First-Time JV Pays $17.8M for Power Center

NORTH RICHLAND HILLS, TX-A 230,000-sf suburban power center has quietly traded for $17.8 million or $77 per sf as the original owner hands off the deed to a first-time joint venture buyer in a smooth transition won by longstanding relationships.

Richland Centre’s new owner is the Praedium Group LLC of New York City and Dallas-based Westmount Realty Capital, led by Clifford A. Booth and Stephen H. Kanoff. Parting with the title was Patsy Smith, head of PR Smith Ltd. of Bedford, TX, whose late husband spent the better part of two decades assembling the 21-acre tract for a center that opened about a year after he died. Steve Greenberg, executive vice president of Dallas-based Weitzman Group, and Chris Thomas, vice president, packaged the sale and will continue to lease the nine-year-old asset, an 89%-occupied property with a national line-up.

“The entire transaction was built on longstanding relationships among all parties involved,” Greenberg tells GlobeSt.com. “Chris mentioned it to Westmount. They pushed for a meeting…and we came to terms rather quickly.”

Greenberg started working with Smith to lease the center about three years ago. As she talked about selling, some feelers were floated, but the property at the intersection of Loop 820 and Texas 183 never formally came to market, Greenberg says. Smith decided it was time to sell her lone retail asset in a mixed portfolio when Ashley Furniture signed for 38,000 sf and open space amounted to just 33,000 sf. Not to be lightly dismissed is investors’ retail appetite for metro properties all across the US.

Thomas brought Westmount to the table in January. A contract was placed in March and then the deal was taken to Praedium’s acquisitions director, Philip Tager, who’s known Booth for a decade.

Tager says the leasing promise and the current cash flow swayed the New York City-based Praedium to kick in the cash, with some debt placed with Bank One and equity drawn from the $465-million Praedium Fund V, now in its second year. Tager confides Richland Centre’s lease rollover is nil for a couple years and then staggers in two-year rolls through 2015. Since Praedium is a typical three- to five-year holder, the roll offers little, if any, risk. Even if it did, Tager stresses the location of the five-building asset would offset any marginal risk since it’s strategically positioned at the epicenter of a strong retail corridor and across the freeway from a regional mall.

The Richland Centre roster consists of large-format home furnishing stores as well as Ross Dress for Less, Barnes & Noble and Oshman’s Super Sports. A 7,500-sf deal is working with a regional retailer, Greenberg says, adding that it’s just too early in the talks to talk about the next name for the marquee.