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ARLINGTON, TX-Dallas’ Henry S. Miller Investment Banking Group has acquired its first retail property with equity from a co-investment fund with Greenstreet/Niosi Capital Partners of New York City. A second property is under contract and a letter of intent has been sent for a third, both of which are in Dallas-Fort Worth.

The 81,900-sf Sublett Corners Shopping Center at 5900 S. Cooper St. in Arlington was bought from St. Ives Realty Inc., a Dallas developer who was offered a purchase contract before the asset could hit the market. That’s the same scenario working with a contract for a 309,000-sf retail center from an unrelated seller while a letter of intent on an 84,000-sf property is up against other bidders, says John Davenport, assistant vice president of the banking group.

Not only is the acquisition the first for the co-investment fund, but it’s Henry S. Miller’s only one in the Cooper Street retail corridor, where every intersection in the 13-mile stretch between Interstates 20 and 30 are “go-home” corners filled with retail in plazas and freestanding structures. For about $11 million, the buyer got the 95%-leased shadow retail to a 57,232-sf Albertsons anchor and the deed to a 32,000-sf abutting tract already earmarked for another 6,000 sf of retail, Davenport tells GlobeSt.com.

The expansion to the 10.7-acre center is poised to start as soon as the leases come back from two national tenants, Davenport confides. Talks are under way with a local tenant for the balance of the new space at the four-year-old center, which will be built by the Henry S. Miller Construction Services Co. The existing space includes tenants such as Stein Mart, Hallmark, Cato, KFC, Dollar Tree and H&R Block.

James Brownlow, president of the firm’s investment banking group, says the co-investment fund most likely will be buying six to eight properties a year, not all retail and not all necessarily in Texas. But most all will be class A assets in bid situations as opposed to cornering the deal before the market gets a look.

“This is the first of many that we expect to do with Greenstreet/Niosi. It’s the beginning of a long-term relationship,” says Davenport. Regions Bank in Dallas provided a four-year loan of nearly $8.6 million, representing 80% of loan to cost, with a floating interest rate over LIBOR, he says, adding that the borrowed amount also covers the expansion cost.

Davenport negotiated the acquisition in a start to finish of about three months as leases continued to roll in for the property at the high-traffic intersection of Sublett Road and South Cooper Street. St. Ives’ partner, Bryce Gissler, represented the seller’s interests.

The Henry S. Miller Investment Banking Group is a relatively new division of Henry S. Miller Commercial. Greenstreet/Niosi Capital Partners is using the co-investment strategy to identify operating partners, such as Henry S. Miller, to deploy capital on a leveraged basis from its investor circles into acquisitions of all types of commercial real estate.

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