Hall Tickets $500M for Office, Hotel Deals

FRISCO, TX-Hall Financial Group has built a $500-million equity war chest to develop office parks and acquire niche hospitality properties in the Southwest, Southeast and Southern California. In a trailblazing move, the plan is to take Hall Office Park's design on the road.

Hall is bankrolling the plan with gains from securities investments in recent years and ongoing sales of multifamily properties. The last 5,000 apartments in a 30,000-unit portfolio are on the market, with concentrations in Dallas, Detroit, Indianapolis and New Mexico. Matt Mumford, vice president of Hall Financial Group, predicts the final leg of the 2.5-year disposition will yield another $150 million for the strategy, which includes 1031 exchanges in traditional and reverse structuring.

Mumford has been scouring select markets to put the $500-million reinvestment plan into action. He says he is close to inking two contracts to buy development sites, deals that could close within three months. All he's saying, for now, is the sites are in Greater Dallas, Phoenix or Denver. He's also spotlighting for deals in Austin and Colorado Springs, CO and sizing up Atlanta and Tampa.

The 1.6-million-sf Hall Office Park, once viewed as the developer's folly, is hoped to be replicated in select markets. The team is looking for 60- to 250-acre sites--entitled or raw--to build multi-tenant office parks mimicking the size and composition of Hall's park in far north Dallas. "We'd like to duplicate the success of Hall Office Park throughout the Southwest," Mumford says. "We're looking to take this model and put it in other places because it's been so successful." Not only is the Frisco park's build-out on the horizon, but so is its lease-up.

Mumford says hospitality properties, eyed as minimum five- to seven-year holds, can range from a "wines and vines" in Napa Valley to a play as significant as a $180-million resort or even a $50-million value-add. Or, it can be an in-between like a boutique. And the locations can be mountains, ocean or desert.

"Every day, we look at everything over $100 million," Mumford tells GlobeSt.com, "but there's not a lot out there." A large hotel deal is being sought for a possible reverse 1031 exchange since the balance of the apartments are expected to sell this year. Hall already owns two hotels in Paris and one in Napa Valley near his vineyard.

In the early and mid-1980s, Hall raised almost $1 billion from limited partnerships to buy real estate. But this time, the plan is to solo. "We prefer to do it on our own so we can move more quickly," Mumford says.

Mumford says the firm's entrepreneurial founder, Craig Hall, made the decision last summer to start buying hospitality value-adds and replicating Hall Office Park in other markets. The time has come to put the $500 million of equity into play. "It's not as easy as it used to be," Mumford explains. "The real estate markets are still very competitive. In today's market, the value you can add to things is slowing down."