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DALLAS-In divvying the components for sale, an 11-year owner has realized $300,000 more than originally planned for an office-and-retail development in northeast Dallas. At the end of the day, the seller has banked about $3.8 million from the all-cash trades.

A partnership with ties to Garland, TX, Washington state and Hawaii sold a 61,063-sf, class B office building at 9550 Skillman St. to a first-time metro investor from New York City. The 35,773-sf Skillman Forest Square at 9560 Skillman St. has been turned over to a private investor from Dallas.

“We decided it was easier to sell it as two separate units rather than one unit,” says Gerald Luterman of Marcus & Millichap Real Estate Investment Services. The shopping center was 87% economically occupied at sale time and the office building was 68% physically occupied. In splitting the asset, 2.9 acres went to the retail component and 2.06 to the office piece. But key to the deal is its location in a pocket in the midst of revitalization, with Home Depot and Lowe’s stores waiting to rise after several older rental complexes are razed.

Luterman says the retail buyer, armed with 1031 exchange funds from a local multifamily property sale, plans to extensively renovate the 13-shop center. The unanchored real estate is leased to a church, insurance company, title company, dress store and bakery. The plan includes re-tenanting. “He hopes to change the tenant profile,” he stresses.

Luterman says Skillman Forest Square was on the market about four months, generating five offers during the run. And, he adds, the 23-year-old center has sold at just a slight discount to the $1.8-million ask.

Marcus & Millichap associate director Ron Hebert had marketed Forest Park office building, pulling six solid offers from 114 inquiries during its four months run on the market. “It was offered at $36 per sf. It’s a great cost per sf,” he says, adding the all-in gain rang up considerably more than originally expected.

The new owner plans to put one of his companies into part of the vacant space of the five-story, 21-year-old office building. Hebert says Tomlinson-Leis Corp. of Dallas has retained leasing and management rights on an interim basis.

The capital markets’ upheaval trickled over to the deal. Hebert says the buyer’s loan from GreenPoint Bank in New York City was one of the last ones to be funded before it discontinued operations. “Getting deals done has been an adventure with the current credit situation,” he says.

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