X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

DALLAS-Konover Property Trust Inc., a REIT headquartered in Cary, NC, is bailing out of Texas.

Five outlet centers have been put on the market along with 23 others that remain from the REIT’s one-time 34-property portfolio. Three years ago, the REIT had done an about face on outlet center holdings, putting into play a strategy to build a community center portfolio primarily situated in the southeastern US. Texas has the largest concentration of the lot.

Six outlet centers have been sold in the past three years. That includes the January sale of a 311,742-sf outlet center in Sulfur Springs, TX, for $7.6 million and a 141,908-sf outlet center in Casa Grande, AZ, for $3.2 million. Now, Texas’ Factory Outlets of America centers in Corsicana, Hempstead, La Marque, Livingston and Mineral Wells are on the “to go” list.

Konover has hired Credit Suisse First Boston to sell the remaining 23 outlet centers situated in 17 states. When a deal is consummated, Konover’s holdings will be reduced to six states, Mary Baldwin, investor relations director, told GlobeSt.com. Revenue will be applied to debt reduction and acquisition of southeastern US community centers, she says.

Baldwin says the sell-off has been triggered as a means to return shareholder value since the portfolio’s outlet centers had been dragging down the REIT’s FFO numbers in comparison to its peers that had only community center properties. “We are sort of a hybrid,” she explains of the mixed bag of holdings. “They’re good centers. It’s just that we’re trying to get our portfolio to be more homogenous to be just community centers.” The REIT presently owns, manages or has under development 145 shopping centers, totaling about 17.1 million sf, in 22 states.

Baldwin told GlobeSt.com that the REIT is waiting for Credit Suisse’s assessment as to what the outlet centers will bring in the market. “Right now, we just don’t know what the market will bear,” she says. It has not been determined if the 28 properties will be sold as a package or divvied up to several buyers.

The largest Texas holding, La Marque, is situated 13 miles north of Galveston. The 10-year-old center contains 176,071 sf. La Marque and its Texas counterparts, which contain 63,605 sf each, share Vanity Fair as a common tenant. All of the remaining centers had been built in 1989. Corsicana’s outlet is situated along Interstate 45, just 58 miles south of Dallas while Hempstead’s largest neighbor is Austin, positioned 109 miles east. The Livingston center is located 74 miles northeast of Houston along Texas 59 Loop south and Mineral Wells is 47 miles west of Ft. Worth. La Marque has the highest vacancy of the lot, with 33,517 sf available. The other centers have vacant space ranging from 323 sf up to 1,567 sf.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.