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[IMGCAP(1)]DALLAS-Structuring a three- to five-year hold, Kinsman Equity Partners LLC and Parking Systems of America have jump-started a 50-50 partnership with an eight-property parking portfolio in four states. The $13-million deal has a 10% net annual return from 1,190 spaces in four CBDs.

Stephen A. Scott, president of Plano, TX-based Kinsman Equity Partners, tells GlobeSt.com that the deal was sealed with a $9.5-million cross-collateralized loan with a release clause to allow for individual sales. Compass Bank funded the deal for parking lots in Fort Worth, Memphis, Milwaukee and Tulsa, OK.

Kinsman and Dallas-based Parking Systems of America formed KEP Belclaire Parking Ltd. to take the deeds from Central Parking Corp. of Nashville. Scott says the new JV emerged from an earlier deal this year when Kinsman invested with Spyglass Equities Co., also from Dallas, in a parking garage at 1900 Cedar Springs Rd. and a small hard corner at St. Paul Street and McKinney Avenue, both in Dallas’ Uptown.

Scott says the key to the parking lot investments are location–all infill and all downtown sites. “We think the whole urbanization of America will be good for us,” he stresses. “This is land waiting to become something else when it grows up.” If it’s not sold before the hold ends, he says it’s a safe bet parking rates will increase and so will the partnership’s return.

The Milwaukee garage at 601 W. Wells St. has 505 spaces, representing 40% of the portfolio. Scott says the sweet spot is it’s 100% leased during the workday week and available for night and weekend traffic for nearby sports venues, setting up a 24/7 revenue-generator for the till. The JV also bought a 51-spot lot at 723 N. 5th St. in Milwaukee.

[IMGCAP(2)]In Fort Worth, the JV bought a 56-space lot at 309 Texas St. In Tulsa, it acquired a 132-spot lot at 114 E. 3rd St. and 256-space parking garage at 601 S. Boston St. In the Memphis CBD, the JV took over a 20-spot lot at 332 N. Main St., 106-space lot at 201 Adams St. and 64-space lot at 243 Exchange St.The portfolio’s total acreage is just 7.4 acres. “We think all are well enough located that someone is going to need this land for something one day,” Scott says.

Kinsman put up $3.1 million of equity to buy into the deal with Parking Systems of America, which had the contract in hand when talks began and will manage the assets, according to Scott. The loan was working through the financial system when the market started to tumble. “It was a miraculous thing to close. It was right at the height of the depth,” says Scott, whose partner in Kinsman is John F. Ammons. “It was amazing it closed. The equity was easy. We were holding our breath at the closing.”

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