DALLAS-Pacific Bay Investments, shopping North Texas streets for retail properties, has picked up two class C centers in an off-market transaction with their long-time local owner, Long Star Properties. The 90%-leased assets have traded for more than $7 million.

The privately held partnership from San Francisco, typically long-term holders, satisfied a 1031 exchange from a hotel sale in its homeport with the purchase of Long Star Properties’ entire portfolio, Adam Sparks, Pacific Bay president, tells GlobeSt.com. The just-bought properties are the 44,140-sf Woodlake Village at 3065 Josey Lane in Carrollton and 90,309-sf Meadowcreek Shopping Center at 903-999 W. Centerville Rd. in Garland.

The Dallas-based Weitzman Group’s Greg McDonald, executive vice president, and Richard Polishuk, vice president, had been showing Sparks around town when the Long Star portfolio surfaced as an option. “We were handling the leasing and we knew about the centers,” McDonald says. Within three months, buyer and seller were sitting at the closing table.

Sparks and his partner, Paul Boschetti, have redirected their buying focus in North Texas for this year’s play. They have acquired 600 apartments in three years of shopping the region, but decided 2006 is the year to buy retail. And, the partners want class B and C. “We still feel that market is undervalued,” Sparks emphasizes. “There’s going to be more capital available for strip centers.” It’s his contention that neighborhood centers will pick up value as inflation kicks in and gasoline prices continue to climb.

The Pacific Bay partners have just placed a letter of intent on a $10-million deal. Sparks says this year’s goal is to acquire $36 million of North Texas real estate, hoping to end the run with roughly 300,000 sf to double its retail portfolio. In early April, they acquired the 62,000-sf Broadmoor Village at 930-50 Centerville Rd. for $7.2 million from Kimco Realty Corp. of New Hyde Park, NY.

The 30-year-old Woodlake Village and 28-year-old Meadowcreek Shopping Center will get some lipstick, but no heavy makeover, according to Sparks. A Weitzman team will continue to lease the assets and affiliate Cencor Realty Services will manage them.Long Star Properties, led by Robert Lavie, bought the 3.6-acre Woodlake Village in 1998. The 7.9-acre Meadowcreek was picked up in May 1983.

Sparks says the unanchored centers’ 90% occupancies, tenant mix and location were the dealmakers. “We like working class centers with stores that are inflation-proof and we want stable properties,” he explains about the search criteria. “We aren’t interested in major risks.”

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