for continued interest in the asset. "The ownership in that submarket primarily is institutional and very stable."

Acting for a private investment group, Rreef bought Vista Ridge Village shortly after it delivered in 1994 from Dallas developer, Dalmac Cos. "It was time to recycle the capital into a new asset," Batjer explains.

In addition to Montgomery, the buyer's team included the firm's executive vice president Jimmy Grisham and vice president Jason Maddox. PO'B Montgomery has put Jeff Kittleson with Dallas-based Trammell Crow Co. at the leasing helm and Dan Smalley with Prizm Partners, also Dallas, in charge of management.