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AUSTIN, TX-A 460,795-sf, four-property retail portfolio, valued at close to $80 million, has come to market for the first time in its history. The critical mass of class A space sits at the heart of Austin’s Arboretum, where the going rate for retail space has hit nearly $50 per sf.

The plan is to secure the first round of offers for the 97%-leased Great Hills portfolio by the third week in December to drive a push for a late first quarter 2005 closing, Jim Batjer, managing director in Dallas for Holliday Fenoglio Fowler LP, tells GlobeSt.com. He and HFF managing director Barry Brown are running the deal for the Austin family, who’s decided it’s time to sell a package that includes three of four corners at Great Hills Trail and Texas 183 on the city’s northwest side.

“They want to capitalize on the market,” Batjer says of the debt-free, first-time offering, “and reallocate some of their assets.” The family developed two of the centers and acquired the other two shortly after they were built, all rising in the early 1990s.

Batjer believes the heated market for retail product, Austin in particular since it’s considered under-served, will generate at least 20 offers from private and institutional buyers. “It’s in the Arboretum where there’s no room to build,” he says, adding the likely scenario is a portfolio sale to lock in a critical mass in one of the priciest sections inside the city line.

The take one or take all offering consists of the 154,730-sf Great Hills Market at 9828 Great Hills Trail; 128,054-sf Great Hills Station at 10225 Research Blvd.; a 132,220-sf box at 10107 Research Blvd., leased to Home Depot through May 2012; and 45,791-sf Teakwood at 8111-8209 Burnet Rd. “It’s a $75-million to $80-million package,” Batjer says, “and it’s never been on the market.”

In all, the portfolio has 30 tenants. Some anchor leases will roll in the next few years, but the Arboretum location practically guarantees renewal, according to Batjer. And, he stresses “there’s not any overexposure in any one year.” The offering’s upside lies in the rolling leases, which are expiring at rates considerably less than the center’s current quotes of a low $20 per sf to high $30 per sf. Specialty space in the Arboretum is commanding up to $50 per sf.

In retail circles, Austin is viewed as the most under-served market in the four Texas metros. The city’s 17.2-million-sf inventory is 93.2% occupied. Within a one-mile radius of the portfolio, the average household income is $81,000 and median home value, $200,000. “Residential growth has certainly outpaced the retail growth,” Batjer says.

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