Coles Crossing's Inline Space Rolls for About $10M

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HOUSTON-A limited partnership from San Diego has acquired 42,063 sf of inline space in the 109,556-sf, grocery-anchored Coles Crossing from a Denver seller. The keys have changed hands for close to the $10-million ask.

Buyer Gellerosa LP’s newest piece of real estate, developed in 2001 and 2002, consists of two buildings split by a 67,493-sf Randalls grocery store, which wasn’t part of the sale. During a six-month run on the market, the center at 12320 Barker Cypress Rd. picked up six offers for seller, SW Coles LP. It came close to going under contract twice, but the potential buyers withdrew their offers. “We had two false starts because the buyers had some internal problems that prevented them from completing the deal,” George Cushing, a senior vice president in Houston for Grubb & Ellis Co., tells GlobeSt.com.

Cushing says the third offer came from Gellerosa, who made it stick. “He flew in from California in the morning, toured the property and struck a deal that afternoon,” he says.

Cushing says Gellerosa assumed a $6.5-million conduit loan for the five-acre center, assessed at $6.6 million by Harris County. The loan, which matures in 2010, had a fixed-rate interest of 5.5% and 30-year amortization, according to Cushing who teamed with Paula Foster to represent the seller. Bryan Holker and Rob Crider with BD Holdings Inc. in San Diego negotiated the buy side.

Cushing says most leases will roll in the next three years. However, one of the main attractions for the buyer was the below-market rental rate. “Nearby centers are leasing for $22 per sf while this one is close to $19 per sf,” he points out.

The acquired shop space is anchored by a 4,050-sf Hallmark and 2,426-sf Today’s Vision. The tenant roster also includes Quizno’s, PostNet, Pilgrim Cleaners, TGF Haircutters, Curves for Women, Southern Maid Donuts, Nationwide Insurance, Baskin-Robbins and Kumon Math & Reading Centers.